MORNING SCAN: ALL THE BIG STORIES TO GET YOU STARTED FOR THE DAY
#1. Foxconn looks to manufacture artificial intelligence servicers in Tamil Nadu
Foxconn plans to begin making AI servers at its Indian facilities, the Economic Times reported, which indicates significant expansion of the Taiwanese contract manufacturer’s operations in the country where it’s the lead assembler for Apple’s iPhone. Foxconn plays a key role in building AI servers for global technology giants such as Amazon, Google, Microsoft and Nvidia.
Why it’s important: Foxconn is expanding its business footprint in India. Manufacturing computer servers after building factories for make iPhones seems like a natural progression. The company may also consider making electric vehicle parts in the country as well.
#2. Business promoters sell Rs 62,000 crore worth of shares in companies in first half of 2024
Indian promoters have offloaded shares worth Rs 62,000 crore in the first six months of 2024, the highest since 2019, the Mint reported, citing numbers from Prime Database, a markets data provider. Promoters had raised Rs 61,277 crore through stake sales in the year-ago period.
Why it’s important: It is not unusual for promoters to go on a spending spree during a bull run. These can be viewed positively, evident from the recent sales to long-term investors boosting holdings of foreign and domestic institutional investors, which bodes well for long-term growth.
#3. Reserve Bank finds mutual fund debt funds with assets of Rs 1.76 lakh crore under stress
The Reserve Bank of India has found 28 open-ended debt schemes of 12 mutual funds with total assets under management of Rs 1.76 lakh crore under stress in April, the Hindu Businessline reported. The banking regulator said all the funds have reported initiation of remedial action to be completed in the prescribed timeframe. A few instances of the ratios falling below the threshold were addressed by the respective asset management companies in a timely manner, it said.
Why it’s important: Inflows into debt schemes have been volatile in recent times on the back of expectations of repo rate cut. That could have led to breach of stress test benchmarks, which is expected to be corrected in a short time.
#4. Battle for cement leadership in India may intensify between Adani and Birla groups
The battle for leadership in the cement sector may intensify with the Adani group announcing ambitious expansion plans and Kumar Mangalam Birla group boosting its position by buying a 23 percent stake in India Cements. Adani has unveiled a $3 billion war chest aimed at expanding through acquisitions.
Why it’s important: With that India Cements acquisition, Birla would retain its pole position but the lead with Adani could narrow once the latter starts its acquisition spree.
#5. Government working on promotion fund to boost exports by small and medium enterprises
The federal government may establish a fund to support exports by small businesses, the Mint reported. A proposal for the fund may be placed in the upcoming budget by the finance ministry, which may have a corpus of around Rs 5,000 crore. The fund is likely to focus on first-time exporters with an annual turnover of less than Rs 25 crore.
Why it’s important: There are several schemes already in place to boost exports by small and medium companies, but a dedicated fund would provide an additional impetus.
#6. Bankrupt Jaiprakash Associates likely prime acquisition target by Adani, JSW groups
Insolvency proceedings against Jaiprakash Associates has laid it open as an acquisition target of the Adani group, JSW group and others, the Hindu Businessline reported. Earlier this month, the National Company Law Tribunal directed insolvency proceedings against the firm, effectively halting the agreement between it and Dalmia Bharat, which had agreed to acquire the cement, clinker and power plants for Rs 5,666 crore.
Why it’s important: Adani is said to be interested in one of the cement plants of Jaiprakash Associates. JSW Cement is also on the lookout for acquisition opportunities in the sector.
#7. Indirect tax authority announces major relief to foreign firms on loans to Indian arms
In a relief for overseas firms giving loans to Indian subsidiaries, tax authorities have said goods and services tax will not be imposed on them, subject to some caveats, the business Standard reported. Additional fees, commissions, or related payments over and above the amount charged as interest on these loans will attract GST at 18 percent, the Central Board of Indirect Taxes and Customs said.
Why it’s important: T move is expected to end uncertainties on taxing loans and credit among group companies, which has been a matter plaguing foreign entities for long.
#8. Reserve Bank turns scanner on payout to senior executives in shadow banks
Payouts to key management personnel in nonbanking financial companies are under the banking regulator’s scrutiny, the Business Standard reported, which is follow-through on the Reserve Bank’s April 2022 circular of April that asked NBFCs in the middle and upper layer of its four-tiered scale-based regulatory framework to put in place a board-approved compensation policy.
Why it’s important: The banking overseer feels that the proportion of variable pay needs to be higher towards the top of the pyramid and a balance be struck between the cash and share-linked instruments in the variable pay. NFBCs have no option but to fall in line.
#9. Government’s capital spending on roadbuilding may see modest increase in budget
The central government may roll out yet another increase in capital expenditure allocations for the roads ministry in the budget as it looks to maintain its focus on rapid infrastructure development in the current financial year, the mint reported. The increase in allocations may range between 5-120 percent of the 2023-24 revised estimates of Rs 2.64 lakh crore.
Why it’s important: The government had led from the front in boosting infra spending in the country. It is now time for the private sectors to also do its bit.
#10. Tata Group retains crown as most valuable brand in India at 28.6 billion
The Tata Group, with a brand value of $28.6 billion, has retained its title as India’s most valuable brand, according to a new report from brand valuation consultancy Brand Finance, the Economic Times reported. As per the Brand Finance India 100 2024 report, the group’s Taj Hotel brand has been ranked the strongest after being valued at $545 million.
Why it’s important: The Tata Group’s brand value highlights the first time an Indian brand is close to the $30 billion value mark, reflecting the prevailing optimism in the local economy.
2024-06-28T02:07:01Z dg43tfdfdgfd