Business News at 05:30 pm on 21st November 2023

Let’s begin. The board of directors of Religare Enterprises backed executive chairperson Rashmi Saluja and the management of the group against charges of insider trading, terming they were raised by “certain people with vested interests”. It added that the financial services company market capitalisation has increased to about a billion dollars from under $100 million in March 2018. Further, they denied the accusations made against REL’s entire management and board, which is committed to make the company “debt free” over the next five years. In a stock exchange statement on Monday, REL board said that Saluja “categorically denies” that a representative of the Burman family informed her of the proposed open offer during a meeting on September 20.
Meanwhile, A year after the launch of 5G services, Reliance Jio and Bharti Airtel together may have notched up a subscriber base of around 125 million, but are still unable to recoup their investments. This is due to absence of meaningful use cases for which the they can charge a premium rate. As a result, for most of the users currently with a 5G smartphone, 4G continues to be sufficient to meet their daily data usage needs. The capex of the two operators for rolling out 5G networks is expected to be near Rs 90,000 crore in FY24. However, there has not been any killer application that can replace 4G with 5G and prompt users to upgrade.
ON to economy. India’s real GDP growth will rise to 6.5% in 2024-25 from an estimated 6.2% in 2023-24, aided by the government’s pre-election spending in the first half of 2024 and private investment in the later half, global investment firm Goldman Sachs said in a report on Monday. On a calendar year basis, India’s real GDP growth will likely moderate marginally to 6.3% in 2024 from an estimated 6.4% for 2023. The report said that the year will likely be a tale of two halves: Pre-elections, government spending will likely be the growth driver. Post-elections, we expect investment growth to re-accelerate, especially from the private side. Repeated supply shocks are likely to keep average headline inflation above target at 5.1% on year in 2024.
Moving on. Net contribution of India’s foreign trade to its Gross Domestic Product may have been positive in July-September FY24 quarter, despite merchandise exports shrinking in the period on a year on year basis, economists said. While in Q4F23 net exports helped boost the GDP, it dragged it down in the first quarter of the current fiscal year, because while exports contracted, imports expanded in double digits. Gaura Sen Gupta, economist, IDFC FIRST Bank, said, quote, “In Q2FY24, imports of both goods and services declined sharply by 55.2% year-on-year, in nominal terms, reflecting lower goods trade deficit and higher services surplus. This is expected to translate into a positive contribution to overall real GDP growth in July-September,” unquote.
IN some more economy news, Microfinance institutions, which went through a rocky start and crisis during the Covid-19, have started seeing good traction for their business models. This has been primarily due to a steady improvement in asset quality in recent years, as lenders have strengthened underwriting standards. Alvarez & Marsal Managing Director Bhavik Hathi said that the microfinance sector as a whole has seen so many shocks and that has helped it become resilient. This has helped increase confidence in the sector’s prospects. According to the latest results, the gross non-performing asset ratio of some of the leading players such as CreditAccess Grameen improved to 0.77% as on September from 2.17% a year ago.
Over to banking. State Bank of India’s novel approach of distributing sweets and counselling borrowers to recover non-performing accounts have started yielding good results. The country’s largest bank has been able to upgrade nearly 60 NPAs, or around 13% of total accounts sent as a pilot project to fintech for resolution, said a senior official. The official said that the pilot so far has been pretty succesful and we are looking forward to expanding it. The banker said that the purpose of sending sweets is to get a response from NPA borrowers. SBI is currently running pilots with two fintechs on this recovery model wherein the fintechs approach NPA borrowers with a box of sweets and counsel them for repayment of their loans.
Lastly, let’s look at teh stocks you need to watch out today. These include Tata Power, Adani Enterprises, SBI, IRCTC, Manappuram Finance, and Oberoi Realty among others. Tata Power Renewable Energy has achieved a significant milestone by surpassing a 1.4-gigawatt capacity in group captive projects over the past seven months. Adani Enterprises Ltd.’s subsidiary, Mumbai Travel Retail Pvt., has taken a strategic step by incorporating its wholly-owned subsidiary, MTRPL Macau Ltd. Tech Mahindra Americas too has inked a collaboration deed with Neom Tech, paving the way for a new subsidiary.