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Table of Contents
LIC Officers Secure More Favorable Wage Settlement Compared to Public Sector Bank Counterparts
LIC officers have received a more favorable wage settlement than their counterparts in state-owned banks. The starting salary for the lowest-grade LIC officer is significantly higher than that of a PSB peer, and the top-management grade salary is nearly double. The wage revision for LIC employees will increase the insurer’s annual wage bill by 17%.
Key Points
- Starting Salary: LIC officers receive a starting salary of ₹88,635 per month, while PSB officers receive ₹48,480.
- Top-Management Salary: LIC officers in the top-management grade earn ₹3,37,945 per month, compared to ₹1,73,860 for PSB officers.
- Wage Revision: The wage revision for LIC employees is effective from August 1, 2022, and will increase the annual wage bill by 17%.
- Dearness Allowance: LIC officers have received a higher dearness allowance (DA) than PSB officers in the past wage revision.
- Five-Day Work Week: LIC officers have been granted a five-day work week since August 1, 2021.
- Parity in DA: The AIBOA is advocating for parity in the DA compensatory system for LIC and PSB officers.
- Outstanding Demands: The AIBOA is pursuing demands for LTC monetization and a five-day work week for PSB officers.
Over 5.7 Lakh Retail Investors Face Trading Suspension in Brightcom Group Shares
The National Stock Exchange (NSE) and BSE have suspended trading of Brightcom Group (BCG) shares from June 14 due to non-compliance with SEBI regulations regarding financial result submissions. The suspension will continue until BCG complies with SEBI’s Master Circular, with limited trading allowed on a weekly basis for six months after 15 days of suspension.
Key Points:
Suspension of Trading: – Trading of BCG shares suspended from June 14 due to non-compliance with SEBI regulations. – Suspension will continue until compliance with SEBI’s Master Circular. – Limited trading allowed on the first trading day of every week for six months after 15 days of suspension.
Shareholding: – Promoters hold 18.38% stake, public holds 81.62%. – 5.7 lakh retail investors hold 37.89% stake. – Vanguard holds 2.19% stake through two funds. – Other notable investors include Shankar Sharma (1.14%) and Subrato Saha (2.02%).
SEBI Investigation: – BCG under SEBI investigation for listing violations, concealing information, and other norm violations. – SEBI found understatement of expenditures and overstatement of profits for five years beginning 2014-15. – Scale of fraud estimated at ₹1,280 crore.
Market Impact: – BCG shares touched lower circuit on BSE and NSE on Wednesday.
Spices Board Explores ETO Limit Harmonization with CODEX
The Spices Board of India is addressing concerns over ethylene oxide (ETO) contamination in spices by engaging with CODEX, the international food standards body. The board has implemented mandatory testing for spices exported to Hong Kong and Singapore, and has issued guidelines to exporters on preventing ETO contamination. Despite some quality concerns raised by other countries, India’s spice exports remain significant, accounting for 12% of the global market.
Key Points:
CODEX Engagement: – India has raised the issue of setting ETO usage limits with CODEX. – CODEX has not yet established limits or testing standards for ETO.
ETO Contamination: – ETO is a chemical used as a sterilising agent in spices. – Excessive ETO use is considered carcinogenic. – India’s sample failure rate for ETO contamination in spices is less than 1% in major markets.
Mandatory Testing: – The Spices Board has made testing mandatory for spice consignments exported to Hong Kong and Singapore.
Root Cause Analysis: – A techno-scientific committee has conducted a root cause analysis of ETO contamination. – Processing facilities have been inspected and samples collected for testing.
Exporters’ Guidelines: – Exporters are advised to test raw materials, processing aids, and finished goods for ETO contamination. – Exporters should not export products with ETO levels exceeding permissible limits. – Root cause analysis and preventive measures should be recorded to avoid future contamination.
International Concerns: – Other countries, including the US, New Zealand, and Australia, have raised quality concerns about Indian spices. – These countries are considering further action.
Spice Exports: – India’s spice exports totaled $4.25 billion in 2023-24. – India accounts for 12% of global spice exports.
Jobless Rate Falls to 6.7% in March Quarter: Government Survey
The unemployment rate in urban areas for individuals aged 15 and above declined to 6.7% in the January-March 2024 period, marking a slight improvement from 6.8% a year ago. The unemployment rate among females in urban areas also decreased, while it increased among males. The labor force participation rate in urban areas witnessed an increase to 50.2%.
Key Points:
Unemployment Rate: – Urban unemployment rate for individuals aged 15 and above: 6.7% in January-March 2024 – Decline from 6.8% in the same period a year ago
Unemployment Rate by Gender: – Female unemployment rate in urban areas: 8.5% in January-March 2024 – Decline from 9.2% a year ago – Male unemployment rate in urban areas: 6.1% in January-March 2024 – Increase from 6% a year ago
Labor Force Participation Rate: – Urban labor force participation rate for individuals aged 15 and above: 50.2% in January-March 2024 – Increase from 48.5% a year ago
Definition of Unemployment: – Unemployed individuals: Those who did not work for even one hour during the week but sought or were available for work for at least one hour during the period
Definition of Labor Force: – Number of persons either employed or unemployed on average in a week preceding the survey date
Definition of Labor Force Participation Rate: – Percentage of the population in the labor force
Offshore Expansion Considered by Fund Managers Amidst Stricter AIF Regulations
Amidst regulatory uncertainty and higher costs, sponsors and investment managers are considering offshore routes to invest in India instead of establishing Alternative Investment Funds (AIFs) within the country. Tighter regulations and mistrust in the industry have spooked investors, leading to a shift in regulatory stance and increased compliance requirements for AIFs.
Key Points
Regulatory Uncertainty * Tighter regulations have impacted AIF operations and raised concerns about regulatory stability. * A recent consultation paper questions the FDI policy around AIFs, treating investments exceeding 50% by non-residents as indirect foreign investment.
Increased Compliance Costs * Increased compliance requirements have impacted the return profile of AIFs, with costs passed on to investors. * Challenges include uncertainty around taxation of carry, difficulty in administering co-investments, and the introduction of an online dispute resolution regime.
Offshore Alternatives * Offshore funds offer a more stable regulatory regime, but tax considerations must be taken into account. * GIFT City has emerged as a credible alternative for managers due to regulatory stability, tax sops, and proximity to India.
Other Considerations * AIFs in India are still necessary for raising funds from Indian investors. * Some Indian managers may be reluctant to shift overseas due to age or other factors. * The AIF industry has grown significantly in recent years, with cumulative commitments and investments amounting to ₹10.8-lakh crore and ₹3.99-lakh crore, respectively.
NLC India’s Quarterly Net Profit Plummets by 86% in Q4 FY24
NLC India (NLCIL) reported a significant decline in its consolidated net profit for Q4 FY24, falling by 86% year-over-year to ₹114 crore. Despite this, the company’s annual net profit for FY24 increased by 31% to ₹1,868 crore. NLCIL’s total income for Q4 FY24 was ₹4,035 crore, while its EBITDA for FY24 grew by 14% to ₹5,556 crore. The company also announced a final dividend of 15% for FY24.
Key Points:
Consolidated Net Profit: – Q4 FY24: ₹114 crore (86% decline y-o-y) – FY24: ₹1,868 crore (31% increase y-o-y)
Total Income: – Q4 FY24: ₹4,035 crore – FY24: ₹13,946 crore
EBITDA: – FY24: ₹5,556 crore (14% growth y-o-y)
Dividend: – Final dividend of 15% for FY24
Capex: – FY24: ₹4,270 crore
Production: – All-time high coal and lignite production of 36.32 million tonnes in FY24
Subsidiaries: – NLC India Renewables (NIRL) incorporated for asset monetization of RE projects – NLC India Green Energy (NIGEL) formed for future renewable energy projects
Power Generation: – 27.1 billion units generated in FY24 – 2.1 billion units generated through green power
Projects: – Foundation stone laid for 2,400 MW Talabira Thermal Power Plant in Odisha – 300 MW Solar Power Project in Barsingsar, Rajasthan
Subroto Geed Appointed as President of Corteva Agriscience for South Asia
Corteva Agriscience has appointed Subroto Geed as President of South Asia. Geed will lead the company’s Seed and Crop Protection businesses in the region, focusing on enhancing agricultural productivity, supporting farmers, and promoting sustainable farming practices.
Key Points:
Appointment: – Subroto Geed appointed as President, South Asia for Corteva Agriscience.
Responsibilities: – Driving growth for Corteva’s Seed and Crop Protection businesses in South Asia. – Enhancing agricultural productivity and farmer livelihoods. – Fostering sustainable farming practices.
Previous Experience: – Geed holds a bachelor’s degree in pharmacy and a post-graduate diploma in management. – Brings extensive experience from previous roles at Diageo, GSK Consumer Healthcare, Pfizer, and Aliaxis.
Company Statement: – Corteva Agriscience is excited to welcome Geed and values his experience and understanding of the industry. – Geed is committed to building on Corteva’s momentum through technological innovation.
Geed’s Statement: – Geed is enthusiastic about the opportunity to lead Corteva’s South Asia operations. – He emphasizes the company’s leadership in agricultural technology and sustainability. – Geed looks forward to collaborating with the team and delivering value to farmers and stakeholders.
Ampa Group and IHCL Collaborate on Luxury Hotel and Branded Residences in Chennai
Ampa Group and Indian Hotels Company Ltd. (IHCL) have partnered to launch Taj Sky View Hotels and Residences, a luxury mixed-use development in Chennai. The project will feature a 23-story hotel tower and apartment building, offering a range of amenities and services.
Key Points:
Project Details: – ₹850 crore investment (excluding land) – 3.5-acre site on Nelson Manickam Road – 253-key luxury hotel – 123 Taj-branded residences – 36 branded boutique offices
Residential Units: – Range from 2,500 to 5,900 sq ft – Priced between ₹6.4 crore and ₹19 crore – Amenities include uninterrupted green power, chiller-based air conditioning, and hotel-style services
Hotel Amenities: – Five restaurants – Bar – House of Ming – Olympic-size pool – Fitness center – Wellness circle spa – Salon – Theatre
IHCL’s Strategy: – Capitalize on the trend of branded residences – Offer hotel-linked services to residents – Expand into other major cities with similar projects
BimaPay Secures $2 Million Investment to Expand Operations and Advance Technological Capabilities
BimaPay Finsure, a fintech company under the Mufin Group, has secured $2 million in funding led by LC Nueva Investment Partners. The funds will be used to expand operations, enhance technology, strengthen partnerships, and reach underserved markets. BimaPay offers digital lending with real-time processes, aiming to increase insurance penetration in India through financial inclusion and technology.
Key Points:
Funding: – BimaPay raised $2 million from LC Nueva Investment Partners.
Purpose of Funding: – Scale operations – Enhance technology infrastructure – Strengthen partnership distribution – Expand reach to underserved markets
Services: – BimaPay provides digital lending with real-time processes. – Offers financing solutions for hospitals, garages, and individual policyholders.
Mission: – Increase insurance penetration in India through financial inclusion and technology.
Investors: – LC Nueva Investment Partners is an India-domiciled Category II AIF Fund. – Partnership between Singapore-based Lighthouse Canton and Delhi-based Nueva Capital.
SBI Hikes Short-Term Retail Deposit Rates by 25-75 Basis Points
State Bank of India (SBI) has raised interest rates on retail and bulk term deposits, effective May 15, 2024. This move aims to address the gap between credit and deposit growth.
Key Points:
Retail Domestic Term Deposits (Below ₹2 crore)
- Interest rate increased by 25-75 basis points on deposits of less than one year tenor.
- Deposits of 46 days to 179 days: 5.50% (up 75 bps)
- Deposits of 180 days to 210 days: 6% (up 25 bps)
- Deposits of 211 days to less than 1 year: 6.25% (up 25 bps)
- Highest interest rate of 7% on deposits of 2 years to less than three years.
Domestic Bulk Term Deposits (₹2 crore and above)
- Interest rate increased by 10-50 basis points on five out of eight maturity buckets.
- Deposits of 7 days to 45 days: 5.25% (up 25 bps)
- Deposits of 46 days to 179 days: 6.25% (up 50 bps)
- Deposits of 180 days to 210 days: 6.60% (up 10 bps)
- Deposits of 1 year to less than 2 years: 7% (up 20 bps)
- Deposits of 2 years to less than 3 years: 7% (up 25 bps)
Liquidity Innovation: A ₹70 Crore Buyout Deal Paves the Way for Enhanced Liquidity in India
ChrysCapital Management Co. has successfully raised ₹70 crore through a continuation fund, a new method for private equity funds to return profits to investors. This tool allows managers to hold assets longer and move them around more easily. The success of ChrysCapital’s transaction sets the stage for other private equity funds in India to explore this option.
Key Points
Continuation Funds – Allow private equity managers to move assets from prior funds into a new vehicle. – Investors can roll over their commitments or cash out for liquidity.
ChrysCapital’s Transaction – Raised ₹70 crore to maintain its stake in National Stock Exchange of India Ltd. – Doubled its original target and rolled over all its carried interest. – Valued NSE at ₹1,700-1,800 crore.
Growth of Continuation Funds – Gained traction in the US and Europe, accounting for 76% of global private equity deal flow in 2023. – Still rare in Asia, but ChrysCapital’s success may pave the way for more.
Benefits of Continuation Funds – Provide liquidity options for investors. – Allow managers to hold assets for longer and maximize returns. – Reflect managers’ “skin in the game” by rolling over carried interest.
Eeki, an Agtech Company, Plans ₹700 Crore Investment for Expansion
Agritech startup Eeki plans to invest ₹700 crore over the next two years to expand its operations and presence both domestically and internationally. The company aims to scale its operations to 800 acres, expand into new states in India, and export vegetables to international markets. Eeki’s patented growing technology enables year-round cultivation, high yields, and reduced water usage. The company has previously secured Series A funding of $6.5 million and aims to eradicate malnutrition globally by providing nutritious and affordable vegetables.
Key Points
Expansion Plans – Investment of ₹700 crore over two years – Expansion into Madhya Pradesh, Maharashtra, Tamil Nadu, and Oman – Exports to UAE, Singapore, and Europe
Technology – Patented controlled environment farming technology – Automation for climate, irrigation, and nutrition control – Image processing and machine learning for disease detection
Impact – 18 times higher yield per acre compared to traditional farming – 80% less water usage – Saved 13,000 kg of fertilizers and 12 crore liters of water annually – Employment for over 150 rural women
Funding – Series A funding of $6.5 million from General Catalyst and Avaana Capital
Vision – Eradicate malnutrition globally – Provide nutritious and affordable vegetables – Utilize barren land for cultivation
Correlation Between India’s GDP and Asian Paints’ Performance Disrupted in 2023
Asian Paints CEO Amit Syngle expresses uncertainty about the accuracy of India’s GDP growth figures, citing a lack of correlation with key industry metrics. He suggests that nominal GDP growth may not accurately reflect real economic growth in certain sectors.
Key Points:
Lack of GDP Correlation: – Asian Paints CEO questions the correlation between GDP growth and industry performance. – Core sectors like steel and cement show no correlation with overall GDP growth.
Nominal vs. Real GDP: – Nominal GDP is not adjusted for inflation, while real GDP is. – Syngle suggests that nominal GDP growth may not translate to real growth in specific sectors.
Regional Variations: – GDP growth varies from region to region, making it difficult to apply national figures to specific sectors.
Clarification from Asian Paints: – The company clarifies that Syngle’s comments were misinterpreted. – He was referring to the lack of correlation between paint industry growth and GDP growth, not questioning the accuracy of GDP figures.
India’s Strategic Infrastructure Gambit: Chabahar as a Catalyst
The Narendra Modi government has focused on infrastructure development, including ports, which have seen significant improvements in capacity and efficiency. India’s port development is a key component of its aim to become a manufacturing powerhouse and counterbalance Chinese and Pakistani influence in the region. The Chabahar Port deal with Iran is a prime example of this strategy, as it will serve as a key node in the International North-South Transport Corridor (INSTC), connecting India to Central Asia and Europe.
Key Points
India’s Mega Port Push
- India’s dozen major ports have doubled their capacity in the past 10 years.
- Traffic at these ports has jumped by 46% in the same period.
- Turnaround time has plummeted from 127 hours to 53 hours.
Chabahar Port
- India has signed a deal with Iran to manage Chabahar Port for the next 10 years.
- The port will serve as a key connectivity link to Afghanistan, Central Asia, and the Eurasian space.
- It will counterbalance Pakistan’s Gwadar port and China’s Belt and Road Initiative.
Vizhinjam Port
- Adani Group’s Vizhinjam Port in Kerala has received approval to operate as India’s first transshipment port.
- It will be India’s first full-fledged deepwater transshipment port.
- Its strategic location and natural channel make it an ideal hub for large ships.
Vadhavan Port
- India is constructing another port, Vadhavan port in Dahanu, to boost its cargo handling capacity.
- It will host large vessels and support India’s maritime expansion plans.
Maritime India Vision 2030
- The government aims to develop world-class mega ports and transshipment hubs.
- It plans to invest Rs 15-20 lakh crore to increase port handling capacity by 2047.
- The investment will also create maritime clusters and develop islands as hubs for bunkering and ship repair.
US Overlooks Its Own Sanctions Waiver for India’s Chabahar Port
Despite the US warning of potential sanctions on entities dealing with Iran, India has emphasized the regional benefits of its 10-year contract with Iran for the Chabahar Port. India has been careful to avoid involving sanctioned Iranian entities in the project, and the US had previously granted a waiver for India’s development of the port.
Key Points:
US Warning and India’s Response: – US warns of potential sanctions for entities dealing with Iran, including the Chabahar Port. – India emphasizes the regional benefits of the Chabahar Port and urges against a “narrow view.”
US Waiver for India: – US granted a waiver to India in 2018 for the development of Chabahar Port and a railway line to Afghanistan. – India has been careful to avoid involving sanctioned Iranian entities in the project.
Strategic Importance of Chabahar Port: – Chabahar Port is considered strategically important for the development of Afghanistan. – The US had previously recognized India’s role in the port’s development.
India’s Sovereign Rights: – India emphasizes its sovereign rights to conclude deals with other countries, including Iran. – The Chabahar Port deal is a bilateral agreement between India and Iran.
India Surges Ahead in Data Center Capacity, Attracting $40 Billion in Investments
India has emerged as the leading data center hub in the Asia-Pacific region, surpassing established markets like Singapore and Australia. With a rapidly expanding economy and increasing demand for data, India is attracting significant investments and becoming a preferred destination for multinational corporations seeking to expand their digital services.
Key Points:
Installed Capacity: – India has an installed data center capacity of 950 MW, with an anticipated addition of 850 MW by 2026.
Market Conditions: – India’s favorable market conditions, including a large population and growing digital economy, are attracting multinational corporations.
Demand Drivers: – BFSI firms, technology companies, and cloud service providers are driving demand for data center services.
Investment Commitments: – India’s data center industry has secured over $40 billion in investment commitments from global and domestic investors.
Top States for Investment: – Maharashtra, Uttar Pradesh, West Bengal, and Tamil Nadu have attracted the highest investment commitments.
Global Hyperscalers: – India is attracting global hyperscalers, with New Delhi emerging as a prime market for expansion.
Regional Capacity: – India has the highest data center capacity in the Asia-Pacific region, followed by Japan, Australia, Singapore, Hong Kong, and South Korea.
Growth Projections: – India’s data center stock is expected to increase by 30% annually to reach around 1,370 MW by 2024.
Pipeline Deals: – A large volume of data center deals are in the pipeline, indicating continued growth in the sector.
Investor Interest: – Data centers remain a top alternative asset class for investors in the Asia-Pacific region, including India.
M&A Activity: – Consolidation is expected in the Indian data center market due to the growing number of players.
IIFCL Targets Zero Net NPA Status by FY25: MD Jaishankar
IIFCL, a state-owned infrastructure financing firm, anticipates an 18% loan growth and aims to eliminate net non-performing assets (NPAs) in the current financial year. The company has significantly reduced its NPAs and plans to achieve a zero or near-zero net NPA target. IIFCL is exploring various capital structure options to support its growth plans and is considering opening an office in GIFT City to attract international investors and raise cheaper capital for infrastructure projects in India.
Key Points:
Loan Growth: – IIFCL expects an 18% loan growth in the current financial year.
Non-Performing Assets (NPAs): – Gross NPAs reduced to 1.61% in FY24 from 4.76% a year ago. – Net NPAs declined to 0.46% from 1.41% in the year-ago period. – IIFCL aims to achieve zero or near-zero net NPAs in the current financial year.
Asset Quality: – 88% of assets are in very high quality projects, compared to 72% at the end of March 2023.
Capital Adequacy Ratio: – IIFCL’s capital adequacy ratio is comfortable at 25%.
Capital Raising: – IIFCL is exploring various capital structure options to support its growth plans. – The company may consider a share sale in the future.
GIFT City Office: – IIFCL’s subsidiary, IIFCL Projects Limited, has opened an office in GIFT City. – The office aims to attract international investors and raise cheaper capital for infrastructure projects in India.
Triad for Resource Raising: – IIFCL plans to establish a triad between London, GIFT City, and Delhi to optimize resource raising for infrastructure development in India.
Government Reduces Windfall Tax on Petroleum Crude to Rs 5,700 per Metric Tonne Effective May 16
India has reduced the windfall tax on petroleum crude to Rs 5,700 per metric tonne, effective May 16th. The tax remains unchanged for diesel and aviation turbine fuel at zero. This is the second reduction in the tax since its implementation in July 2022.
Key Points:
- Windfall Tax Reduction: India has cut the windfall tax on petroleum crude to Rs 5,700 per metric tonne from Rs 8,400.
- Diesel and ATF Tax Unchanged: The windfall tax on diesel and aviation turbine fuel remains unchanged at zero.
- Previous Reduction: The government had previously reduced the windfall tax on petroleum crude to Rs 8,400 per metric tonne on May 1st.
- Tax Implementation: The windfall tax was introduced in July 2022 to regulate private refiners who were exporting fuel overseas instead of selling it locally.
India’s Trade Gap Expands to $19.1 Billion in April
India’s merchandise trade deficit widened to $19.1 billion in April 2024, driven by a surge in imports and a marginal increase in exports. Despite the deficit, the government remains optimistic about the overall trade outlook for the year.
Key Points:
Trade Deficit: – India’s merchandise trade deficit expanded to $19.1 billion in April 2024. – The deficit had narrowed to $15.6 billion in March 2024, an 11-month low.
Exports: – India’s exports rose marginally by 1.06% to $34.99 billion in April 2024. – Exports had dipped to $41.68 billion in March 2024.
Imports: – India’s imports stood at $54.09 billion in April 2024, up 10% from April 2023. – Oil imports witnessed a slight dip, while gold imports more than doubled.
Gold Imports: – India’s gold imports surged to $3.11 billion in April 2024, compared to $1.53 billion in March 2024. – The increase is attributed to rising global demand and geopolitical conflicts.
Services Trade: – India’s services exports stood at $29.57 billion in April 2024, while imports totaled $16.97 billion. – Services exports had reached $28.54 billion in March 2024.
LIC Stock Surges 5.5% as SEBI Extends Deadline for Public Shareholding Compliance
LIC’s stock price surged after SEBI granted the company an additional three years to meet public shareholding norms. The revised deadline is now May 16, 2027. LIC had previously been granted an exemption from the 25% minimum public shareholding requirement until 2032 by the Finance Ministry.
Key Points:
SEBI Extension: – SEBI granted LIC an additional three years to achieve 10% public shareholding. – Revised deadline: May 16, 2027.
Public Shareholding Norms: – Listed companies are required to maintain 25% public float. – Newly-listed companies have a three-year window to fulfill the requirement.
LIC’s Financial Performance: – Net profit grew 49.10% YoY in Q3FY24. – Net premium income increased 4.6% YoY in Q3FY24.
LIC’s Stock Performance: – Stock price hit a lifetime high of Rs 1,175 on February 9, 2024. – Up 24% over its IPO issue price. – Bounced back 121.6% from its all-time low.
