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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

December 29, 2021 / 07:50 AM IST

India’s real GDP growth to be 9 percent till 2022-23

India’s real gross domestic product is likely to maintain a 9 percent growth rate in fiscal years 2021-22 and 2022-23, according to ICRA. The rating agency also expects the visibility of tax revenue growth to spur faster government spending in 2022.

Why it’s important: Fresh restrictions to curb the spread of Covid-19 may temporarily interrupt the economic recovery, especially in the contact-intensive sectors in the three months to March. The expansion in 2022-23 will be more meaningful and tangible than the base effect-led rise in 2021-22.


SEBI tightens regulations amid IPO frenzy


The Securities and Exchange Board of India has placed new limits on the amount of shares existing shareholders of a company without a track record intending to IPO can sell under offer for sale. The new rules bar large shareholders, with more than 20 percent stakes in the company, from selling their entire holdings on listing day. However, they can sell 50 percent of their shares on listing.

Why it’s important: The market reforms are expected to plug regulatory gaps and tackle extreme stock price volatility on trading debut, after a record year for IPOs that saw Indian companies raise Rs 1.19 trillion.


Bad loans by banks to ease to nearly 6-year low

The declining trend in bad loans that started in 2018 continued during the pandemic year, which saw gross non-performing assets of scheduled commercial banks dropping to 7.3 percent in March 2021. It was 8.2 percent in March 2020, and 6.9 percent in September 2021, according to a progress report by the Reserve Bank of India.

Why it’s important: Credit growth is showing signs of recovery. Banks will need to raise more capital to help meet the potential demand for credit and insulate themselves from ongoing stress among borrowers, especially when monetary and fiscal measures are expected to unwind.


Indians to continue to embrace cryptocurrencies despite regulatory concerns

Cryptocurrencies will continue to grow in the country. India now has the highest number of cryptocurrency investors in the world.

Why it’s important: The future of cryptocurrencies in the country appears uncertain, with the Reserve Bank of India expressing reservations over them, but that has not deterred young Indians from embracing blockchain technology.


Mutual funds can’t make crypto-related investments before law

Domestic mutual funds cannot make investments in crypto-related products till there is a law for such digital assets in the country, according to Ajay Tyagi, chairman of market regulator Securities and Exchange Board of India.

Why it’s important: The government is expected to introduce a draft legislation on cryptocurrencies in the budget session of Parliament. The proposed law is widely expected to ban use of cryptocurrencies as a medium of exchange, although it is likely to allow Indians to hold cryptocurrencies like Bitcoin and Ethereum as a digital asset.


IndiGo, SpiceJet face Omicron risk in 2022

Both IndiGo and SpiceJet have incurred losses due to pandemic disruptions. In 2020-21, net losses of IndiGo and Spicejet stood at Rs 58 billion and Rs 10 billion, respectively. The financial year to March 2022 is set to be another painful year. For the six months ended September, net losses of IndiGo and Spicejet were about Rs 46 billion and Rs 13 billion, respectively. As of 30 September, both airlines had negative net worth.

Why it’s important: Although civil aviation has seen robust demand, rising cases of the Omicron variant of coronavirus are a looming near-term threat to the pace of recovery that might affect budget carriers IndiGo and SpiceJet. There will also be heightened competition as new airline Akasa launches and Jet Airways resumes operations.


Increased demand to spur pharma growth in 2021-22

The domestic pharmaceutical sector is expected to post healthy revenue growth of 9-10 percent this financial year despite the high base of 12.5 percent in 2020-21. The strong pickup in demand in the domestic formulations market will lead the expansion, despite slower exports growth.

Why it’s important: Drug exports have been sluggish despite Covid-19 vaccines providing some support. Growth in regulated markets, accounting for half of the industry’s exports, will be supported by a steady increase in product launches. Credit profiles of most firms will be supported by healthy balance sheets and liquidity.


Mukesh Ambani talks of leadership transition at Reliance

Richest Indian Mukesh Ambani spoke about leadership transition at his energy-to-retail conglomerate on Reliance Family Day, saying he wants the process to be accelerated with seniors, including him, yielding to the younger generation. He did not elaborate.

Why it’s important: Mukesh Ambani has three children ­— twins Akash and Isha, and Anant. Handing over the baton in family-owned businesses in India can be difficult, as seen by the feud between Mukesh and Anil Ambani that went on for years before the brothers settled their differences.


Ola Electric in talks with partners to set up public chargers

Amid delays in the launch of its electric two-wheeler, Ola Electric is looking to build infrastructure for charging batteries. The Bengaluru-based mobility firm is in advanced talks to tie-up with Bharat Petroleum to set up its fast chargers at petrol pumps across the country.

Why it’s important: The market for electric vehicles is expected to grow exponentially in India as it makes a transition to green technologies. Although many firms have launched e-vehicles, the charging infrastructure remains weak and could see increased interest by stakeholders.


LIC to squeeze surplus transfer to policyholders

The finance ministry and LIC have approved gradually lowering the public sector outfit’s distributable surplus to policyholders. From next year, LIC will distribute 92.5 percent of its surplus to policyholders against 95 percent at present, and then bring the level down to the industry norm of 90 percent. The pie for the shareholders, including the government, will go up to 10 percent from 5 percent at present.

Why it’s important: The announcement comes ahead of the initial public offering of the country’s largest insurer, which is slated to be the biggest IPO in 2022. Existing policyholders will be given some preferential treatment in buying shares.

Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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