Stock markets decline almost 1 percent on weak global cues
Indian equities dropped almost 1 percent following a rout in global markets as sentiment remained downbeat on the spread of Covid in China and overnight selloff in US technology giants. The benchmark Sensex fell 537.22 points, or 0.94 percent to close at 56,819.39. The 50-share Nifty declined 0.94 percent to end at 17,038. 4.
Why it’s important: Both stock gauges in India have seesawed between gains and losses in the past few days, which adds uncertainty over the direction of the market. The volatility is expected to continue and market sentiment remains cautious.
LIC to be fifth largest company after IPO at Rs 6 trillion market valuation
The initial share sale of Life Insurance Corporation of India, which opens on May 4, will make it the fifth-largest listed company in India with a market capitalization of Rs 6.02 trillion at the upper price band of Rs 949 a share. LIC has fixed the price band at Rs 902-949 per share for the IPO. It will also become the fourth most valuable insurer globally.
Why it’s important: The IPO of India’s largest insurer comes at a time when there’s market volatility, but the share sale is unlikely to suffer as there’s already high interest from anchor investors. Policyholders are also expected to bid in large numbers.
DMart owner Damani in race to buy Ambuja Cements in consortium
Radhakishan Damani, billionaire investor and promoter of Avenue Supermarts, which owns the DMart chain of retail stores, is planning to join hands with other bidders to invest up to Rs 100 billion in Ambuja Cements as a financial partner. Damani already owns 23 percent stake in India Cements, a South India-based cement company.
Why it’s important: There has been strong buyer interest ever since Holcim put up Ambuja and ACC for sale. Buying these two cement makers will place the acquirer on a strong wicket in a market where construction activity is expected to remain strong over the long term.
Bodhi Tree to invest Rs 135 billion in Viacom18 to help snag IPL media rights
Bodhi Tree Systems, backed by James Murdoch and former Star India head Uday Shankar, is set to invest Rs 135 billion in Viacom18, a joint venture between Reliance Industries owned TV18 and Paramount Global. Bodhi Tree Systems will lead a fundraising exercise with a group of investors, which will help Viacom18 bid aggressively for the upcoming media rights of the Indian Premier League cricket tournament.
Why it’s important: Mukesh Ambani has said the partnership with Bodhi Tree will help Reliance lead India’s transition to a streaming first media market. This will reshape media experience in over 1 billion screens, mostly through smartphones, Murdoch and Shankar said.
Foreign investors to contest order on tax treaty misuse
Many global funds have filed objections before the dispute resolution panel against the tax order issued by the income-tax department for underreporting income by misusing tax treaties. Some foreign funds have said they would file an appeal to the Commissioner of Income-Tax (Appeals) requesting a final order in the matter.
Why it’s important: The tax department had last year reopened past assessments for most foreign funds for allegedly misusing the tax treaties with Mauritius, Singapore, and Cyprus. Most global funds currently either take the traditional route to invest directly in Indian firms as foreign direct investment, or set up a special purpose vehicle outside India, usually in a tax-friendly jurisdiction.
Modi asks states to cut tax on auto fuels in national interest
Prime minister Narendra Modi has urged state governments to cut value-added tax on petrol and diesel to help reduce fuel prices and lessen the burden on consumers in the spirit of cooperative federalism. A couple of state ruled by the Bharatiya Janata Party have already slashed VAT.
Why it’s important: Domestic retail fuel prices have surged, with petrol selling for more than Rs 100 a liter in many places, pushing up inflation and impacting household budgets. Central and state levies have risen significantly since 2014 that have kept fuel prices high.
Apple’s iPhones worth Rs 470 billion likely to be made in India
Apple’s contract manufacturers are expected to make iPhones worth Rs 470 billion in India in the current financial year, the second year of the production linked incentives scheme. It will be almost five times the Rs 100 billion worth of iPhones made in the country in 2021-22 by Foxconn and Wistron.
Why it’s important: The incentive scheme for smartphones was floated in 2020 to wean smartphone manufacturing away from China and Vietnam to India. over 60 percent of the production of iPhones will be for exports, one of the main goals of the scheme.
Software profession to see 8-10% pay hikes to rein in attrition
Indian IT firms are likely to raise annual wages 8-10 percent for local employees in the current financial year as the industry copes with an unprecedented talent crunch and attrition that’s at 17-28 percent in companies such as TCS and Infosys. This compares with pay hikes of 10-12 percent last year.
Why it’s important: Attrition rates in software companies hit a record high in the March quarter. The firms are focusing on retaining talent, which will also include perks like travel opportunities and even stock options. But the rising wage bills may not be sustainable for long.
Hindustan Unilever net profit rises 5% in fourth quarter
Hindustan Unilever posted numbers in line with street expectations in the March quarter of 2021-22 as its annual turnover crossed Rs 500 billion. Net profit rose 5.4 percent year-on-year to Rs 23.04 billion, compared with Rs 21.86 billion the year-ago period.
Why it’s important: The numbers at India’s largest fast-moving consumer goods company are better than the industry growth as companies is facing higher input cost pressures that are crimping margins.
Mankind Pharma plans $1 billion IPO, hires bankers
Mankind Pharma plans to enter the capital market by the end of this year. The Delhi-based pharmaceuticals company has hired JM Morgan, Citi, Jefferies, Axis, IIFL and Kotak as investment bankers for a $900 million-1 billion (Rs 76 billion) initial public offering.
Why it’s important: The IPO by Mankind, started in 1995 by brothers Ramesh and Rajeev Juneja, could be one of the biggest by an Indian drugmaker.