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

A round-up of the biggest articles from newspapers.

A round-up of the biggest articles from newspapers.

Below is a shortlist of all the important articles from newspapers.

Cairn executives discuss retro tax settlement with the government

The top executives from Cairn Energy have met officials from the finance ministry to seek clarifications on retrospective tax settlement plans, reports The Economic Times.

Why it’s important: The company wants to settle all disputes with the government, but a clear roadmap is needed.

They want to know refund plans on the tax collected if the company goes ahead with the settlement.

The company is likely to withdraw legal proceedings if it gets its refund faster.

Promoters sell stakes to cash in on the market rally

The promoters of around 130 firms sold a small part of their equity in the last three months, reports The Economic Times.

Why it’s important: The bullish stock market rally has prompted promoters to cash in.

Promoters of mid-and small-cap firms sold their shares worth ?21,000 cr in the open market.

HDFC Life, Coforge, TVS Motor, CG Consumer, Max Financial Services, Quess Corp, Bharat Forge and GMR Infra, are some of them.

Tata Group to rejig private equity business

The Tata Group is planning to rejig its private equity business, reports The Economic Times.

Why it’s important: It is part of its consolidation plan to bring its future limited partner commitments under a separate entity.

It is also closing its flagship Tata Opportunities Fund.

Existing investors or limited partners to get back their money by 2022-end, by selling shares in the businesses or through IPOs.

Bus manufacturers slow capital expenditure plans, focus shifts to EVs

The bus manufacturers in the country are not in a mood to go for capital expenditure, says The Times of India report.

Why it’s important: The move is the aftereffect of poor sales that slumped to 15,000 units in FY21 and 5,000 in Q1FY22 from about 80,000 annually before the pandemic.

They think this slow patch will continue throughout the year.

Big produces such as Ashok Leyland and Tata Motors are watching markets before any new investments.

Now, the focus is also shifted to push electric models.

Grey market premium for IPOs down, weak listings likely ahead

The grey market premiums for the IPOs are slowing down, reports Mint.

Why it’s important: It shows that the appetite for IPO is thinning.

This may be because of so many IPOs are coming to the market one after another.

With increasing borrowing costs to fund IPOs and not-so-great debuts, investors are facing losses.

The weak debuts are flagging investors that the IPO bandwagon may derail.

Hindujas plans to develop luxury homes and hotels 

As the Hinduja group is planning to develop luxury homes and hotels across the world, G.P. Hinduja, co-chairman of the Hinduja group, shared his vision for the new business in an interview with the Mint.

What Hinduja is saying:

We did not get into the Old War Office project not only to make money but to create a lasting legacy.

We hope to make it one of our finest and most memorable projects so far.

This project could be among the top three or five hotel properties in the world, and also a fitting tribute to the illustrious journey of the Hinduja group’s achievements spanning so many decades.

We have a huge land bank in Mumbai, Bengaluru, Chennai and Hyderabad.

In India, we are continuously looking into heritage buildings where now we have the expertise of restoring them.

Larger banks eat into smaller ones’ businesses

Big private banks with its aggressive plans poaching customers from smaller banks, reports Mint.

Why it’s important: Larger banks are offering cost-effective loans.

They have abundant liquidity and limited avenues to deploy funds.

The larger banks can refinance loans with lower rates for corporate borrowers.

Only a negligible few get liquidated that are referred to IBC: Sahoo 

Insolvency and Bankruptcy Board of India Chairperson M.S. Sahoo said in an e-mail interview with Mint said that only a few of the businesses that get referred to tribunals under the Insolvency and Bankruptcy Code are liquidated.

What he says: IBC is evolving in the context of life.

The Insolvency Law Committee continuously reviews the working of IBC to identify issues impacting efficiency and effectiveness of processes and makes recommendations to address them.

The claim regarding the higher incidence of liquidation may appear correct if one watches only the end game, where about 1,600 cases reach the finishing line, that is, end with resolution plan or liquidation.

However, 19,000 cases were closed, either before or after admission, but before reaching the finishing line.

If the entire universe of companies touching IBC is considered, the percentage of companies proceeding for liquidation is negligible.

The IBC is a road under construction.

‘Non-Covid business was back to normal but got hit again’

Metropolis Healthcare is planning to expand its geographical footprint and is targeting to go deeper into the hinterland, says its promoter and managing director Ameera Shah in an interview with the Business Standard.

What the promoter says: The non-Covid business that had come back to normal in the fourth quarter of last financial year again got hit in Q1 of FY22 due to the second wave.

However, compared to last year, the hit was not that bad.

We are adding 90 labs and 1,800 collection centres over the next three years.

We had collection centres in tier-2 cities, but now we are also setting up labs there.

We now have over 4,000 tests. The bulk of the revenues comes from the top 15 cities.

‘Post-Covid, businesses must build on trust & sustained outcome’

Seven months after taking charge as chairman at PwC India, Sanjeev Krishan in an interview with Business Standard talks about the business plans.

What he says: Our strategy is a bet on India.

In many ways, the Covid-19 pandemic has exacerbated the situation and highlighted the unaviability of many businesses and segments alike.

In the post-Covid world, organisations are going to be challenged on every dimension of trust and will simultaneously need to deliver returns.

Our strategy centres around the two fundamental needs confronting our clients – the need to build trust with their stakeholders and to deliver sustained outcomes.

On the job front, a large proportion of the new jobs will be across select high-growth areas, including digital, analytics, cyber and emerging technologies.

BSE has to tighten the bolts: Deven Choksey 

Deven Choksey, managing director at KR Choksey Investment Managers, tells Business Standard in an interview that correction may continue in weaker companies, but relatively bigger ones will see investor interest return.

What he says: The BSE tightened regulations pertaining to mid- and small-cap companies because they were rallying in the market because of heightened trader activity.

I think there is more activity happening at the behest of the traders rather than the actual investors and it was obvious that some corrective action had to be taken.

That’s what the BSE has done, which is to tighten the bolts and clamp down on such ‘trading’ activity.

As regards the road ahead, stocks of weaker companies may see the correction continue, but those that are relatively bigger and stronger will see investor interest come back.

One should stay invested and selectively look at quality stocks and exit weaker ones.

‘Corporate earnings growth and low-interest rates will likely cushion valuations going forward.’

Ashish Shanker, MD and CEO of Motilal Oswal Private Wealth tells Business Standard in an interview that the markets will mirror the estimated earnings growth of 12-15 per cent for the next few years.

What he says: The equity market rally over the last year has been driven predominantly by corporate earnings growth. That and low-interest rates will likely cushion valuations going forward.

The performance of an equity portfolio will likely be driven by stock-specific earnings, rather than the kind of macro rally we saw last year.

Over the next few years, if we expect nominal GDP to grow at an average of 10 per cent, then earnings growth could be between 12-15 per cent.

Companies in the mid-and small-cap categories that are leaders in their respective industries, and which demonstrate pricing power and have low debt, are likely to gain market share.