Episode 458

Business News at 9:30 am on 27th March 2023

Here’s what you need to know to start your Monday morning. Reliance Capital’s insolvency saga is not ending anytime soon. Meanwhile, the unseasonal rains have adversely impacted the rabi crops across the nation. All this and more in today’s audio bulletin.

Business News at 9:30 am on 27th March 2023

[Disclaimer: This transcript is auto-generated]

We begin the day with latest in the corporate world. The second e-auction of debt-laden Reliance Capital is likely to hit a roadblock with the Hinduja Group seeking to withdraw its enhanced offer and Torrent Group unlikely to participate due to lack of clarity. In case of no interest from bidders, the former Anil Ambani group company would face liquidation, leading to depletion of the value of its assets. IndusInd International Holdings, the firm through which the Hinduja Group had placed bids, has informed lenders of its intention to withdraw its post-auction revised bid of Rs 9,000 crore. The company now wants to retain its earlier offer of Rs 8,110 crore, made at the time of the first auction held on December 21, 2022, sources close to the development said. This is likely to derail the committee of creditors’ plans to conduct the second round with a base price of Rs 9,500 crore as it intended to maximise the recovery from the resolution process.

Now some of latest news from the telecom sector. As Bharti Enterprises-backed satellite communication service provider OneWeb prepares for the launch of its services in India by July-August, chairman Sunil Bharti Mittal expressed hope that the allocation of spectrum for the same won’t be done through auctions. He said that the spectrum for satellite services is not owned by a single company but is a shared resource, and there’s only a limited requirement, so allocation should be done administratively. Satellite ground stations are required to provide real-time communication with satellites. These stations send radio signals to the satellite known as uplink, receive data from the satellite known as downlink and serve as control centres for the satellite network.

Moving on. The government has plugged a loophole in the taxation of pan masala and assorted tobacco products, including cigarettes, by clearly defining the value – maximum retail price – on which the GST compensation cess would apply on these demerit items. However, it addressed concerns of “excessive taxation” of the evasion-prone sector by capping the cess. The necessary amendments were part of the Finance Bill, 2023, which was passed by the Lok Sabha on Friday. The key change is that the tax will now apply to the MRP, rather than the “actual sale price” at the factory gate, which the manufacturers used to under-report. Also, the MRP is defined as “the maximum price at which the concerned goods in packaged form may be sold to the ultimate consumer and includes all taxes, local or otherwise, freight transport charges, commission payable to dealers, and all charges towards advertisement, delivery, packing, forwarding and the price is the sole consideration for such sale”.

Over to the news from the real estate market. Listed property developers are increasingly gaining market share with many private developers being shunted out after the enforcement of the RERA Act, and the pandemic, which made the survival of smaller developers difficult. The market share of listed developers is set to rise to 29% in FY23 from 16% in FY20 at a pan-India level, a recent report by ICICI Securities said. Further, it is set to grow to 33% in FY25. Most developers in the listed space have aggressive launch plans for FY23-25 and are looking to grow at a double-digit sales value CAGR over the next two years, said Adhidev Chattopadhyay, vice-president, of equity research at ICICI Securities.

And finally, here’s what the pre-opening cues say about the trade today. Asian shares followed US stock futures higher on Monday on hopes authorities were working to ring-fence stress in the global banking system, even as the cost of insuring against default neared dangerous levels. Meanwhile, SGX Nifty hints at a positive start for the Indian indices today. Among the buzz-worthy stocks, NBCC, Sun Pharma, L&T Finance and BEL will be the entities to watch out for.

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Business News at 9:30 am on 27th March 2023