Business News at 09:30 am on 7th December 2023

“Let’s begin…Several real estate and infrastructure companies are set to file writ petitions before various High Courts in the coming days, challenging the 18% Goods and Services Tax imposed on corporate guarantees issued by parent companies to their subsidiaries and related parties to boost lenders’ confidence, sources aware of the matter told FE. The move follows as many as 50-60 such companies receiving tax notices after the GST Council’s decision in late October to tax these guarantees. Experts feel the new tax will cause stress in the infrastructure sectors as many firms are heavily dependent on external financing for mega projects. The pleas will also raise questions over the valuation mechanism of taxing such transactions, and, of course, retrospective nature of the current set of notices.
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“Next up…The share of term deposits offering an interest rate of 6-8% has surged to nearly 80% at the end of September from 58% at the end of March, Reserve Bank of India (RBI) data shows. Approximately half of the fixed deposits (FDs) with banks, amounting to Rs 52.87 trillion, now offer an interest rate of 7-8%. Suresh Khatanhar, DMD, IDBI Bank, said the liquidity deficit in the banking system was at a five-year low and banks need funds to meet credit demand. The cost of funds for banks has risen since the share of term deposits carrying sub-6% interest rates declined to 16.7% in September from 38.7% in March. The amount parked in deposits offering less than 6% interest halved to Rs 17.59 trillion at the end of September from Rs 36.82 trillion at the end of March.
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“In some exciting news…In a development that will deepen India’s local value addition in the mobile and electronics manufacturing chain, Apple has asked its suppliers to make batteries for its forthcoming iPhone 16 domestically. This is part of the company’s plans to shift its global supply chain out of China. According to a Financial Times report, Apple has asked its battery manufacturers, like Desay of China, to establish new factories in India. Similarly, Simplo Technology, a Taiwanese battery supplier has been asked to scale up production in India for future orders. Earlier this week, minister of state for electronics and IT Rajeev Chandrasekhar had said that TDK, a Japanese supplier for Apple, was setting up a 180-acre facility in Manesar, Haryana, to build batteries for iPhones.
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“Additionally…Gautam Adani, chairman of the Adani Group, on Wednesday said that Adani Electricity is on course to provide 60 % renewable electricity to Mumbai by 2027 and will set a global record for the country’s financial capital. He further said that over 38 per cent of Mumbai’s power supply is green at present. Adani in a post on X said, quote, “As world leaders gather for COP28, Adani Electricity stands out with its green initiatives. We are on course to provide 60 per cent renewable electricity to Mumbai by 2027, setting a global record for a major city. Currently, over 38 per cent of our supply is green. This Diwali, we achieved a landmark by fuelling Mumbai entirely with 100 per cent renewable energy, demonstrating our dedication to a sustainable future.” Unquote.
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“In other news…Large corporates such as Bharti Airtel and lending institutions like Bank of Baroda, Canara Bank and Small Industries Development Bank Of India (SIDBI), among others, have raised Rs 45,493 crore via bonds since November 17, a day after the Reserve Bank of India (RBI) hiked risk weights on unsecured credit, data compiled by FE showed. The quantum is significantly higher than Rs 24,161.3 crore raised in October. Canara Bank and Bank of Baroda raised Rs 5,000 crore each via infrastructure bonds at 7.68% coupon rate in late November. SIDBI, too, raised Rs 4,887 crore at 7.83% coupon. Bharti Airtel, meanwhile, raised Rs 8,000 crore via NCDs in three separate tranches on December 1 at an average yield of 8.95%.
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“Meanwhile….The government will sell up to 8% stake in state-run railway firm IRCON International worth around Rs 1,160 crore through an offer for sale (OFS) on Thursday-Friday. The floor price for the OFS is set at Rs 154/share, at a discount of 10.5% to the closing price of IRCON on Wednesday. Quote, “Offer for Sale in IRCON opens tomorrow for Non-Retail investors. Retail investors can bid on Friday. Govt. would divest 8% equity including Green Shoe option,” unquote, Department of Investment and Public Asset Management (Dipam) said on ‘X’.
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Lastly…Let’s take a look at the key stocks to watch in trade today – ONGC, Himadri Speciality Chemicals, Delta Corp, Bharat Electronics, Adani Power, Ircon. GIFT Nifty traded up 50.5 points or 0.24 % at 21,046.5, indicating a negative opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 gained 82.55 points or 0.40% to settle at 20,937.65, while the BSE Sensex advanced 357.59 points or 0.52% to 69,653.75.