1. Clutch of IPOs to hit street this week, more after 2024 general elections
Five initial public offerings will be launched this week, including Tata Technologies, Indian Renewable Energy Development Agency, Fedbank Financial Services, Flair Writing Industries and Gandhar Oil Refinery, which together are expected to raise over Rs 7,300 crore. Another interesting bunch of at least nine new-age tech startups is preparing to tap the markets after next year’s general election.
Why it’s important: Many companies are expecting investor appetite for new listings. The sentiment for the IPOs hitting the market after the parliamentary elections would largely depend on the poll outcome.
2. Reserve Bank to review penalty framework, likely raise penal amounts
The Reserve Bank of India may undertake a comprehensive review of its framework for penalties, which could include raising the penal amount; the feasibility of linking it to the size of regulated entities, especially for systemically important entities, and repeat offences; and claw back of the payouts to CEOs and key management personnel.
Why it’s important: The review is part of the central bank’s move to improve standards of corporate governance in regulated entities and raise the premium placed on it. It will also look at ethics, the role of boards, and supervisory expectations.
3. Government may place curbs on jurisdictions where overseas listings could be made
Suspicious jurisdictions will be barred for Indian firms looking to first list their shares overseas. The corporate affairs ministry on October 30 notified a provision in the companies act that allows Indian businesses to list abroad before a domestic IPO. The final rules will be notified by the economic affairs department that will specify the class of public limited companies eligible for this facility and the markets they could tap for raising capital.
Why it’s important: Listing abroad first would ease capital-raising possibilities for companies but the government wants to make prevent misuse of the overseas route to dodge taxes and launder money.
4. Unclaimed funds of Sahara-Sebi refund account could be transferred to government
The government is looking into the legal process of transferring unclaimed funds of the Sahara-Sebi Refund Account to the Consolidated Fund of India, with a provision to refund investors who stake claims. The Supreme Court in 2012 upheld an order by the market regulator and directed Sahara India Real Estate Corp and Sahara Housing Investment Corp to refund investors with interest.
Why it’s important: The death of Sahara Group founder Subrata Roy has put the spotlight on the fund. There have been few claimants for refunds in the decade since it was established.
5. Apple aims hitting milestone of Rs 1 lakh crore local production in year to March
Apple is targeting production of nearly Rs 1 lakh crore worth of iPhones in India in 2023-24, having ramped up capacity at its factory partners and achieved over Rs 60,000 crore in production in the first seven months of the financial year. It will reach the milestone in case of a miss by the first quarter of next fiscal.
Why it’s important: The rapid rise in the worth of Apple’s products made in India indicates the importance the American company places on diversifying its supply chains away from China.
6. Auto shines and FMCG stumbles in divergent consumer demand and spending
India’s automobile sector has increased its share in corporate revenues and profits, but FMCG companies are struggling with poor sales and earnings growth. The share of the automobile sector in corporate net sales rose to a 10-quarter high of 10.05 percent in the September quarter, compared with the share of FMCG companies in corporate net sales that declined to 2.76 percent in the same three months.
Why it’s important: The divergent trend on corporate results underscores the K-shaped economic recovery in India after the pandemic, where big-ticket items are doing well but daily essentials are lagging in volume growth. A section of India’s population seems to be prospering but the rest aren’t doing so well.
7. Imports of computer hardware surge 42 percent to $715 million on licensing fears
Import of personal computers, including laptops and tablets, shot up in September by 42 percent to $715 million, according to trade ministry data. The rise in these imports were led by China at 33 percent, followed by and Singapore at as much as 188 percent.
Why it’s important: This is a complete reversal of a year-long downward trend triggered mainly by the government’s decision to impose import restrictions on electronic hardware.
8. OpenAI investors try to bring back founder Sam Altman after dramatic ouster
OpenAI’s investors are making efforts to bring back Sam Altman, the CEO who was ousted last week. Altman is thinking about returning but has told investors that if he does return, he would want a new board and governance structure. He has separately discussed starting a company that would bring on former OpenAI staff, including several who quit in protest over his ouster.
Why it’s important: Dramatic developments seems to be overtaking OpenAI ahead of the first anniversary of the launch of its game changing ChatGPT. OpenAI went from a small non-profit to a multibillion-dollar company in supersonic speed under Altman.
9. Compensation consultants caution that 9-10 percent hike may not beat inflation
At a time of high inflation and rapidly rising costs, a 9-10 percent salary hike may not help beat inflation, consultants working on compensation across sectors have cautioned. Companies on the other hand are striving to offer tax-saving benefits and reimbursements to help increase cash-in-hand for staff and help them make the best of increased pay packages.
Why it’s important: Persistently high inflation in recent times have taken a toll on even employees in India’s formal sector. An erosion is earnings by the high-spending segment of the population could put on the brakes on the economy’s growth story.
10. Singhania couple may reach settlement on splitting $1.4 billion wealth post separation
Nawaz Modi, the estranged wife of Gautam Singhania, has sought three-quarters of the industrialist’s net worth of an estimated $1.4 billion for their two daughters and herself as part of a family settlement following the couple’s separation. While Singhania is believed to have agreed to share the wealth with Nawaz Modi and daughters Niharika and Nisa, the Raymond Group chief has suggested setting up a family trust to hold the assets where he would be the sole managing trustee.
Why it’s important: Setting up family trusts have long been the preferred method of transferring wealth to the next generation in the US. The trend seems to be catching up in India as well, especially in instances where there are multiple claimants.