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


Godrej family looks to divide $ 4.1 billion empire

The 124-year-old Godrej Group worth $ 4.1 billion is planning to divide their assets and businesses among the family members, The Economic Times reported.

Why it’s important: The businesses would be divided between two groups, one led by the families of patriarch Adi Godrej and his brother Nadir, the other by their cousins Jamshyd Godrej and Smita Godrej Crishna.
Family members, their close aides and external advisers are engaged for the purpose.
The talks are being led by Pirojsha Godrej, Adi Godrej’s son, representing one side and Jamshyd is representing the other side.
A resolution is expected in the next six months.

The division is also aimed at resolving certain differences related to business strategy and hands-on involvement of generation.

Delhivery plans to raise $ 1 billion via IPO

Delhivery is planning to raise up to $ 1 billion through an IPO, The Economic Times reported.

Why it’s important: It is getting ready to file its papers within the next week for IPO.
It plans to list before March next year with a “post-listing valuation goal of about $ 4.5-5 billion.”
They have plans for both primary and secondary share sales.

Some of the existing investors are planning for partial exits.

Large companies target PEs to fund new businesses

Top companies in the country are eyeing private equity funds to finance their new businesses, Mint reported.

Why it’s important: The trend is accelerating is due to the debt-fuelled growth that landed many companies in bankruptcy courts recently.
Private equity funds have huge pent-up funds.
Such deals worth around $ 10 billion are likely to be sealed over the next nine months.
The Tatas, Adani and Aditya Birla are seeking significant equity investments from PE firms

Reliance Industries has raised a staggering $ 15 billion from strategic and PE firms over the past year.

“Large corporates have realized that running a company with investment from PEs in lieu of a partial stake is much better than running the same company with a large amount of debt in the books,” said Gopal Agrawal, MD and head of investment banking, Edelweiss.

Railway ministry to take 50 percent of IRCTC convenience fee

IRCTC has to share half the revenue through the convenience fee on train tickets with the Ministry of Railways from next Monday, Business Standard reported.

Why it’s important: However, IRCTC has to figure out a strategy to safeguard its revenues.
It earned Rs 299.13 crore from the convenience fee during 2020-21.

Income from the convenience fee was the largest revenue earner for IRCTC in 2020-21.

Govt to speed up power project approvals

The government is speeding up the approval process for power transmission projects in the country, Business Standard reported.

Why it’s important: The move is to achieve the government’s energy transition goal which focuses on renewable power.
The ministry of power has tasked the National Committee on Transmission and the Central Transmission Utility to make the changes.
The Centre will soon offer 44 power transmission projects worth Rs 41,369 crore, with most under Green Energy Corridors plan.
Now, proposals of expansion of inter-state transmission systems projects up to Rs 100 crore will be approved by CTU.
Proposals costing between Rs 100 crore and Rs 500 crore will be approved by NCT.

The power ministry will approve the proposals costing more than Rs 500 crore.

Attrition an industry-wide concern: Cognizant India CMD

Rajesh Nambiar, CMD of Cognizant India, and President (digital business & technology), in an interview with Business Standard, said that growth in the non-digital business is one of the reasons why the digital business remains 44 percent.

What the CMD says: Like digital, non-digital businesses have seen a tremendous uptick.
The BPO business is growing three times the industry rate.
Growth in the non-US markets was in double digits.
One of the strategic priorities is to globalise Cognizant, which means that it needs to increase the share of revenue from the global growth markets.
Attrition is an industry-wide concern.
Despite these attrition numbers, the company had solid operating growth.
The headcount has grown by 17,000 in one quarter.

Able to balance attrition by bringing in the right level of talent.

Luxury shopping gets a festive lift

After a lacklustre year and a half, luxury retail shopping in the country is gaining traction again, Business Standard reported.

Why it’s important: With new launches and special packages by global brands have brought the energy back in the segment.
People are back at luxury brand shops after the Covid restrictions eased.
For several outlets, those sales figures have touched pre-pandemic levels.

International travel restrictions push customers to flock to the local luxury market.

‘Markets aren’t fully discounting headwinds’

Krishna Kumar Karwa, managing director of Emkay Global Financial Services, in an interview with Business Standard, said that stocks are vulnerable to corrections for various reasons.

What he says: A carefully constructed portfolio should deliver 12-15 percent compound returns over the medium term.
IT, manufacturing, real estate, financial services, capital market intermediaries, and capital goods are expected to do well over the medium term.
Macro headwinds like high oil prices, supply chain disruptions, sticky inflation and the ongoing US-China spats will keep markets volatile.
Stocks will track earnings and valuations.
Companies whose stock prices are reflecting an optimistic outlook three-four years down the line are the most vulnerable to price and time corrections.
There is abundant liquidity in the system.
Liquidity will flow to primary or secondary markets depending upon the opportunities available.
Unique technology-led IPOs, where there are no listed comparable alternatives, will attract interest.Rising commodity prices are a matter of short-term concern.