Business News at 05:30 pm on 17th June, 2024

Let’s begin with the major update, While India’s wholesale price index-based inflation accelerated for the third consecutive month to 2.61 percent in May, primarily due to increase in prices of food articles, economists said that the outlook for inflation looks brightened due to anticipation of a normal monsoon. Sarbartho Mukherjee, Senior Associate Economist, CareEdge Ratings, said that the outlook for food inflation has brightened due to anticipations of a normal monsoon, which is expected to bolster agricultural production. However, monitoring the monsoon’s temporal and spatial distribution is critical. Earlier last week, data released by the Ministry of Commerce & Industry stated that WPI inflation rose to 2.61 per cent in May, primarily due to increase in prices of food articles and manufacturing of food products.

Moving on, Hyundai Motor’s Indian business has filed draft papers for India’s largest initial public offerings (IPOs) on Saturday. This IPO, aimed at bolstering Hyundai’s brand presence and providing liquidity in the country, marks a pivotal moment in the automotive industry. Not only will this be the biggest IPO in the automotive space, it also surpasses the IPOs filed thus far on Dalal Street including the largest so far – LIC’s $2.5 billion issue in 2022. Hyundai Motor’s Indian unit has applied for regulatory approval for a stock market listing in Mumbai, potentially marking the nation’s largest IPO. This move involves the South Korean parent company selling up to a 17.5% stake.

In other news, India Inc’s sequential revenue growth is expected to taper in the first quarter of FY25, stated a report by ICRA. While signs of a revival in rural demand have emerged, ICRA said that headwinds such as a slowdown in the Government of India’s (GoI) spending during the Parliamentary elections and onset of monsoon period are likely to weigh on growth in H1 FY2025. However, the operating profit margin (OPM) will remain steady in the range of 15-18 per cent, despite the expected tapering in revenue growth, as raw material costs are expected to remain steady. This is estimated to keep the credit metrics of India Inc in Q1FY25 largely stable with the interest coverage ratio in the range of 4.7-5.0 times.

Meanwhile, The automatic signalling system between Ranipatra Railway Station and Chattar Hat Junction in West Bengal, where a goods train collided with the Sealdah Kanchanjunga Express from the rear on Monday, was reported defective since 5:50 am, according to railway sources. In such instances of signalling failure, the station master issues a written authority known as TA 912, permitting the train driver to pass all red signals in the affected section due to the defect. Initial statements from the Railway Board attributed the collision to the goods train’s driver disregarding the signal, with the reported death toll standing at five, although local officials suggested it could be higher, possibly up to 15.

Up next, State-owned insurance giant Life Insurance Corporation of India (LIC) has achieved a significant milestone, with its total assets under management (AUM) crossing the Rs 50 lakh crore mark, nearly double the size of Pakistan’s GDP. Following a sharp rally in Indian stocks, LIC’s AUM has surged by 16.48% year-on-year, reaching Rs 51,21,887 crore ($616 billion) as of the end of March. This marks a substantial increase from Rs 43,97,205 crore at the end of FY23. According to the latest data, LIC’s financial clout now not only dwarfs Pakistan’s GDP, which stands at approximately $338.24 billion, but also surpasses the economies of Denmark and Singapore. The impressive size of LIC’s insurance fund also eclipses the combined GDPs of three of India’s neighboring countries.

Moving ahead, Congress may not have garnered enough votes to form the government after election results, but Indian National Congress (INC) leader Rahul Gandhi’s equity market portfolio has been booming as markets zoomed to new record highs after the initial correction. The politician’s overall portfolio stood at Rs 4.56 crore as of June 14 and has gained 7.5% since June 04 when it stood at Rs 4.25 crore. Though Rahul Gandhi called for a Joint Parliamentary to probe the crash on June 04 which he called “the biggest scam” in the history of India’s stock market, his portfolio has been yielding encouraging returns. He also alleged that Modi, Shah, and Sitharaman motivated people to “buy stocks before June 04 as markets will rise sky high.”

Lately, Finance Minister Nirmala Sitharaman will present the first budget of Modi 3.0 government in the second half of July. Industries, farmers and other stakeholders across sectors are eagerly anticipating potential booster announcements from the Narendra Modi government in the upcoming budget. Among these hopeful groups are taxpayers also, who are particularly expecting relief from the Finance Minister in form of tax sops. The middle-class, in particular, has not seen significant tax reductions in the last two budgets. In the Union Budget 2020, the Modi government introduced a new tax regime alongside the existing one, aiming to provide taxpayers with an alternative. Initially, the government anticipated a broader adoption of the new regime due to its lower tax slabs, albeit without the traditional deductions.