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IREDA Announces Up to Rs 4,500 Crore Equity Capital Raise
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 Targets Revival with New SUVs and India-Made EV by 2025
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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Supreme Court Approves NBCC Rs 15,000 Cr Fundraising for Amrapali Project.
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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Indian Tyre Exports Rebound with 17% Growth in Q1 FY25
Business, Equities, Market News, Markets - September 12, 2024

Indian Tyre Exports Rebound with 17% Growth in Q1 FY25

India’s Tax Hike Concerns Weigh on Palm Oil Futures

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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India's Rooftop Solar Capacity Rises 26% to 1.1GW in H1 2024
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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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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Govt Lowers Public Float Requirement for IFSC Listings to 10%
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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Maruti Suzuki’s new facility faces short delay; 2025-26 production kick-off

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Primark and TCS Join Forces to Boost Retail Innovation
Business, Equities, Market News, Markets - September 11, 2024

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

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India's Tax Hike Concerns Weigh on Palm Oil Futures
Business, Equities, Market News, Markets - September 11, 2024

India's Tax Hike Concerns Weigh on Palm Oil Futures

India’s Tax Hike Concerns Weigh on Palm Oil Futures

Palm oil prices are facing downward pressure for the third consecutive day, weighed down by the prospect of higher import taxes in India, the world’s largest vegetable oil buyer. This potential policy shift is overshadowing concerns about a weaker supply outlook from top producer Indonesia.

The price of palm oil futures for November delivery on the Bursa Malaysia Derivatives Exchange decreased by 0.28% to 3,909 ringgit ($904.23) per metric ton on Thursday. This decline is largely attributed to comments from Indian government sources on Wednesday, indicating the country is considering raising import taxes on vegetable oils. This measure is intended to safeguard domestic farmers who are facing difficulties due to decreased prices for oilseeds.

According to Lingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, the potential tax hike is a major concern for the palm oil market. He explains that it could dampen demand and significantly reduce overseas purchases of palm oil by India. This, coupled with the competitive pricing of other vegetable oils and a strengthening ringgit, is driving the downward trend in palm oil prices.

Supporting the bearish sentiment is the recent decline in Malaysian palm oil product exports. According to data from Intertek Testing Services and AmSpec Agri Malaysia, palm oil exports from Malaysia decreased by 14.1% to 14.9% in the first 25 days of August compared to the previous month. Although the rate of decline has slowed down in the second half of August, the overall trend suggests that demand for palm oil may be decreasing.

Palm oil prices are also influenced by movements in related vegetable oils like soybean oil. Dalian’s most-active soyoil contract witnessed a slight increase of 0.03%, while its palm oil contract experienced a steeper decline of 0.7%. On the other hand, soyoil prices on the Chicago Board of Trade rose by 0.69%. These price fluctuations highlight the interconnectedness of the global vegetable oil market, where palm oil competes for a share alongside other oils.

The Malaysian ringgit, the currency used for palm oil trade, has also played a role in the price decline. A stronger ringgit makes palm oil less attractive for foreign currency holders, as it translates to a higher cost of purchase. The ringgit’s appreciation by 0.16% against the dollar on Thursday further weakens the appeal of palm oil in the global market.

Reuters technical analyst Wang Tao suggests that palm oil prices may enter a rangebound trading pattern between 3,819 ringgit to 3,864 ringgit per metric ton. This prediction is based on the failure of palm oil to break resistance at 3,966 ringgit and its movement along a falling trendline.

While the potential tax hike in India raises concerns about demand, Indonesia, the world’s top producer, presents a mixed picture on the supply side. Data from the Indonesia Palm Oil Association shows a significant increase in June palm oil exports compared to May. However, these exports still fell short of year-on-year figures. This suggests that while production may not be at peak levels, it’s not experiencing a drastic decline either.

Despite the recent export figures, some market participants remain cautiously optimistic about future palm oil prices. Mitesh Saiya, a trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co., believes that expectations of lower Indonesian palm oil production due to unfavorable weather conditions and aging trees could keep market sentiment bullish in the long run. Additionally, Indonesia’s plans to increase its biodiesel mandate in 2025 are likely to limit export availability, potentially supporting global palm oil prices down the line.

However, this bullish outlook is countered by the potential tax hike in India and the ongoing adjustment of Indonesia’s palm oil export tax policy to improve competitiveness in a weak global demand environment.

Conclusion

The palm oil market is currently facing a complex interplay of factors, including the threat of higher import taxes in India, weakening supply from Indonesia, global economic conditions, consumer preferences, government policies, technological advancements, geopolitical events, and currency fluctuations. While the short-term trend appears bearish, the long-term outlook will depend on the evolution of these factors and their combined impact on demand and supply.

As the palm oil market continues to evolve, it is essential to stay informed about the latest developments and consider the broader context to make informed investment decisions.

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Sugar Industry Fears New Norms May Stifle Growth and Innovation

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Government Expands Capex, Keeps Deficit in Check
Business, Equities, Market News, Markets - September 10, 2024

Paytm Gets Government Clearance To Invest in Payment Subsidiary

Paytm Gets Government Clearance To Invest in Payment Subsidiary

Leading fintech company Paytm has been given permission by the Ministry of Finance to invest in its payment services subsidiary, Paytm Payments Services Limited (PPSL).This clearance is a major boost for the company. With this approval, which the firm announced on Wednesday, Paytm has taken a significant step towards expanding its variety of financial services and growing its market share in the digital payments market.

The Department of Financial Services of the Ministry of Finance issued a letter on August 27, 2024, permitting downstream investment into PPSL. Paytm declared that it will resubmit its application for a payment aggregator (PA) licence in reaction to this development. This is a necessary authorisation that Paytm needs in order to maintain and grow its payment services.

In a written statement, Paytm expressed, “We would like to advise you that PPSL has received endorsement from the Government of India, Service of Fund, Department of Money related Administrations, by means of its letter dated August 27, 2024, for downstream venture from the Company into PPSL.” This permission, which enables the business to proceed with its objectives to strengthen its payment services operations, is regarded as a turning point for the business.

India’s financial crime-fighting agency and the Reserve Bank of India (RBI), the nation’s banking regulator, have been keeping a close eye on Paytm’s efforts to obtain the required licenses. The RBI ordered Paytm to shut down its payments bank earlier this year in January, putting the business under closer examination. It is anticipated that the Ministry of Finance’s most recent permission will lessen some of these legal constraints, allowing Paytm to maintain its current growth trajectory.

Paytm plans to reapply for the payment aggregator licence, which is necessary for the survival and expansion of its payment services business, with the government’s consent . To ensure there is no service interruption in the interim, Paytm Payment Services will continue to run its business by offering its current partners online payment aggregation services.

Background information on this development comes from the RBI’s November 2022 rejection of Paytm’s original application for a payment aggregator licence.At that point, the RBI gave Paytm instructions to reapply in accordance with the rules outlined in Press Note 3, which contains specific suggestions for foreign direct investment (FDI). Press Note 3 states that investments coming from nations that border India on land must have prior consent from the Indian government.

Because China’s Alibaba Group held the majority ownership in Paytm at the time of the application rejection, this regulatory framework became more important to the company. Complying with FDI laws to the letter was necessary due to the involvement of a large foreign corporation from a neighbouring nation, which added to the difficulty of Paytm’s licensing process.

Furthermore, according to RBI requirements for payment aggregators, one company cannot run an e-commerce platform and payment aggregator services at the same time. Paytm must now keep its payment aggregator services apart from its e-commerce marketplace operations in order to comply with the central bank’s regulatory requirements.

For Paytm, this latest certification is a critical step towards both regulatory compliance and securing its place in the fiercely competitive digital payments market. To preserve its leadership in India’s fast expanding fintech market and extend its offerings, the company will need to get the appropriate licenses and continue operating. Paytm is now in a strong position to achieve its strategic goals and provide its large consumer base with improved payment options thanks to this approval.

Stakeholders and industry observers will probably be keenly observing this development because it may indicate additional progress in the company’s attempts to manage the regulatory landscape and spur innovation in the financial technology space. The Ministry of Finance’s permission may prove to be a turning point in Paytm’s ongoing efforts to transform digital payments in India as it continues to gain traction.

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India’s Digital Transactions Set TO 3X By 2028-29
Business, Equities, Market News, Markets - September 10, 2024

India’s Digital Transactions Set TO 3X By 2028-29

India’s Digital Transactions Set TO 3X By 2028-29

Digital financial transactions in India are expected to triple from 159 billion in 2023–2024 to 481 billion by 2028–2029, according to a PwC India report. The Native Payments Handbook 2024-29. The value of these digital payments is also set to double, growing from $3.16 trillion (Rs. 265 trillion) to $7.06 trillion (Rs. 593 trillion) during the same period. This impressive growth is being driven by several factors, including technological innovations, stronger government regulations, and the introduction of advanced technologies aimed at improving user experience and managing risks.

A major player in this growth is the Unified Payments Interface (UPI), which is projected to experience a 57% increase in transaction volumes. The number of UPI transactions is expected to rise from 131 billion to 439 billion by the fiscal year 2028-29, accounting for over 91% of all retail digital payments in India by that time.

Credit cards have also seen substantial growth, with more than 16 million new cards issued in 2023-24, bringing the total number of credit cards in use to over 100 million. Due to the rise in credit card usage, transaction volumes and values have increased by 22% and 28%, respectively. On the other hand, debit card usage has declined, with the number of transactions falling from 3.94 billion in FY22 to 2.29 billion in FY24, and transaction values dropping from $86.97 billion (Rs. 7.3 trillion) to $70.29 billion (Rs. 5.9 trillion).

The expansion of QR code infrastructure has been another significant factor in the growth of digital payments, with nearly 30% year-over-year growth in 2023-24 across various city tiers. Innovations such as soundboxes and the Payments Infrastructure Development Fund (PIDF), introduced by the Reserve Bank of India (RBI), have further accelerated this growth. The PIDF was specifically designed to encourage the deployment of Point of Sale (PoS) infrastructure in smaller cities and towns across the country, particularly in Tier-III to Tier-VI centres.

The last decade, India’s digital payment ecosystem has witnessed remarkable growth, positioning the country as a global leader in this space. This evolution has been pivotal in transitioning from a cash-dominated economy to one that increasingly relies on digital transactions, with significant adoption across metropolitan areas, tier 1 to tier 4 cities, and even rural regions. At the forefront of this revolution is UPI, which has driven deeper penetration of digital payments in India. Innovative use cases, including credit card linkages and international partnerships, are further propelling this momentum. Notably, there is a discernible shift towards person-to-merchant (P2M) transactions, enhancing the network effect as more customers engage with merchant.

In the last ten years, India’s digital payment system has grown rapidly, making the country a global leader in this area. This growth has helped move India from relying heavily on cash to using more digital transactions, with people in big cities, smaller towns, and even rural areas adopting digital payments .A key player in this change is the Unified Payments Interface (UPI), which has greatly increased the use of digital payments across India. New features like linking credit cards to UPI and partnerships with international companies are pushing this growth even further. More people are now using digital payments when shopping, both online and in stores, which is encouraging more merchants to accept digital payments.

Innovations like soundboxes and better selling strategies are helping more merchants use digital payments. Due to this, it is anticipated that UPI will increase from around 350 million transactions per day in 2024 to 1 billion transactions per day by the fiscal year 2028.
The number of credit cards in use now exceeds 100 million, and this number is increasing.

This number is expected to double to 200 million by 2029, with daily transactions increasing to 25 million, which is 2.5 times the current volume. Additionally, the Bharat Bill Payment System (BBPS) is becoming more popular, thanks to government support and the addition of new billers, making it easier to handle cross-border transactions and helping the system grow.

This year has seen the implementation and growth of several new payment technologies and use cases, including UPI Lite, credit cards on UPI, virtual credit cards, pay-by-points, business payments, and merchant acquisition. These advancements are part of a broader strategy to enhance the issuance and distribution of payment solutions while also promoting digital payments among merchants through innovative activation strategies and cross-sells.

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