In today’s podcast, we talk about Adani group’s trouble over coal supply, Paytm job cuts and mobile PLI among other news. Also know about the stocks in focus today.
Today’s Latest Business News at 10:00 am on 23rd May, 2024.
In today’s podcast, we talk about Adani group’s trouble over coal supply, Paytm job cuts and mobile PLI among other news. Also know about the stocks in focus today.
Today’s Latest Business News at 10:00 am on 23rd May, 2024.
[Disclaimer: This transcript is auto-generated]
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In a surprise gift to the government, the RBI’s Central Board of Directors today approved a record dividend transfer of Rs 2.10 trillion for 2023-2024. The amount is more than double what was budgeted, shoring up fiscal revenues. The government had budgeted to receive Rs 1.02 trillion in dividends from the RBI and state-controlled banks. The RBI’s annual payout to the government comes from the surplus income it earns on investments and valuation changes on its dollar holdings, and the fees it gets from printing currency. Last year, the RBI transferred Rs 87,416 crore to the government. State Bank of India’s group chief economic adviser Soumya Kanti Ghosh said the RBI’s income in FY 24 is projected to be around Rs 3.75-4 trillion.
Meanwhile, The Adani Group found itself at the centre of yet another controversy, with the Organized Crime and Corruption Reporting Project alleging that the group passed off low-quality coal as far more expensive cleaner fuel in transactions with an Indian state power utility. A Financial Times report on Wednesday said documents accessed by OCCRP add a potential environmental dimension to other accusations against the conglomerate. The report said that they suggest Adani may have fraudulently obtained bumper profits at the expense of air quality, since using low-grade coal for power means burning more of the fuel. The charges were however dismissed by the Adani group.
Moving on. The higher-than-expected dividend of Rs 2.11 trillion from the RBI will let the Centre reduce its market borrowings in the current fiscal by over 0.37% of the GDP if other budget numbers hold. However, official sources indicated that part of the extra inflows of around Rs 1.3 trillion from the central bank could be used for scaling up the capex budget. The record surplus transfer by the central bank has positive spin-offs for the economy. It will boost investment demand and ease inflationary pressures further. The unexpected fiscal bonanza will also make more capital available for corporates that are on the cusp of an investment cycle and ease the tight liquidity for banks, thereby accelerating credit flows to consumers.
On to industry. Paytm parent One97 Communications saw its net loss widening to Rs 550 crore in the January-March quarter from Rs 168 crore a year ago due to a fall in revenue from operations. The operating revenue in fourth quarter fell 3% year on year to Rs 2,267 crore, impacted by temporary disruptions in business operations. The fintech firm warned of job cuts and said it would trim non-core assets as it saw its revenue decline 3 per cent in the quarter to Rs 2,267 crore — the first drop since its listing on the bourses in 2021. For FY24, the company’s loss narrowed to Rs 1,422.4 crore from a loss of Rs 1,776.5 crore in FY23.
Smartphone production-linked incentive, the most successful of all 14 such schemes, may be extended by a couple of years beyond 2025-26 when it officially ends. The five-year PLI scheme, which started in 2020 ends in 2026, and each company has the flexibility to choose any five consecutive years. While Apple has chosen the period of 2021-2026, for Samsung it’s between 2020-2025. Officials sources said that while it’s not a good practice for any industry to be perpetually supported by subsidy, ending the same abruptly could also be counter-productive. Therefore, the thinking in the government is that a component scheme should replace the PLI in the sector.
Over to economy. The government has identified a clutch of products where inverted duty structure is distorting trade and impacting manufacturing competitiveness and has initiated the process to address the issue, a senior official said. Among the products that have been identified are washing machines, air purifiers, solar glass, paper, furniture, apparel and jewellery. Some of these products are on the list identified for special attention under Make in India initiative. Inverted duty structure is a situation where inputs and raw materials attract higher tax than the finished products. In cross-border trade it makes imports of finished products cheaper than raw materials and disincentivises local manufacturing. In domestic taxation inverted duty structure creates hurdles for manufacturers to claim credit for taxes paid on inputs.
Lastly, let’s look at the stocks in focus. These include Paytm, Airtel, Tata Communications, Nykaa, and Jubilant Foddworks among others. Paytm parent One97 Communications saw its net loss widening to Rs 550 crore in the January-March quarter from Rs 168 crore a year ago due to a fall in revenue from operations. The operating revenue in fourth quarter fell 3% year-on-year to Rs 2,267 crore, impacted by temporary disruptions in business operations. On the other hand, Airtel Payments Bank is targeting around 50% year-on-year growth in FY25. The overall deposits stood at Rs 2,801 crore as on March 2024, with monthly transacting users at 80.4 million.