Business News at 10:00 am on 7th June, 2024

Let’s begin…The RBI may allow Security Receipts holders to change the trusteeship of Asset Reconstruction Companies. This change would enable ARCs to retain stressed assets without acting as trustees, thereby expediting the resolution process. Banks, NBFCs and FPIs are the holders of SRs issued by ARCs. Security Receipt is an instrument like a pass through certificate which is issued by ARCs to investors, which represent rights of the investors over realisations from underlying assets. Under the extant guidelines, when an ARC acquires distressed debt, it becomes trustee of the underlying asset. So, currently there cannot be a trustee without a debt. Bankers say that the idea behind allowing the change in trusteeship is to have a single trustee for pooled distressed debt.
Next up, Sebi has introduced a ‘financial disincentives’ framework for stock exchanges and other market infrastructure institutions to address their lapses in detecting abnormal or suspicious trading activities. It said, quote, They need to be well equipped to detect market abuse, including new modus-operandi that could be adopted by unscrupulous elements and take suitable, prompt, effective and preventive action against such activities’, end quote. Under the new framework effective July 1, Sebi will impose penalties in case of surveillance related lapses on stock exchanges, clearing corporations, and depositories. The penalty will be based on the annual turnover in the previous financial year and the number of instances of surveillance lapses during a financial year.
In a push towards making India carbon neutral, the country’s largest lender, State Bank of India (SBI) is targeting to deploy a minimum of 7.5% of its domestic loans in the green energy sector by 2030. The bank’s overall loan book stood at Rs 37.67 trillion as on FY24 end. It has sanctioned Rs 47,419 crore of loans for renewable energy projects as of March, 2024. During FY24, the bank consolidated its environmental, social and governance (ESG) and climate finance functions under a dedicated unit, the ESG & Climate Finance Unit, SBI chairman Dinesh Khara said in the bank’s FY24 business responsibility and sustainability report.
Moving on, The trend of contractual employment which gained momentum in tech-based firms post the COVID-19 pandemic has now spread its roots across various sectors such as consumer durables, e-commerce, and retail. These sectors are increasingly leveraging contract roles to navigate short-term market demands, scale operations flexibly, and on the back of rapid adoption of artificial intelligence. Recent studies, including a comprehensive report by Careernet, a talent solutions provider, reveal a robust growth in contractual hiring, with a 15% compounded annual growth rate since 2022, and an anticipated surge of 20-25% in 2024 compared to the previous year, with most growth expected to come from Global Capability Centers.
In another development, Three lenders to Go First — Central Bank of India, Bank of Baroda and IDBI Bank — have invited bids to sell a 94.71-acre land parcel in Thane. The reserve price of the land parcel has been kept at Rs 1,965 crore. The sale notice of the land parcel will be under the SARFAESI Act. Go First, currently under corporate insolvency resolution, owes Rs 3,918 crore to creditors. The property on sale lies on Ghodbunder Road and in the name of Wadia Reality, will be sold on July 22, the announcement said.Lenders have sought to liquidate the mortgaged property after the airline declared bankruptcy in May, 2023, when the Wadia group-backed carrier filed for voluntary insolvency after several years of losses.
Up next, Buy Now, Pay Later startup, Simpl, has made another round of workforce reductions, letting go of 30 more employees just a month after laying off 160 people. This strategic move comes as the company intensifies its efforts to accelerate its path to profitability by mid-2025. Ashish Kulshrestha, Head of Communications, Simpl, said, quote, ‘As an organisation, we routinely review our businesses to improve efficiencies and become more agile..we have been undertalking a series of measures to improve operational efficiencies. Today’s decision to let 30 of our employees go is a continuation of our organisation-wide efforts to become a fiscally prudent company and achieve profitability by mid-2025,’ end quote
Lastly, GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 might see a subdued opening on Friday. Here is all you need to know before the market opens. GIFT Nifty was flat at 22,917 indicating a muted start for the domestic indices NSE Nifty 50 and BSE Sensex on Friday. Previously, on Thursday, the NSE Nifty 50 advanced 201 points or 0.89% to finish at 22,821.40, while the BSE Sensex jumped 692 points or 0.93% to finish at 75,075. Meanwhile, The Wall Street or US market closed in a mixed ahead of a key labour market report. The tech-heavy Nasdaq Composite fell 0.09% to end at 17,173.12. The S&P 500 pulled back 0.02% to 5,352.96. However, the Dow Jones Industrial Average rose 0.20% to 38,886.17.