Business News at 10:00 am on 26th March, 2024

Let’s begin – For Indian buyers, EMIs, or equated monthly instalments, are not an unfamiliar concept. The trend of piecemeal payments has driven high-value purchases in India for long, whether it be cars or homes. It is now slowly but steadily taking over smaller purchases too, as consumers look to upgrade their products or seek instant gratification. Conversations with consumer durable companies and electronic retailers indicate that sales backed by credit-schemes such as no-cost or low-cost EMIs, longer-tenure loans, and zero-down payment options etc now contribute nearly 45% of industry sales from 15-20% five years ago. Many retailers, meanwhile, have tie-ups with banks and financial institutions like Bajaj Finserv and HDB Financial Services, making it easier for consumers to apply for loans.

Up Next – Unsold inventory in residential properties is likely to increase due to a sharp price rise and increase in launches. Housing prices went up sharply by 15-35% in 2023, especially in key markets like National Capital Region (NCR), Hyderabad and Mumbai. Luxury property prices have gone up even more at 20-50%, as per CLSA. “This has also led to an increase in speculative demand, especially in the NCR market. Such a sharp increase in prices may deter end-users, which will then lead to high unsold inventory as speculative buyers try to offload their units,” CLSA said. Between 25-40% of buyers are speculators/ investors in NCR, as per channel checks done by the brokerage .

Moving on – Global Lighthouse Network, an initiative by the World Economic Forum aimed at fostering the adoption of fourth industrial revolution technologies within production networks, has successfully guided 15 manufacturing sites in India to transition to cutting-edge global technologies. “Globally there are 153 Lighthouse locations of which 15 are in India and they include names in the cutting edge of manufacturing like ReNew Energy and Unilever,” head of the WEF’s Center for Advanced Manufacturing and Supply Chain Kiva Allgood told FE. The Fourth Industrial Revolution, also known as Industry 4.0, encompasses increased automation, enhanced production processes, and the emergence of new products and services. It revolves around four disruptive technology pillars: connectivity, data, computation power, and analytics and intelligence.

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Meanwhile – Indian students going abroad for higher education should opt for an international student travel insurance for comprehensive protection. It provides coverage for unexpected situations, such as study interruptions, sponsor protection and is issued for a longer time period, unlike traditional travel policies that are issued for up to 180 days. They should purchase the policy from India as it is much more affordable than buying it abroad. A student travel insurance plan is designed for those between 16-40 years, enrolled in full-time courses at an accredited college or university and who have valid passports. It offers coverage for one to two years, with the option for renewal.

In other news – Record-low prices of renewable energy certificates on power exchanges have empowered power distribution companies to enhance compliance with their renewable purchase obligations in the current financial year. In the last trading session on March 13, REC prices hit an all-time low on the Indian Energy Exchange, dropping to Rs 300 per certificate, compared to the previous floor of Rs 1,000. The upcoming trading session is scheduled for March 26. For many years till FY23, discoms’ compliance with RPO stood at around 60%, but it improved to 90% in the last fiscal year. Analysts suggest that this year’s compliance could mirror last year’s, though they note that achieving 100% compliance would have been feasible.

Moving ahead – Insolvency experts are making a fresh pitch for changes to the Insolvency and Bankruptcy Code to address one of the glaring shortfalls of the current regime — absence of a mechanism to ensure a fair share of realised proceeds of resolution for operational creditors. “Operational creditors have been muted with abysmally low recoveries, and now they understand that the IBC cannot shield their rights as its provisions seem to be predominantly financial creditor-centric,” said Anjali Jain, partner, Areness. “The reason behind such discrimination is the lack of statutory protection of claims of OCs over and above the liquidation value and since in majority of cases resolved, the liquidation value assigned to their claims is negligible,” she said.

Lastly – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a subdued opening. GIFT Nifty traded a tad higher as the index was up 11.50 points or 0.05% at 22,081.00 indicating a subdued start for domestic indices NSE Nifty 50 and BSE Sensex on Tuesday. Previously, on Friday, the NSE Nifty 50 gained 84.80 points or 0.39% to settle at 22,096.75, while the BSE Sensex closed 190.75 points or 0.26% higher at 72,831.94. The key stocks to watch in trade are Jindal Stainless, Tech Mahindra, Bharti Airtel, JSW Energy and Jindal Steel among others.