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


Telcos put in bids worth Rs 1.45 lakh crore on first day of 5G auction

The government has received bids worth Rs 1. 45 lakh crore after four rounds on the first days of India’s first 5G spectrum auction. The expensive 700 MHz band saw bidding for the first time. All bids were at base price. All three private telcos, Reliance Jio, Bharti Airtel, and Vodafone Idea have bid for mid- and high-band airwaves.

Why it’s important: The robust demand is good news for the government as it looks to narrow the fiscal deficit. The stage is now set for wireless services that offer 10 times higher mobile internet speeds than 4G.

HDFC Bank starts drive to attract deposits from non-resident Indians

HDFC Bank has opened a dedicated two-day window on July 27-28 to mobilize non-resident external accounts offering up to 0.5 percentage point additional interest than existing rates in the category. The move coincides with the US Federal Reserve’s expected 0.75 percentage point rate hike. The private lender expects NRIs to buy NRE deposits for 12-15 months.

Why it’s important: Other banks are expected to start similar initiatives. The objective is to ensure inbound flows of dollars amid a rush of the greenback for safe-haven assets worldwide.

India becomes largest importer of seaborne Russian crude oil

India is set to overtake China as the top destination for seaborne Russian crude oil in July. The overall Russian crude oil imports to India could exceed 1 million barrels a day this month, according to London-based energy analytics company Vortexa.

Why it’s important: Hit by western sanctions after it invaded Ukraine, Russia has been selling crude oil to India and China, which have been ignoring the ban, at hefty discounts. The cheaper oil has helped India in reining in runaway crude import bills.

IMF sharply slashes India’s economic growth projections

The International Monetary Fund has lowered India’s economic growth forecast to 7.4 percent from 8.2% estimated earlier in April because of its vulnerability to external shocks and rapid monetary policy tightening. It also cut India’s growth forecast for 2023-24 to 6.1 percent. The fund lowered it prediction for global growth outlook as well.

Why it’s important: It is widely expected that India’s growth will slow down, but IMF’s projection at 7.4 percent is still higher than the 7.2% growth predicted by the Reserve Bank of India.

Metropolis Healthcare looking to raise $ 500 million to fund acquisitions

Diagnostics chain Metropolis Healthcare is looking to raise at least $ 500 million to finance acquisitions in the healthcare and diagnostics lab space. The company has abandoned its aim to find a buyer and may instead bring in a strategic partner. It may raise the money through preferential share allotments and secondary share sales over the next few months.

Why it’s important: As the pandemic has receded, demand for lab tests has petered out and profit margins have dropped at diagnostics firms. Metropolis’ market capitalization has halved in the past six months, and it hopes to turn the tide with its expansion plans.

Adani to invest $ 70 billion in energy transition and infrastructure projects

The Adani Group will invest $ 70 billion in green energy transition and infrastructure projects, chairman Gautam Adani said at the annual general meeting of Adani Enterprises. “We are leading the race to turn India from a country over-reliant on import of oil and gas to a country that might one day become a net exporter of clean energy,” he said.

Why it’s important: Adani has seen remarkable debt-fueled growth in the past decade and a substantial portion of its investments are going towards eco-friendly initiatives such as solar power and green hydrogen.

Bharti’s OneWeb and Eutelsat to merge to rival Elon Musk’s SpaceX

Eutelsat Communications SA and OneWeb Ltd are set to combine in an all-share deal valuing the UK satellite operator at $ 3.4 billion, a step toward creating a European champion to rival the likes of Elon Musk’s SpaceX. After the merger, Bharti Group will be the single largest shareholder of Eutelsat.

Why it’s important: A race has started by corporations and governments to offer rapid connectivity via low-orbit satellites. The merger will provide Eutelsat a strong position in the European market.

Mergers and acquisitions rise as startups diversify into new areas

The second half of 2022 is expected to see further consolidation as startups look for M&A opportunities at attractive valuations to increase market share. This trend was reflected in the first half, when acquisitions stood at 169, with average price at $ 90.2 million, a significant jump from a year ago.

Why it’s important: Funding has come under pressure, lowering valuations. There are also lesser IPOs as tech stocks are being hammered. M&A is the natural avenue for larger startups to keep up the growth momentum.

L&T beats estimates as profit soars 45 percent in fiscal first quarter

Engineering firm Larsen & Toubro reported nearly 45 percent growth in consolidated net profit to Rs 1,702.07 crore for the quarter ended June 30. In the year-ago period, net profit was Rs 1,174.44 crore. This compares favorably with Bloomberg consensus estimates of Rs 1,647 crore for the period. Sequentially, first quarter net profit was down 53 percent.

Why it’s important: The sequential decline in profit indicates that inflationary pressures and the decline of the rupee is affecting margins at the company. To be sure, the first quarter is typically weak for infra and engineering firms because of the monsoon.

Rising call rates point at costlier borrowings in the short term

Call money, or the rate at which banks lend to one other, has risen to 5.50 percent, according to Clearing Corporation of India data. The central bank’s decision to tighten monetary policy is beginning to bite with interbank call money levels rising past the policy repo rate by as much as 0.6 percentage point.

Why it’s important: The Reserve Bank is likely to find it challenging to balance the twin objectives of taming inflation and boosting growth amid shrinking liquidity.