Weekly News Roundup at 10:00 am on 23rd June, 2024

Let’s begin – The government is considering various options to discourage retail participation in the futures and options segment. The proposed steps include moving F&O from the head of ‘business income’ to ‘speculative income’ and/or also introducing a tax-deductible-at-source in the upcoming Budget, sources said. Changing the head of F&O income from ‘business income’ to ‘speculative income’ will be a big step because it will be considered at par with lottery or crypto investments. Income from F&O transactions is now taxed as business income. The income is added to business/salary income and taxed as per the applicable slabs of 5%, 20% and 30%, respectively.

Up next – India Inc’s sequential revenue growth is expected to taper in the first quarter of FY25, stated a report by ICRA. While signs of a revival in rural demand have emerged, ICRA said that headwinds such as a slowdown in the Government of India’s spending during the Parliamentary elections and onset of monsoon period are likely to weigh on growth in H1 FY2025. However, the operating profit margin will remain steady in the range of 15-18 per cent, despite the expected tapering in revenue growth, as raw material costs are expected to remain steady. This is estimated to keep the credit metrics of India Inc in Q1FY25 largely stable with the interest coverage ratio in the range of 4.7-5.0 times.

In another development – The Cabinet has approved the development of mega Rs 76,200 crore all-weather greenfield deep-draft port at Vadhavan in Maharashtra, signalling then National Democratic Alliance government’s intent to give continued thrust to public investment in infrastructure. The Cabinet also gave its nod to viability gap funding, for Rs 7,453 crore offshore wind energy projects, including one in Gujarat, and a Rs 2,870-crore project for the expansion of Varanasi airport. It also approved viability gap funding, for Rs 7,453-crore offshore wind energy projects, including one in Gujarat. On completion, the new port on west coast will have a cumulative capacity of 298 million metric tonnes/annum, and will be among the top 10 in the world.

Moving on – The coal ministry will seek to reduce the import of the dry fuel to nil by FY26. To achieve the same, it will operationalise 20 new mines in the current fiscal year, including 12 with a total capacity of 58 million tonnes in the first 100 days of the new government. The government is confident of producing 1.08 billion tonnes of coal in the current financial year while reducing imports. In FY24, the country’s coal sector companies cumulatively imported 265 million tonnes of coal, up from 245 million tonnes in FY23, as per official data. As part of the 100-day agenda, the ministry will also raise Coal India’s renewable energy capacity to 1 gigawatt.

Meanwhile – The National Human Rights Commission this week issued a notice to Union Ministry of Labour and Employment over the alleged ‘anti-labour’ practices at Amazon’s warehouse located in Haryana’s Manesar. Taking a ‘suo motu cognizance,’ the NHRC has sought the reply from the Secretary, Labour Ministry, within next seven days. In its notice, commission took note of the media reports about how the workers employed at the warehouse were asked to take a pledge that they would not take any water or toilet breaks until they finish unloading of material from six trucks. The NHRC notice comes a day after the Indian Express published a report detailing the account of horrible working conditions at the Manesar warehouse.

In other news – Air India is all set to launch premium economy class on selected domestic routes from July 2024. As of now, Vistara is only Indian airline to offer premium economy services on domestic flights. Air India’s Chief Executive Director and Managing Director Cambell Wilson said that the launch of a three-class cabin in Air India’s narrow-body fleet and initiation of interior renovations are major steps taken for enhancing the travel experience. The airline will offer premium economy seats on Delhi Chandigarh-Delhi and Delhi Bengaluru-Delhi for now. The Tata Group Airline has renovated two new A320 neo aircraft which will consist of 24 seats with extra legroom in premium economy section, 132 seats in economy section, and eight seats in business class.

Lastly – Hyundai Motor’s Indian business has filed draft papers for India’s largest initial public offerings. This IPO, aimed at bolstering Hyundai’s brand presence and providing liquidity in the country, marks a pivotal moment in the automotive industry. Not only will this be the biggest IPO in the automotive space, it also surpasses the IPOs filed thus far on Dalal Street including the largest so far – LIC’s $2.5 billion issue in 2022. Hyundai Motor’s Indian unit has applied for regulatory approval for a stock market listing in Mumbai, potentially marking the nation’s largest IPO. This move involves the South Korean parent company selling up to a 17.5% stake.