Business News at 09:30 am on 8th December 2023

Hit by the Reserve Bank of India’s decision to raise risk weights on unsecured loans, digital lenders are looking to reduce their exposure to small-ticket personal loans. Anticipating an imminent increase in funding costs, they have scaled down disbursal targets in the sub-Rs 50,000 loans category and are planning to diversify their product portfolio and customer base. As per industry estimates, 70-75% of the total advances of digital lenders consist of small ticket loans below Rs 50,000. Jatinder Handoo, chief executive officer, Digital Lenders Association of India, told FE that some digital lenders may reduce their small-ticket loan portfolio. They might enter into portfolios which are more secured. He added that the rise in the cost of funds will make digital lenders choosy.
Meanwhile, Amid lingering concerns that the much-delayed private capex cycle may not have taken root yet, Corporate India on Thursday said with capacity utilisation in many sectors being 75-80% if not higher, a strong momentum in private investments was firmly around the corner. Pointing out that fresh investments have already started in many sectors, a clutch of senior company executives told FE on the sidelines of the CII Global Economic Policy Forum here that strong corporate balance sheets and an incipient revival in the rural economy would aid private capex. However, some of them pointed out that many firms might wait till the interest rates go down and global uncertainties ease.
Moving on. Adani Cements, the holding company of Adani Group’s cement firms, will power 60% of its cement production with renewable energy sources by 2028. Adani Group chairman Gautam Adani in a social media post on Thursday said, quote, “This ambitious goal will establish us as a front runner in the global arena of sustainable cement production,” unquote. At present, blended cements forms more than 90% of its production. It is produced by recycling waste, fly-ash and slag. He added that this significant shift not only enhances the environmental footprint of our cement but also marks a substantial step towards sustainability. Chief Economic Adviser V Anantha Nageswaran told FE that that external uncertainties would always remain, and it should not deter the private sector from investing.
Speaking of Adani, Adani Ports and Special Economic Zone, India’s largest port developer and operator, will exceed its guidance of 370-390 million metric tonne for FY24 and is on track to cross 500 MMT by FY25. The Adani Group company recorded a 42% rise in cargo volumes at 36 MMT in November, with growth coming from all three cargo categories. Its dry bulk cargo grew 60% year-on-year, containers by 26%, and liquid and gas by over 23%. Between April and November this year, APSEZ handled around 275 MMT of cargo, a 21% year-on-year rise. A source close to the development said that this is nearly 70% of the full-year guidance of 370-390 MMT, and the company expects to meet the target set for the entire year.
Over to industry. Google on Thursday withdrew its appeal against the order of a single judge of the Delhi high court asking the Competition Commission of India to hear applications moved by Indian startups against Google’s user choice billing system. Senior advocate Sajan Poovayya, who appeared for Google, told the court that the order was passed by a single judge when the CCI did not have the quorum to hear the plea. The CCI, however, now has the quorum and has been hearing the plea by startups, he noted. Google’s counsel further told the court that while the company wishes to withdraw the appeal, it would like to keep the questions of law open.
Next up, economy. Most economists and market watchers expect the Monetary Policy Committee of the Reserve Bank of India to hold the key repo rate at 6.5% when it announces the monetary policy on Friday. They also believe the stance will be left untouched at “withdrawal of accommodation” even though crude oil prices have fallen below the $75 mark. The majority expects the RBI to raise it growth forecast for FY24 to 6.7% from 6.5% following a strong showing in Q2FY24, even though the consumption side is not faring so well. As some experts have pointed out, the proxy indicators that are used to assess the informal sector within the GDP data, have surprised on the downside.
Lastly, let’s look at the stocks in focus today. These include Adani Ports & Special Economic Zone, Balrampur Chini Mills, Triveni Engineering, Dalmia Bharat Sugar, and Vedanta among others. Adani Ports & Special Economic Zone will exceed its guidance of 370-390 million metric tonne for FY24 and is on track to cross 500 MMT by FY25. ON the other hand, Vedanta Resources is in talks with a clutch of foreign investors to raise $1.25 billion, ahead of its debt maturity of $1 billion in January 2024.