Episode 367

Business News at 09:30 am on 31th January 2023

Listen to the latest news on business and finance where we talk about the investment in Adani Group’s FPO, Electronics despatches jumping 52 percent, government’s food and fertiliser subsidy expenses, Reliance Jio witnessing the worst fall in its active subscriber base. We also talk about Tech Mahindra’s net profit.

Today’s Latest Business News at 09:30 am on 31th January 2023.

[Disclaimer: This transcript is auto-generated]

In a boost to the Rs 20,000-crore follow-on offering of Adani Enterprises, Abu Dhabi’s International Holding Company on Monday said it would invest $400 million in the FPO via its subsidiary Green Transmission Investment Holding RSC. International Holding Company was an investor in the offering’s anchor book as well. Syed Basar Shueb, chief executive officer, IHC, said, quote, “Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises; we see a strong potential for growth from a long-term perspective and added value to our shareholders,” unquote. This is the second investment deal IHC has completed with India’s Adani Group after last year’s $2-billion investment in three green-focused companies of the Adani Group, including Adani Green Energy, Adani Transmission, and Adani Enterprises. A high QIB subscription may help the issue reach its target subscription requirement of 90%, said experts. On Monday, the offering had garnered bids for 1.39 million shares for its Rs 20,000 crore follow-on offering against the offer size of 45.5 million shares, data from the BSE as of 5 pm showed. This means an effective subscription of 3% on the second day of the sale. Next to Industry news, Electronics despatches jumped 52.4% on year until December this fiscal to a record $16 billion, defying a contraction in many export segments in recent months, supported by the production-linked incentive scheme for smart phones. Official sources expect such exports to continue to perform well in the coming months and cross $20 billion for the first time in financial year 23. Elevated exports will somewhat drag down electronics trade deficit this fiscal from a record $56.2 billion in financial year 22, the first annual reduction since financial year 20, although the deficit will still remain high, said the sources. Current account deficit in financial year 23 is projected to jump to 3-3.5% of GDP, against 1.2% a year before. Growth in electronic exports remained way above that of 10.3% in the overall merchandise supplies until December this fiscal. In fact, electronics exports in the first nine months of FY23 have exceeded the level witnessed in the entire financial year 22. Let us have talk on economy, The government’s food and fertiliser subsidy expenses in the current fiscal are estimated at Rs 5.21 trillion, an all-time high, as per the official sources. While food subsidy expenses would be around Rs 2.76 trillion in financial year 23, the subsidies incurred because of supplying highly subsidised soil nutrients to farmers in the current year are estimated at Rs 2.45 trillion. Sources told Financial Express that due to a softening of global fertilsers prices in the recent months and discontinuation of Pradhan Mantri Garib Kalyana Anna Yojana or free ration scheme, the subsidies outgo next fiscal could decline by around 20% on year to Rs 4.1 trillion. The previous annual record of actual expenses on these two major explicit subsidies was Rs 4.48 trillion incurred in 2021-22; the food subsidy bill alone was budgeted at Rs 5.41 trillion in 2020-21, but that Rs 3.4 trillion of it was on a account of repayment of off-budget NSSF loans pertaining to previous years. Meanwhile, In line with a slowdown in revenue growth so far this fiscal, Reliance Jio has witnessed the worst fall in its active subscriber base in nearly two years, according to the latest Telecom Regulatory Authority of India data for November. The telecom operator’s active subscriber base fell by nearly three million month-on-month to 388 million in November, due to SIM card consolidation, purging of inactive users by the operator, and upgrades from JioPhones to smartphones, analysts said. While industry executives and analysts do not indicate the trend as something to be jittery about for the company’s strong market hold, the loss of active subscribers by Jio means that there won’t be any tariff hikes by the operators in the times to come. A Mumbai-based analyst said, quote, “Jio’s loss of active subscribers has come in largely at the JioPhone subscriber base and lower end users. While people leaving a second SIM card because of inflationary pressure is the reason for a fall in active subscribers, the company also removes inactive subscribers from its base after 90 days,” unquote. Lastly, Tech Mahindra’s net profit for the third quarter ended December was up 0.9% sequentially to Rs 1,297 crore, below the consensus Bloomberg estimates of Rs 1,322.40 crore. However, net profit declined 5.3% year-on-year due to high inflation and cost impact due to supply side pressures. The company’s revenues for the December quarter rose 4.6% sequentially to `13,735 crore, beating the consensus Bloomberg estimates of `13,488.70 crore.

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Business News at 09:30 am on 31th January 2023