Business News at 10:00 am on 11th March, 2024

Let’s begin – Fast-moving consumer goods companies may hike prices by 2-3% by the second half of 2024-25, led by volatile commodity prices, notably of food and crude oil, and wage inflation. Small, calibrated price hikes may also boost price-led growth, which has been flat to negative for most firms through FY24. “As we are in the process of preparing our budgets for FY25, we find that there is likely to be some amount of inflation in the next financial year. Some amount of price increases therefore will come back, to the tune of 2-3%. So, even as the emphasis is on volume growth within FMCG, small price hikes will be there,” Mohit Malhotra, chief executive officer at Dabur India, said.

Meanwhile – Investors in several Tata group stocks are keeping their fingers crossed, following reports that Tata Sons, the conglomerate’s investment holding company, is looking at options to avoid taking the initial public offer (IPO) route as mandated by the Reserve Bank of India. The RBI rule that Tata Sons would have to get listed by September 2025 as it has been classified as an upper-layer NBFC, was known for a long time. But investors started buying Tata stocks, Tata Chemicals in particular, after investment banker Spark Capital released a report last Monday identifying Tata Chemicals as the only potential play in the IPO. Tata Chemicals rallied 31% in the last three trading sessions as it was believed to be the biggest beneficiary of the mega listing. Spark had identified Tata Chemicals as the only realistic way to get exposure to the potential value unlocking of Tata Sons’ stake. Calculations by Spark show that Tata Chemicals’ 3% stake in Tata Sons is worth around Rs 19,850 crore or 80% of the market value of the company.

In a separate development – The Centre may a draw up a comprehensive scheme to provide concessional capital support to the tune of Rs 1 trillion to private sector to encourage them to adopt indigenous deep-tech and cutting-edge technologies in defence, energy and electronics. The scheme, to be run for an initial period of five years, may be run by state-run agencies like National Bank for Financing Infrastructure and Development and National Investment and Infrastructure Fund (NIIF), a senior official told FE. Consultations are going on among concerned government departments and various scientific departments and institutions, the official added.

In another development – While Tata Sons’ initial public offer has been in focus for the past week, but there are five other companies who also have to launch their offers in slightly-over one year. These include companies like Bajaj Housing Finance and five other shadow banks including Piramal Capital and Housing Finance, Tata Capital Financial Services, HDB Financial Services, and Aditya Birla Finance that must list in a year on account of being featured in Reserve Bank of India’s list of ‘upper-layer’ non-banking financial companies. In October 2021, RBI issued scale-based regulations, which classified NBFCs on the basis of size, activity, and perceived weakness. According to these norms, NBFCs are classified as base layer, middle layer, upper layer, and top layer.

Now news related to NBFC – Non-banking finance company, IIFL Finance, has filed a compliance report with the Reserve Bank of India (RBI) on Friday after making some key systemic changes in its operating processes, said sources close to the development. The banking regulator on March 4 had barred the NBFC from offering gold loans due to norm violations. “The company has submitted all detailed documents along with evidences to the regulator. It has made full proof changes in all the five compliance issues that the regulator pointed out,” a source said seeking anonymity.

In another development – To diversify import dependence on a few countries, India has started to source urad dal from Brazil for first time to meet a shortfall in domestic output. Sources said that first consignment of around 3000 tonne of urad dal from the South American country has arrived. “We are working with Brazil and Argentina for the imports of urad and tur as depending on one country poses risk,” an official said. He said that around 20,000 tonne of urad is likely to be imported into India this year from Brazil. The government has held a series of discussions with Brazil and Argentina to source urad and tur dal for meeting the domestic requirement.

Lastly – GIFT Nifty traded lower, down 66.00 points or 0.29% at 22,638.00, indicating a negative start for domestic indices NSE Nifty 50 and BSE Sensex on Monday.Asian equity indices closed on a mixed note. Japan’s Nikkei 225 was down 2.31% at 38,772.45. Similarly, the Asia Dow was up 0.48% to 3,254.30. Hong Kong’s Hang Seng index was up 0.76% at 16,353.39. The benchmark Chinese index Shanghai Composite closed 0.62% higher at 3,046.02.