News Nook: Oct 2, 2024

Indian Sector Specific News:

A) Indian Telecommunication:

1) Telecom Industry Urges Govt to Develop Plug-and-Play Zones

The telecom industry urges the government to set up "plug-and-play" manufacturing zones with ready-to-use sheds and essential utilities for faster telecom equipment production.
This initiative will help companies focus on manufacturing rather than setting up new facilities from scratch.
The Department of Telecommunications (DoT) is exploring whether to use existing industrial clusters or create new telecom-specific zones.
Companies involved are Reliance Jio, Bharti Airtel, Vodafone Idea, Nokia, Ericsson, Tejas Networks, Jabil, Dixon Technologies.
Source: Economic Times

2) Telecom Capex Drops as 5G and Broadband Investments Slow

Telecom capital expenditures (Capex) fell by 10% in the first half of 2024, with global Capex projected to decline at a mid-single-digit rate through the year due to reduced investments in 5G and broadband technologies.
Despite this, global telecom revenues are expected to grow at a 1% compound annual growth rate (CAGR) over the next three years.
Top telecom infrastructure vendors, including Huawei, Ericsson, and Nokia, accounted for 37.7% of the market, while Huawei showed signs of recovery after previous challenges.
By 2026, Capex is anticipated to have a negative CAGR of 2%, with wireless Capex declining at a 3% CAGR, reflecting industry-wide challenges.
Source: telecomlead

B) Indian Pharma:

1) FMCG and Pharmaceutical Formulations Set to Outperform: Crisil

Crisil expects FMCG and pharmaceutical formulations to exceed expectations due to rising rural demand, better monsoons, easing inflation, and improved realisations in the US generics market.
Specialty chemicals, agrochemicals, textile cotton spinning, and diamond polishing sectors remain constrained by global economic conditions but have strong balance sheets.
The financial sector, including banks and non-banks, shows strong credit quality, with banks' credit growth projected at 14% for this fiscal year.
India Inc's credit quality has improved, reflected by a rise in rating upgrades driven by infrastructure investments and resilient domestic growth.
Source: Business World

C) Indian BFSI:

1) Cloverdell Investment Set to Exit IDFC First Bank via Block Deals

Cloverdell Investment, an affiliate of Warburg Pincus, plans to sell its entire 2.25% stake in IDFC First Bank through block deals on March 28, worth Rs 1,191.40 crore.
The company is selling 15.9 crore shares at a floor price of Rs 75 per share, a 4% discount to the current market price.
Morgan Stanley is likely the broker for the deal.
Earlier, Warburg Pincus sold a 1.3% stake in December 2023 for Rs 790 crore.
Source: Microsoft Start

D) Indian Renewable Energy:

1) Uttar Pradesh to Attract Rs 1.5 Trillion Investment in Energy Sector

Uttar Pradesh is expected to secure Rs 1.5 trillion in energy sector investments from both public and private sectors over the next 4-5 years.
The investment will cover power generation, transmission, and distribution across conventional and renewable energy.
The state's energy demand is projected to reach 53,000 MW by 2028, with a focus on solar and thermal power.
UP is offering incentives to attract private companies for power projects and manufacturing, with the western region seeing the highest industrial power consumption.
Source: Business Standard

2) REC's Bold Nuclear Power and Green Energy Expansion

Rural Electrification Corporation (REC) plans to invest ₹6 trillion in nuclear and renewable energy by 2030, with a commitment to sanction ₹1 trillion annually for green projects.
The company aims to increase its renewable energy loan portfolio to ₹3 trillion, accounting for 30% of its total loans, while also supporting the addition of 80 GW of thermal power capacity by 2032.
REC has demonstrated a strong financial performance, with a 31.5% YoY increase in net interest income for June 2024 and a 14.75% rise in net profit, reflecting a stable financial trajectory.
The government is shifting focus to nuclear energy, collaborating with private sectors on new reactor technologies, benefiting companies like REC in financing nuclear projects.

International Markets:

India and Pakistan lifted export restrictions on rice, causing global rice prices to drop as both countries compete in the market again; Pakistan removed its minimum export price (MEP) for Basmati and non-Basmati rice after India ended its export ban, aiming to boost rice exports but facing challenges from Indian competition, with analysts projecting a potential $5 billion in revenue for Pakistan despite concerns from local rice growers.
Brazilian wood exports fell 10.8% in August 2024 due to shipping issues. Pine and tropical sawnwood, tropical plywood, and wood furniture saw declines, while only pine plywood exports grew by 8.9%. Rising freight costs and shipping shortages were key factors.
Guvera is reviving its music streaming platform with a Korean partnership for 600,000 K-Pop songs. It’s expanding Soundstage Live into US festivals and launching My VML for user-created music labels, focusing on niche offerings and innovation to grow in the market.