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

Invesco is in talks to invest around $500-600 million in Swiggy

US asset manager Invesco is planning to invest around $500-600 million in Swiggy, reported The Economic Times.

Why it’s important: Swiggy is finalising the new financing round.
The move is expected to push Swiggy’s valuation to around $10 billion.
The valuation is almost double the $5.5 billion valuations it had a few months back.

The plan will also catapult Swiggy to the country’s most valued privately owned startups after Byju’s and Paytm.

 

High LNG prices to hurt sector in long run: GAIL chairman

GAIL Chairman Manoj Jain, in an interview with The Economic Times, said that the record-high LNG prices are going to affect the sector negatively in the long run.

What the chairman says: This will slow industries’ switch to natural gas.
It will also delay India’s plan of launching clean fuel LNG-powered trucks.
The high prices are good for GAIL’s margins, but a “setback” to consumers and industry.

A scramble to replenish storage ahead of winter by big consumers like China and Japan has also pushed up prices.

 

Our focus has been on medium-sized companies in India: Mark Mobius

Founder of Mobius Capital Partners and veteran emerging markets investor Mark Mobius in an interview with The Economic Times said that the Indian market looks very good because of the changes that are taking place in the economy generally.

What Mobius says: India to get a greater share of the money coming into the emerging markets.
China's Evergrande issue is really domestically-oriented. It’s not going to have that much impact other than the impact on the index.
Our focus has been on medium-sized companies in India.
Focusing very closely on companies with good growth prospects and low debt.
We are into software companies, companies that produce materials for infrastructure, such as pipes and healthcare testing companies.

Don't get involved in companies that are not making money.

 

JSPL unit Sarda Mines top bidder for Kwality Dairy

Jindal Steel and Power Limited’s subsidiary Sarda Mines is the top bidder for Kwality Dairy, reported The Economic Times.

Why it’s important: The firm wins e-bid with an offer of Rs 121 crore.
The bid is awaiting NCLT’s final approval.
Sarda Mines is not a directly-owned JSPL firm.
The Odisha firm is a supplier of iron ore to its steel plants and Sarda Mines recently bought a 0.52% stake in JSPL through bulk deals.

Haldiram’s and French dairy firm Lactalis were interested parties in buying Kwality Dairy.

 

Govt plans solar energy to power cold chain facilities

The government is planning to make use of solar energy to power the cold-chain facilities for storing vaccines, reported Mint.

Why it’s important: This will supply uninterrupted power to cold-chain facilities.
This could be a major push for the COVID-19 vaccination drive.
The power supply is erratic in several parts of the country, especially rural India.
India has over 29,000 cold chain facilities for various vaccines.

The model could be expanded to other cold-chain facilities later.

 

Pharma major Lupin eyes big diagnostics business

The pharmaceutical major Lupin is entering the diagnostics business, reported the Business Standard.

Why it’s important: The plan is to tap the huge potential in the sector.
Lupin wants to extend its expertise as well to tap the market.
It has low entry barriers and gives high returns on capital.
The sector is also witnessing double-digit growth.

Lupin wants to go for a franchise model with an initial investment of Rs 2-5 lakh.

 

SpiceJet’s cargo business hive-off plan faces hurdles from creditor

The plans of SpiceJet to hive off its logistics and cargo business is facing legal hurdles, reported Business Standard.

Why it’s important: It has plans for a separate company called SpiceXpress.
SpiceJet lenders and aircraft lessors challenging the move and approached the court.

They want the airline to clear their dues before going for any other plans.

 

Rate cut not mispricing of risks: Union Bank of India's head

Rajkiran Rai G, MD & CEO of Union Bank of India, and Chairman of Indian Banks’ Association (IBA), in an interview with Business Standard, said that the cost of funds has gone down while operating efficiencies have improved with digitisation.

What he says: The rate cut is not due to competition among banks.
Banks are not losing money by giving such rebates.
It is not mispricing risks.
Retail is doing well. So is agriculture. In MSMEs, banks had stress and to some extent, it continues.

A stable interest rate scenario is expected for some more time.

 

‘There’s growing interest in mediation in India’

Singapore’s Minister for Law K Shanmugam, who also heads home affairs, in an interview with Business Standard said interest among the Indian legal fraternity in mediation is growing.

What the Minister says: The Supreme Court of India upholding the Emergency Arbitrator Award in the Future-Amazon arbitration battle, under SIAC rules, is a welcome development.
It upholds the fundamental principle of party autonomy in arbitration and gives parties greater confidence in seeking expeditious interim relief via arbitration.
The pandemic has accelerated the adoption and use of technology in the context of international dispute resolution.
Singapore and India are also collaborating closely in mediation.

There has been growing interest in mediation as a viable form of alternative dispute resolution domestically.

 

‘Sustained low-interest rates will impact banks’ net interest margins’

Akash Lal, senior partner, McKinsey & Company, in an interview with Business Standard said banks need to increase productivity by 25-30 per cent to reach pre-COVID-19 levels of profitability.

What he says: Private equity investments have quadrupled in the last five years.
The Indian bond market crossed $100 billion in 2020.
Equity flows from foreign portfolio investors remained robust.
India remains a preferred choice for FPIs owing to the prospects of better economic growth.
India should sustain the long-term growth of mutual funds, especially in tier-2 and tier-3 cities.
The private equity role can be increased.
The country must speed up disinvestment plans.
Sustained low-interest rates will impact banks’ net interest margins.Banks will need to increase productivity by 25-30 per cent to continue at pre-COVID-19 levels of profitability.