Business News at 09:30 am on 5th June 2023

Let us begin with top news: A department of telecommunications task force has recommended that the government provide incentives up to 75% for domestic design and manufacturing of telecom chipsets. Currently, under the Rs 76,000-crore incentive scheme for development of semiconductors and display manufacturing ecosystem in the country, the government is providing a fiscal support of 50% of the project cost, which is uniform across all technology nodes. Semiconductors are used in manufacturing all kind of products, ranging from mobile phones & electronic products to automobiles.Though the semiconductor incentive policy has been drafted by the ministry of electronics and information technology, which is also the implementing agency, DoT had set up several task forces to suggest measures to boost domestic telecom manufacturing. One of the term of reference was to recommend measures to manufacture high volume telecom chipsets in the country. The task force on telecom chipsets was headed by Tejas Networks co-founder Sanjay Nayak, and included representatives from industry, academia and various government departments. It submitted its recommendations to the government on Saturday.

In another news related to Industry: With consumer demand expected to stay muted, analysts expect India Inc to report a modest topline growth in FY24 driven by the good performance of banks and the automobile sector. Operating margins, however, are tipped to expand as prices of key commodities soften. Analysts at Kotak Institutional Equities expect the net profits of the Nifty-50 Index to grow at an estimated 12.6% in FY24 and 15.2% in FY25. Softer prices of key inputs are expected to boost corporate India’s margins in the current year even as demand, especially for consumer products remains sluggish, impacting the topline. Analysts at Jefferies noted that consumption demand trends remain weak overall, including in rural India. While some companies saw a pick-up in volumes in Q4FY23, for many the growth was similar to that seen in previous quarters. “Commentary and confidence on pickup in growth was mixed,” Jefferies wrote. The subdued consumption demand is corroborated by the anaemic 2.8% year-on-year increase in Private Final Consumption Expenditure in Q4FY23 on the back of a 2.2% y-o-y growth in Q3FY23.

Meanwhile, Reliance Retail and six other prospective bidders have submitted expressions of interest for Future Supply Chain Solutions, a Future Group firm that is under insolvency proceedings. One City Infrastructure, Globe Ecologistics, Shanti GD Ispat & Power, Camions Logistics Solutions, Tatkal Loan India and Sugna Metals are the other firms in the fray. The resolution professional is verifying the EoIs, FSCS said in a stock exchange update. The resolution professional will submit the final list of the prospective resolution applicants on June 14, it added. FSCS, which was admitted to bankruptcy proceedings by the National Company Law Tribunal’s Mumbai bench earlier this year, used to manage Future Group’s warehousing and logistics requirements. The company was admitted to bankruptcy on a petition filed by DHL Ecommerce (India), alleging default in payments. Two other operational creditors – Best Roadways and Leap India – had also moved the National Company Law Tribunal.

Let us talk about market, The prices of base metals lost their shine over the past year as supplies recovered after earlier disruptions and rising input costs and increased availability of raw materials also played their part. The supply of global base metals will remain tight in calendar year 2023, industry experts opine, due to supply issues and low inventory position. In the past one year, the prices of most base metals – including aluminium, copper, nickel, iron ore and hot rolled coil steel – were trading lower by up to 40.3% on the London Metal Exchange, Commodity & Energy Exchange and Multi Commodity Exchange of India. According to ICRA, global prices of base metals contracted by a steep 18-28% in FY23, compared with the record highs in March 2022, amid considerable volatility. Although the fiscal commenced on a healthy note, the metal prices witnessed significant headwinds in Q2 and Q3 of FY23 given an uncertain global economic outlook and demand slowdown in China.

Lastly, The SGX Nifty gained 0.46% in trade on Monday morning, signaling that domestic indices NSE Nifty 50 and BSE Sensex would open on a positive basis. Nifty futures were 85 points higher on the Singaporean exchange at 18,714. Nifty 50 and Sensex concluded last Friday’s session in positive territory. Nifty 50 rose 0.25% to 18,534 and Sensex jumped 119 points to 62,547. India Oil Corporation has incorporated a joint venture company with NTPC Green Energy Limited (a wholly owned subsidiary of NTPC Limited), named IndianOil NTPC Green Energy. The JV will develop renewable energy-based power projects to meet the round the clock power requirements of new projects of IndianOil Refineries.