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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

February 24, 2022 / 08:08 AM IST

#1. Economy may have grown 6 percent in fiscal third quarter

India's economy likely grew 6 percent in the three months to December, slower than the first two quarters of financial year 2021-22, as the waning base effect overshadowed the economic recovery, a poll of economists by the Economic Times showed. The 11 economists polled predicted the October-December quarter growth in the 4-6.6 percent range, with a median estimate of 6 percent. India’s GDP had grown 20.1 percent and 8.4 percent in the first and second quarters, respectively, and 0. 5 percent a year earlier.

Why it’s important: Although India’s economy has gained some traction, growth in 2021-22 is likely to be lower that the government’s projection of 9.2 percent, going by the expansion expected in the third quarter and the contraction likely in the final three months due to the Omicron wave of the Covid-19 pandemic.

#2. India’s inflation and current account deficit may rise

As crude oil prices look to touch $100 a barrel due to the Ukraine crisis, both inflation and current account deficit in India would be impacted. The price rise may not moderate, as anticipated by the monetary policy committee of the Reserve Bank. The impact of inflation will depend on how much auto fuel prices rise and whether the government slashes levies on the.

Why it’s important: Although crude oil prices have been rising in the recent months, fuel retailers have not raised prices due the assembly elections in five states, the results of which will be declared on March 10. Once they hike rates, the impact on inflation will depend on whether there are some cuts in excise duties.

#3. India to emerge as clean energy superpower in 20 years: Mukesh Ambani

If the past 20 years saw India emerge as an IT superpower, the next 20 years will mark its emergence as a superpower in energy and life sciences, billionaire Mukesh Ambani said at a public event. Clean energy exports could rise to half a trillion dollars in the next 20 years, the owner of Reliance Industries said.

Why it’s important: The optimism by the promoter of India’s largest conglomerate underscores the country’s focus on reducing its dependence on coal and transitioning to renewable energy to power its growth. Big business houses are placing heavy bets on renewables that have already started showing some results.

#4. Former NSE chief’s yogi might actually be Anand Subramanian

The mysterious Himalayan yogi who allegedly advised Chitra Ramkrishna, former managing director and chief executive of the National Stock Exchange, on confidential matters of the bourse could be none other than Anand Subramanian, former group operation officer promoted by Ramkrishna, according to a letter written by former chairman Ashok Chawla to the Securities and Exchange Board of India in July 2018.

Why it’s important: It has recently been revealed that Ramkrishna leaked confidential information and discussed important matters with a so-called Himalayan yogi. Investor confidence in the stock exchange has been dented by the charges of corporate misgovernance.

#5. Vodafone to sell $2.5 billion stake in Indus Towers

The UK-based Vodafone Group is looking to sell its entire 28.1 percent stake in Indus Towers, India’s largest telecom tower firm. The troubled telecom services company has launched an initial sale of 63.6 million Indus shares. Its total stake of 757.8 million shares is worth approximately Rs 190.7 billion ($2.56 billion).

Why it’s important: The British firm has said it was in advanced talks with one of Indus’s largest shareholders to sell a 4.7 percent stake in the company. Although it did not provide a name, there has been reports that say it would be to Bharti Enterprises, the largest stakeholder in Indus.

#6. Call cryptos highly risky assets, advertising regulator suggests

Trading in digital assets could be highly risky, all advertisements promoting crypto products and non-fungible tokens must declare from April 1, according to new guidelines issued by of the Advertising Standards Council of India. The advertisements currently only say such transactions are subject to market risks, similar to the warning on investing in mutual funds.

Why it’s important: There has been a frenzy in investing in cryptos among retail investors in India, who have been lured by promises of exceptional returns. The many advertisements on digital assets, particularly on television channels, fail to mention that they are highly risky and, being regulated, have no legal recourse in case of complaints.

#7. Adani, Shell frontrunners to buy Sprng Energy for $1 billion

Energy major Shell and the Adani Group could emerge as the frontrunners to purchase Actis’ Indian renewable energy unit Sprng Energy for around $1 billion in equity. The binding bids for Sprng are to be placed by 15 March. Seventeen firms had submitted non-binding bids in the first stage of the sale process. In the second stage, five firms, which include Shell, Adani, Canada Pension Plan Investment Board, Singapore’s Sembcorp Industries Ltd and ArcelorMittal, are said to be conducting due diligence.

Why it’s important: The sale of Sprng Energy would be one of the largest deals in India’s green energy sector, underlining keen investor interest in the country energy transition to renewables. As the sector matures, there would be further business consolidation in the next few years.

#8. Approach company tribunal, Supreme Court tells Amazon and Future

The Supreme Court has directed Amazon and Future Group to request National Company Law Appellate Tribunal to decide on the US e-commerce firm’s plea challenging Competition Commission of India’s order, which cancelled its 2019 deal with Future Coupons. Amazon approached the apex court after the Delhi High Court ordered a stay on the ongoing Amazon-Future arbitration before a three-member arbitral tribunal.

Why it’s important: Amazon has been exploring all legal avenues to block the cash-strapped Future Retail’s deal to sell its retail assets to Reliance Industries. Future has already defaulted on loan repayment. The acquisition of Future’s retail stores by Reliance would pose a serious challenge to Amazon in India.

#9. India’s crude oil production slumps even as imports surge

India’s crude oil production declined by some 2.6 percent on an annualized basis in the first 10 months of 2021-22 financial year. However, the consumption of petroleum products jumped by 4 percent between April 2021 and January 2022, indicating a surge in oil imports.

Why it’s important: Crude oil prices are rising and may soon touch $100 a barrel as the Ukraine crisis escalates. India’s dependence on imports is likely to raise the prices of auto fuels, which in turn will feed the already high retail inflation. This might imp act demand and the nascent economic recovery.

#10.  Mutual funds get ready to invest in LIC IPO in March

The top five fund houses held Rs 232.45 billion in cash, or 4 percent of their total equity assets, as on January 31, which experts say is in preparation to invest in the initial public offering of the Life Insurance Corporation of India, which will be the biggest listing in the country.

Why it’s important: A few large-cap and flexi-cap schemes may hold back fresh flows, which will then be funneled into the LIC offering. A few funds may also liquidate a few existing holdings, especially in other insurers, and plough the money into LIC shares.

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