Business News at 10:00 am on 12th June, 2024

Let’s begin. When the market turned topsy-turvy in May due to the Lok Sabha elections, many retail investors stopped their systematic investment plans , data from the Association of Mutual Funds in India showed. As a result, the SIP stoppage ratio shot up to a record high of 88.4% in May. Interestingly, this is despite the number of overall SIP accounts hitting new highs and SIP inflows into the market continuing to climb new peaks month after month. As per the data, 4.97 million new SIPs were registered in May, while 4.39 million SIPs were discontinued or their tenure got completed. This means the SIP stoppage ratio, which is the ratio of SIPs discontinued to the new SIPs registered, was 88.4% in May.
Moving to Industry news, greater thrust to domestic production of crude oil, boosting the refining capacity and raising the consumption of natural gas would be the top objectives of the new National Democratic Alliance government in the hydrocarbon sector, Hardeep Singh Puri said on Tuesday after assuming charge as the Union Minister of Petroleum and Natural Gas, for the second straight term. The minister also hinted that if the Indian basket of crude is sustained at around $70-80/barrel, the state-run oil marketing companies (OMCs) may consider cutting retail prices of auto fuels. The government would be firm on its target of 20% ethanol blending with gasoline and work to bring gas under the goods and services tax, he added.
Over to Roadways section, as alternate investment vehicles gain greater acceptance, the National Highways Authority of India plans to raise around Rs 20,000 crore by monetisation of highways through National Highways Infra Trust in the current financial year. Quote Under the National Monetisation Pipeline for 2024- 25, NHAI intends to monetize projects worth Rs. 15,000 – 20,000 crore through NHIT, unquote a statement said here. The target for monetisation through InVIT is higher than Rs 15.700 crore raised through this route last financial year by monetising 10 highway stretches. NHAI is the sponsor of NHIT with 16% stake. Other unitholders of the InvIT are Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board with 25% each and 9.86% is held by insurance companies and mutual funds.
Next from Economy news, states’ capital expenditure likely rose by over a quarter in 2023-24 compared with a 18% rise in 2022-23. This was supported by the Centre’s interest-free loans to them and the states’ own robust revenue growth. A review of the finances of 24 states by FE, showed that their capex in FY24 rose to Rs 7.16 trillion compared with Rs 5.68 trillion in the previous year, a rise of 26%. These states are: Madhya Pradesh, Andhra Pradesh, Uttar Pradesh, Maharashtra, Tamil Nadu, West Bengal, Bihar, Gujarat, Haryana, Karnataka, Kerala, Odisha, Punjab, Rajasthan, Telangana, Assam, Chattisgarh, Jharkhand, Uttarakhand, Himachal Pradesh, Tripura, Sikkim, Nagaland and Meghalay. These states’ capex includes Rs 1.09 trillion in 50-year loans given by the Centre in FY24
Now from aviation sector, the pace of building aviation infrastructure, including creation of new airports, will be accelerated, new civil aviation minister Kinjarapu Ram Mohan Naidu said, adding that “best global practices” and technologies will be employed to develop the sector further. Speaking to FE, the youngest minister of the new NDA government said that his first priority as minister would be ensure quote that all pending projects are completed without any delays unquote. Naidu will take charge on Wednesday. Outlining his priorities, Naidu said the reach of the civil aviation sector should be such that people can afford it and even reach the last-mile destinations. “Safety is a top priority.” According to Naidu, the sector has to provide growth and employment.
Next on infrastructure loans, the Finance Industry Development Council, the representative body for non-bank lenders, has asked the Reserve Bank of India for a review of the proposal to increase provisions that lenders have to set aside against infrastructure project loans. In May, the RBI proposed that banks and non-bank lenders set aside a provision of 5% of the total loan amount for infrastructure projects in the construction phase. In response, the FIDC has requested the RBI to continue with the standard provision of 0.4% for all projects in the construction phase. The FIDC has also asked the RBI not to implement the 10% limit on funding cost overruns. The NBFC body explained that cost overruns may happen for various reasons.
Lastly, let’s have a look at the stock to watch for today. Union Bank, OMCs, IndiGo, Patanjali Foods, Wipro, TVS Supply Chain, HCL Tech are the stocks that need to be look into. Union Bank of India, the board of directors of Union Bank of India has approved a capital raising plan of up to Rs 10,000 crore whereas, TVS Supply Chain has announced the acquisition of a significant 5-year strategic contract with Daimler Truck South East Asia Pte Ltd.