Business News at 10:00 am on 22nd July, 2024

Let’s begin with the major update, Private risk capital, which has stayed out of the highway sector since 2014, is finally returning to the sector. This follows the government’s efforts to raise the comfort level of investors in the latest set of amendments to the model concession agreement (MCA). The changes in MCA provide for liberal construction support for projects, allow borrowing from non-bank lenders, and enhanced compensation if the tariff projections are not met. It also has buyback provisions by the National Highways Authority of India (NHAI), in certain conditions and enhanced liability by the government agency if the contract is terminated. However the industry is waiting for more lucrative projects to come their way.

Moving on, HDFC Bank is aiming to lower its credit-deposit (CD) ratio from 104% as quickly as possible, said MD & CEO Sashidhar Jagdishan in an analyst call. Quote, We have not received any regulatory prescription (from the Reserve Bank of India), but the thought process is that we will try and get this done (lower CD ratio) as quickly as possible and still maintain the objective of profitable growth, unquote, he said in an analyst call post the bank’s June quarter results. The country’s largest private bank’s overall advances grew at 53% year-on-year (y-o-y) to Rs 24.86 trillion whereas deposits grew 24% to Rs 23.79 trillion in the June quarter, thereby leading to credit exceeding deposit growth. Sequentially, deposits growth fell 7%.

In other news, Amid acrimony between the ruling dispensation and the opposition parties, the Budget session of Parliament commencing on Monday will take up five Bills for consideration and passing, but not any major economic legislation.The Budget session between July 22 and August 12 will have a total of 16 sittings. Finance minister Nirmala Sitharaman will table the Economic Survey in Parliament on Monday. The Union Budget for 2024-25 will be presented on July 23. Five Bills have been listed for introduction, consideration and passing during the session, excluding the Finance Bill, 2024. The Disaster Management (Amendment) Bill, 2024 seeks to bring clarity and convergence in the roles of different organisations working on disaster management, according to PRS Legislative.

Meanwhile, Quant Mutual Fund is set to lower the base total expense ratio for 11 of its schemes by up to 12% effective July 25, in a bid to boost the investor confidence as the company is facing a Sebi probe with regard to alleged front-running activities. The fund house will lower the total expense ratio for some of its biggest schemes – Quant Active Fund, Quant Mid Cap Fund, Quant Large Cap Fund, Quant Value Fund, Quant Multi Asset Fund and Quant Manufacturing Fund – according to an email sent to its investors. After the proposed changes, the base total expense ratio of Quant Active Fund and Quant Mid Cap Fund will be 0.47%, compared with 0.51% at present.

Up next, Reliance Retail, the country’s largest organised retailer, has added 30 Metro Cash & Carry outlets in the April-June quarter as the company rapidly expands the footprint of the organised wholesaler. Metro Cash & Carry — part of the grocery new commerce or B2B division — was acquired for Rs 2,850 crore in December 2022 with 31 outlets in 21 cities. It now has over 200 stores in 180 cities, the company said in its latest investor presentation. B2B customers — mainly kiranas, merchants and small retailers — can use the Metro B2B app or visit stores to place orders, industry sources said. Metro Cash & Carry’s customer base has crossed the four-million-mark, according to sources in the know.

Moving ahead, Kotak Mahindra Bank is planning to increase its branch count by 80% to around 3,500 in the next five years, as the lenders looks to expand presence across the country. The country’s fourth-largest lender plans to add approximately 1,500 branches to its current network, which currently stands at around 1,965. The lender added 168 branches in the previous financial year, and aims to open 200-250 branches annually over the next five years. The bank will add up to 200 branches in the current fiscal, around 20% higher than fresh branch additions in 2023-24. The total branch count stood at 1,948 as on March 31 this year. Around 45% of branches are located in metros.

Lately, let’s take a look at the key stocks for today. GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a negative opening on Monday. GIFT Nifty traded down by 117.50 points or 0.48% at 24,416.50 indicating a negative opening for domestic indices NSE Nifty 50 and BSE Sensex on Monday. Previously, on Friday, the NSE Nifty 50 ended down by 269.95 points or 1.09% to settle at 24,530.90 while the BSE Sensex fell 738.81 points or 0.91% to 80,604.65. Here’s a look at the key stocks to watch in trade – Reliance Industries, HDFC Bank, Wipro, Kotak Mahindra Bank, IRCTC, Vedanta, ONGC, JSW Infra.