Most CEOs see little or no impact of Ukraine war on Indian economy
Three-fourths of business leaders and chief executives polled in a survey by the Economic Times see moderate or no impact of the war in eastern Europe on the Indian economy. Over half expect revenue growth of over 15 percent. More than 70 percent of 40 CEOs surveyed want the government to slow down fiscal consolidation to support growth and 60 percent do not see the geopolitical situation impacting their capital expenditure plans.
Why it’s important: Corporate leadership in India seem to an optimistic lot. Although the Russian invasion of Ukraine has caused some disruption, domestic business sentiment remains high since CEOs see growth of around 7-8 percent in the next fiscal year.
Reserve Bank may hold rates despite high inflation
Although consumer prices have risen above the Reserve Bank of India’s inflation target band of 6 percent for the second straight month, many economists said the central bank will maintain its accommodative stance to support economic recovery. The chances of a hike in the benchmark interest rate is remote as oil prices have eased and the regulator has taken into account high inflation, they said.
Why it’s important: Retail inflation has been persistently high in the recent past and wholesale inflation has been in double digits for almost a year. This would have prompted a rate hike but for the extraordinary situation caused by the pandemic. Corporate India would welcome such as stance by the monetary regulator.
Talks fail between Amazon and Future to resolve legal tussle
The talks between Amazon and the Future Group aimed at resolving their battle in courts and tribunals over Future’s proposed $ 3.4 billion sale of retail assets to Reliance Industries have failed, the companies told the Supreme Court. Amazon will now begin arbitration proceedings in a Singapore tribunal, which had been put on hold by the Delhi High Court. Future Group has agreed to this.
Why it’s important: Reliance Industries has started taking over the supermarkets of Future Retail over nonpayment of rent and has started rebranding them as Reliance stores. Amazon has strongly opposed this by publishing public notice accusing Reliance of fraud and requesting the apex court to stop the takeover of the stores.
Walmart optimistic on PhonePe prospects, no decision on Flipkart IPO
Walmart is bullish on the prospects of digital payment firm PhonePe, chief executive Doug McMillon said. However, the retail giant is not yet ready to talk about the initial public offering of PhonePe parent Flipkart, which the American firm purchased for $ 16 billion in 2018.
Why it’s important: The restrictions and disruption caused by the Covid-19 pandemic has been a boon for digital payments firms, and PhonePe is no exception. However, market volatility and adverse investor sentiment after Russia invaded Ukraine have made companies cagey about IPO plans.
Yes Bank must decide if it is investor or lender to Dish TV: Subhash Chandra
Private lender Yes Bank should decide whether its role is that of a a shareholder of Dish TV India or a lender so that the Essel group can take steps to settle pending issues, group patriarch Subhash Chandra. Chandra said his family’s settlement offer was in Yes Bank’s court, but the bank had not taken any steps to take the matter forward.
Why it’s important: The shareholders of Dish TV in December voted to remove the promoter-nominated director on the company’s board. They also voted against the annual accounts for the year ended March 2021. Yes Bank has seized the Chandra family’s pledged shares after a loan default, plunging the family’s stake in Dish TV to 6 percent.
Zomato to acquire online grocery supplier Blinkit in stock deal
Zomato is set to take control of Blinkit after the food aggregator extended a $ 150 million emergency loan facility to the quick commerce startup. The share-swap deal would see Blinkit own around 10 percent stake in Zomato and would be valued at around $ 750-800 million.
Why it’s important: The latest valuation of Blinkit will dethrone it from its unicorn status of being valued at over $ 1 billion. It could be an indication that Blinkit, run by Grofers India, may be struggling to sustain the 10-minute delivery of groceries. It might also dampen investor euphoria around cash-guzzling quick-commerce startups.
LIC’s growth slows to a crawl ahead of public listing
Business growth at Life Insurance Corporation of India has fallen ahead of its initial public offering, even as private rivals have leapt ahead. While the state-run insurer saw just 0.24 percent growth in new business premium to Rs 1.56 trillion in the 11 months of 2021-22, private life insurers clocked a 24.7 percent rise to Rs 982.13 billion in the same period, regulatory filings show.
Why it’s important: The government has already indicated that it might delay the launch of LIC’s IPO because of market volatility and subdued investor interest due to geopolitical uncertainty. LIC has till middle of May launch the much-anticipated mega offer.
Hotel and travel booking surge as Holi weekend approaches
As the Covid-19 pandemic recedes and Holi festivities begin, hotels and travel companies are seeing a rush of bookings. Airbnb’s India business is almost back to pre-pandemic levels, its cofounder said.
Why it’s important: The lockdowns and mobility restrictions due to the coronavirus pandemic have severely impacted the travel and hospitality industry in the past two years. That people have restarted leisure travel will be music to the trade’s ears.
Reserve Bank declines to disclose its stance on cryptocurrencies
Revealing the inputs sent by the Reserve Bank of India to the central government on cryptocurrencies at this juncture could affect India’s economic interests, the central bank has said in response to a right to information query.
Why it’s important: The Reserve Bank’s leadership had been wary of crypto assets. Its advice to the government might prove crucial whether India legalizes cryptocurrencies. Although it has said it would tax digital assets, the government is yet to make its stand clear on how it plans to regulate such assets.
Revenues from 5G telecom services may touch $ 9 billion by 2026
India’s 5G revenues are projected to hit $ 9 billion by 2026 and will account for 37.7 percent of its total mobile services revenues, according to projections by Global Data, a research agency. Despite this expansion, India will account for just 1.39 percent of global 5G revenues.
Why it’s important: The share in global revenues will remain low in the country as tariffs are among the lowest in the world. Also, it is likely that 4G will continue to play a dominant role for a while after the launch of 5G services.