Business News at 09:30 am on 22nd November 2023

Naveen Jindal-led Jindal Power will not go ahead with its bid to take over low-cost carrier Go First, leaving the future of the grounded airline uncertain amid calls for its liquidation. The deadline to submit the bids ended on Tuesday. Jindal Power and Jettwings Airways, a northeast-based low-cost regional airline, were the only bidders, and had put in expressions of interest for Go First in October. The Wadia group chose to sit out of the EoI process though they were allowed to participate. Jindal Power spokesperson declined to comment when contacted. The reluctance from Jindal Power follows the clarification from the DGCA in early November stating that aircraft and engines leased can be deregistered and returned to their lessors exempting them from moratorium under the IBC.

IN more industry news, The fortnight leading up to Diwali, between October 29 and November 11, witnessed an impressive 49 per cent average increase in sales online and a 35 per cent surge in traffic, with conversion rates experiencing an upswing of up to 22 per cent, says a festive season report by global commerce media company Criteo. Sales also saw a whopping 72 per cent rise just two days before Diwali. Diwali sales in 2022 had grown by 17 per cent of that in 2021. Vaishal Dalal, co-founder and director, Excellent Publicity, said, quote, “During Diwali, brands created remarkable advertising campaigns, ensuring sustained excitement throughout the festival period,” unquote. A pandemic-free year and World Cup fever also contributed positively to the growth, experts added.

Meanwhile, Banks’ borrowing from the Reserve Bank of India’s Marginal Standing Facility rose sharply in November, reflecting the tight liquidity situation in the banking system. Lenders borrowed Rs 1.5 trillion on November 20, the highest amount borrowed so far in this month. Tightening in liquidity was earlier visible in the last week of the previous month when banks’ borrowing through MSF had reached Rs 1.86 trillion in October. Banks turn to RBI’s MSF facility for overnight funds when the interbank liquidity dries up. Currently, the MSF rate is 6.75% which is 25 basis points higher than the repo rate. Borrowing through MSF remained in the Rs 45000 to Rs 74000 crore in the first week of this month.

In some more banking news, Bank credit offtake is expected to grow at 13-13.5% in 2023-24, aided by an expansion in the overall economy and a strong demand for loans, says CareEdge Ratings. The credit rating agency feels that banks have adequate capital to absorb the impact of RBI measures on expected credit losses and unsecured personal loans. Latest RBI data showed that credit offtake increased by 20.4% year on year for the fortnight ended November 3 due to a strong demand for personal loans. Excluding the impact of the merger of Housing Development Finance Corporation with HDFC Bank, the growth stood at 15.9%. Deposits too grew by 13.5% y-o-y for the fortnight ended November 3.

Moving on. Tata group firm Tata Technologies raised Rs 791 crore from 67 anchor investors on Tuesday, at the higher end of the Rs 475-500 price band. The firm’s IPO opens for subscription on Wednesday, in what will be the first IPO of a Tata Sons entity for almost 20 years after TCS in 2004. The issue will remain open for subscription till Friday. The company in its filing to exchanges said, quote, “Tata Technologies, in consultation with the book running lead managers, has finalised allocation of 1,58,21,071 equity shares to anchor investors, at a price of Rs 500 per share,” unquote. The issue is an ‘offer for sale’ only by promoter Tata Motors, and investors Alpha TC Holdings & Tata Capital Growth Fund I.

Over to economy. The Virtual G20 Leaders’ Summit on Wednesday will review the progress on the decisions taken by the Leaders in September even as India pushes for early implementation of priorities including climate finance and energy transitions. The virtual summit will be the culmination of the Indian Presidency in 2023 during which G20 leaders met physically in New Delhi on September 9-10 and agreed upon 205 outcomes. India’s G20 Sherpa Amitabh Kant said that the summit will provide an opportunity for leaders to share views and enhance cooperation on critical challenges that we confront and address gaps in global governance.

Lastly, the stocks you need to watch out include Reliance Industries, TCS, Adani Ent., Maruti Suzuki, Bharti Airtel, and Wipro among others. Reliance Industries Chairman and Managing Director, Mukesh Ambani, announced plans for a Rs 20,000 crore investment in West Bengal over the next three years. TCS on the other hand will make a $125 million provision in its Q3 earnings related to a case with Epic Systems Corp. Maruti Suzuki India will consider the allotment of 1.23 crore equity shares to Suzuki Motor Corp. on a preferential basis on November 24.