Stock market rebounds after six days of fall
India’s stock markets ended in positive territory for the first time in six days. The Sensex fell 1,082 points before staging a comeback. It ended the session at 57,858 points, gaining 367, or 0.64 percent, while the Nifty rose 129 points, or 0.75 percent, to close at 17,278.
Why it’s important: Bargain hunters rushed to buy beaten down stocks on a day that saw wild swings. A similar wild ride was seen in the US markets on Monday where the Dow Jones managed to erase a steep decline to close in positive territory. There’s still cause for caution as the US Federal Open Market Committee started its two-day meeting to decide whether to raise rates.
IMF raises India’s GDP forecast to 9 percent in 2022-23
The International Monetary Fund has raised India’s growth forecast for financial year 2022-23 while cutting it back to 9 percent for the current fiscal year. The World Economic Outlook estimated 2022-23 growth at 9 percent, up from 8.5 percent earlier. The IMF’s revised growth projection for 2022-23 is higher than that of the Reserve Bank India at 8.7 percent, and the World Bank at 7.8 percent.
Why it’s important: The uptick in the growth estimate by the Fund anticipates a robust recovery in investments and consumption on the back of improved credit flow. It will be on better-than-expected performance of the financial sector.
Maruti’s net profit falls 48 percent, still better than expectations
Maruti Suzuki India reported a 48 percent decline in net profit in the three months ended December. India’s largest carmaker reported a standalone net profit of Rs 10.11 billion in the fiscal third quarter, compared with Rs 19.41 billion in the same period a year earlier. The profit, however, beat estimates by analysts, which led to its share prices rising 6.88 percent to Rs 8,600.60.
Why it’s important: A global shortage of semiconductor chips slowed production and high material costs crimped margins. However, as demand for cars was higher than supply, Maruti raised prices of some models to offset rising manufacturing costs. The company hopes to do better in the fiscal fourth quarter.
Vedanta raises Rs 80 billion loan from Union Bank
Anil Agarwal-promoted Vedanta has availed a secured term loan of Rs 80 billion from Union Bank of India by pledging its shares of Hindustan Zinc. Proceeds of the loan, availed at 7.75 percent, were used to prepay high-cost debt raised two years ago.
Why it’s important: Vedanta prepaid Rs 100 billion term loans availed from four Indian banks at over 10 percent in December. It has announced major restructuring plans in November. The company will demerge its aluminum, iron and steel, and oil and gas businesses as standalone entities and list them separately.
Future Retail seeks more time to repay loans
Future Retail has filed a writ petition in the Supreme Court, requesting it to stop lenders from declaring the company a non-performing asset if the retailer did not pay its dues of Rs 34.94 billion by January 29. Future Retail missed its payment date of December 31, after which it had a review period of 30 days to pay the amount to its lenders.
Why it’s important: The cash-strapped Future Retail is fighting a bruising legal battle with Amazon over its deal to sell its retail assets to Reliance Industries. Lenders have said they would not become party to Future approaching the court for an extension to repay loans.
Budget unlikely to hike railway freight rates and passenger fares
The national budget to be presented on February 1 may keep railway freight rates and passenger fares unchanged. It would mean the national transporter will depend on government budgetary support and extra-budgetary resources to meet capital expenditure needs, while using freight and passenger traffic earnings to improve operations.
Why it’s important: The unchanged rates and fares will offer businesses and individuals some respite from rising costs. Mobility has been rising gradually in the wake of the Covid-19 pandemic and is important for a sustained economic recovery.
Banks to put up for sale four big power projects
Indian banks have put several large electricity generation and transmission projects, including KSK Mahanadi, Lanco Anpara Power, Lanco Amarkantak Power and South East UP Power Transmission, up for sale because there’s a March 31 deadline to close the sale of these projects under the insolvency process.
Why it’s important: Several asset reconstruction companies, the Tata Group, JSW and the Adani Group are expected to bid for these projects. The lenders are hopeful of finding buyers.
James Murdoch and Uday Shankar may buy nearly 40 percent stake in Viacom18
James Murdoch, son of media baron Rupert Murdoch, and Uday Shankar, former chairman of Star & Disney India, plan to acquire nearly 40 percent stake in Viacom18. ViacomCBS, which owns 49 percent stake in Viacom18, may sell a small part of its stake and get diluted to about 10 percent, while Reliance Industries-owned TV18 will continue to hold a majority stake. The deal will include infusions of over Rs 120 billion in Viacom18 from the investors at a valuation of around $ 4 billion, or Rs 300 billion.
Why it’s important: Reliance Industries, along with other investors, plan to invest over Rs 120 billion in the entertainment and sports broadcasting business, responding to an industry consolidation triggered by the Zee-Sony merger.
Unilever to pare 1,500 jobs in business restructuring plan
Household goods giant Unilever will slash 1,500 jobs worldwide as part of an action plan that will restructure its businesses into five divisions, aiming to make the organisational model simpler and more category-focused.
Why it’s important: Unilever has been facing increased pressure to revive sales growth after it had missed profit margin targets. The company also made a failed GBP 50 billion bid for GlaxoSmithKline’s consumer health business last week.
JSW Steel to spend more than $ 1 billion to reduce emissions
India’s most valuable steel maker is planning to spend more than $ 1 billion and use more natural gas as it seeks to cut emissions. JSW Steel has earmarked Rs 100 billion ($ 1.3 billion) to decarbonise, including by shifting to solar power for energy and using more scrap. It’s also in talks with the GAIL India for the supply of natural gas to its biggest factory.
Why it’s important: The steel sector is among the biggest polluting industries in India. Companies are under increasing pressure to pare carbon dioxide emissions and switch to cleaner fuels as the country aims for a net-zero goal by 2070.
