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

Morning Scan

#1. India’s economy grows 7.8 percent in fiscal first quarter, highest in one year

The Indian economy grew 7.8 percent in the June quarter from a year ago, picking up further from the 6.1 percent expansion recorded in the preceding three months. There were signs of investment revival as gross fixed capital formation rose 8 percent. Consumer demand rose as well, with private final consumption expenditure rising 6 percent compared with a lackluster 2.8 percent in the March quarter.

Why it’s important: Growth in the June quarter was in line with expectations because of robust domestic demand and increased manufacturing and services activity. Annual numbers could be healthy for 2023-24 unless the monsoon plays spoilsport.

#2. Growth prospects bright, private capex increasing, says chief economic advisor

Capital formation in the private sector, supported by the central government’s capex push, has taken off, with investment intentions coming back in a big way, chief economic advisor V Anantha Nageswaran said. The government is comfortable with the GDP forecast of 6.5 percent for the current financial year as risks to the forecast were evenly balanced, he said.

Why it’s important: India remains a bright spot amid a global slowdown. To be sure, the government’s efforts to talk up private investment is still to make much headway.

#3. Adani Group faces new allegations of secretly investing in own companies, shares plummet

The Adani Group invested millions of dollars in its own companies through secret offshore structures, investigations by the Organized Crime and Corruption Reporting Project have claimed, which were published in the Guardian and Financial Times newspapers. The revelations dragged down the market value of the 10 Adani group stocks by as much as Rs 35,210 crore. The conglomerate dismissed the findings.

Why it’s important: Just as the Adani Group looked to put behind allegations of financial irregularities and stock price manipulation by short seller Hindenburg Research that led to a market rout earlier in the year, the fresh allegations have again dented investor confidence depite its denial of wrongdoing.

#4. Torrent intensifies efforts to secure funding to buy out promoter stake in Cipla

Torrent Pharma is boosting efforts to put together financing to buy out the promoter family of Cipla, which includes a likely $1 billion equity infusion. Torrent has reached out to several private equity funds, including Advent International, Bain Capital, Warburg Pincus and CVC Capital, for a minority stake in a consortium. It is also in talks with shadow banks and mutual funds for $1.1 billion in share-backed promoter financing.

Why it’s important: Torrent has now emerged as a key contender to finalize the largest acquisition in the pharmaceuticals space in India. The rising valuations of Cipla could be a concern.

#5. Met department warns of below normal rainfall in southwest monsoon

After the driest August since 1901, the India Meteorological Department said rainfall in September would be close to average, but cumulatively southwest monsoon this year could be below normal. There was no forecast of any early withdrawal of the southwest monsoon, the weather department said.

Why it’s important: A revival of the monsoon after an unusually dry August is badly needed for standing summer crops in many parts of the country. A shrunken harvest would impact rural demand revival.

#6. Viacom18 wins all bilateral India cricket media rights for five years for Rs 5,963 crore

Viacom18 Media, a unit of Reliance Industries, secured the media rights for all bilateral cricket matches to be played in India during the next five years for Rs 5,963 crore through the e-auction conducted by the Board of Control for Cricket in India. The broadcaster outbid Sony Pictures Networks India across digital and television, while Disney Star just placed a couple of bids.

Why it’s important: Viacom18 now has a dominating position on broadcasting cricket matches as it already owns media rights for the Indian Premier League. Other players have become wary of the sky-high valuations that have ceased to make business sense to them.

#7. Highway construction slows down despite government push ahead of general elections

Construction of highways in India continued to be in the slow lane although the government is pushing for a record target to showcase progress ahead of the 2024 general elections. Work has been completed on just 2,670 km of highways in the first four months of the current financial year, or just about 20 percent of a target of building 13,800 km, transport ministry data showed. The award of road projects has also fallen.

Why it’s important: Building over 40 km of highways every day for the next eight months is a near impossible task, which would compel the government to scale down its ambitious target.

#8. UPI transactions breach 10 billion for the first time in a single month

India made history in August with Unified Payment Interface transactions crossing 10 billion transactions in volume for the first time in a month. The transaction volume reached 10.241 billion till August 30, according to the National Payments Corporation of India. In terms of value, UPI transactions are within striking distance of Rs 15.34 lakh crore, recorded in July.Why it’s important: UPI has been a runaway success, with QR codes becoming ubiquitous across business establishments and shop in the country. The already high penetration is only going to deepen.

#9. Lenders to Byju’s decide to delay litigation to work on out-of-court settlement

Edtech company Byju’s and its term lenders have decided to postpone an ongoing disagreement in the US courts until 6 October. The extension aims to provide more time to achieve an out-of-court resolution on loans amounting to $1.2 billion.

Why it’s important: Troubles at India’s most valuable start-up are far from over. Holding back lenders is a temporary solution at best as Byju’s business credibility continues to struggle.

#10. Cash market turnover in India rises to 22-month high on recent bull run

Stock turnover in India’s cash market has hit a 22-month high in August, reflecting the impact of a broad-based rally. Multiple block deals and a raft of mid-sized public offerings garnered funds from savers, boosting trade volumes. The combined average daily cash market turnover on the National Stock Exchange and BSE was Rs 83,693 crore in August, the highest since October 2021.

Why it’s important: Market sentiment has been extremely bullish in recent months that drew in many fence sitters, which is reflected in the cash volumes.