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

Stocks

IIFL, Edelweiss may board Ola, double valuation to $ 7 billion

Ola is finalising a pre-IPO financing round which is likely to be led by IIFL Wealth Management and Edelweiss Private Equity, The Economic Times reported.

Why it’s important: The move will take the ride-hailing company’s valuation to as much as $ 7 billion.
The latest fundraise could be in the range of $ 250-500 million.
It signals investor interest in the mobility sector as the economy opens up.
Existing investors such as private equity fund Warburg Pincus, Japan’s SoftBank are likely to participate in the latest fundraising.

Ola plans to raise up to $ 1 billion through its public offering which is expected to hit the markets in the next few months.

Companies to increase prices of discretionary items by 8-10 percent

Companies and retailers selling discretionary products such as apparel, electronics, liquor and cosmetics said they will increase prices by 8-10 percent The Economic Times reported.

Why it’s important: The price hike is to offset rising raw material and supply chain costs although it could impact demand for some products.
Grocery essentials, personal care products, packaged food, and dining had already raised prices and they are planning another round of hikes in the new year.
The cost challenge comes at a time when retailers across segments breached the pre-pandemic sales mark during the festive season.

Prices of key inputs such as glass, cotton, steel, copper, chips, and chemicals among others have risen sharply, impacting margins.

Vi wants to defer payment of Q2-Q4 dues

Cash-strapped Vodafone Idea has informed the telecom department that it won’t be able to pay quarterly licence fees and spectrum usage charges for the fiscal year totalling about Rs 6,000 crore, The Economic Times reported.

Why it’s important: It has sought permission to pay all these dues together with interest in April-May 2022.
The DoT is yet to take a call on the written request.
The move has come after the government announced relief measures for the sector recently.
Vi, which is due to announce its second-quarter results on Friday.

It normally pays about Rs 2,000 crore per quarter as licence fee and spectrum usage charge.

TVS Group’s logistics arm gears up for Rs 3,000 crore IPO

TVS Group plans to take its logistics business public, with a Rs 2,500-3,000 crore share sale in the first half of next year, Mint reported.

Why it’s important: TVS Supply Chain Solutions (TVS SCS) offers transportation, logistics, material handling, in-plant warehouse management, and aftermarket warehousing facilities in India.
It also offers logistics and supply chain-related services in the UK, US, Spain, Germany and Thailand.
TVS SCS operates on an asset-light business model, working with clients across automobiles, beverages, manufacturing, electronics and defence.

It has for a long time driven its growth through private equity funds.

GDP to grow at 9-11 percent this fiscal; 7 percent in FY23: Debroy

Bibek Debroy, chairman of the Economic Advisory Council to Prime Minister Narendra Modi said in an interview with Mint that India’s economy is expected to grow at 9-11 percent this fiscal.

What Debroy says: He said that the country will register a 6-7 percent growth next year.
Debroy said the economic recovery is broad-based, and inflation is under control.
He says part of the reason for this is the low base.
Debroy is also keenly looking at how micro, small and medium enterprises and the urban labour market are faring.
He is confident that the labour market will also recover with a time lag.

Debroy said the commodity price surge may be contributing to inflation, but he would not worry too much about it.

Bibek Debroy says: “If we accept that in the year before there was a 7 percent decline, then merely to compensate for it, I will get a 7 percent growth. I repeat that not all of the growth is because of the base effect; some of it is. That is why I think people who are still arguing that 10 percent is not possible are statistically not realistic.”

BharatPe plans scheme to enrol merchant partners as investors

BharatPe is planning to make its merchant partners stakeholders in the company with the start of a $ 100 million Merchant Shareholding Programme, Mint reported.

Why it’s important: It will encourage and reward loyalty among its merchants ahead of a planned public listing in about three years.
It will roll out the incentive to its more than 7.5 million existing merchant partners soon.

The programme will also be offered to new merchants joining the platform.

India is a top-3 priority market for us: Rado CEO

Adrian Bosshard, global chief executive officer of Rado, said in an interview with Mint, that India is a top-three priority country for the company.

What he says: 2020 was the worst year for the company.
Everywhere in the world, especially in India, there was a positive rebound.
The Diwali period for Rado was a record month in the history of the company in India.
Gifting was big in India during this time and so the lower price points where we had more affordable watches did well during this time.
It was better than the 2019 Diwali for us in terms of volumes.
For Rado, India is among the top three countries.
It is an absolutely crucial market.
Only 3-4 percent of the people can afford a Rado watch now, but the purchasing power will grow, and we see many opportunities.

Don’t see the Apple Watch as a competition to a premium Swiss watch because it is a digital device, an electronic consumption good and not a piece of art like a watch.

Govt wants ONGC to bring in private players to boost output

The government wants ONGC to farm out portions of its producing assets to private entities to boost crude oil and gas output, Business Standard reported.

Why it’s important: ONGC’s crude oil output has been steadily declining over the past five years.
The Ministry of Petroleum and Natural Gas has suggested that this could be in the form of selling stakes to private players and exploring partnerships.
“We are telling ONGC to increase the area under exploration,” Petroleum Secretary Tarun Kapoor told Business Standard.

“India’s crude oil production should rise. For that, ONGC has to expand its portfolio and do more exploration. It should involve private players for deep-sea exploration and ramping up production in existing fields.”

From 2025, all new vehicles will need to be E20-compliant

India is aiming to sell only petrol blended with 20 percent ethanol (E20) from 2025-26, Business Standard reported.

Why it’s important: This means all new vehicles sold in the country will need to be E20 Compliant from 2025.
The move may force automakers to reconfigure their existing petrol vehicles to operate using blended fuel.

Automakers said they were ready to be E20 compliant even as some expressed concern.

Petroleum Secretary Tarun Kapoor said: “E20 petrol will be introduced from 2023. In the transitional period, both E20 and E10 will be available but at different retail outlets.”