Business News at 05:30 pm on 5th January, 2024

Let’s begin. Adani Group Chairman Gautam Adani has surpassed Reliance Industries Limited Chairman Mukesh Ambani to regain the top spot as the richest man in Asia, with a total net worth of $97.6 billion, according to the Bloomberg Billionaire’s Index. Gautam Adani is now the world’s 12th richest person, up from the 15th position in December 2023. Adani had lost his position as India’s richest man to the RIL chairman almost a year ago after a massive dip in the valuation of his conglomerate, triggered by a report by US-based short seller Hindenburg Research. Meanwhile, Mukesh Ambani, per the data, secured the position of second richest man in Asia and 13th in the world with a net worth of $97.0 billion.

In the industry sector, Home decor and lifestyle brand Nestasia is showcasing a conversion rate of over 80 percent from in-store customers and a 30 percent higher average order value in comparison to online sales. The brand launched three brick-and-mortar stores in 2023 and has subsequently announced its expansion strategy targeting a total of 24 stores by the end of next year. Currently, its smaller-sized stores, ranging from 500 to 1000 square feet, in mall locations are ensuring a good rent-to-revenue ratio. The brand has also set an ambitious target of achieving sales per square feet of over two thousand across all stores. Nestasia is targeting to capture 20 percent of its total revenue from offline stores by the end of 2024.

Over to market. Jefferies maintained a buy rating on Reliance Industries, setting a target price of Rs3125, reflecting an optimistic upside of 21% from the current market price. Despite underperforming the Nifty by 9% in the calendar year 2023, Jefferies sees significant potential in the stock, highlighting its favorable valuation compared to the broader market. The report forecasts a robust 13% EBITDA growth for Reliance Industries in the fiscal year 2025. Notably, the report suggests that Jio, a telecom subsidiary of Reliance, could contribute two-thirds of the company’s share, driven by an expected tariff hike. Jefferies also expects a decline in capex for Jio and the retail segment in the fiscal year 2025.

Meanwhile, the government is likely to estimate economic growth close to 7% in the current fiscal year, keeping it on track to be the fastest-growing major economy in the world. The first official estimate for gross domestic product, due to be released on Friday, will probably be set at 6.7%, according to economists surveyed by Bloomberg. The Reserve Bank of India has already raised its projection for the fiscal year ending March 31 to 7%, while Bloomberg Economics is predicting 7.3% growth. Strong consumer and government spending, a robust services sector, and a boost in manufacturing has helped buoy India’s economy in the face of a weaker global economy and six RBI rate hikes since 2022.

Moving on. India’s services activity growth momentum showed a pick-up at the end of the 2023 calendar year, rising from 56.9 in November to 59.0 in December, according to the data released by S&P Global. The seasonally adjusted HSBC India Services PMI Business Activity Index highlighted a sharp increase in output that was the most pronounced since September. Owing to lower readings in October and November, however, the latest quarterly average was the lowest since Q4 fiscal year 2022-2023. According to S&P Global’s survey data, the demand buoyancy spurred sales, subsequently fuelling business activity. Job creation extended into a nineteenth successive month, while business optimism strengthened. Meanwhile, cost pressures receded further, reaching their lowest in nearly three-and-a-half years.

In another development, the overall securitisation volumes, originated mainly by non-banking financial companies and housing finance companies, stood at Rs 38,000 crore in third quarter of FY2024, reflecting a sequential de-growth of 17 percent from ~Rs 46,000 crore recorded in second quarter of FY2024, said a report by ICRA. Further, it said that the volumes for third quarter of FY2024 also trailed Rs 43,000 crore securitised in third quarter of FY2023, mainly due to the exit of a large HFC from the securitisation market in the current fiscal. Per the estimates by ICRA, securitisation activity is expected to pick up again and touch Rs 50,000 crore in Q4 of the current fiscal, which is typically the busiest quarter of the year.

Lastly, let’s see how the share market performed today. Indian equity indices ended higher on the second consecutive day on January 5 with Nifty around 21,700. Top gainers on the Nifty were Adani Ports, L&T, TCS, SBI Life Insurance, and LTIMindtree, while losers included Nestle India, Britannia Industries, UPL, JSW Steel and Kotak Mahindra Bank. Among sectors, IT and Capital Goods indices rose 1 per cent each, while pharma, and PSU Bank indices down 0.3-0.5 per cent. BSE midcap index flat, while small cap index added 0.6 per cent.