GIFT City attracts big funds with business incentives
The International Financial Services Centre in GIFT City now has 20 Alternative Investment Funds registered it. It has attracted big names in the venture funds, private equity, and hedge funds ecosystem, which include commitments to raising $4.6 billion from global investors. Additionally, 25 fund managers, 6-7 portfolio management services and 4-5 investment advisors have registered with the IFSCA. Another 25-30 players are in the advanced stages of applying to it for fund services.
Why it’s important: The funds ecosystem in India’s maiden financial hub is gaining significant momentum. Total banking transactions at IFSC have likely crossed $140 billion and non-deliverable forward transactions to have crossed $170 billion. Twenty foreign and Indian banks are now part of the IFSC ecosystem.
TCS becomes world’s second most valuable IT brand
Tata Consultancy Services has become the second most valued brand in the IT services sector globally, while Accenture retained pole position, according to Brand Finance. Infosys has emerged as the fastest growing IT services brand after 52 percent brand value growth since last year and 80 percent since 2020, the brand valuation consultancy said in its latest Global 500 IT Services Ranking report. TCS and Infosys have pushed IBM to fourth spot from second.
Why it’s important: Indian IT services firms have grown faster than their American competitors in brand value growth in the past two years of digital transformation in the global economy, hastened by the Covid-19 pandemic. The average growth of Indian brands is 51 percent, compared with US brands shrinking by an average 7 percent.
Economic recovery fails to gather pace in December
The early impact of the third wave of the Covid19 pandemic weakened India’s recovery trajectory in December, according to a group of high-frequency indicators compiled by Mint’s monthly macro tracker. Just four of 16 indicators in the tracker were green. Nine indicators were red in both November and December, while the number of amber indicators were two in November and three in December. The fall in activity induced by the third wave will reflect in the tracker next month.
Why it’s important: Several high-frequency indicators could decline in January due to pandemic curbs in some states. A business resumption index by Nomura saw a significant drop due to a drop in public mobility. Analysts have downgraded GDP growth projections for the January-March quarter but said the impact of the third wave will be smaller than earlier. The economic hit may remain limited.
Vanguard, Nippon India, Axis in race to buy IDFC mutual fund
Vanguard Group, Nippon Life India Asset Management and Axis Asset Management Company are among the 15 contenders to buy IDFC’s mutual fund business in a deal that could be worth Rs 70-100 billion.
Why it’s important: The sale is in line with IDFC’s aim to merge with IDFC First Bank and focus on banking after shedding its non-core assets, including IDFC asset management company. There have been a few deals in the mutual fund industry in the recent past. In 2019, Nippon Life acquired 22.49 percent in Reliance Nippon Life Asset Management, which is now called Nippon India Mutual Fund.
Sale of packaged goods fall amid pandemic restrictions
Sales of fast-moving consumer goods declined 9.9 percent in the first two weeks of January from a month ago. Sales in fully operational grocery outlets declined 8.4 percent during this period, showed data from retail intelligence platform Bizom, which tracks sales across 7.5 million retail shops.
Why it’s important: The substantial drop in sales comes amid restrictions to contain the spread of the Omicron variant of Covid-19, and a sharp drop in mobility. The curbs have impacted demand for packaged foods and beverages.
DoT to raise Rs 70 billion from TCIL stake sale in Bharti Hexacom
India’s department of telecommunications is likely to raise about Rs 70 billion by selling a 30 percent stake of state-owned Telecommunications Consultants India in Bharti Hexacom. Bharti Hexacom will then opt for a public listing and issue an IPO upon regulatory approvals.
Why it’s important: Bharti Hexacom, which offers mobile services in Rajasthan and northeast India, is a joint venture between Bharti Airtel, which owns 70 percent, and state-run Telecommunications Consultants, which holds a 30 percent share. The divestment has been hanging fire for more than a decade.
E-way bill generation picks up in mid-January
Electronic permits needed to transport goods within and across states showed an uptick in the past two weeks but were not enough to raise the daily average so far this month to the level seen in December, official data showed. After an initial shrinkage to 2 million permits a day on average up to 9 December, e-way bill generation has climbed back to 2.16 million a day on an average, as per data up to 23 January available from GSTN, which processes tax returns.
Why it’s important: Since May 2021, goods shipments within India have improved steadily, recovering from the regional mobility restrictions that were imposed to battle the second wave of the Covid-19 pandemic. The impact of the current third pandemic wave on supply chains has been limited.
Recent economic surveys miss mark in estimating growth
Of the eight Economic Surveys presented after Narendra Modi became Prime Minister, three predicted either a somewhat correct number or underestimated actual growth. One was presented when the base year was changed. The remaining four, presented in the past four years, were wide off the mark in predicting economic growth numbers.
Why it’s important: The annual surveys, typically presented a day before the national budget, are essentially prescriptions made by the finance ministry’s economic advisors. It’s important that they make accurate projections based on which policies are made by the central government.
CEOs expect economic rebound by February-March
India Inc has shown resilience in the third wave of Covid-19 pandemic and business should rebound by February-March, chief executives and business leaders said. The relative mildness of Omicron, lower mortality levels compared with the second wave and large-scale vaccinations resulted in less fear and stress among organizations.
Why it’s important: Large markets such as Mumbai and Delhi have dealt successfully with the third wave without putting pressure on healthcare infrastructure, and smaller cities are expected to ride it out better than the previous waves.
Non-strategic PSU divestment may see push in 2022-23
The federal government may put several public sector undertakings in non-strategic sectors on the auctioning block next financial year as it plans to continue with its privatization push. These sectors include steel, hospitality, tourism, urban development, and healthcare, among others.
Why it’s important: The privatization process has been tweaked to hasten approvals as the divestment process is time-consuming and market driven. The government has also announced that its focus would be privatization, and sale of minority stakes will take a backseat.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.