Finance ministry allows Vodafone Idea to convert government dues to equity
The finance ministry has cleared a proposal to convert Vodafone Idea’s dues on accrued interest on deferred adjusted gross revenue worth Rs 16,130 crore into equity. The wireless operator now needs a nod from the telecom department, which has to finalize the transaction. The conversion has been pending since January this year.
Why it’s important: The equity conversion is crucial for Vodafone Idea to finalize its external fundraise via equity as potential investors want clarity on this issue. The carrier is also talking to banks for debt financing as it needs to invest in its 4G network and roll out 5G services.
India has become the fifth largest equity market in the world
After becoming the world’s fifth-largest economy, India has become the fifth-biggest equity market as well. Although global equities suffered because of the Covid pandemic and the Ukraine war, the Indian share market held firm in 2022. The outperformance has pushed India’s share in global market cap to an all-time high of 3.5 percent, rebounding from 2.05 percent in May 2020, when the pandemic raged.
Why it’s important: India’s strong economic growth makes the country attractive to overseas investors. There has been a steep rise in local mutual fund investments as well.
Indian stock markets may have decoupled from emerging market peers
A big gap has opened up between Indian stocks and other emerging markets, which have been battered swooned in recent months on fears about an economic recession in the US, prompting some investors to conclude that India has decoupled itself from its peers. While MSCI Emerging Markets Index fell about 21.8 percent in the 12 months to 31 August, MSCI India Index declined just 3.17 percent. Similarly, while the EM index shed 6.49 percent in the three months ended August, MSCI India gained 6.14 percent.
Why it’s important: India’s recovery from the pandemic has been much more robust than most emerging and developed countries. Since the country is likely to remain the fastest-growing major economy in the next five years, local stocks will continue to command a premium over other emerging markets.
Adani to build three massive factories as part of $ 70 billion ecofriendly push
The Adani group will build three gigafactories as part of its commitment to invest $ 70 billion in green energy and related businesses, Gautam Adani has said. This will lead to one of the world’s most integrated green energy value chains, the world’s third richest man said.
Why it’s important: The gigafactories and planned investments will generate an additional 45GW of renewable energy to add to Adani’s existing 20GW capacity and 3 million tons of hydrogen, all of which will be completed before 2030.
New policy on lease of railway land gets Cabinet nod, licensing fee cut to 1.5 percent
The cabinet committee on economic affairs has revised the long-term lease policy for the industrial use of railway land. The new policy will see the land licensing fee coming down to 1.5 percent from 6 percent, with a 7 percent annual increase, of the market value of the land. The lease period has been extended to 35 years from five years now.
Why it’s important: The revised terms will help the government’s proposed strategic disinvestment in the Container Corporation of India, an undertaking of the Indian Railways. It will also allow private firms to open more cargo facilities.
Market regulator may allow private equity firms to own asset management companies
The Securities and Exchange Board of India is mulling a proposal to allow private equity funds to own local asset management companies. If a private equity fund has a net worth of Rs 150 crore and is able to establish the ultimate beneficiary, it may be able to invest in AMCs in India. The regulator is also examining whether to allow loss-making sponsors to invest in mutual fund businesses provided they fulfil the fit-and-proper criteria.
Why it’s important: SEBI’s move could boost competition and M&A activity in the space. It would also allow fintech companies to enter the asset management business.
Social media influencers to face stiff fines on non-disclosure of partnerships
India is set to introduce rules to regulate social media influencers, including penalizing them by as much as Rs 50 lakh for not disclosing financial ties with brands, according to the chief of the Central Consumer Protection Authority. The guidelines are ready and will be released shortly.
Why it’s important: The new rules aim to bring transparency into the world of influencer marketing, the practice of paying popular people on social media to promote products. the Indian influencer marketing industry is valued at nearly Rs 900 crore and could surpass Rs 2,000 crore in three years.
Reserve Bank, government proposed new action plan for special rupee accounts
The central government, along with the Reserve Bank, has prepared an action plan to facilitate special rupee accounts for trade settlements. It includes nudging banks to reach out to foreign lenders for opening vostro accounts. Banks have also been asked to process over 115 proposals at the earliest.
Why it’s important: The plan comes in the backdrop of the government’s push towards recognizing the rupee as an international currency, as well as facilitate trade with sanctions-hit Russia and crisis-hit Sri Lanka.
India’s consumer firms see strong festival sales after two years of pandemic
Retailers, FMCG and consumer durables companies are expecting their sales to grow in double digits this festival season compared to pre-pandemic times, as there are no curbs on movement now. Rural areas are likely to see much better demand from the first week of October as rainfall has been good and farmers are expected to harvest a bumper kharif crop.
Why it’s important: India is a consumption-driven economy. Higher sales during the festive season will provide a much-needed momentum to a faster economic recovery after the pandemic disruptions.
Enforcing seat belt rules more important than rear alarms, carmakers say
A strict enforcement of seat belt norms for passengers in rear seats will be more effective in preventing injuries and fatalities than making an alarm go off when people do not belt up, executives of car manufacturers said. Their comments came a day after roads and transport minister announced that seat belt alarms will be made mandatory for passengers in the rear seat of cars.
Why it’s important: It is well-established that wearing of seat belts saves lives in road accidents. Authorities should strictly enforce the wearing of safety belts by passengers in the rear of a vehicle.
