Business News at 10:00 am on 25th January, 2024

Let’s begin. In a relief to foreign portfolio investors with disproportionately high exposure to a single corporate group, the Securities and Exchange Board of India has decided to give them more time to comply with the new disclosure norms on beneficial owners or liquidate holdings, sources close to the development said. In its latest move, the markets regulator has informally advised FPIs that by the end of January, the ones that exceed Sebi-defined threshold limits will get 10-30 days to make the necessary disclosures. If they fail to do so, they will get another six months to prune their holdings to admissible limits, the source said. The standard operating procedure that custodians follow for enhanced disclosures and exemptions were first put up in October 2023.
Meanwhile, The banking system liquidity deficit breached the Rs 3-trillion mark to hit a 14-year high, pushed by lower government spending, outflow towards tax payments and sluggish growth in deposits. According to the Reserve Bank of India, the liquidity deficit touched Rs 3.34 trillion on Tuesday from Rs 2.72 trillion on Monday. Ajay Manglunia, managing director and head —investment grade group, JM Financial, told FE, quote, “The liquidity from government side comes into the market after a gap which causes fluctuations in liquidity. Month-end GST outflows have also added to the liquidity tightness,” unquote. He added that the RBI wants liquidity to remain tight to control inflation because tighter liquidity means higher rates and slower credit disbursement.
Moving on. The National Financial Reporting Authority is going to inspect the Big Four audit firms as well as other top auditors of large listed entities in 2024, an official familiar with the development told FE. The official said, quote, “We shall inspect the Big four audit firms again this year in order to check whether the corrective measures highlighted in the December report have been taken or not,” unquote. In early December 2023, the accounting watchdog, which came into being in 2018, released a report highlighting the deficiencies in the audit processes of the Big four companies – Deloitte Haskins & Sells BSR & Co (EY), SRBC & Co (KPMG) and Price Waterhouse Chartered Accountants.
Over to economy. After failing to meet the Budget target to provide connectivity to rural and remote areas for the last six financial years, the government’s expenditure from the Universal Service Obligation Fund is expected to be at an all-time high in FY24, officials said. In fact, in the run-up to the interim Budget for 2024-25, the department of telecommunications has revised expenditure estimates from the USO fund to Rs 15,000 crore in FY24, 44% higher than the Rs 10,400 crore estimated earlier for the year. An increase in disbursement from USOF can be attributed to BSNL’s Rs 30,000 crore 4G saturation project to connect about 30,000 villages, ongoing projects to provide connectivity to Andaman and Nicobar Islands and Lakshadweep among other projects.
In some more economy news, Amid concerns over the absence of snowfall and rains over the hills this season, the India Meteorological Department expects the persisting El Nino conditions to turn ‘neutral’ prior to the start of monsoon season in June. Neutral El Nino conditions imply that it would not have an adverse impact on the monsoon rains next season. Mrutyunjay Mohapatra,Director General, India Meteorological Department, however, said there are several other parameters which could influence the monsoon. IMD will be releasing the first forecast for 2024 monsoon (June-September) in April. The next monsoon rains are crucial for Indian agriculture and more than 70% of the country’s annual precipitation is received during four months.
Next up, industry sector. Tata Steel on Wednesday posted a net profit of ₹513 crore on a consolidated basis for the quarter ended December 31, missing consensus street estimates of ₹1,688 crore, driven by demand from the domestic market. The company had posted a net loss of ₹2,224 crore for the comparable year-ago period. It The had posted a net loss of ₹6,196 crore for the preceding quarter ended September 30, impacted by weak performance of its European operations. For the reporting quarter, Tata Steel’s revenue fell 3.1% to ₹55,312 crore from ₹57,084 crore recorded during the comparable year-ago period, while Ebitda rose 54.7% to ₹6,264 crore from ₹4,048 crore, the company said in a regulatory update.
Lastly, let’s look at the stocks which are in focus today. These stocks include ZEEL, Coal India, Religare Enterprise, Mazagon Dock, and Indus Tower among others. For those unawre, the government approved the setting up of a coal-to-synthetic natural gas project through a joint venture between the company and GAIL and a coal-to-ammonium nitrate project through a venture between Coal India and BHEL. ON the other hand, Zee moved NCLT against Sony Pictures Networks’ termination of $10-billion merger. The company is “seeking directions to implement the merger scheme.”