Weekly News Roundup at 10:00 am on 15th June, 2024

Let’s begin – The Securities and Exchange Board of India’s crackdown on stockbrokers’ misuse of client funds and securities has resulted in a significant fall in compensation claims filed by defrauded investors since the peak during the Karvy scandal. In FY24, the National Stock Exchange received 164 compensation claims, a drop from 758 claims in FY23, 3,009 in FY22 and the peak of 68,518 in FY21, according to the latest data. A similar downward trend can be seen through the claims paid by the NSE, though many have not yet been processed. In FY24, NSE disbursed over Rs 52 crore, compared with nearly Rs 129 crore paid in FY23, Rs 535 crore in FY22 and Rs 552 crore in FY21, data show.

Up next – 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 this week 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 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.

In another development – The NCLT extended the corporate insolvency resolution process of the grounded airline Go First by 60 days, at the request of the lenders. Since, this is the fourth extension given to the company, the tribunal made it clear that this is the last extension. Accordingly, the CIRP will now expire on August 3. During the hearing, the lawyer for the airline’s resolution professional told the tribunal that they were seeking this extension owing to an extraordinary situation post the Delhi High Court judgment asking DGCA to deregister all of its 54 aircraft. According to the RP, those who have shown interest in buying the airline have revised their offers and the lenders are yet to consider them, hence the 60 day extension is needed.

Moving on – The stock market may have recovered from the fall of almost 6% on poll result day, but IPO aspirants may take a little more time before taking the plunge, say experts. Most would like to assess the ramifications of a coalition government at the Centre and wait at least till the Budget in July before firming up their listing plans. Around 11 IPOs with issue size of more than Rs 9,200 crore have received permission from SEBI in 2024, but are yet to get listed. These include ixigo’s parent firm Le Travenues Technology, Allied Blenders & Distillers, Asirvad Microfinance and Fincare Small Finance Bank. The new government is expected to focus more on consumption spending rather than capital expenditure.

In other news – The Federation of Automobile Dealers Associations released Vehicle Retail Data for May 2024. According to the data, the Indian Auto Retail sector achieved a 2.61% YoY growth in May 2024, owing to positive rural demand due to expected good monsoon and improved finance availability kept the counters ticking. The two-wheeler segment grew by 2.5% YoY but declined by 6.6% MoM. Dealers reported supply constraints, lack of OEM marketing activities and impacts from extremely hot weather and elections. Positive rural demand due to expected good monsoon and improved finance availability were also noted which kept the counters ticking.

Meanwhile – The gross loan portfolio of the microfinance industry rose 25% year-on-year to Rs 4.3 trillion as on March 31, a report by Micro Finance Industry Network said this week. The industry served 78 million unique borrowers through 149 million accounts. NBFC-MFIs are the largest provider of micro-credit, accounting for 39.4% of the total industry portfolio. The loan outstanding of NBFC-MFIs stood at Rs 1.7 trillion as on March 31. Assets under management of NBFC-MFIs rose nearly 30% YoY to Rs 1.6 trillion. AUMs include an off-balance-sheet exposure of Rs 30,641 crore. The average loan amount disbursed per account rose 9.9% to Rs 45,024 in 2023-24. On an aggregated basis, NBFC-MFIs have a network of 20,348 branches with 1,83,842 employees.

Lastly – JSW Energy announced that it has begun construction activities for its battery storage project marking its entry to the energy storage services. In a regulatory filing, JSW Energy said the company is spearheading the development of the largest commercial-scale green hydrogen project in India and first in the country for making green steel. The company has achieved significant milestones in the green hydrogen space. These include signing a seven years green hydrogen supply agreement with JSW Steel Ltd for 3,800 tons per annum, along with associated green oxygen. The detailed engineering work and ordering of equipment have been completed with commissioning expected in Q4FY25, it said.