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India Inc: Navigating a Challenging Q2 with Resilience in ROCE
Business, Equities, Market News, Markets - September 16, 2024

India's Manufacturing Growth Slows in August, PMI Hits 3-Month Low at 57

India’s Manufacturing Growth Slows in August, PMI Hits 3-Month Low at 57

In August, companies reported weaker growth in output and new orders, which brought the expansion of India’s manufacturing sector to a three-month low. According to HSBC’s most recent data, which was made published on Monday, the Purchasing Managers’ Index (PMI) fell from 58.1 in July to 57.5 in August. Even if the sector’s growth is still good, this fall signals that it is losing some of its movement. Increase is indicated by an index number higher than 50.

Softer Growth in New Orders and Output: The August report makes clear that the rate of growth in new business and production for Indian manufacturers decreased. When compared to historical averages, the expansion rates are still substantial despite this slowdown. The poll indicates that while companies are still growing, the rate of growth has slowed. Some businesses have blamed the slower pace on intense competition, which has been linked to this in part. Regarding output, although production levels remained elevated, the growth rate decelerated to its lowest point since January of this year. While demand wasn’t as high as it had been in prior months, some businesses pointed out that technological investments and increased sales volumes helped maintain production levels.

Impact on the International Market and Reduced Demand: According to the poll, the two main measures of demand output and new orders reached their lowest points in seven months. While still healthy overall, international demand grew at its slowest rate since January. This implies that although the industry is still growing, it is not doing so as quickly as it formerly did on a national and worldwide level.

Focussing on the current situation, HSBC Chief India Economist Pranjul Bhandari noted that output and new order patterns closely followed the PMI’s overall trend. According to Bhandari, the industry is still performing well by historical standards, but several companies blamed the decline on intense competition.

Price inflation remains despite easing cost pressures: A moderating of cost pressures was one of the report’s good observations from August. The rate of inflation for input prices decreased to its lowest level in five months, enabling businesses to expand their purchasing. The rapid inflation of output prices faced by manufacturers persisted, almost matching the 11-year peak reached in July, even with the slower increase in expenses. This indicates that, mainly as a result of consistently high demand, businesses were still charging more to their customers even if it was cheaper for them to create the items.

Although there was an obvious decrease in input costs, Bhandari clarified that the inflation of output prices slowed down considerably less sharply. Because of this, producers were able to raise their profit margins by charging customers for extra expenses.

Effect on the RBI’s Interest Rate Outlook and Employment: According to the poll, employment growth in the manufacturing sector has slowed for the past two months. In spite of this, businesses kept adding new employees for the sixth consecutive month, propelled by high demand and hope for the future of their businesses. Nonetheless, when several businesses lowered their headcounts at the middle of the second fiscal quarter, the labour market appeared to be tightening.

The main cause of India’s July inflation rate drop, which was nearly five years below the previous record of 3.54%, was a substantial base impact.  Due to the decline in inflation, economists forecast that the Reserve Bank of India (RBI) would cut interest rates by 25 basis points in the upcoming quarter. A rate reduction is anticipated to contribute to economic stimulation and partially overcome the manufacturing sector decline.

Prospects for the Manufacturing Industry in the Long Run: Considering the difficulties encountered in August, the Indian manufacturing sector has grown for 38 months running since July 2021. The industry is still growing, but there are underlying issues that need to be resolved, as seen by the PMI’s drop from the flash estimate of 57.9 to 57.5.

Softer demand, increased competition, and rapid price inflation all point to the reality that manufacturers will face challenging conditions in the months to come. But with the possibility of an RBI rate decrease as well as ongoing investments in efficiency and technology, the industry might be able to maintain growth even in more difficult economic times.

In summary, the development trajectory of the Indian manufacturing sector has slowed, but it is still growing. The months ahead will be critical as businesses adapt to shifting market conditions and authorities think through ways to encourage sustained economic growth.

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Sugar Industry Fears New Norms May Stifle Growth and Innovation

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Chinese Tech Giants Export India-Made Electronics to Global Markets
Business, Equities, Market News, Markets - September 16, 2024

Digital India: Consumer Electronics Market on the Brink of $100 Billion

Digital India: Consumer Electronics Market on the Brink of $100 Billion

India’s domestic market for consumer electronics and home appliances is poised to reach nearly $100 billion by the end of December 2024, making it the third-largest market globally, trailing only China and the United States. This significant milestone highlights the growing demand for devices such as smartphones, laptops, air conditioners, and refrigerators within the country. Notably, this figure only includes consumer electronics and home appliances sold within India and excludes heavy appliances and ancillary electronics, which would substantially increase the market’s size.

The projected $99 billion market size in 2024, with the potential to cross the $100 billion mark, reflects a robust year, especially with the strong festive season demand expected between September and December. The festive season is crucial in India, often contributing to nearly half of the annual sales for electronics and appliances.

What stands out is India’s rapid growth pace in this sector. Analysts estimate a 10% growth rate for the Indian market in 2024, which is almost double China’s growth rate and triple that of the US. This surge is fuelled by the increasing affordability of consumer electronics, driven by easy access to credit, financing schemes, and year-round discount offers. This trend is particularly evident in the rise of high-value products like smart TVs, where consumers are willing to pay more for premium features.

Tarun Pathak, Director of Research at Counterpoint India, emphasized the importance of these financing options in changing market dynamics. While there may be a slowdown in sales volumes, the rising average prices, particularly in segments beyond smartphones, have found a market among Indian consumers. This has led to sustained revenue growth for companies operating in India, despite fluctuations in sales volumes.

For instance, Samsung India reported a 16% increase in net revenue to ₹98,924 crore in FY23. Similarly, China’s BBK Group, which operates five gadget brands in India, maintained steady revenue at ₹81,870 crore in FY23, even though sales volumes fell significantly. Apple India also saw robust growth, clocking ₹49,321 crore in revenue in FY23, driven primarily by the increasing popularity of iPhones in the country.

Looking ahead to FY24, these companies are expected to continue their growth trajectory, with high single-digit revenue increases. Apple India, in particular, is likely to see exponential growth due to the rising demand for iPhones.

However, not everyone agrees with the optimistic view of India’s electronics market reaching the $100 billion mark. Navkendar Singh, Associate Vice-President at IDC India, cautioned that the growth in market value does not necessarily equate to market expansion. He argued that the increase in value might benefit retailers, but it does not indicate a broader market growth or greater value generation for the Indian economy. Singh pointed out that while more premium devices are being sold, this trend is largely driven by credit availability and consumer sentiment, rather than an influx of new customers into the market. This, he warned, could lead to a skewed understanding of the market’s true growth potential.

Despite these concerns, retailers are enthusiastic about the current trends. Kailash Lakhyani, Founder and Chairman of the All-India Mobile Retailers Association, noted that after a period of low demand, retailers are now benefiting from higher-value sales. He highlighted the growing demand for premium electronics and appliances, driven by consumers’ desire for a physical experience before purchasing high-end products. With ample availability of premium units and an expected increase in footfall during the festive season, retailers are optimistic about the future.

In summary, India’s consumer electronics and home appliances market is on the cusp of a major milestone, driven by strong consumer demand, particularly for premium products. While there are differing views on the implications of this growth, the overall trend suggests a positive outlook for the industry as it continues to expand and evolve.

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Shriram Finance Targets $1.5 Billion in Overseas Funding

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Poonawalla Fincorp’s Bold NCD Move: ₹1500 Crore Private Placement
Business, Equities, Market News, Markets - September 13, 2024

The Motorbike Industry's Changing Dynamics in India

The Motorbike Industry’s Changing Dynamics in India

In order to satisfy customers seeking a dependable, fuel-efficient, and low-maintenance bike, Honda Motorcycle and Scooter India (HMSI) introduced the Shine model with concentration on the commuting market. The Shine is a well-liked option for everyday commuters since it has continuously lived up to these expectations throughout time.

A significant section of the Indian market finds resonance in the Shine’s 125cc engine, which perfectly balances power and efficiency. Because to Honda’s Enhanced Smart Power (ESP) technology, which guarantees a vibration-free and smooth ride, the motorcycle provides a sophisticated riding experience. Its cutting-edge features, which include a five-speed gearbox and a quiet start with an alternating current generator, also set it apart in the commuter market.

Commuter bikes, which put comfort, affordability, and fuel efficiency above performance, dominate the Indian two-wheeler market. There have always been a lot of models in this market competing for the interest of budget-conscious buyers. The Shine’s rise has been largely attributed to its capacity to meet these demands. Honda’s reputation for dependability and affordable maintenance has also helped to fuel the Shine’s rising sales figures. The Shine meets the long-term value expectations of Indian customers by offering strong build quality and economical operation. The bike’s attraction among customers on a tight budget is further reinforced by its continued high resale value.

For many years, the Bajaj Pulsar series was incredibly popular in India because of its aggressive styling, strong engines, and variety of versions that could suit a wide spectrum of consumer tastes. Among young riders looking for a combination of performance and flair, the Pulsar 150 in particular became identified with the brand. But as time went on, the tastes of the commuter market started to drift towards more useful and fuel-efficient versions. The Honda Shine, which provided a more affordable and dependable daily commuter, posed a serious threat to the Pulsar series, even if devotees continued to find it endearing.

The growing cost of gasoline has made Indian customers more aware about fuel economy. With its 125cc engine, the Shine gets better economy than the Pulsar’s larger engines, which makes it a more appealing option for daily commuting. A significant portion of consumers seeking a hassle-free ownership experience find the Honda Shine appealing due to its reputation for having cheaper maintenance expenditures. On the other hand, because of its increased focus on performance, the Pulsar needs more frequent maintenance, which over time may increase the cost of ownership. This has resulted in high brand loyalty, as many buyers decide to continue with Honda when they need to upgrade or buy a new car. However, although still widely used, Bajaj’s client base has fluctuated significantly, particularly with those who value cost-cutting and efficiency.

Honda has taken a number of calculated steps to benefit from this change in customer preferences. The Shine has undergone constant updates from the manufacturer to satisfy changing customer needs. Features like combi-brake systems, tubeless tires, and digital instrument displays have been added to improve user experience and safety. Further increasing the attraction of the brand is Honda’s wide dealer and service network throughout India, which has made it simpler for consumers to obtain after-sales services. Additionally, the business has concentrated on offering alluring financing alternatives, opening up the Shine to a wider range of consumers.

In an attempt to reclaim its position, Bajaj Auto is probably going to improve the range of the Pulsar while also putting more of an emphasis on maintenance costs and fuel economy. Honda will try to hold onto its dominance in the interim by keeping up with innovation and meeting customer demands.

In summary, a wider trend in customer preferences towards more sensible and affordable options is highlighted by the Honda Shine’s ascent to the position of second-best-selling motorbike model in India. Manufacturers will need to be aware of customer demands and industry trends in order to hold onto their positions as competition in the Indian two-wheeler market heats up.

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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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PFC Withdrawals May Impact Zero-Coupon Bond Market
Business, Equities, Market News, Markets - September 13, 2024

IREDA Announces Up to Rs 4,500 Crore Equity Capital Raise

IREDA Announces Up to Rs 4,500 Crore Equity Capital Raise

IREDA, a leading public sector green financier, plans to raise up to Rs 4,500 crore in equity capital to support India’s renewable energy goals. This decision was made during a meeting of IREDA’s Board of Directors held on August 29, 2024, as the company seeks to bolster its financial capabilities and support India’s ambitious renewable energy goals.

As a mini-Ratna company under the administrative control of the Ministry of New and Renewable Energy, IREDA has played a crucial role in financing green energy projects across the country. The funds raised through this equity capital infusion will be used to expand IREDA’s on-lending activities, enabling it to provide financial support to a broader range of renewable energy projects, from inception to post-completion.

The planned fundraising will be executed in one or more tranches, utilizing various methods such as a Further Public Offer (FPO), Qualified Institutional Placement (QIP), Rights Issue, Preferential Issue, or other permitted modes. The exact number of securities to be issued will be determined at a later stage, based on market conditions and the company’s funding requirements.

IREDA’s decision to explore diverse funding avenues, including public and institutional channels, demonstrates its commitment to diversifying its sources of capital. This strategic move will not only strengthen the company’s financial position but also enable it to cater to the evolving needs of the renewable energy sector in India.

The proposed fundraising initiative requires approval from the Government of India and other relevant regulatory authorities. This process is crucial, as the additional capital will play a pivotal role in supporting India’s ambitious renewable energy targets. The country aims to achieve 500 GW of renewable energy capacity by 2030, which requires an annual addition of approximately 50 GW to the existing infrastructure.

IREDA’s financial performance in the recent past has been commendable, further underscoring the need for this capital infusion. During the June quarter of 2024, the company saw a significant boost in its financial performance, with a 30% surge in net profit reaching Rs 384 crore, accompanied by a 32% year-over-year increase in revenue, which stood at Rs 1,502 crore. This robust financial standing has inspired the company’s leadership to seek additional resources to fuel its continued growth and contribute to the nation’s renewable energy aspirations.

The Indian government’s focus on renewable energy, as evidenced by policies such as the National Renewable Energy Policy and the National Solar Mission, has been a driving force behind the sector’s expansion. IREDA’s role as a leading financier in this space has been instrumental in facilitating the implementation of these policies and supporting India’s transition towards a more sustainable energy future.

The proposed fundraising by IREDA is expected to have a positive impact on the renewable energy industry in India. By providing access to additional capital, IREDA will be able to expand its lending activities and support a greater number of projects across the country. This, in turn, will contribute to the overall growth and development of the renewable energy sector, helping India progress towards its ambitious targets and reduce its reliance on fossil fuels.

Furthermore, this strategic move aligns with the global efforts to combat climate change, as the increased funding for renewable energy projects will play a crucial role in reducing greenhouse gas emissions and promoting a more environmentally sustainable energy landscape.

Overall, IREDA’s decision to raise equity capital of up to Rs 4,500 crore is a significant development that underscores the company’s commitment to supporting India’s renewable energy ambitions. By diversifying its funding sources and strengthening its financial capabilities, IREDA is poised to play an even more pivotal role in driving the country’s transition towards a greener and more sustainable energy future.

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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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Hyundai Q3 FY2025 Sees 19% Profit Drop Amid Lower Sales and Rising Costs
Business, Equities, Market News, Markets - September 13, 2024

Hyundai Targets Revival with New SUVs and India-Made EV by 2025

Hyundai Targets Revival with New SUVs and India-Made EV by 2025

Hyundai Motor, once the dominant foreign automaker in India, is determined to regain its lost ground in the country’s rapidly evolving automotive landscape. The South Korean giant is embarking on an ambitious product offensive, backed by a planned $3 billion public listing of its Indian subsidiary, to fend off increasingly formidable domestic rivals.

The company’s strategy revolves around a multi-pronged approach that aims to address the shifting consumer preferences and intensifying competition in the world’s third-largest car market.

At the heart of Hyundai’s revival plan is a promise to introduce a slew of new SUV models, including its first India-made electric vehicle (EV) early next year, followed by at least two additional gasoline-powered SUVs by 2026. This product onslaught is part of the company’s broader efforts to strengthen its presence in the high-margin SUV segment, which has become the hottest-selling vehicle category in India, displacing the once-favored small cars.

Hyundai’s market share in India has been on a gradual decline, dropping from 17.5% four years ago to 14.6% currently, as domestic giants like Tata Motors and Mahindra & Mahindra have gained ground with their own range of SUV offerings. Meanwhile, Toyota, another major foreign rival, has also seen its share rise to 6% from 4% over the same period.

V G Ramakrishnan, a management expert, acknowledged Hyundai’s challenging position in the Indian market. He noted that the company’s primary focus should be on retaining its market share, and the only way to achieve this is through a faster rollout of new products.

To address this challenge, Hyundai has outlined an ambitious product pipeline that includes not just the introduction of new SUVs, but also a strategic shift towards higher-margin offerings. The company’s plan to list its Indian subsidiary on the local stock exchanges, seeking to raise $3 billion, underscores its bullish outlook on the country’s automotive market.

In April, during his visit to India, Euisun Chung, the Executive Chair of Hyundai Motor Group, expressed the company’s pride in consistently securing the second-largest market share in the country’s dynamic automotive landscape.

The introduction of Hyundai’s first India-made EV in 2025 will be followed by four more EV models by the end of the decade, as the company evaluates plans to establish the country as a regional EV export hub. This move aligns with Hyundai’s broader strategy to boost its global sales by 30% by 2030, with a focus on higher-priced, premium vehicles.

In the gasoline-powered segment, Hyundai’s upcoming launches include a crossover model based on its Bayon offering sold in global markets, competing against Maruti’s Fronx crossover and Tata’s Nexon SUV. The second gasoline-powered SUV is expected to be larger than the popular Creta model and will likely compete with Mahindra’s XUV700.

The new SUV models are expected to contribute around 120,000 additional units per year to Hyundai’s sales in India, further reinforcing the company’s position in the market.

However, Hyundai’s rivals are also not standing still. Tata Motors, the country’s top-selling EV maker with a market share of over 75%, has announced plans to launch five more EVs over the next three to four years, taking its total EV portfolio to 10. Mahindra, another prominent domestic player, has plans to introduce seven electric SUVs and six new gasoline-powered SUVs by the end of the decade.

An Indian supplier to Hyundai cautioned that the strategies that have worked for the company in the past may not be sufficient to secure its future success. The Indian supplier to Hyundai cautioned that the strategies that have worked for the company in the past may not be sufficient to secure its future success. An Indian supplier to Hyundai cautioned that the strategies that have worked for the company in the past may not be sufficient for its future success.

Regaining its lost ground will require Hyundai to strike a delicate balance between market share and profitability. The company’s “premiumization” strategy, which has helped it record some of the highest profit margins among its peers in India, has come at the cost of sales volumes.

As Hyundai prepares for its public listing, the company will need to strike a careful balance between its focus on higher-margin offerings and maintaining its market share. “If there is a drop in either sales or profits, the company can be questioned by shareholders,” cautioned management expert V.G. Ramakrishnan.

Hyundai’s journey in India has been a rollercoaster ride. From its early success with affordable hatchbacks like the Santro to its recent dominance in the SUV segment, the company has navigated the challenges of this dynamic market. Now, as it embarks on a new phase of growth, Hyundai faces the crucial task of reclaiming its position as the leading foreign automaker in India, while also satisfying the demands of its future public shareholders.

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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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Business, Equities, Market News, Markets - September 12, 2024

Supreme Court Approves NBCC Rs 15,000 Cr Fundraising for Amrapali Project

Supreme Court Approves NBCC Rs 15,000 Cr Fundraising for Amrapali Project

The state-run NBCC (India) has been granted permission by the Supreme Court of India to generate an extra ₹15,000 crore through the development of additional apartments within the Amrapali housing projects. This decision aims to address the long-pending issue of delivering homes to around 16,000 homebuyers who have been waiting for years. This move is a part of a larger strategy to revive the stalled Amrapali projects and ensure that the homebuyers finally get possession of their homes.

 Funding Strategy and Payments to Authorities : As part of the funding strategy, NBCC plans to make significant payments to local authorities To be clear, NBCC is going to Assign ₹258.24 crore to the Noida Authority and ₹484.92 crore to the Greater Noida Authority. These payments include an 18% Goods and Services Tax (GST) for the purchasable Floor Area Ratio (FAR), which allows the company to develop additional flats. These payments are scheduled to be made in two equal instalments, with the first payment due by January 2025 and the second by March 2025.

Using Funds to Finish Unfinished Projects: KP Mahadeva swamy, Chairman of NBCC (India) Limited, stated that the majority of the proceeds from the sale of these extra apartments will go in the direction of finishing the remaining Amrapali projects .This involves paying off existing debts to banks, which have posed a major obstacle to these projects’ completion. Any extra money, according to Mahadeva Swamy, will be utilised to pay off debts to the Greater Noida and Noida administrations. In less than a month, the required development plans should be approved by the local government, at which point NBCC will formally begin construction on the extra apartments.

Expansion Plan: New Housing on Extra Land: The Supreme Court approved the inclusion of an additional 75 acres of land in addition to the FAR. This will greatly broaden the project’s scope by enabling NBCC to build some 13,250 additional homes. NBCC faces substantial financial challenges, including an additional ₹3,000 crore from the Greater Noida Authority and ₹1,550 crore in outstanding bank debt. As the project moves forward, NBCC will need to be cautious in how it handles these responsibilities.

 Advancements in the Housing Delivery of Multiple Projects: NBCC is in charge of finishing the delivery of over 46,000 housing units in 20 different Amrapali projects. 5,000 of these remain unsold out of the 41,000 units that have already been sold. NBCC was initially tasked with finishing 38,000 homes, of which it has successfully delivered 22,000 to date. The remaining houses are being built, and work is already underway in a number of them.

The Court Receiver Committee was created specifically to manage the Amrapali projects, managing all transactions and advancements. This committee is in charge of overseeing the entire procedure, making sure that NBCC and its construction partners are adhering to the court’s orders and making good progress on the projects.

Challenges and Future  Although rooftop solar is expanding in India, the paper points out certain possible obstacles that can hinder its expansion. Given the rising demand for these modules, the supply of high-quality solar modules is a concern. Furthermore, shortages of components and growing costs may make rooftop solar systems more expensive for consumers and companies to purchase. The momentum of the industry may be slowed down if these problems are not resolved. The future of India’s rooftop solar sector seems promising despite these obstacles. The sector is expected to continue to grow as a result of continuous government initiatives, rising consumer awareness, and industrial demand. According to the survey, rooftop solar installations in India may increase even more significantly in the upcoming years with the correct legislation and assistance.

The Supreme Court’s decision to allow NBCC to raise additional funds and develop more flats is a crucial step toward resolving the long-standing issues surrounding the Amrapali housing projects. With these new funds, NBCC aims to complete the stalled projects, deliver homes to thousands of waiting buyers, and settle its financial obligations. While significant challenges remain, this move brings renewed hope to the many homebuyers who have been waiting for years to move into their homes. NBCC’s commitment to completing these projects, combined with the support of the Court Receiver Committee, is expected to bring much-needed relief to the affected homebuyers.

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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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MRF Q1 FY26: Revenue Up, Profits Down on Margin Pressures
Business, Equities, Market News, Markets - September 12, 2024

Indian Tyre Exports Rebound with 17% Growth in Q1 FY25

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The Indian tyre industry has witnessed a remarkable turnaround in its export performance, with a substantial 17% year-on-year growth recorded in the first quarter of the current fiscal year (FY25). This surge in exports comes after a 14% decline in the corresponding quarter of the previous year, showcasing the industry’s resilience and ability to navigate the evolving global landscape.

According to the data released by the Ministry of Commerce, India’s tyre exports reached ₹6,219 crore during the first quarter of FY25, a significant increase from the ₹5,333 crore recorded in Q1 of FY24. The Automotive Tyre Manufacturers Association (ATMA) has attributed this resurgence to a combination of strategic factors employed by Indian tyre manufacturers.

One of the key drivers behind this growth is the sustained investment in research and development (R&D) and the development of advanced technology products. Indian tyre companies have been at the forefront of innovating and enhancing their product offerings to cater to the diverse needs of global markets. This focus on technological advancements has not only improved the quality and performance of Indian-made tyres but has also enabled them to stay competitive in the international arena.

Additionally, the Indian tyre industry’s efforts to maintain competitive pricing and implement effective branding strategies have been crucial in boosting its global appeal. By striking the right balance between quality, cost, and brand recognition, Indian manufacturers have been able to capture a larger share of the global tyre market, despite the challenging economic environment.

ATMA Chairman Arnab Banerjee highlighted that “improving demand prospects in key export destinations and expected monetary easing also helped growth” during the first quarter of FY25. This points to a broader recovery in global demand, which has provided a tailwind for Indian tyre makers to expand their footprint overseas.

The rise in exports shows the Indian tyre industry’s deeper incorporation into global supply chains. Banerjee emphasized that the globally aligned regulatory environment for tyre manufacturing in India has also played a crucial role in increasing the addressable market for Indian-made tyres. This alignment has enabled Indian manufacturers to seamlessly integrate their products into the global supply network, thereby enhancing their competitiveness and accessibility to international buyers.

An analysis of export destinations shows the broad global appeal of Indian-made tyres. The United States has emerged as the largest market, accounting for a 17% share of Indian tyre exports during the first quarter. Other major export markets include Brazil, Germany, France, and Italy, underscoring the diverse geographic reach of Indian tyre companies.

In terms of product categories, passenger car radial (PCR) tyres remained the largest exported segment, closely followed by motorcycle and farm/agricultural tyres. Interestingly, the highest growth in export volumes was witnessed in motorcycle tyres, which saw a remarkable 38% increase. Truck & Bus Radial (TBR) tyres also recorded a substantial 31% rise in exports.

The robust performance of motorcycle and TBR tyres highlights the versatility and competitiveness of the Indian tyre industry, as it caters to the diverse needs of global markets. This diversification of export portfolios has been a key strategy employed by Indian manufacturers to navigate the evolving global landscape and mitigate risks associated with over-dependence on any single product category or market.

However, Banerjee cautioned that downside risks to Indian tyre exports continue to persist. Factors such as global supply chain disruptions, geopolitical tensions, the West Asia crisis, and rising shipping costs remain areas of concern that could potentially impact the industry’s growth trajectory.

The rebound in tyre exports in Q1 FY25 highlights the Indian tyre industry’s resilience and adaptability despite challenges. The sustained focus on R&D, technological advancements, and strategic pricing and branding initiatives have enabled Indian manufacturers to capitalize on the improving global demand and strengthen their position in the international market.

Moreover, the industry’s enhanced integration with global supply chains and the favourable regulatory environment in India have further bolstered the export potential of Indian-made tyres. As the industry continues to navigate the evolving global landscape, the ability to address downside risks and maintain its competitive edge will be crucial in sustaining the momentum of export growth.

In conclusion, the resurgence in tyre exports during the first quarter of FY25 highlights the Indian tyre industry’s growing prowess and its ability to capitalize on emerging opportunities in the global market. As the industry continues to innovate and adapt, it is poised to further solidify its position as a major player in the international tyre trade. The industry’s strategic focus on R&D, technological advancements, pricing, branding, and global integration have been the key drivers behind this remarkable turnaround, and they will continue to be the cornerstones of its future success in the global arena.

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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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Business, Equities, Market News, Markets - September 12, 2024

India's Rooftop Solar Capacity Rises 26% to 1.1GW in H1 2024

India’s Rooftop Solar Capacity Rises 26% to 1.1GW in H1 2024

India increased its rooftop solar energy capacity by 26% in the first half of 2024, adding 1.1 gigawatts (GW) compared to 873 megawatts (MW) during the same period in 2023. This indicates that India has achieved substantial success in increasing its rooftop solar energy capacity. The US-based analysis company Mercom Capital reported that rooftop solar installations are increasing at an accelerating rate, particularly in the second quarter of 2024.

Growth in Rooftop Solar Installations: India installed 731 MW of rooftop solar systems during the second quarter of 2024, which ran from April to June. This represents a notable 89% increase over the 388 MW added in the same period previous year. The paper states that as of June 2024, India had 11.6 GW of installed rooftop solar power. This increase indicates a tremendous rise in the use of rooftop solar energy across the country.

Industrial and Commercial Contributions: The study also examines how various industries have contributed to the expansion of rooftop solar capacity. With more than 23 percent of the installations during the quarter, the industrial industry was the biggest contributor. Concurrently, the government and commercial sectors made up 0.7% and 4% of the capacity additions, respectively. This demonstrates that although rooftop solar is being adopted by industrial users at the forefront, the commercial and government sectors still have room to develop.

Government Initiatives’ Effects: The Prime Minister’s “PM Surya Ghar: Muft Bijli Yojana” rooftop solar project is one of the main causes of the recent spike in rooftop solar installations. Customers’ interest in this program has grown significantly, which is motivating more homes and businesses to install rooftop solar panels. Raj Prabhu, CEO of Mercom Capital Group, stated that this government program has led to a notable growth in the rooftop solar business in India. He was upbeat about the residential sector’s installation rates continuing to improve gradually in the upcoming months.

Difficulties in the Rooftop Solar Sector: Prabhu cautioned about possible obstacles that might impede the expansion of the rooftop solar industry, albeit its encouraging trajectory. Problems including solar module availability, component shortages, and cost increases could be major roadblocks. In order to maintain the current trajectory of rooftop solar installation development, these concerns must be rapidly addressed.

State-by-State Contributions: As of June 2024, the top 10 states in India accounted for the majority of the nation’s rooftop solar capacity, according to the research. When combined, these states were responsible for more than 78% of rooftop solar installations In terms of installations, Gujarat, Maharashtra, Rajasthan, Kerala, and Karnataka were the top states. These states have paved the way for other states to follow by actively promoting and embracing rooftop solar energy.

India’s rooftop solar sector is undoubtedly expanding, as seen by the notable capacity gains that are seen every year. Initiatives from the government, especially the PM Surya Ghar: Muft Bijli Yojana, have been instrumental in quickening this rise. Although rooftop solar has become most popular in the industrial sector, there is still a lot of room for growth in the residential, commercial, and government sectors as well. However, resolving the issues with the supply chain and cost considerations is crucial to maintaining this development. Preserving the momentum behind rooftop solar installations will need guaranteeing the accessibility of solar modules and components at reasonable costs.

Success in the rooftop solar industry would be critical as India works to meet its targets for renewable energy. India can keep growing its solar energy capacity and contribute to a more sustainable and greener future with steady policy backing and business cooperation. While the current state of affairs is encouraging, much work remains before rooftop solar energy in the nation can reach its full potential.

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Business, Equities, Market News, Markets - September 11, 2024

Govt Lowers Public Float Requirement for IFSC Listings to 10%

Govt Lowers Public Float Requirement for IFSC Listings to 10%

The Indian government has recently announced a significant change to the listing requirements for Indian companies seeking to list on international exchanges within the International Financial Service Centres (IFSCs) at Gandhinagar’s Gift City. This move is aimed at facilitating easier access to global capital for Indian startups and companies in emerging sectors.

Previously, Indian companies required a minimum of 25% public shareholding for continued listing on stock exchanges in Gift City, which was the same threshold as for listing on Indian exchanges. Under the revised guidelines, public Indian companies wishing to list solely on international exchanges at the IFSCs will now only need to offer and allot at least 10% of their post-issue capital to the public. This is a substantial drop from the previous requirement of 25% public shareholding for continued listing on IFSC exchanges. This represents a substantial relaxation of the previous regulations.

The finance ministry highlighted that this change in the Securities Contracts (Regulation) Rules, 1957 (SCRR) is intended to encourage more Indian entities to list on IFSC exchanges. By lowering the mandatory public offering from 25% to 10%, the government hopes to enable Indian companies to list globally while still retaining a greater degree of control over their businesses.

This move is also expected to incentivize foreign investments and boost foreign exchange inflows into the country. Mohit Chaudhary, a legal expert, identified the government’s dual objectives behind the reduced listing requirements. Firstly, it aims to encourage more Indian companies to list on IFSC exchanges, as the lower public float allows them to maintain greater control over their businesses while still attracting public capital. Secondly, the move is intended to incentivize foreign investments and boost foreign exchange inflows into the country.

However, Chaudhary also highlighted a potential downside, noting that the reduction in the public float would result in fewer shares available to the public, which could impact market liquidity and price discovery.

The government’s decision to allow Indian companies to list abroad was first announced in 2020 as part of a pandemic relief package. Last November, the ministry of corporate affairs took a further step by permitting certain unlisted companies to list directly on foreign stock exchanges. The plan is to initially roll out this overseas listing option through the IFSCs at Gift City, before potentially expanding it to actual overseas listings.

This move by the Indian government is a significant and strategic decision that reflects its broader efforts to position the country as a global financial hub. By relaxing the listing requirements for Indian companies on IFSC exchanges, the government is aiming to create a more attractive and accessible environment for Indian businesses to access international capital markets.

The potential benefits of this policy change are manifold. It could help Indian startups and technology companies raise funds more easily to fuel their growth and expansion, while also attracting greater foreign investment into the country. This, in turn, could strengthen India’s position as an attractive destination for global capital and enhance its reputation as a hub for innovation and entrepreneurship.

However, it will be crucial for policymakers to carefully monitor the impact of the reduced public float requirement to ensure that it doesn’t negatively affect market dynamics or investor confidence. Striking the right balance between facilitating easier access to global capital and maintaining robust corporate governance and market integrity will be essential for the success of this initiative.

Overall, the Indian government’s move to ease the listing requirements for Indian companies on IFSC exchanges is a proactive step towards enhancing the country’s competitiveness in the global financial landscape. As Indian businesses continue to expand their global footprint, this policy change could play a crucial role in supporting their ambitions and driving further economic growth and development in the country.

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Primark and TCS Join Forces to Boost Retail Innovation

Primark and TCS Join Forces to Boost Retail Innovation

Primark, a well-known clothes store, has announced an extension of its relationship with Tata Consultancy Services (TCS), a major step towards improving its technology capabilities. Over the next five years, TCS will be a major contributor to Primark’s IT operations transformation, spurring innovation, improve efficiency, and support the retailer’s development goal in a fast changing retail environment.

Primark is a main participant in the retail sector with its business expanding to US and Europe. However, Primark has had difficulties recently, much like many other businesses, as a result of shifting customer habits, heightened competition, and the requirement for digital transformation. Primark first collaborated with TCS to address these issues, taking advantage of the IT behemoth’s knowledge of digital technologies and retail operations.

One of the biggest providers of IT services in the world, TCS, is widely known for providing huge international retailers with all-inclusive IT solutions. The fact that TCS and Primark have extended their relationship is evidence of their capacity to lead digital transformation projects that support organisational goals and improve operational efficiency.

Accelerating Primark’s digital transformation is one of the partnership’s main objectives. This entails modernising the retailer’s current IT setup to increase its adaptability and responsiveness to shifting market conditions. TCS intends to use cutting-edge digital technologies, such as artificial intelligence (AI), data analytics, and cloud computing, to optimise Primark’s operations and enhance its decision-making procedures.

Customer experience is a major distinction for merchants in the modern digital era. TCS and Primark will collaborate closely to improve TCS’s consumer engagement strategy through the integration of digital technologies that provide tailored shopping experiences. To bring clients additional easy and smooth buying alternatives, this might entail creating new digital channels, including e-commerce platforms or mobile applications.

For a store like Primark, which depends on a large network of suppliers to deliver its items on time, effective supply chain management is essential. TCS will use real-time data analytics and predictive modelling technologies to assist Primark improve its supply chain capabilities. With the help of these technology, Primark will be able to save waste, better manage inventory, and react to fluctuations in demand.

The alliance also intends to automate certain business processes in order to increase Primark’s operational efficiency. To cut costs and increase productivity, TCS intends to use robotic process automation (RPA) and other cutting-edge technology to replace human activities. Primark may concentrate more on strategic goals and innovation by automating ordinary activities.

For Primark, the extended collaboration with TCS is anticipated to provide a number of advantages. It will, first and foremost, provide the store access to a more dependable and scalable IT infrastructure, allowing it to respond quickly to shifts in the market and client demands. Primark can provide a more customised and interesting shopping experience by using digital technology, which is essential for keeping consumers in a cutthroat retail industry.

The alliance supports Primark’s dedication to sustainability. Primark may adopt more ecologically friendly practices, lessening its influence on the environment and improving its reputation among customers who care about the environment, by utilising TCS’s technological and innovative know-how. Beyond merely delivering IT services, TCS plays a strategic partnership role with Primark, providing insights and knowledge that propel the retailer’s digital transformation goal. Primark can benefit from TCS’s extensive expertise in delivering large-scale IT projects and its strong understanding of the retail sector as it helps Primark manage the challenges of digital transformation.

In terms of Primark’s digital transformation, the retailer’s journey has advanced significantly with the growth of their relationship. Significant advancements in Primark’s technological infrastructure, customer experience, and operational efficiency are anticipated as a result of this partnership over the course of the next five years. Investing in technology and innovation will be essential for Primark to sustain its competitive advantage and achieve sustainable development as the retail industry undergoes continuous change.

In summary, Primark can effectively address the demands of the digital era and establish itself as a prominent player in the retail sector by capitalising on TCS’s proficiency and inventive fixes. Through this cooperation, Primark is demonstrating how important technology is to achieving company success and advancing its forward-thinking strategy.

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