In this week’s roundup, we talk about zero coupon zero principle, Tata Consumer and Tata Coffee’s merger, and extension on import duty waiver for tur & urad among other news.
Weekly Business Roundup at 10:00 am on 30th December, 2023.
[Disclaimer: This transcript is auto-generated]
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Let’s begin. Tata Consumer Products this week revealed the appointed date of the merger of Tata Coffee with the company, which would be January 1, 2024. The announcement came almost two years after Tata Consumer had first announced the merger of all businesses of Tata Coffee with itself. This was part of a reorganisation plan in line with the company’s strategic priority of unlocking synergies and efficiencies. The Kolkata bench of the National Company Law Tribunal had approved the merger of TCL with TCPL and a wholly-owned subsidiary called TCPL Beverages & Foods last month. While the plantation business of TCL would be demerged into TBFL, the remaining business of TCL, consisting of its extraction and branded coffee business, would be merged with TCPL.
Meanwhile, Tata Sons chairman N Chandrasekaran has warned of more disruption and volatility in 2024, even as he said India’s future is bright as the country fared better than most others this year. The country’s economy is thriving and GDP is on track to double to $7 trillion over the next five years, while technologies such as generative AI is a potential antidote, he added. Chandrasekaran said in his New Year message to employees said, quote, “Looking ahead of 2024, we must be prepared for more disruption and volatility. The complexity of global governance will reach new heights as the world finds new rules to protect data privacy, curb inflation, reduce carbon emissions and perceptions of AI risk,” unquote.
Moving on. The government this week extended duty-free imports of tur and ural dal by a year till March 31, 2025, as it sought to avoid another spurt in retail prices of these mass-consumption pulses varieties. Consumption of these two pulses and masoor are heavily import-dependent. Import duty exemption for massoor was extended to the end of next fiscal last week. The duty waiver for tur and ural has been effective since October 2021, and was earlier to stay till end of current fiscal. A trader said that the move would cool down the prices of pulses varieties in the coming months. According to department of consumer affairs, in 2023, India has imported 2.28 million tonne of pulses.
In some more market news, Sebi this week came out with a procedure for public issuance of ‘zero coupon zero principle’ instruments by not-for-profit organisations and listing of such instruments on the Social Stock Exchange. Under this, the SSE will have to specify the details to be incorporated in the fundraising document. In a circular, Sebi said that an NPO, through the lead manager, is required to file the draft fundraising document with the SSE and an application seeking in-principle approval for listing the instrument on the SSE. The SSE will provide its observation to the NPO within 30 days from the filing of the papers or receipt of clarification, if any, sought by the exchange from the NPO, whichever is later.
Over to economy. The Central Board of Direct Taxes has clarified that any payment made by the buyer or seller in a transaction facilitated by the e-commerce operator, shall be included in the gross amount of sales of goods or services for the purpose of 1% Tax Deduction at Source. In Budget FY20, the TDS provision was brought in, making it mandatory for e-commerce operator (buyer) to deduct tax on payments made to the e-commerce seller on gross sales exceeding Rs 5,00,000 in a financial year. The relevant Section 194-O came into effect on October 1, 2020. In a notification issued this week, the CBDT clarified how the TDS will apply in a multiple ECO framework, such as the Open Network for Digital Commerce.
In other news, The EMI to income ratio for households has improved in 2023 after the brief decline in affordability in 2022, according to Knight Frank India’s proprietary Affordability Index. While marginally better than last year, home affordability across cities also significantly improved since pre-pandemic year of 2019. And expected moderation in inflation and projected downward trend in interest rates should further improve home affordability in 2024. Ahmedabad remains the most affordable housing market in the country with an affordability ratio of 21%, which implies that on an average a household in Ahmedabad needs to spend 21% of its household income to pay EMI for housing loans. Ahmedabad was followed by Kolkata and Pune at 24% each in 2023.
Lastly, the auto sector. EV startup Ather has achieved significant milestone in India, selling over 2 lakh units since its launch. In January this year, the company achieved 1 lakh sales and has managed to garner another one lakh customers in just under a year. The company’s current offerings include the 450S and the 450X, while Ather will be launching the sportier Ather 450 Apex in January 2024. Bookings are currently open and deliveries are set to begin in March 2024.
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