Exit polls predict easy win for BJP in Gujarat, close contest in Himachal Pradesh
The Bharatiya Janata Party is set to win the Gujarat assembly elections comfortably, exit polls have predicted, although it will be a tight finish in Himachal Pradesh. In the Delhi municipal elections, the Aam Aadmi Party is set to win, pollsters said. A low voter turnout of less than 60 per cent was seen in the second phase of polling in Gujarat, down from nearly 70 per cent in 2017. The Congress’s tally will be drastically reduced in the 182-member Gujarat Assembly, but it will fight back in the 68-seat Himachal Pradesh assembly.
Why it’s important: The seventh consecutive win for the BJP in Gujarat assembly polls shows the party’s political dominance in that state. The AAP’s win in Delhi municipal elections will end the BJP’s 15-year winning streak. The decline of Congress continues.
Corporate profits slump sharply to 3.48 per cent of GDP in fiscal second quarter
The ratio of India Inc’s profit to national GDP declined sharply in the previous two quarters, reversing the steep rise seen in the second half of financial year 2020-21 and 2021-22. The combined net profit of 3,361 listed companies was equivalent to 3.48 per cent of India’s GDP at current prices in the September quarter, down from 3.57 per cent in the three months to June, and 4.39 per cent in the second quarter of the preceding financial year, which was a decadal high. The September 2022 quarter number was, however, higher than the pre-Covid average of 2.3 per cent.
Why it’s important: Shrinking margins in the manufacturing sector led the decline, indicating that higher input costs and lower price realizations in multiple segments have started hurting.
Private equity exits from newly listed firms, mutual funds enter
Private equity investors are cashing out of several new-age companies that went public last year and domestic institutions are buying into them, latest data show. Private equity firms have offloaded shares worth Rs 14,935 crore through block deals over the past year through November. While a part of this was absorbed by other foreign institutions, domestic entities like mutual funds have purchased a substantial chunk, according to Venture Intelligence. More than 40 per cent of the shares sold in block deals in 2022 were bought by domestic institutional investors.
Why it’s important: Local mutual funds are betting on promising fundamentals, relatively low free-float and attractive valuations, showing their long-term belief in the India story.
India likely to export cellphones worth $9 billion in the year to March
India will probably export mobile phones worth about $9 billion in 202-23, up from $5.8 billion in the year earlier, as manufacturers step up production and outward shipments. The country is set to achieve overall electronics manufacturing of $300 billion by 2025-26. Electronics worth roughly $87 billion were manufactured locally in 2021-22, which is expected to grow to $100 billion in the current financial year, according to data from the India Cellular and Electronics Association. Cellphone exports have gone past $5 billion in the first seven months starting April, more than double the $2.2 billion clocked in the same period last year.
Why it’s important: The rapid development of an ecosystem for electronics manufacturing and a subsequent rise in exports are being primarily led by the government’s production-linked incentive schemes.
India set to emerge as a major manufacturing hub for Apple’s iPhone
India is set to emerge as a major hub for iPhone manufacturing as US smartphone giant Apple looks to diversify production units outside China. The percentage of locally made iPhones is likely to rise to over a fifth of total output in value in the next three to four years, from the current 5 per cent, industry insiders said. Manufacturing in India by Apple is set to rise sharply as the company’s three contract manufacturers, Foxconn, Pegatron and Wistron, boost production and exports, driven by the government’s Rs 41,000-crore production-linked incentive scheme.
Why it’s important: Apple is said to have speeded up its plans to make the shift from China after Covid-induced lockdowns disrupted production at Foxconn factories in that country. China’s loss is India’s gain.
Azim Premji Foundation to enter healthcare sector after investing in education
More than 20 years after setting up the Azim Premji Foundation to improve teaching in government schools, the country’s biggest philanthropic billionaire has turned his attention to healthcare for the poor. The foundation will set up primary healthcare clinics in some of India’s most backward towns, which will be followed by multispecialty hospitals and a medical university, executives said.
Why it’s important: The decision to make healthcare its second focus area marks the biggest change in the history of the Azim Premji Foundation since it began operations in 2001. This could lead to significant gains in public healthcare in underserved areas.
GST Council to consider proposals to decriminalize violations, set up tribunals
The Goods and Services Tax Council will consider proposals to decriminalize GST law and establish appellate tribunals to resolve disputes at its next meeting on 17 December. The 48th meeting of the Council will consider proposals by a group of ministers led by Dushyant Chautala, deputy chief minister of Haryana, which examined the changes needed in GST laws to make them conform with various court orders concerning different aspects of tribunals.
Why it’s important: The proposed tribunals will help in ensuring uniformity and quickly resolving GST disputes. Decriminalizing relevant laws will improve ease of doing business and reduce the compliance burden.
Foreign regulators need to recognize India’s robust financial infrastructure
After having recently said that the attention of developed economies is now on the financial benchmarks of India, Reserve Bank of India deputy governor T Rabi Sankar said the primary issue is recognizing the financial infrastructure of the domestic agency. His comments come after the derecognition of the Clearing Corporation of India by the European Securities and Markets Authority. The clearing house hosts the trading platform for government bonds and overnight indexed swaps. The move by the European regulators came after the Reserve Bank declined to permit the rights of audit and inspection over the Clearing corporation.
Why it’s important: The impasse over the extent of European oversight into the clearing corporation continues. Once the derecognition comes into effect in May, it will hamper the bond and derivative trading operations of European banks in India.
Aditya Birla leads race to purchase TCNS Clothing Company for about Rs 3,000 crore
Aditya Birla Fashion has emerged as the frontrunner to acquire TCNS Clothing Company, which owns brands such as W, Elleven and Aurelia, pulling ahead of Nykaa in what has narrowed down to a two-horse race. Promoters of the retailer, the New Delhi-based Pasricha family, and PE investor TA Associates together own 61.24 per cent of the company. The transaction will also trigger an open offer for an additional 25 per cent stake. If the open offer is fully bought into, the new investor could own up to 86.24 per cent of TCNS for Rs 3,016 crore. The current market capitalization of TCNS Clothing is Rs 3,507.16 crore.
Why it’s important: The acquisition could well be the largest branded apparel buyout by the Aditya Birla group. It will help the conglomerate consolidate its presence in the clothing retail segment.
Chief justice in favor of imposing costs on frivolous commercial cases to avoid clogging
Chief Justice of India DY Chandrachud has mooted the prospect of pre-hearing costs for commercial cases in order to curb frivolous matters from clogging up the system. “It is time for the Supreme Court in commercial matters to say that first deposit Rs 5 crore cost as they take most of the court’s time, and if it’s frivolous then the cost will remain with us,” he said in court. “Time has come to impose anticipatory costs in commercial matters which come to the Supreme Court against interim orders.” The bench was hearing an appeal by Edelweiss Special Opportunities Fund against Future Corporate Resources.
Why it’s important: the top judge’s comments come at a time when there is heightened concern and debate over the pendency of court cases involving commercial transactions. Imposing a mandatory cost could reduce litigation.
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