Business News at 10:00 am on 5th July, 2024

Let’s begin… The government is looking at a multi-pronged strategy to address the decline in foreign direct investment (FDI) inflows. “Internal discussions are on for further liberalisation of FDI,” Rajesh Kumar Singh, secretary at the department of promotion of industry and internal trade (DPIIT) said on Thursday, without elaborating on the manner of relaxation, or the sectoral policies being reviewed. According to sources, the possible changes include raising or dispensing with the equity limits that still exists for FDI investors in a few residual sectors, and removing the cumbersome conditions wherever possible. The government may also go slow on the import substitution (high tariffs) policy, that is inflating the costs of import of intermediates, and capital equipment by foreign investors in high-potential areas.

Moving on, The country’s socioeconomic survey architecture is set for a major upgrade. Apart from the conventional surveys like those to track household consumption expenditure, labour force participation, and the annual survey of industries, a whole new set of activities is going to be surveyed on a periodic basis. According to official sources, the National Sample Survey Office (NSSO), an arm of the ministry of statistics, has identified “export and import data of small traders”, “income and living standards of sanitation workers,” “unpaid activity of individuals working in households” among several activities to be tracked for more-informed policy-making. “All these requests (for surveys) from different ministries have been pending with us for the past two years. We will start work on them soon,” an official said.

Furthermore, The board of directors of private sector lender Bandhan Bank will likely meet later this week and could finalise the name of the candidates that will be recommended to the Reserve Bank of India (RBI) for the post of the interim CEO, sources say. “The directors have scheduled a meeting over the weekend and could take the final call over the interim CEO post,” a source said. Incumbent MD and CEO Chandra Shekhar Ghosh is set to retire on July 9. According to sources, two internal executive directors (ED) – Ratan Kumar Kesh and Rajinder Kumar Babbar – are the frontrunners for the position. Kesh, being the senior-most ED at the bank, could be the first choice for the board.

Additionally, The merger and acquisition (M&A) activity in the domestic fast-moving consumer goods (FMCG) sector has gathered pace in the first half of calendar year 2024, touching $938 million in terms of value — the highest in four years, data from Venture Intelligence showed. This comes at a time when companies are shedding their cautious approach to fill up crucial portfolio gaps and enter new categories, investment bankers and sector experts said. A good example is Tata Consumer’s acquisitions in January this year of Capital Foods, the maker of Ching’s Secret noodles, and Organic India, which produces a range of herbal teas and infusions. The two deals put together are the biggest in the FMCG sector in the first half at $844 million.

Moving on, Arvind SmartSpaces Limited (ASL), the real estate development company of Lalbhai Group of companies, is planning to focus on residential real estate projects in Ahmedabad, Surat, Pune, Mumbai and Bangalore for FY25. Riding on the back of good cash flow, zero debt and a Rs 900 crore investment platform with HDFC Capital, ASL is targeting to add new inventory worth Rs 4,500 – 5,000 crore to its portfolio. Kamal Singal, Managing Director & CEO, Arvind SmartSpaces, said, “Since Covid, mid range and luxury residential demand has got more traction than the affordable segment which is why we are not focusing on affordable housing right now. In the medium term, ASL’s focus on the Gujarat, Bangalore and Maharashtra market will follow the ratio of 40:40:20

Next up, With the aim to promote affordable housing, the government is likely to set up a new fund for housing finance companies (HFCs) under the National Housing Bank (NHB) in the Budget. The fund will allow HFCs to borrow at concessional rates, enabling them to offer home loans at reduced rates to eligible customers. Borrowers having annual income of Rs 6 lakh to Rs 7.5 lakh may be eligible to get such loans from HFCs. “Representatives from HFCs and the NHB and finance ministry officials recently held a discussion on strategies to boost affordable housing. There was consensus to create a new fund which will be managed by the NHB,” a source told FE.

Lastly, let’s see which are the stocks in focus today. These include HDFC Bank, LIC, Arvind SmartSpaces, Persistent Systems, Mahindra Lifespace Developers among others. HDFC Bank on Thursday said its gross advances registered 53% year-on-year growth at Rs 24.87 lakh crore in the first quarter. The same stood at Rs 16.3 lakh crore in the last year quarter. Life Insurance Corporation of India on Thursday announced that it has increased its shareholding in IDFC First Bank by 0.2% to 2.68% of the post-issue paid-up capital of the bank. IDFC First Bank has a market capitalisation of Rs 57,058.68 crore. Arvind SmartSpaces, the real estate development company of the Lalbhai Group of companies, is planning to focus on residential real estate projects in Ahmedabad, Surat, Pune, Mumbai and Bangalore for FY25.