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

The average issue size for IPOs in the current financial year could be double or triple of last year (Rs 815 crore), when a number of small and mid-sized companies hit the market, the Hindu Businessline reported. This number was Rs 1,409 crore in 2022-23 and Rs 2,105 crore in the year preceding that. Hyundai Motor India alone may garner about Rs 25,000 crore, beating the earlier record set by LIC.

Why it’s important: India’s continuing growth story is expected to lead to a huge line up of offerings as issuers and investment bankers seem confident of sufficient liquidity in the market to fuel large-value IPOs.

#3. Higher capital spending translates into less generous dividends declared by India Inc

Indian companies were less generous with dividends in the year ended March than in previous nine years amid an increase in capital expenditure with average capacity utilization exceeding the long-term average, the Economic Times reported. The dividend payout ratio was 34 percent, down from 43 percent in 2022-23 and 37 percent in 2021-22. The payout including buybacks was 38 percent in 2023-24 compared with 44 percent and 41 percent in the preceding two financial years.

Why it’s important: A lower payout ratio indicates investment in new projects is gaining momentum, which would be welcomed by policymakers as private capex has lagged government spending in recent times.

#4. Family offices of Indian brass in talks to invest Rs 1,000 crore in hospitality platform Oyo

Hospitality startup Oyo is at advanced talks to raise around Rs 1,000 crore from the family offices of top Indian corporate executives and stock market experts, the Economic Times reported. Backers are likely to include corporate strategy advisor Anand Jain, Mankind Pharma promoter brothers Ramesh and Rajeev Juneja, as well as Utpal Sheth, aide of the late market expert Rakesh Jhunjhunwala.

Why it’s important: The discussions are taking place after Oyo last month withdrew its IPO application. It seems family offices are emerging as a significant source of capital for new-age companies.

#5. Ola Electric to switch to commercial use of battery tech pioneered by Tesla Motors

Ola Electric is set to join a select group of electric vehicle makers by starting the commercial use of the cutting-edge 4680 battery cells, the Business Standard reported. Currently undergoing trial runs in Ola Electric’s two-wheelers, these cells are designed and manufactured in house by Ola Electric Mobility.

Why it’s important: The 4680 battery is viewed as a game-changer in the global battery market as it offers more energy density and output. It could reduce costs and increase efficiency of electric scooters.

#6. Quick commerce platform Zepto to build bigger warehouses for non-grocery delivery

Quick commerce company Zepto will over the coming months look to set up one or two big storage facilities in major cities, which will serve as hubs as it moves to deliver high-value items such as electronics, appliances, gifting items and even luxury goods like gaming consoles, the Mint reported.

Why it’s important: The development comes as the online grocery platform seeks to move into non-grocery delivery, and as investors queue up to buy a stake in the four-year-old startup.

#7. Central government to launch coal reforms to increase availability in non-power sectors

The central government is preparing to launch coal reforms aimed at reducing imports and increasing the availability of the fuel for industrial sectors, the Business Standard reported. Following coal nationalization in 1971 and the introduction of the e-bidding regime in 2015, the coal ministry views this as the third wave of reform targeting non-power sectors, especially the steel industry.

Why it’s important: The government is said to be targeting zero coal imports in the next two financial years, which looks unlikely in the present scenario. The burgeoning steel industry would welcome the move though.

#8. Food deliverer Zomato in advanced talks to buy Paytm’s movie ticketing and events vertical

Food delivery company Zomato is in advanced negotiations to acquire Paytm’s movie ticketing and events division, as the firm looks to double down on its going-out businesses, the Economic times reported. The deal may value Paytm’s unit at Rs 1,600-1,750 crore. Adding receivables from cinema exhibitors, the valuation could go up to Rs 2,000 crore. An announcement could be made as early as this week.

Why it’s important: Besides food delivery, Zomato has been looking to benefit from consumer demand in categories such as entertainment. It wants to take as much control of the customer’s discretionary spending wallet as possible. How much it succeeds in doing so remains to be seen.

#9. Norway’s Equinor and Indian government in discussions on LNG and oil reserves

The central government is in discussions with Norwegian energy firm Equinor to secure its participation in India’s strategic petroleum reserves part of efforts to enhance the energy security of the world’s third-largest energy consumer, the Mint reported. In a related move, negotiations are ongoing for long-term deals for supply of liquified natural gas from Equinor’s extensive portfolio in the US and Qatar.

Why it’s important: If the negotiations are successful, it would be the second instance of a partner for strategic oil reserve after India inked a similar pact with Abu Dhabi National Oil Company. These deals could potentially allow India to have large amounts of crude oil in reserve for emergencies.

#10. DPIIT looking to ease funding and compliance burden for early-stage startups

The Department for Promotion of Industry and Internal Trade (DPIIT) is likely to focus on easing early-stage funding for startups and reducing the compliance burden on businesses and overall logistics cost as part of its 100-day action plan, the Economic Times reported. The arm of the commerce ministry is also working on a policy for deep-tech startups that includes nine areas needing intervention to create a conducive ecosystem.

Why it’s important: The startup ecosystem in India has started humming with activity and now needs next-generation reforms. The government seems to be on the right pathway for that.