Indian equities break out of four-day losing streak, rise 1 per cent
The Indian stock markets rebounded after falling for four straight trading sessions on value buying. The Sensex rose 1.2 per cent to close at the psychologically important level of 60,566.42 points. The 50-share Nifty expanded 1.2 per cent as well to close at 18,014.6 points, also reclaiming psychological grounds. Investors gained Rs 5.58 lakh crore, getting some relief after nearly Rs 16 lakh crore of wealth was lost last week due to the resurgence of covid infections in China. The 207.8-point rise in the Nifty and the 721-point bounce in the Sensex were the highest since 24 November.
Why it’s important: Investors are hopeful of a Santa rally in the last week of the year to recoup losses in December. Markets are, however, expected to remain choppy.
Videocon’s Venugopal Dhoot arrested by CBI in ICICI loan fraud case
The Central Bureau of Investigation has arrested Videocon Group founder Venugopal Dhoot in connection with its probe into loans of Rs 1,730 crore sanctioned by ICICI Bank. The arrest came days after the investigating agency arrested ICICI Bank’s former CEO and managing director Chanda Kochhar and her husband Deepak Kochhar for alleged irregularities in financial transactions with the bankrupt conglomerate. All three have been remanded to CBI custody.
Why it’s important: The federal sleuths have claimed that the Kochhar duo are giving evasive answers. They want to confront Dhoot with the Kochhars. The CBI is expected to file charges on the loan fraud case.
India’s start-up founders seek to cut cash burn, start showing profits in 2023
Conserve funds, control spending and turn profitable—this was the common refrain among India’s top founders, investors, and internet executives in the annual State of Startups survey by the Economic Times. The poll, which sought responses from over 60 key people, came amid one of the worst downturns for the technology industry globally. As start-ups tighten belts, 64 per cent of the respondents said the funding crunch may ease in the second half of 2023, while 21 per cent said it could become worse and 14.8 per cent said the environment will remain the same as this year.
Why it’s important: Raising fresh money could be challenging next year as a funding winter sets in. Cutting cash burn and turning profits could be the only viable way for start-ups to survive and flourish.
Advent to acquire 50.1 per cent in Suven Pharma for Rs 6,313 crore
Private equity firm Advent International will buy 50.1 per cent stake in Hyderabad-based Suven Pharmaceuticals for Rs 6,313 crore and merge it with its portfolio company Cohance Lifesciences. The promoter Jasti family will hold only 9.9 per cent stake if the deal goes through regulatory approvals. Advent will launch an open offer for another 26 per cent at Rs 495 per share. If the open offer is fully subscribed, it will have to pay another Rs 3,276 crore and the total deal size would jump to Rs 9,589 crore.
Why it’s important: This would be one of the biggest acquisition deals in the pharma space in India. There has been keen investor interest in the sector since business is rapidly expanding post the pandemic.
Exporters concerned as covid resurgence in China derails trade
The covid surge in China has triggered fears among Indian exporters as it may add to the softening of demand from Western countries. China, India’s largest trading partner, reported an 11 per cent decline in imports in November, and the latest outbreak could further hit exports of Indian goods. The Chinese government’s decision to stop publishing daily covid data has created significant uncertainty about the severity of the spread.
Why it’s important: The impact on Indian exports from the China outbreak will not be immediately felt because orders for the next quarter have been received. But the medium-term outlook could be choppy.
Tight liquidity, high credit growth force banks to raise deposit rates
Many banks are hiking deposit rates as competition hots up to garner deposits in a scenario of tight liquidity and high credit growth. Bank of Baroda has hiked deposit rates for the second time in the current quarter. Private lender IDBI Bank has come out with a limited period offer on its term deposits. It is offering 7.6 per cent interest rate for a tenor of 700 days, effective from December 2022. Other major lenders such as Punjab National Bank, Canara Bank, State Bank of India, and Bank of India are offering peak interest rates of 7.25, 7, 6.75 and 6.75 per cent, respectively.
Why it’s important: Monetary policy transmission in India is typically slow when the central bank raises benchmark rates. It is finally catching up as credit demand rises amid tight liquidity.
Telecom department calls operators over worsening service quality
The department of telecommunications has called mobile phone operators for a meeting on December 28 over deteriorating quality of services. There has been an increase in complaints about call drops and call failures, particularly as mobile operators shift to 5G. Both the department and the Telecom Regulatory Authority of India are concerned at the rising service quality issues.
Why it’s important: There is not denying that call quality has deteriorated in the recent past. Although cellphone operators have said this is temporary, they must do more to provide promised service to customers.
Bharat Biotech to soon decide on price and availability of covid nasal vaccine
India’s first nasal spray vaccine for covid iNCOVACC will soon be introduced as a booster dose, Suchitra Ella, managing director of Bharat Biotech International, the company making the vaccine, said in an interview. The development comes after the uptake of booster dose jabs slowed to a trickle, with only 27 per cent of Indians taking the shot. The drugmaker plans to follow this up with nasal spray vaccines for specific covid variants, Ella said.
Why it’s important: The nasal vaccine for covid is expected to ease the immunization effort. However, interest in getting booster doses seem to be waning in the country.
Cricketer Shikhar Dhawan’s venture capital fund scouts for sports investments
India cricketer Shikhar Dhawan’s new venture capital fund Da One Global Ventures is scouting for sports technology companies worldwide to make early-stage investments and will start deploying funds from the first quarter of the next financial year, he said in an interview. The Abu Dhabi-based fund’s investments would range from $ 500,000 to $ 5 million. The fund, which plans to raise $ 50 million from investors, was announced during the Abu Dhabi Finance Week.
Why it’s important: Sports tech is an emerging sector with high growth potential. Dhawan wants to be an early mover as the segment is yet to see big-ticket investments in India and globally.
TV networks shy away from movie rights as viewership declines
Many films are selling on the cheap to broadcasters and remaining unsold as the price of acquiring films has plummeted amid a shift towards streaming platforms. Many films, other than big-budget ones, are struggling to find buyers at even half the asking price. Over the past few months, trade experts say the box office failure of films like ’83 and Dhaakad made it tough to strike satellite television deals, and a lot of small films, particularly those in Malayalam and Tamil, have remained unsold to TV.
Why it’s important: This will remain a trend as viewership patterns are shifting from TV to streaming platforms. There has been a 40 per cent drop in viewership and advertising for movie channels in recent times.
