Business News at 05:30 pm on 8th May, 2024

Let’s begin…In a development that could further delay the insolvency process of Reliance Capital, the Hinduja Group has sought to change the holding structure of the firms through which it intends to take over the debt-laden firm. This comes a couple of weeks ahead of the deadline of May 27 set by the NCLT in February to conclude the resolution.In a recent letter to RBI, IIHL has also sought approvals for the new corporate structure stating the change was to streamline the whole process, sources close to the development said. IndusInd International Holdings, the arm of Hinduja Group which was the successful bidder, has proposed four new firms as part of the transaction, sources added. Moving on, domestic rating agency Icra on Tuesday said corporate bond issuances are likely to rise to Rs 10.6 trillion in FY25 from Rs 10.2 trillion in FY24 . Accordingly, the overall corporate bond outstanding is likely to increase to Rs 50.3 trillion by March 2025, a year-on-year growth of 9.5%. Higher competitive funding conditions in domestic markets compared to developed markets has led to big corporates tapping more domestic funding sources over the last two years, Icra said. While corporate bond issuances will likely rise in FY25, the incremental total credit, including from bonds, non-food bank credit and commercial papers (CPs) is expected to moderate to Rs 24.5 trillion in FY25 from an all-time high of Rs 25.4 trillion in FY24. In other news, Consumer goods company, Marico, will invest Rs 80-100 crore over the next three years to increase its direct distribution in the country, chief financial officer Pawan Agarwal said in a conversation with FE on Tuesday. Called ‘Project Setu’, the initiative will see the company improve its direct outlet reach from 1 million to 1.5 million by FY27. Currently, Marico reaches a total of 5.8 million outlets through direct and indirect distribution channels. The distribution expansion initiative by Marico comes as organised FMCG companies in general have been looking to take up direct reach aggressively amid a resurgence in the FMCG sector. On Tuesday, market researcher NielsenIQ said that rural growth has outpaced urban growth for the first time in five quarters. Next up, The impact of FTAs has been positive for the traditional export sector of readymade garments, with exports to Australia growing 5.7% on year in the first 11 months of the last fiscal, while shipments to Mauritius grew 16.8% even though the overall exports fell. Chairman of Apparel Export Promotion Council Sudhir Sekhri said, quote, The advantages from FTAs are now visible…The signing of FTA in the near future with the UK, which accounts for roughly 8% of Indian apparel exports, will provide a much-needed fillip to the garment industry, end quote. In April-February, exports of apparel to Australia were at $299.4 million, while to Mauritius it was $35.2 million. In another development, India’s automobile sector has identified 28 key components for indigenisation as part of the ‘localisation roadmap’ to accelerate the ‘Make in India’ initiative. Society of Indian Automobile Manufacturers director-general Rajesh Menon told FE that these components are critical to maintain the growth rate. He said, quote, It’s estimated that forex savings on account of the ongoing localisation efforts have already saved over Rs 7,000 crore,” end quote. Accordingly, original equipment manufacturers have requested their component suppliers to work on ways to locally manufacture these components, which include high-end electrical and electronic parts. Menon said, quote, Locally available components will reduce the dependence of OEMs on imports in line with the auto industry’s commitment to ‘Atma Nirbharta’, end quote. Moving on, Startups benefiting from the Digital Communication Innovation Square scheme have urged the government not to stop it midway. The department of telecommunications is considering closing down the scheme which supports research, development, product design, and intellectual property creation in the telecom sector. In a letter to the telecom secretary Neeraj Mittal, close to two dozen startups have said the continuity of scheme and financing is essential as the R&D journey cycles are fairly long. They have pointed to the lack of interest from investors to fund projects. Moreover, they claim that while the majority of the startups is not self-sustaining yet, they are working on promising solutions. Lastly, GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a lacklustre opening on Wednesday. Here is all you need to know before the market opens. GIFT Nifty traded up by just 12.50 points or 0.06% at 22,406 indicating a lacklustre opening for domestic indices NSE Nifty 50 and BSE Sensex on Wednesday. Previously, on Tuesday, the NSE Nifty 50 ended down by 140.20 points or 0.62% to settle at 22,302.50 while the BSE plunged 383.69 points or 0.52% to 73,511.85. Furthermore, US stocks remained close to their highest levels in about a month, with investors at crossroads about how much further the market can sustain the rebound from April’s selloff, Bloomberg reported.