Business News at 10:00 am on 8th August, 2024

Let’s begin… Thanks to the amendments added to the Finance Bill 2024 before it was passed by the Lok Sabha on Wednesday, the new regime for taxation of long-term capital gains from property transactions won’t result in any additional burden on the taxpayers, Finance Minister Nirmala Sitharaman said on Wednesday. The government eased the LTCG tax regime for sale of properties proposed in the Budget 2024-25 by allowing the taxpayer to select between two options – 12.5% without indexation and 20% with it — to lower the outgo, in regard to transfer of properties acquired before July 23, 2024. Sitharaman also clarified that the rollover benefit will be available to taxpayers who buy new immovable property utilising the capital gains on the sale of old property.

Next up, As the government looks at thermal power actively to mitigate the rising demand , private sector companies such as Adani Power, JSW Energy and Tata Power are looking at adding thermal capacities and launching new projects. Interestingly, some companies like Tata Power and JSW Energy, who have renewable energy as the main focus of their business, are now actively looking at the opportunities in the thermal energy space. Power companies refocusing on thermal capacity is not without a reason. The Union government is looking at over 80 gigawatt of new capacity additions in thermal by 2032 to meet the growing electricity demand. In the Union Budget, the FM proposed new thermal plants to be set up in the country to augment power supply.

Moving on, Domestic steel prices have tumbled to a 45-month low despite strong consumption, as falling exports and rising imports boosted supplies. The subdued prices, if not corrected, might derail the country’s ambition to have 300 million tonnes per annum steel-making installed capacity by 2030, as the margins of major manufacturers could come under pressure, industry executive say. However, lower steel prices may help combat inflation, as the alloy is key industrial raw material. Data compiled by rating agency ICRA show that at Rs 51,200 a tonne, the August (ex-works) price of the benchmark Hot rolled coil was at its lowest since November 2020, when it was Rs 45,975 a tonne in the Mumbai market.

In other news, Private banks have outperformed public sector banks in deposit growth during the first quarter. Private banks have increased their deposits by 12-35% year-on-year whereas public sector banks have only managed a growth range of 5-13%. With the deposit growth lagging the credit growth, both private and public lenders have raised deposit rates to attract more depositors. “Savings continue to be a challenge, and I think the saver-to-investor momentum continues and especially after elections, this has accentuated,” Shanti Ekambaram, deputy managing director, Kotak Mahindra Bank, said in an earnings call. Among private banks, IDFC First Bank recorded a 36% Y-o-Y growth in deposits in the first quarter, followed by Bandhan Bank (23%) and Yes Bank (21%).

Next up, There is a plan to expand the scope of the India-Turkiye Air service agreement with the addition of new destinations, Turkish Airlines said on Wednesday. Speaking to Fe, Erkan Erdogan, general manager, northern and eastern India, said that as an airline, “we wish” to have revisions in current bilateral agreements with the civil aviation ministry for an expansion of the air service agreement. “There is huge potential in India that is not being realised because of the limited capacity. If the agreement allows, with our fleet availability, we would like to operate direct flights between Istanbul and major metro cities, which will also give an opportunity for Indians to explore our wide network operating in 130 countries,” Erdogan said.

Elsewhere, With Vodafone Idea infusing Rs 20,000 crore via follow-on public offering and equity contribution by one of the promoter entity, Aditya Birla Group, the government is now exploring whether sovereign wealth funds would be interested in picking up its stake in the company. Sources said that since the promoter group has shown sufficient interest in raising funds and running the company, and government fully backing the efforts, it makes sense for sovereign wealth funds to acquire government’s current 23.15% stake in the company. Abu Dhabi Investment Authority, Qatar Investment Authority, Singapore’s Temasek, are some of the funds which have been sounded out, sources said, adding that the efforts are at a very initial stage.

Lastly, Stocks to watch include Hindalco, Godrej Consumer Product, Apollo Tyres, Radico Khaitan, NHPC, Maruti Suzuki, Eicher Motors and LIC. Furthermore, Hindalco subsidiary Novelis Inc reported a 2% year-on-year (YoY) increase in net sales for the first quarter, reaching $4.2 billion. This growth was primarily driven by higher average aluminium prices and increased total shipments. Total flat-rolled product shipments rose 8% to 951 kilotonnes compared to the same period last year. The FMCG major reported a 41.36% jump in profit after tax at Rs 450.69 crore for the June quarter of FY25. This marks a significant increase from the Rs 318.82 crore profit after tax (PAT) recorded in the same quarter of the previous fiscal year.