Business News at 10:00 am on 4th June, 2024

Let’s begin, exciting times on Dalal Street! Markets started the election results announcement week with a bang – Record highs, the best trading day in 40 months or almost 3 years, Nifty Bank Index crossed the key 51,000 mark and volatility slumped 20%. If you think ’tis all high drama, that’s exactly how the markets closed on the eve of what is decidedly the biggest day for democracy- The election results are set to be announced in some hours. Exit Polls have signalled a thumping victory for the BJP-led NDA. So the question is, will it be a hat trick for Prime Minister Modi or does a twist in the tale await India? Most market players seem to be following the Exit Poll.

Moving to Economy news, It has been a rather busy fortnight for the Indian economy. Close on the heels of robust corporate earnings and an enduring 7 percent GDP growth, the nation awaits ballots getting counted in less than 24 hours followed by the verdict on the interest rates from the Reserve Bank of India on June 7. While the election results may not impact the economy directly, nonetheless a prospect of an NDA Government led by BJP coming back to power, as signalled by Exit Polls, could have a direct bearing on the economic policy or, to some, a sign of  continuity. The Indian economy is poised at a critical point and the momentum in terms of GDP growth continues.

Over to Industry news, the Allahabad bench of the National Company Law Tribunal  on Monday directed initiation of insolvency proceedings against debt-ridden Jaiprakash Associates . The insolvency plea against the company was filed by ICICI Bank and State Bank of India in 2018 and 2022 respectively. Pronouncing the order, a two-member NCLT bench, comprising members Praveen Gupta and Ashish Verma also appointed an interim resolution professional. Jaiprakash Associates, which is the flagship firm of Jaypee Group, is mainly into construction, cement and hospitality businesses. JAL has sold many cement plants in the last few years to reduce its debt. The ICICI Bank has claimed over Rs 3,000 crore to be recovered, including interest, in its plea. The first insolvency plea was filed by ICICI Bank.

Some more from Market section, The alternative investment fund (AIF) industry has welcomed recent suggestions by the Securities and Exchange Board of India (Sebi) to change the valuation norms heeding to demands of industry representatives with an aim to resolve valuation issues and relax guidelines.  On May 23, Sebi proposed that the valuation of unlisted securities held by Alternative Investment Funds (AIFs) be carried out as per the guidelines issued by the eligible industry association, and not as per Mutual Fund (MF) Regulations. The proposal is open for public comment till June 13.The AIF industry association has endorsed the International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines) for the proposed change. Experts believe the change was needed to address valuation gaps.

Latest news from GST, the Directorate General of GST Intelligence is set to intensify the scrutiny of suspected tax evasion by pharmaceutical companies, over non-payment of dues. In addition to the notices sent already, the DGGI is likely to ask many more companies to explain what it perceives as under-payment of tax by them in the current year, FE has learnt. The notices could pertain to non-payment of GST on brand transfer sales, claiming fake input tax credit on expired drugs and for business support services, and non-payment under the reverse charge mechanism, according to official sources. The combined tax liability that would be mentioned in all these notices is close to Rs 1,000 crore, and so far Rs 450-500 crore has been paid.

News from IT industry, Infosys has markedly reduced its intake of college graduates at 11,900 in FY24, which is a significant drop from the over 50,000 freshers the company recruited the previous year. The company’s CEO and MD, Salil Parekh, disclosed these figures in the FY24 annual report released on Monday. “We recruited nearly 11,900 college graduates in the year and ended the year with over 317,000 employees,” said Parekh. This reduction is part of a broader industry trend where top Indian IT companies have collectively seen a reduction in workforce numbers amidst uncertain demand and other market dynamics.Not to forget, Infosys’ also saw a headcount reduction for the first time in at least 23 years in FY24, which fell by 25,994 to 317,240.

Lastly, let’s have a look at stocks which are in focus today. Infosys, Praj Industries, Muthoot Finance, NTPC, Kalyan Jewellers . Here’s a look at the key stocks to watch in trade. Infosys has markedly reduced its intake of college graduates at 11,900 in FY24. On the other hand, Praj Industries has opened its account in Brazil, the ethanol capital of the world.