News Nook: Dec 16, 2024

Indian Sector Specific News:

A) BFSI:

1) Hinduja Group Set to Acquire Reliance Capital by January-End

• Hinduja Group's IIHL plans to finalize the ₹9,650 crore acquisition of Reliance Capital by January 2025, aiming to triple its BFSI business valuation to $50 billion by 2030.
• The company will retain RCAP's management, divest most subsidiaries, and may launch an IPO after two years, with an additional ₹200 crore infused to improve RCAP's solvency.
• Source: Economic Times

2) HDFC Bank Restarts Stake Sale Talks with MUFG for HDB Financial

• HDFC Bank has reopened discussions with Japan's MUFG to sell a 20% stake in HDB Financial Services, aiming to bring in a large investor before HDB Financial's ₹10,000 crore IPO.
• The move is driven by proposed RBI norms requiring banks to reduce stakes in subsidiaries, with HDFC Bank potentially reducing its stake in HDB Financial from 94.36% to 61% if the deal succeeds.
• Source: Moneycontrol

3) SEBI Has Robust Mechanisms to Address Conflict of Interest: FM Sitharaman

• Finance Minister Nirmala Sitharaman assured Parliament that SEBI has effective frameworks, including a disclosure policy and recusal provisions, to handle conflict-of-interest concerns, addressing allegations against SEBI Chairperson Madhabi Puri Buch.
• The allegations, raised earlier by Congress, were dismissed by Buch and her husband as "false and defamatory," with Sitharaman emphasizing the importance of evaluating facts before drawing conclusions.
• Source: CNBCTV

4) Banks Struggle to Meet SEBI's Cybersecurity Deadline

• Banks, especially multinational lenders, are finding it challenging to comply with SEBI's January 1st deadline for implementing new cybersecurity rules, which include frequent audits, disaster recovery plans, and domestic data storage.
• Many banks have requested an extension, citing the complexity of the regulations and the need for significant system upgrades. Non-compliance risks penalties and reputational damage.
• Source: Economic Times

B) Automobile:

1) Auto Expo 2024 to Witness Record Participation

• The upcoming Auto Expo will host 34 vehicle manufacturers, marking the highest-ever participation in its history, according to the Society of Indian Automobile Manufacturers (SIAM).
• The event will feature cutting-edge technologies and products, reflecting strong industry interest and advancements in the automotive sector.
• Source: Economic Times

2) Auto Sales Remain Weak Despite Discounts

• Over 800,000 cars worth ₹2 lakh crore remain unsold in stockyards as Indian auto sales show mixed results in November 2024. Passenger car sales declined by 5.24% YoY to 97,186 units, and two-wheeler sales fell by 1.15% to 16,04,749 units.
• However, total passenger vehicle sales rose 4.41% YoY to 3,00,459 units, driven by strong festive demand in October carrying over to November, according to SIAM. Luxury brands like BMW, Mercedes, and others were excluded from the November data.
• Source: Millennium Post

C) Pharma

1) PLI Scheme Boosts Pharmaceutical Sales in H1FY25

• Pharmaceutical products under the PLI scheme achieved sales of ₹11,853 crore in H1FY25, 51% of FY24's total sales (₹23,228 crore). The scheme supports manufacturing high-value products like biopharmaceuticals, complex generics, and patented drugs.
• The PLI scheme has seen ₹30,623 crore in investments, ₹1,83,784 crore in production, and generated 77,119 jobs across 374 manufacturing locations since inception in FY21, aiming to position India as a global pharmaceutical leader.
• Source: Pharmabiz

2) Drug Recalls by Aurobindo, Glenmark, and Zydus in the US

• Aurobindo and Glenmark recalled medicines due to impurity issues, while Zydus recalled a product over labeling errors, affecting over 200,000 packs in total.
• These recalls are classified as low-risk (Class II) by the USFDA, with minimal health impact.
• Source: Economic Times

D) Telecommunication:

1) Gratuity Limit Raised for BSNL/MTNL Pensioners

• The gratuity cap for BSNL/MTNL absorbees under Rule 37 of CCS(Pension) Rules, 2021, has increased from ₹20 lakh to ₹25 lakh, effective January 1, 2024, following DA reaching 50%.
• Pension calculations and commutation values remain unchanged under the new rules.
• Source: Department of Telecommunications Circular

E) Agriculture:

1) UPL-SAS Transforms Indian Agriculture with Tech and Climate Solutions

• UPL-SAS is shifting from selling crop protection products to providing comprehensive solutions, focusing on technology, digital innovations, and addressing farming challenges in India.
• The company aims to improve performance after a downturn, leveraging the diverse agricultural landscape with a strategic focus on smallholder farmers.
• Source: Business Standard

F) Energy:

1) India to Supply LNG to Sri Lanka's Power Plants

• India will provide LNG to Sri Lanka’s power plants and work on connecting the two countries' power grids and laying a petroleum pipeline.
• Prime Minister Modi highlighted India’s ongoing support, including a $5 billion credit and grant aid, and collaboration on digital identity and infrastructure projects.
• Source: Economic Times

2) CNOOC Sells Gulf of Mexico Oil & Gas Business to INEOS Energy

• CNOOC has sold its oil and gas business in the US Gulf of Mexico to INEOS Energy, marking a significant divestment in its energy assets.
• The sale aligns with CNOOC’s strategy to streamline operations and focus on core areas of its business.
• Source: Indian Chemical News

G) IT

1) Narayana Murthy Advocates for Tech but Warns Against Unsupervised Learning

• Narayana Murthy emphasized the role of technology in bridging the wealth gap, citing examples like financial inclusion and AI applications in various fields.
• He cautioned against "unsupervised learning," stressing the importance of controlling technology and establishing safeguards to prevent unforeseen consequences.
• Source: Business Standard

Indian Economy and Government Initiatives:

• India's growth rate has slowed due to weak private consumption, especially in urban areas, with stagnant wages contributing to lower demand despite rising inflation.
• The government is exploring fiscal measures like GST rationalization and direct tax revisions in the upcoming Union Budget to stimulate consumption, but there are concerns over whether these will effectively boost spending.

Indian Stock Market Overview:

• Sensex fell by 384.55 points (0.47%) to close at 81,748.57, while Nifty dropped 100.05 points (0.40%) to finish at 24,668.25.
• IT, metal, and oil & gas sectors dragged, with losses between 0.5-1%, while realty and media sectors saw gains.
• Titan Company, TCS, Hindalco Industries, and Adani Ports were among the top Nifty losers.
• Dr Reddy's Labs, IndusInd Bank, and Bajaj Finance were the top gainers on the Nifty.

Bonus Briefs:

• Central banks worldwide, including the US Federal Reserve, are making key interest rate decisions this week, with the Fed expected to cut rates, while others like the Bank of England and Bank of Japan may hold steady.
• The timing of these decisions reflects different economic conditions globally and could be influenced by US trade policies.
• Despite political shocks like the annulled Romanian presidential election results, the market has shown resilience, with investor confidence recovering quickly after uncertainties are resolved, highlighting the influence of both local and global factors on Romania's market volatility.