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

Let’s begin – RBI governor Shaktikanta Das on Wednesday strongly defended the action against Paytm Payments Bank. Das said he failed to understand the narrative that the banking regulator was killing the fintech sector when the restrictions were essentially against the business operations of a bank. Dispelling doubts that the RBI was being unduly harsh on fintechs, in an interview to ET Now, Das said, “The action was against a regulated entity. In this case, it is a payments bank and not against any fintech company. I fail to understand and do not see any reason why a narrative was building up, or was built up, as if RBI has taken some measures against fintech companies.”

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Moving on – The outstanding dues of electricity distribution entities to gencos dropped more than a third since mid-2022 to under Rs 45,000 crore now, and was declining further at an unprecedented pace, Union minister for power, new and renewable energy R K Singh said on Wednesday. This, and the fact that “states no longer default on release of the subsidy amounts,” have made the sector commercially viable after several years, the minister said, adding that the “Modi 3.0 government’s” first=100-days agenda would include a definitive action plan to double the capacities across the electricity value chain, from generation to distribution, by 2030.

Up next – Imagine that a short-term investor wants to make listing gains in an initial public offering or small and medium enterprises IPO. Typically, he would approach his brokerage for funds for a fee to make that punt. If the brokerage makes the due diligence much harder or simply refuses to lend, getting those funds to make a quick buck may become far more difficult. Against this backdrop, Tuesday’s ‘cease and desist’ order on JM Financial Products by RBI makes things more interesting. The banking regulator’s move may help the market watchdog realise its own end since the coming together of the two key regulators can ensure that punters are starved of a key ingredient – liquidity.
Moving ahead – Angel investor networks are now spreading their wings in tier II and III cities such as Ahmedabad, Indore, Dehradun, Rajkot, Coimbatore, Surat and Nagpur, and technology has played a big role here also. An increasing understanding of the startup ecosystem and larger risk appetite for private asset classes, are some of the other factors, which are attracting local business communities to angel networks. Mumbai-based We Founder Circle said it has added nearly 4,000 investors in the last 12 months, among which about 2,500 are from tier II and III cities. Prior to 2020, hardly 10-15% of the new investors came from these cities, Neeraj Tyagi, co-founder and CEO of We Founder Circle told Fe.
In other news – Israel-based Tower Semiconductor’s Rs 91,000-crore fabrication project, is now likely to be approved only after the general elections, official sources said. This is because the ministry of electronics and IT will first have to seek Cabinet’s approval for raising the current incentive ceiling of Rs 76,000-crore for domestic semiconductor manufacturing. With the government already approving four chip projects so far, incentives worth Rs 60,000 crore have already been committed. Tower Semiconductor’s project is currently under evaluation stage. Companies whose applications are approved are entitled for a 50% subsidy from the government on the project cost. State governments where the projects are set up are free to further top this up with any subsidy amount they want.

Meanwhile – Family members of Keshub Mahindra, former chairman Mahindra & Mahindra, will off load 0.75% stake in the tractor and SUV maker for a consideration of around Rs 1,850-1900 crore. A promoter entity of M&M, Prudential Management and Services, which held 11.64% stake in M&M as of December, 2023, will sell 9.3 million shares, according to a term sheet. “Post transmission of shares of PMSL held by the former Chairman of M&M, Late Keshub Mahindra, to his family members, the family is looking for liquidity for specific needs, and hence proposes to sell a small number of shares held by PMSL in M&M,” M&M said in a statement sent to the BSE.

Lastly – GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a positive opening on Thursday. Stocks in Focus: GIFT Nifty traded up by 64 points or 0.28% at 22,655 indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Thursday. Previously, on Wednesday, the NSE Nifty 50 ended up by 117.75 points or 0.53% to settle at 22,474.05, while the BSE Sensex gained 408.86 points or 0.55% to 74,085.99. Key stocks to watch in trade are Vedanta, Hindustan Aeronautics, Glenmark Pharmaceuticals, Mukka Proteins, Infosys, Bajaj Finserv, Mishra Dhatu Nigam, Jupiter Wagons, Glenmark Pharmaceuticals, Mahindra & Mahindra and United Spirits among others.