Business News at 09:30 am on 12th December 2023

Let’s begin…Asset reconstruction companies are increasingly focusing on recovering retail loans as lenders have largely cleaned up their corporate book in recent years. Quote “With lenders increasingly focusing on retail loans, this portfolio has been growing faster than the corporate book. As such, there is likely to be a sizeable supply of retail non-performing loans,” Unquote, Neeta Mukerji, CEO, Asset Care and Reconstruction Company (ACRE), said. Hari Hara Mishra, CEO, Association of Asset Reconstruction Companies, estimates the share of retail assets in the overall portfolio of ARCs to rise to over 20% in the next two years, from around 13% currently. Rishabh Goel, co-founder and CEO, Credgenics, said ARCs recognise the huge untapped opportunity in small-ticket loans like personal, education and MSME.

Next up…As the benchmark indices touch new highs, individuals need to be prudent about their exposure to equities by increasing investments in large-cap stocks now as mid-caps and small-caps look overbought suggesting potential risks, say experts. Many large-cap stocks are seeing robust earnings growth and their valuations are around the long-term average. The large-caps offer a relatively cheaper investment option compared to mid- and small-caps and would benefit once interest rates start falling next year. This underlines the importance of prioritising large-cap investments in anticipation of better returns. Also, large-cap stocks or funds are ideal for new investors as a higher level of due diligence is needed to differentiate between fundamentally good companies and stocks that are rallying without the basis of underlying business performance.

In some exciting news…The Uttar Pradesh chief minister Yogi Adityanath, is intensifying efforts to rejuvenate the historical significance of Ayodhya, which has experienced a decline during the invasions of Arab-Muslim rulers and the era of British colonialism spanning nearly a thousand years. Yogi Adityanath aims to build the Ayodhya in a new concept. The city is undergoing developmental initiatives based on eight key concepts, with the aim of restoring its unparalleled prosperity and transforming it into a city of prominence. In addition, Adityanath is placing a significant emphasis on transforming Ayodhya into a solar city, aiming to decrease its reliance on conventional electricity sources. Ayodhya, once referred to as the Amaravati of the earth and a sacred Saptapuri, holds praise in various scriptures.

Additionally…Propelled by a surge in vegetable prices, India’s retail inflation, based on the Consumer Price Index (CPI), likely rose to a three-month high of 5.7% in November from 4.87% in October, according to a poll of 17 economists by FE. In November 2022, the retail inflation was at 5.88%. The estimates in the poll, however, ranged widely from 5.30% to 6.92%. Core inflation, on the other hand, is expected to remain around the same level as in October, at around 4.2%. At 5.7%, the overall CPI index likely rose 0.7% month-on-month, or at the highest pace in 4 months. Also, the 0.7% rise is higher than the average 0.5% increase the overall index has recorded in the past 10 years.

In other news…National Highways Authority of India has decided to revise the list of highway stretches on offer for monetisation in the third round through infrastructure investment trust and have added five more to the bundle. The addition of new stretches to the six already on offer takes the total length of highways to be monetised through the third round to 1,029 km from 580 km earlier. These stretches will be offered to National Highways Infra Trust, which is sponsored by NHAI. The new stretches added to round 3 include Kaljhar to Patacharkuchi in Assam (27km), Lakhnadon to Mahagaon (74 km) and Mohgaon to Khawasa (43 km) in Madhya Pradesh, Hubli to Haveri (62 km) and Davangere to Haveri (71 km), Davangere to Chitradurga (72 km) in Karnataka.

Meanwhile….Power distribution companies like Adani Energy and Tata Power will expedite deployment of smart meters to bring greater operational efficiency by aligning power purchase with real time demand. Adani Energy Solutions for instance is currently working on delivering over 20 million smart meters in eight distribution licensee areas, Anil Sardana, managing director of Adani Energy Solutions told Fe. These will come at a contract value of about Rs 23,000 crore and revenue recovery will be spread over a 10-year period, Sardana said. Through smart meters, the company can monitor and predict power consumption pattern over micro geographies and hence manage retail distribution better. It is adopting IoT (Internet of Things) across its assets for getting their real-time health diagnosis and undertaking predictive maintenance wherever needed, he said.

Lastly…Let’s take a look at the key stocks to watch in trade today – BPCL, Tata Motors, Adani Green Energy, Cochin Shipyard, Cipla, Paytm. GIFT Nifty traded flat at 21,081.5 down merely 0.05%, indicating a flat opening for domestic indices NSE Nifty 50 and BSE Sensex on Monday. Previously, on Friday, the NSE Nifty 50 gained 68.25 points or 0.33% to settle at 20,937.10, while the BSE Sensex added 303.91 points or 0.44% to 69,825.60.