Business News at 10:00 am on 14th June, 2024

Let’s begin… The stock of Nestle India rose 3% to an intraday high of Rs 2,614.45 after the company continued to pay a general licence fee, or royalty, to its parent company, Societe des Produits Nestle S.A. The current royalty rate is at 4.5% of the net sales. Shares of Nestle India have given a return of more than 3% in the last five days. The scrip has risen over 2% in the past six months. It raised investors’ wealth by 14% in the last years and 123% in the past five years. To compare, the benchmark index, Nifty 50, has risen 2% in the past five days. The index has given a return of 12% in the past six months.

Moving on, Fuelled by economic diversification, rising consumer demand, and reverse migration patterns accelerated by the pandemic, the real estate markets of Tier-2 cities are witnessing remarkable growth trends, and these once overlooked urban centres are rapidly closing the gap with their Tier-1 counterparts, according to Housing.com’s ‘The Bharat in India’ report. This surge can be attributed to the burgeoning economic potential of these cities attracting a growing influx of residents. Notably, this trend has gained momentum in the wake of the pandemic and fuelled by the phenomenon of reverse migration. The economic dynamism has had a multiplier effect on the real estate market in Tier-2 cities especially in retail, warehousing and residential segments.

Furthermore, Larsen and Toubro (L&T) announced on Thursday, that its Hydrocarbon vertical (L&T Energy) has secured a large order from the Oil & Natural Gas Corporation (ONGC) for Daman Upside Development Project-Wellhead Platforms & Pipelines (DUDP-WP), off India’s west coast. The scope of work, it added, includes engineering, procurement, construction, installation, and commissioning of four Wellhead Platforms, 140-km Pipeline and associated Topside modifications at Tapti Daman block at a Western offshore location. According to the company, the value of significant order is between Rs 1000 crore and Rs 2500 crore, large orders are worth Rs 2500 crore- Rs 5000 crore, major orders are in the range of Rs 5000 crore- Rs 7000 crore and mega orders are worth above Rs 7000 crore.

Additionally, India’s non-financial corporates will require capacity expansion, inorganic growth, refinancing and working capital needs, along with shareholder payments, in order to fulfil their large capital requirements, said a report by Moody’s Ratings and ICRA. “While India’s domestic liquidity and companies’ internal cash flow can largely cover their capital needs, offshore funding will remain key despite its share reducing to 12 per cent of India Inc’s total funding due to its higher costs and rising domestic liquidity,” said Vikash Halan, Managing Director, Moody’s. Per Moody’s, non-financial corporates will face stiff competition from the retail sector for bank funding as retail loans face high demand and have higher yields relative to corporate loans.

Moving on, The India ship recycling industry is expected to record a revenue growth of approximately 15 per cent this fiscal after two years of decline of 22 per cent in fiscal 2024 and 8.5 per cent in fiscal 2023, said a report by Crisil Ratings. The growth, it added, will be supported by two factors. First, the increased availability of ageing vessels for recycling due to addition of new vessel capacity globally; and second, the higher competitiveness of Indian ship recyclers compared with the key rival nations, Bangladesh and Pakistan. Per the report, the increased availability of ageing vessels will bring down input cost of ship recyclers. This, along with higher capacity utilization leading to better efficiency, will improve operating profitability by 75 basis points to 6.5% this fiscal.

In other news, Assorted regulations and the lack of any let-up in compliance burden are crippling the growth of India’s $220 billion chemical industry. Each unit in the employment-intensive sector requires to meet as many as 635 compliance requirements every month, and this is particularly stifling for the MSMEs, industry sources and analysts feel. Rishi Agrawal, co-founder and CEO, TeamLease RegTech said, “Even understanding the compliance needs is difficult for most MSMEs. Lack of training and skilled manpower makes it more challenging for the units to comply.” Rishi Agrawal, co-founder and CEO, TeamLease RegTech said, “Even understanding the compliance needs is difficult for most MSMEs. Lack of training and skilled manpower makes it more challenging for the units to comply.”

Lastly, The benchmark equity indices closed the trading session on a positive note on June 13. The BSE Sensex gained 221 points or 0.29% to finish the day’s trading at 76,827.11, while the NSE Nifty 50 closed 77 points or 0.33% higher at 23,399.95. Nifty Midcap 100 closed 450 points or 0.83% at 54,676.05. However, Bank Nifty closed in the red down 5.80 points or 0.01% at 49,889.30. Shriram Finance, HDFC Life Insurance, Divi’s Lab, M&M, and Titan were the top gainers in the Nifty 50. While Hindustan Unilever, ICICI Bank, Axis Bank, Eicher Motors, and Britannia are the key losers in the Nifty 50 on June 13.