Business News at 09:30 am on 1st December 2023

Let’s begin. India’s gross domestic product beat all estimates by a wide margin to grow at 7.6% in real terms in the September quarter, with a big – and unexpectedly solid – push from manufacturing and investment segments that have been weak spots in the country’s economic landscape for long. Manufacturing grew an encouraging 13.9% in Q2FY24, though on a weak base, thanks to a sharp sequential pick-up from 4.7% in the June quarter. The headline GDP number, way higher than the Reserve Bank of India (RBI) projection of 6.5% — even the most optimistic forecasts hovered around 7% —got backing from government consumption spending (up 12.4% on shrunken base), while private consumption, the largest part of the GDP, was muted at 3.1%.
Over to banking. Banks’ non-food credit grew nearly 20% year-on-year in October, compared with an 18.3% growth during the same period last year, Reserve Bank of India’s sectoral credit deployment data showed on Thursday. Excluding the impact of the HDFC merger, banks’ non-food credit grew 15.3%. In absolute terms, banks’ outstanding credit stood at Rs 154.05 trillion as of October 20. While loans to the agriculture sector grew 18% YoY to Rs 19.13 trillion, loans to small, medium and large industries grew 6% YoY to Rs 35.72 trillion. On the services side, loans to non-banking finance companies grew 22% YoY to Rs 14.76 trillion, lower than a 34% growth a year ago, while credit to housing finance companies rose 2% YoY to Rs 3.22 trillion.
Meanwhile, thanks to festive-season boost, the growth rate of eight-core sector industries rose to 12.1% in October from 9.2% in September, mainly due to sharp expansions recorded in production of electricity, steel, and coal during the month. These three industries constitute 48% of the overall core sector industries. The coal sector’s output jumped 18.4% year-on-year in October, and steel’s rose 11%. Electricity sector’s production surged 20.3% during the month. The October print was also aided by the statistical effect of a low base. In October 2022, the core sector had grown only 0.7% year-on-year. Sequentially, the output of core sector industries increased 2.8% month-on-month. This is sharply higher than the 0.1% sequential growth recorded in October 2022.
Next up, industry. The number of 5G subscribers in India is expected to touch 130 million by the end of 2023, compared to the 10 million recorded at the close of 2022, according to the Ericsson Mobility Report for November 2023. Fast-growing 5G network across cities, affordable service plans, and the growing availability of 5G smartphones has increased 5G penetration in the country, the report said. According to telecom operators Jio and Airtel, the number of 5G users crossed the 125-million mark last month. With this, India now ranks among the top three 5G-enabled nations. The services are available in more than 8,000 towns and 20,000 villages at present, with over 385,000 5G base transceiver stations.
Moving on. Global fintech player MODIFI is aiming to increase its small and medium-sized enterprises cross border finance book to $4.5 billion in next five years, from $2 billion currently, co-founder and CEO Nelson Holzner told FE. He said, quote, “I think we can triple the business in next five years, or even faster. Obviously situations like Covid-19 can derail plans but we would like to triple the business to $4.5 billion,” unquote. The Amsterdam headquartered fintech provides digital financing options to SMEs for cross-border payments. Through the platform, SME exporters can get instant finance from the fintech against their invoices and the buyer can experience the “Buy Now Pay Later” model wherein they have the option to pay back the fintech within 30-120 days.
On to economy. Two months into paddy procurement for the kharif season 2023-24, the Food Corporation of India and state agencies have purchased nearly 30 million tonnes under the minimum support price operations, marking a 6% decline compared to the previous year. According to the food ministry, 32.66 MT of paddy has arrived in the mandis across key rice producing states. The officials said kharif paddy purchase target of 77.4 MT this season will be met and attributed the decline to delayed harvesting in states like Punjab, Chhattisgarh, and Telangana, caused by replanting due to floods in July and assembly elections. Major contributors to paddy procurement include Punjab, Haryana, Telangana, Chhattisgarh, Uttar Pradesh, Uttarakhand, and Tamil Nadu.
Lastly, a look at stocks you need to watch out today. These include JSW Steel, JSW Holding, Tata Tech, REC, Flair Writing, and UltraTech Cement among others. Sajjan Jindal-led JSW Group has entered into a joint venture with Chinese automotive major SAIC Motor to pick up 35% stake in MG Motor India. On the other hand, State-owned REC has approved a proposal to increase the borrowing to Rs 1.5 lakh crore from Rs 1.2 lakh crore for the financial year 2023-24, the company said on Thursday.