In this weekly round-up, we talk about firms, banks floating bonds, fintechs going slow on personal loans, and PSUs crossing Rs 50 lakh mcap among other news.
Weekly Business Roundup at 10:00 am on 9th December 2023.
[Disclaimer: This transcript is auto-generated]
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Let’s begin with the news that made headline this week. Large corporates such as Bharti Airtel and lending institutions like Bank of Baroda, Canara Bank and Small Industries Development Bank Of India, among others, have raised Rs 45,493 crore via bonds since November 17, a day after the Reserve Bank of India hiked risk weights on unsecured credit, data compiled by FE showed. The quantum is significantly higher than Rs 24,161.3 crore raised in October. Canara Bank and Bank of Baroda raised Rs 5,000 crore each via infrastructure bonds at 7.68 per cent coupon rate in late November. SIDBI, too, raised Rs 4,887 crore at 7.83% coupon.
Meanwhile, Hit by the Reserve Bank of India’s decision to raise risk weights on unsecured loans, digital lenders are looking to reduce their exposure to small-ticket personal loans. Anticipating an imminent increase in funding costs, they have scaled down disbursal targets in the sub-Rs 50,000 loans category and are planning to diversify their product portfolio and customer base. As per industry estimates, 70-75 per cent of the total advances of digital lenders consist of small ticket loans below Rs 50,000. Jatinder Handoo, chief executive officer, Digital Lenders Association of India, told FE that some digital lenders may reduce their small-ticket loan portfolio. They might enter into portfolios which are more secured.
Moving on. The aggregate market capitalisation of India’s public sector undertakings surpassed ₹50 lakh crore this week, marking an unprecedented milestone driven by the robust performance of state-owned firms across various sectors. The PSUs’ exceptional performance is reflected in the stock prices of 23 companies, with their values soaring over two-fold in the year 2023. Leading the pack were REC, Power Finance Corp, Mazagon Dock Shipbuilders, Rail Vikas Nigam , IRFC, BHEL, Hindustan Aeronautics, and others. Particularly noteworthy is the three-fold surge in the stock prices of REC and Power Finance Corp in 2023, while companies like Engineers India, Hindustan Aeronautics, BHEL, IRFC, Cochin Shipyard, Rail Vikas Nigam, and IRCON International witnessed gains ranging from 100% to 190% between January and the present.
Over to market. Capital markets regulator Sebi has barred two individuals from the securities markets for two years and ordered them to return Rs 82.5 lakh collected from investors through unregistered investment advice services. Also, they have been restrained from associating as directors or key managerial personnel with any listed public company for two years. Further, Sebi has imposed a fine of Rs 2 lakh each on them. In its order passed this week, the regulator found that the persons were engaged in providing investment advisory services without obtaining registration from Sebi as required under the Investment Advisers Regulations. By providing such services, they collected Rs 82.52 lakh from investors. Accordingly, Sebi has directed the individuals to immediately refund the money.
Next up, industry. Google this week withdrew its appeal against the order of a single judge of the Delhi high court asking the Competition Commission of India to hear applications moved by Indian startups against Google’s user choice billing system. Senior advocate Sajan Poovayya, who appeared for Google, told the court that the order was passed by a single judge when the CCI did not have the quorum to hear the plea. The CCI, however, now has the quorum and has been hearing the plea by startups, he noted. Google’s counsel further told the court that while the company wishes to withdraw the appeal, it would like to keep the questions of law open.
In some more industry news, Amid lingering concerns that the much-delayed private capex cycle may not have taken root yet, Corporate India on Thursday said with capacity utilisation in many sectors being 75-80 per cent if not higher, a strong momentum in private investments was firmly around the corner. Pointing out that fresh investments have already started in many sectors, a clutch of senior company executives told FE on the sidelines of the CII Global Economic Policy Forum here that strong corporate balance sheets and an incipient revival in the rural economy would aid private capex.
Lastly, India will add another 38 giga watt of renewable energy capacity by March 2025 to touch 170 GW mark, aided by moderation in solar module prices, an Icra analyst said on Thursday. The country’s installed renewable energy capacity was at 130 GW as of October 2023, Vikram V, Vice President & Sector Head – Corporate Ratings, Icra, said in a webinar. Indian Renewable Energy capacity is expected to reach 170 GW by March 2025, led by strong policy support and moderation in solar module prices, he said. The capacity addition thereafter is likely to be supported by the significant improvement in tendering activity in the current fiscal with over 16 GW projects bid out so far and another 17 GW bids underway by the central nodal agencies.
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