Business News at 09:30 am on 3rd February 2023

A day after presenting the Budget for 2023-24, finance minister Nirmala Sitharaman said growth was the predominant focus from Day 1 when she and her team sat down to prepare the last full-year Budget ahead of Lok Sabha elections. Sitharaman said quote, “The Prime Minister was also on board with it. He said growth ka momentum rakhna chahiye (we need to keep the growth momentum). If anything, we need to speed it up, oil it better and run it better, and that is why this number of Rs 10 trillion for capital expenditure came up,’ unquote. She said given that there was no let-up in the pandemic, and the hit the private sector took due to this, the government remained consistent with its capex plan over the last three years. The minister added quote, “We weren’t really looking if they were investing or not. We went about investing. Simultaneously, of course, the private sector has come out, the twin balance sheet problem has been addressed, they have deleveraged themselves considerably,” unquote.

Moving on to Market, Shares of Adani Group companies slid for the sixth straight session on Thursday with the group’s combined market capitalisation seeing a drop of $106 billion since last Tuesday’s close as a video statement by group chairman Gautam Adani failed to assuage investor concerns. Adani Enterprises called off its Rs 20,000-crore follow-on public offering late on Wednesday, citing sustained market volatility and the interest of investors. There’s trouble brewing in the bond market as well. Bonds of firms related to Gautam Adani’s flagship Adani Enterprises have come under pressure after the FPO was withdrawn. According to reports, Citigroup’s wealth unit has stopped extending margin loans to its clients against securities of Adani Group companies. The Reserve Bank of India has sought details from banks about the exposure to Adani companies amid the sustained fall in the shares of group firms and the withdrawal of the follow-on public offer of Rs 20,000 crore. Separately, market regulator Securities and Exchange Board of India (Sebi) is examining the fall in shares of Adani Group and possible irregularities in the share sale by its flagship company, according to a Reuters report.

Meanwhile, In a relief to Torrent Group, a bidder for the assets of debt-laden Reliance Capital, the National Company Law Tribunal on Thursday declared the proposed second e-auction a violation of the bankruptcy rules. Further, the bankruptcy tribunal also termed Torrent as the highest bidder under the first challenge mechanism and directed the administrator to take the process to its “logical conclusion”. The move would further delay the insolvency proceedings of the former Anil Ambani group firm, as the administrator and the committee of creditors are slated to move the National Company Law Appellate Tribunal, sources close to the developments said. The committee of creditors had decided to conduct the extended challenge mechanism on the basis of a late bid submitted by IndusInd International Holdings, NCLT said in its order, adding that the extended challenge mechanism is a violation of Section 39 (1A) of the Corporate Insolvency Resolution Process.

Speaking of some more news on Budget, Even though the new Public Sector Enterprises policy unveiled in 2021 created a large pool of PSEs in both the strategic and non-strategic sectors for privatisation, the slow pace of the process has limited the government’s non-debt capital receipts. The new policy has to be “internalised” by all the stakeholders in the government and PSEs to succeed, department of investment and public asset management secretary Tuhin Kanta Pandey told FE. He also underlined the need to take care of the bidders’ interests and give them a fair deal. Certain flexibility has to be given to them even post-disinvestment, he said. It has to come from some of the transactions that we have been working on like a stake sale in Hindustan Zinc Ltd the government’s 29.54% stake in HZL is worth Rs 42,800 crore in the current market prices and other minority stake sales.

Lastly, The Goods and Services Tax Council is likely to meet later this month to take up the long-pending issue of setting up of appellate tribunals. According to sources, the date of the meeting is yet to be finalised but it will be towards the middle of the month around February 18. The Council typically meets once after the presentation of the Union Budget. The top agenda would be setting up of the appellate tribunals for GST. The Council is also expected to take up the report on online gaming that was submitted by a Group of Ministers. The GST Council, chaired by union finance minister Nirmala Sitharaman, had last met on December 17 after a six-month gap.