Business News at 10:00 am on 29th July, 2024

Let’s begin…The World Trade Organisation’s (WTO) dispute settlement body has given time till October-end to India and Taiwan to resolve their dispute regarding tariffs on some IT products including telephone handsets on a joint request.The decision came in the meeting of the dispute settlement body (DSB) on July 26. The DSB meeting was called on Taiwan and India’s joint request on July 15 to call a meeting on July 26 to give more time for settlement of the dispute. In September 2019 Taiwan had requested consultations with India regarding the tariff treatment that India accords to certain information and communications technology goods which it said are against WTO rules. After Taiwan’s filing, other countries like the US, Singapore, Canada and the European Union joined the dispute.
Next up, UltraTech Cement on Sunday said it will acquire an additional 32.72% stake in India Cements from its promoters and their associates for Rs 3,954 crore, a move that will further cement its leadership position in the sector. According to analysts, the move could also be an attempt by the Aditya Birla Group company to stop Adani Group from acquiring the south India-based cement firm. The transaction will be done at Rs 390 per share, and will increase UltraTech’s stake in India Cements to 55.49%, necessitating a mandatory open offer at the same per-share price. Through the open offer, the company will buy up to 80.5 million shares, or 26% of the equity, from public shareholders at Rs 390 per share, totalling approximately Rs 3,142.39 crore.
In other news, Air India Express is gearing up for a capacity expansion, in both the domestic and international market segments, driven by planned aircraft inductions, senior airline executives told FE. Last month, the airline inducted its 75th aircraft, a Boeing 737. Over the past 10 months, the airline has added 26 new Boeing 737-8 aircraft to its fleet, significantly increasing the number of daily flight operations. According to airline sources, Air India Express plans to increase its flight frequencies to West Asia and Southeast Asia. Currently, the airline flies to 14 international destinations (13 in West Asia and Singapore) and over 30 domestic destinations, operating more than 380 flights a day.
Moving on, On the back of improved railway passenger traffic, the government is expecting over 14% jump in passenger revenues in FY25. As per the budget documents, the passenger revenues target for FY25 stands at Rs 80,000 crore as compared to Rs 70,000 in the last year’s budget. At the same time, the government is expecting the revenues from goods segment to stagnate in the current fiscal. It is estimated that the goods segment receipts will be at Rs 1,74,500 crore in FY25, slightly lower than Rs 1,74,590 crore in the previous year. In fact, this amounts to a dip in real terms, after taking inflation into account.
In another development, The Economic Survey’s prescription of more FDI from China for manufacturing and export push is being supported with caution by the commerce and industry ministry, which formulates and administers FDI policies. Officials say that there cannot be general opening up for Chinese investments, but in cases where technology and skills cannot be sourced from elsewhere, relaxations may be considered. A senior official, requesting anonymity, said, quote, ‘We have to take a nuanced view. There could be some areas like batteries or e-vehicles or any other manufacturing sector where Chinese companies have really good technology which can be encouraged. It (opening up) cannot be general, it is not possible,’ end quote.
Up next, With trillions of crore rupees locked up in cases under the Debt Recovery Tribunals and NCLTs,, the government has asked chiefs of PSBs to monitor the top twenty defaulter loan accounts personally for faster recovery. The move is expected to boost the banks’ bottom lines, as the bad loans have already been fully provisioned. After the gross non-performing assets of the PSBs rose to a high 14.5% as of March 2016, the government took a slew of measures such as strengthening the banking regulatory framework, amending the recovery laws, enacting comprehensive insolvency and bankruptcy legislation, and establishing a public sector asset reconstruction company. These measures have nursed the credit sector back to sound health, and the GNPA ratio shrunk to 2.8% in March 2024.
Lastly, Investors in Real Estate Investment Trusts and Infrastructure Investment Trusts are poised to benefit from new tax regulations as proposed in the Union Budget, which align the long-term capital gains (LTCG) holding period of these assets with that of listed equity shares. This adjustment, which has been a long-standing demand of the industry, reduces the holding period for determining LTCG for listed business trusts from 36 months to 12 months, putting REITs and InvITs on par with listed equities. A REIT comprises a portfolio of commercial real estate assets that are mostly leased out, while InvITs focus on infrastructure assets such as highways and power plants.