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Shree Renuka Sugars Q2 FY26: Revenue Holds Up Seasonally, But Loss Widened Sharply as Costs Bite
Equities, Markets - February 26, 2025

Adani, Ambani to invest Rs. 50,000 Cr. in Assam

Adani, Ambani to invest Rs. 50,000 Cr. in Assam

 

Overview

At the Advantage Assam 2.0 Summit, Adani and Reliance Industries each pledged to spend Rs 50,000 crore in Assam. Among other projects, Mukesh Ambani revealed plans for an Al-ready Data Center. The Adani Group will invest in a number of areas, such as renewable energy and infrastructure. JSW and Tata are also expected to make large investments in the state.

 

Huge investment promises

Advantage Assam 2.0 Investment & Infrastructure Summit 2025 got underway in Guwahati on Tuesday with Reliance Industries Limited and the Adani Group having pledged to invest Rs 50,000 crore and Rs 50,000 crore, respectively. Speaking at the event, Reliance Industries Limited Chairman Mukesh Ambani stated that AI would refer to both Assam intelligence and artificial intelligence. In 2018, during the last summit, Reliance pledged to invest Rs 5,000 crores in Assam. We have since invested more than Rs 12,000 crore in the state. In the next five years, Reliance plans to more than treble its investment in Assam to over Rs 50,000 crore in the five priority areas listed below.

 

Ambani to set up Data Centres

Mukesh Ambani underlined Reliance’s intent to make Assam “Tech-Ready and AI-Ready” as part of its digital transformation vision. An AI-ready Data Center may be built in Assam which would apply AI assisted teachers to improve education, AI assisted doctors to better healthcare, and AI assisted farmers for agriculture. Assam will enable its youth to learn and earn from home. Furthermore, Reliance will help Assam become a leader in clean atom and green energy, adopting the government’s nuclear policy for the participation of the private sector.

 

RIL’s 5 schemes for development

Mukesh Ambani provided five grand schemes for development of Assam’s economy. Reliance is set to construct two world class Compressed Biogas (CBG) facilities on reclaimed wasteland, and are expected to produce 8 lakh tonnes of clean biogas yearly that could power 2 lakh passenger automobiles daily. New Mega Food Park in Assam would enable it to become a key supplier of food and non-food agro based consumer goods at the national and international level by increasing the value chain of the local produce. Within five years, Reliance Retail is set to double its stores in Assam from 400 to 800. To further develop Assam’s tourism and hospitality sector, Reliance plans to build a seven star luxurious Oberoi hotel. These measures are sure to provide a wealth of direct and indirect employment opportunities for the youth.

 

Adani targets infrastructure

Gautam Adani, Chief of the Adani Group, made a landmark investment of ₹50,000 crore in Assam. These investments will target major infrastructure domains such as airports, ports, city gas distribution, power transmission, cement making, and road development. They are meant to drive the growth of Assam’s economy, increase connectivity, and enhance the distribution of energy.

 

Tata Sons’ pledge for renewable power

N Chandrasekaran, Chairman at Tata Sons, also delineated the development ambitions of the Tata Group for Assam. The corporation will set up 5GW of renewable power in the state within the next five years and help India in its green energy mission and in curbing carbon emissions. Apart from this, the Tata Group will also make an investment in a mega project of large-scale manufacturing technology that will provide jobs for 30,000 youngsters. The venture will help drive Assam’s industrialization, provide skilled jobs, and reinforce the local economy.

 

Other major investments in Assam

Sajjan Jindal, JSW Group Chairman and MD, announced investments in Assam’s renewable energy sector. Further, Anil Kumar Chalamalasetty, MD of Greenko Group, announced that the company will be investing ₹10,000 crore in two Assam units. Greenko is already working with Numaligarh Refinery Limited on ongoing projects.

 

Vedanta Group subsidiary Cairn Oil & Gas invested ₹50,000 crore in oil and gas exploration and production in the region. Vedanta Group Chairman Anil Agarwal informed that the company has three locations in Assam and Tripura and will set up world-class oil and gas exploration and production (E&P) facilities in Assam. The potential of the state to emerge as a Mega basin of the world and an energy production center of the country was highlighted. Vedanta is going to invest more than ₹50,000 crore in Assam to produce 100,000 barrels of oil and gas per day. This project will create world-class exploration and production (E&P) facilities and provide direct and indirect employment to 1 lakh youth, strengthening the position of Assam as a power player in India’s energy sector.

 

Conclusion

The Advantage Assam 2.0 Summit attracted big-ticket investments with Reliance and Adani committing ₹50,000 crore each for AI, clean energy, and infrastructure. Tata, JSW, Greenko, and Vedanta also committed to renewable power, oil and gas, and manufacturing. The investments make Assam a pioneering center for innovation, energy, and industrial development, with thousands of jobs being created.

 

 

 

 

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Easing of risk weights on loans given to MFIs and NBFCs

 

 

 

 

 

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Easing of risk weights on loans given to MFIs and NBFCs
Banking, Business, Equities, Markets - February 26, 2025

Easing of risk weights on loans given to MFIs and NBFCs

Easing of risk weights on loans given to MFIs and NBFCs

 

On 25th January, 2025, Reserve Bank of India (RBI) lowered the capital requirement leading to easing up of giving micro loans and loans to microfinance institutions (MFIs) and non-banking finance companies (NBFCs).  RBI lowered the risk weight to 100 percent for NBFCs. These new regulations will come into effect from 1st April, 2025. The main aim of the Reserve Bank of India is to increase liquidity, better loan flows, and also boost growth in the economy. 

 

Actions taken by RBI

In order to support economic growth, RBI declared a contraction in policy rate by 25 basis points which accounts to 6.25 percent on 7th February, 2025. In less than a month, RBI took the decision of lowering the capital requirement against loans given to NBFCs and MFIs. 

 

Prior to this, the risk weights on bank credits to Non-Banking Financial Companies (NBFCs) was expanded to 125 percent from 100 percent.  The reason for the implementation of this action was to limit unsecured loans, which had expanded to 25 percent in the month of October, 2023. Following expansion in risk weight, NBFCs faced high borrowing costs leading them to demand for relief. 

 

The recent decision of the RBI restored the risk weights on credits to NBFCs back to 100 percent. It will not only lead to expansion in liquidity but also lower borrowing costs for NBFCs giving them relief from the persistent concerns about high borrowing costs.

 

Impact of actions taken by RBI

The recent steps of RBI to lower capital requirement will lead to capital of around Rs. 40,000 crore more available for the banks. The banks can now give credit up to Rs. 4 lakh crore to AAA-rated entities. It will lead to lower funding costs,  rise in liquidity, and better margins for institutions. Its goal is to have strategic growth in the economy and to resolve the issue of subdued bank loans to NBFCs.

 

Changes in risk weight on loans to MFIs

Prior to this decision, banks had to have a capital requirement of 125 percent on loans given to MFIs. The aim of this regulation was to lower potential risks. It made lending to MFIs expensive. 

 

In a recent decision of RBI, the risk weight is assigned to be 75 percent on loans given to MFIs which will encourage more credit to MFIs. The loans given for consumption purposes are assigned a risk weight of 100 percent.

 

Reasons for lowering capital requirement 

The decision of RBI to restore risk weight highlights that potential risk prevailing in the economy of unsecured credit has contracted. The previous measures of RBI to expand risk weight has helped the economy and the banking sector. Though, it affected NBFCs, particularly small NBFCs as they faced the issue of high funding costs. Many large NBFCs had to keep their liquidity levels high in order to have enough funds to maintain lending activity.

 

In the current financial year, the bank loans to NBFCs are recorded to be sluggish. Also, contraction in liquidity in the market was observed. These are reasons why RBI lowered capital requirements and also to prioritise loan flow to under-served segments for growth in the economy. 

 

It is now time for the economy to target strategic economic growth. It will give more access to funds leading to strong growth in the sector. 

 

Benefit to banks

The change in regulations of RBI will not only help MFIs and NBFCs but also banks in the sector. The credit system of NBFCs generally functions by taking loans from banks and then using that loan amount to give loans to its customers. The lowering of capital requirement will likely lead to lower interest rate to NBFCs by banks. It will lower the funding costs of NBFCs. 

 

Bandhan Bank is considered to get more gains as a quarter of its portfolio used to attract 125 percent risk weight but now it will attract 75 percent risk weight. It will aid the bank to lend more as it will have more capital to give credit. It will lead to improvement in its profit margins.

 

In conclusion, the main aim of the RBI is to have strategic growth by lowering funding costs and improvement in margins for the sector. It also gives relief in terms of loans given to NBFCs and MFIs and addresses the issue of subdued bank credits to NBFCs. 

 

 

 

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Nasdaq and S&P 500 dip in the midst of AI worries

 

 

 

 

 

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MRF Shares Soar Above ₹1.5 Lakh, Reaching a 52-Week Peak!
Equities, Markets - February 25, 2025

Nasdaq and S&P 500 dip in the midst of AI worries

Nasdaq and S&P 500 dip in the midst of AI worries

 

Overview

As investors waited for market giant Nvidia’s results and fretted about the demand for equipment underpinning artificial intelligence, the Nasdaq Composite slid more than 1% on Monday, with large technology firms acting as the largest drag. The Dow managed to squeeze out a small gain, but the S&P 500 ended the day marginally lower, marking its third consecutive day of declines. Additionally, it was the third straight loss for the Nasdaq and the fourth time in February that it had dropped more than 1% in a single day.

 

Friday’s sharp drops ended a negative week for stocks, which was characterized by data indicating that American firms and consumers are growing uneasy about Trump’s tariff proposals. President Donald Trump said at a news conference on Monday that tariffs on Canada and Mexico would “go forward on time, on schedule,” when a one-month postponement ends next week.

 

AI worries shadow US markets

As they awaited Nvidia’s quarterly reports on Wednesday, investors were worried about the company’s ability to meet future demand for its expensive AI chips. Since China’s DeepSeek shocked the industry in January with its low-cost AI models, concerns about significant spending on the technology have grown.

 

Uncertainty was increased when a TD Cowen analyst note revealed late Friday that Microsoft has canceled leases for sizable data center capacity in the US, raising the possibility of an excess of AI infrastructure. Microsoft stated that while it “may strategically pace or adjust” infrastructure in some areas, its ambition to invest more than $80 billion in AI and cloud capacity this fiscal year remains intact.

 

Gene Goldman, chief investment officer at Cetera Investment Management, stated that since AI has been driving market rise in recent years, any issue about the technology is viewed as a justification to reduce profits. Goldman noted that markets are already anxious and searching for an excuse to take profits. Further, according to Goldman, market hesitancy on whether we are facing an inflation or growth scare is what is driving volatility.

 

Following a poor projection from Walmart and a slew of negative economic data this week, investors are growing increasingly concerned about economic growth in addition to tariffs and inflation.

 

US market performance

The S&P 500 dropped 29.88 points, or 0.50%, to 5,983.25; the Nasdaq dropped 237.08 points, or 1.21%, to 19,286.93; and the Dow Jones Industrial Average increased 33.19 points, or 0.08%, to 43,461.21.

 

Tech drove US market down

Technology was the largest loser, closing down 1.43%, while the more defensive healthcare index led percentage gains, closing up 0.75%. The largest index point drag on the S&P 500 was Nvidia, which ended the day down 3.1%. Broadcom Inc., a chip manufacturer, opened a new page, down 4.9%, and Amazon.com, down 1.8%. Microsoft’s stock fell 1% in the end. Another well-known AI stock, Palantir Technologies, saw the largest percentage reduction in the tech sector, falling 10.5%. Though these businesses are still excellent stocks, the AI tech industry’s supremacy has ended. According to Peter Boockvar, CIO at Bleakley Financial Group, the market is about to enter a significant digesting phase.

 

Inflation data out this week

Regarding statistics, the Federal Reserve’s favored inflation indicator, the Personal Consumption Expenditure index, is anticipated on Friday and may aid markets in determining when the central bank may decrease interest rates for the first time this year.

 

Fed Rate Stability Expected Until June, Stocks Gain on Key Announcements

According to CME Group’s FedWatch, which launches a new tab feature, interest rate futures show traders’ views that the Fed would keep borrowing prices the same until June. Following the iPhone manufacturer’s announcement of plans to invest $500 billion in the United States over the next four years, including the establishment of an AI server facility in Texas, individual stocks ended the day up 0.7%. After Warren Buffett’s conglomerate announced a record yearly profit, Berkshire Hathaway’s class B shares ended up more than 4%, and the company’s shares reached record highs in early trade.

 

Conclusion

The U.S. overall stock market did not do well, with the Nasdaq declining over 1% due to concerns regarding demand for AI gear, economic growth, and tariffs. Tech stocks, and especially those that deal in AI, were hammered, with the Dow managing only a small gain. Some stocks were boosted by positive news from Apple and Berkshire Hathaway, but investors are waiting until inflation figures and Nvidia’s quarterly results are announced. Market sentiment is still cautious, with most waiting until there are more positive economic indications.

 

 

 

 

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Reliance Consumer Products’ pricing strategy could lead to price war in beverage industry

 

 

 

 

 

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Reliance Plans ₹8,000 Crore Expansion to Boost Beverage Manufacturing Nationwide
Equities, Markets - February 25, 2025

Reliance Consumer Products’ pricing strategy could lead to price war in beverage industry

Reliance Consumer Products’ pricing strategy could lead to price war in beverage industry

 

 

India’s beverages industry is likely to face price war for the first time. The reason for this is the aggressive pricing strategy of Reliance Consumer Products. The company has launched its brand Campa Cola and new energy drinks at Rs. 10. It will likely lead to an intense competition with other companies like Coca-Cola, Dabur, and ITC.

 

Reliance pricing strategy

The company has launched its brand Campa Cola at Rs. 10. Apart from this, it has also launched its sports drink Spinner and also energy and rehydrating beverage product known as RasKiK Gluco Energy at Rs. 10.  

 

This aggressive pricing strategy of the company has severely impacted products under the category of out-of-home consumption higher than products under category of in-home consumption. In the financial year 2024-25, the company recorded revenue of Rs. 1,000 crore from its Campa brand. In a few states, the Campa brand has a market share of higher than 10 percent in the sparkling beverage segment.

 

Plans of firms operating in beverages industry

As the summer season is coming near, companies like ITC and Dabur operating in manufacturing of fruit-based beverages are planning to serve attractive discounts and deals to the consumers. Beverages are generally out-of-home consumption products. Pricing strategy is important in these products as out-of-home consumption products contribute to about 40 percent of the beverage business.

 

Dabur has plans to reduce the prices of its Real juice nectar products to about Rs. 100 per litre, which was earlier Rs. 130. The chief executive officer of Dabur, Mohit Malhotra stated that the sales growth of Real juice is adversely impacted due to prices of Coke and Pepsi being Rs. 50 per litre. He further stated that Dabur will launch a new better affordable range of product portfolio in the consumer market. It will also provide some slightly higher margins to its distribution networks. Its aim is to attract more consumers and also to incentivize its distributors. It has joined hands with McKinsey & Company, who earlier worked with PepsiCo and Coca-Cola  to prepare a strong beverage strategy. 

 

The price of Coca-Cola bottlers contracted to Rs. 15 for 250-ml, which was earlier Rs. 20. According to the company, it is a promotional offer to the consumers and not a price cutting strategy of the company. It is a historical trend of the company to reduce its price before the upcoming festivals like Holi. 

 

The owner of B Natural Brand, ITC is also preparing for aggressive consumer offers and pricing strategy. 

 

In the past, Coca-Cola and PepsiCo had several price wars but it was only between them and no involvement of other brands and players. This is for the first time that many beverage companies along with juice makers are aggressively competing in the market for the same consumer base at large pricing points. 

 

The chairman of PepsiCo, Ramon Laguarta stated that pricing strategy is a crucial part for the development of beverage segments, particularly in emerging and developing nations. The company is already following this in the USA and it plans to do so in India as well in the upcoming terms. 

 

Tata consumer Products has decided to increase profit margins for retailers on its Tata Gluco+, glucose drink. It will act as an incentive to retailers who promote and sell Tata Gluco+ as it will earn them more profit. The main aim of the company is to expand the product sales and consumer attraction towards Tata Gluco+. The improvement in the total profitability of the brand and company will be worked on later. 

 

Impact in long-run

The ongoing aggressive price strategy of the beverage companies will be profitable in the short-run and this summer season but it will be adverse in the long-run. It will certainly affect the profitability of the companies. In the past, Pepsi and Coca-Cola declared a pricing of Rs. 5 which was quite profitable in the short-run but the companies had to pay the price with its profitability levels.

 

Perception of consumer demand

The summer season is an important term for the beverage players as 60 to 65 percent of their yearly sales is earned in the period of March to June. 

 

Dabur stated that the purchasing behaviour for out-of-home consumption products is based more on impulse. The consumers tend to buy the beverage which they find cold and it could be refreshment drinks or fruit juice or anything. In recent times, many new brands have entered the beverage industry which includes energy drinks and colas segments. It led to widening the availability of a variety of products for the consumers.

 

Expansion in Production Capacity

Reliance is rapidly expanding its production capacity in the market. Varun Beverages, the biggest bottler of PepsiCo has also expanded its production capacity to around 20 to 25 percent YoY for the upcoming summer season. The company states that there is a large scope for affordable products offered by regional brands in the country who have a market share of 20 percent. The company is optimistic about the ongoing competition and believes that all brands have enough space to grow. It also believes that this will lead to expansion in the market. The main focus of the company is to expand 10 to 12 percent of more retail outlets each year. 

 

The product categories like tender coconut water, 100 percent juices, and bottled water are not yet affected by the price war. The reason for this is these products are considered as healthy options and are sold at higher prices. 

 

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Easing of restrictions on New India Co-operative Bank

 

 

 

 

 

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Easing of risk weights on loans given to MFIs and NBFCs
Banking, Equities, Markets - February 25, 2025

Easing of restrictions on New India Co-operative Bank

Easing of restrictions on New India Co-operative Bank

 

Overview

With effect from February 27, 2025, the Reserve Bank of India has loosened restrictions on New India Co-operative Bank, permitting withdrawals of up to Rs 25,000. This comes after the bank’s liquidity status has been evaluated. The general manager of the bank was also taken into custody on suspicion of embezzling Rs 122 crore.

 

Depositors can withdraw

Starting February 27, the Reserve Bank of India (RBI) has permitted ₹25,000 withdrawals to depositors of the fraud-plagued New India Cooperative Bank, providing some respite. More than half of all depositors would be able to withdraw their full balances with the aforesaid relaxation, and the remainder depositors will be allowed to withdraw up to ₹25,000 from their accounts, according to the RBI.

 

Depositors can make this withdrawal using the bank’s ATM channel or in-branch. It was explained, however, that the total amount that any depositor may withdraw will be ₹25,000 or the amount that is available in their account, whichever is less.

 

With effect from February 25, the RBI has also reorganized the Committee of Advisors (CoA) to the Administrator. CoA members include former State Bank of India general manager Ravindra Sapra, former Saraswat Co-operative Bank Ltd. deputy general manager Ravindra Tukaram Chavan, and chartered accountant Shri Anand M. Golas. However, the Administrator has not changed.

 

RBI had issued AID

As a precautionary step to safeguard depositors’ interests, the RBI issued All Inclusive Directions (AID) to the bank on February 13, 2025, prohibiting any withdrawals from current, savings, and other accounts. The central bank then replaced its Board on February 14, 2025, and established an Administrator and a Committee of Advisors (CoA) to supervise the situation and guarantee the stability of the bank.

 

The RBI was developing a proposal to permit extraordinary withdrawals for personal and medical situations for depositors of the financially troubled New India Co-operative Bank. In the event of a bank failure, savings up to Rs 500,000 are guaranteed under present regulations, and payouts must be given within 90 days. A request for comment was not immediately answered by the RBI.

 

Citing worries about the bank’s financial condition and ongoing supervisory challenges, the RBI placed severe limitations on the bank last week, forbidding it from issuing new loans, suspending deposit withdrawals for six months, and designating an administrator.

 

Story so far

On February 17, Hitesh Mehta, the bank’s general manager and head of accounts, was taken into custody on suspicion of embezzling Rs 122 crore. Mehta admitted to giving a real estate developer Rs 70 crore to finance an SRA (Slum Rehabilitation Authority) project in Charkop, Kandivali, according to a police official.

 

Mehta and developer Dharmesh Paun were detained in connection with the investigation and placed under police prison until February 1, 2025.  The bank’s interim CEO, Devarshi Ghosh, filed the case at the Dadar police station on Friday. The Mumbai police’s Economic Offences Wing (EOW) took over the case after the complaint was filed, and it is currently investigating the alleged theft at the bank’s Prabhadevi and Goregaon branches.

 

Conclusion

Thus, the RBI is supporting the New India Co-operative Bank and its depositors by easing restrictions. The checking of the bank’s liquidity position has yielded positive results. This increased facility has given relief to depositors as above 50% of them are able to access all of their funds while some of them are permitted to withdraw Rs 25,000. Steps have also been taken to restructure the bank by changing the Committee of Advisors and placing the administrator under active oversight. This comes after the recent arrest of the bank’s general manager, Hitesh Mehta, for suspected embezzlement of funds to the tune of 122 crore rupees, thus exposing shocking levels of corruption and internal inquiry into the financial mismanagement. Despite challenges, the RBI aims to balance the interests of the depositors and restore order to the meandering waters of financial chaos still looming around the bank.

 

 

 

 

 

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Hike in limit on small-value credits of Urban co-operative banks

 

 

 

 

 

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Hike in limit on small-value credits of Urban co-operative banks
Banking, Equities, Markets - February 25, 2025

Hike in limit on small-value credits of Urban co-operative banks

Hike in limit on small-value credits of Urban co-operative banks 

 

 

On 24th February, 2025, Reserve Bank of India made an announcement regarding raising the credit limits for urban co-operative banks (UCBs). It stated that the UCBs can now classify their loans of up to 0.4 percent of Tier I capital or Rs. 25 lakh in category of small-value credits based on whichever of them is higher. The limit of the loans per borrower is increased to Rs. 3 crore which was earlier Rs. 1 crore per borrower.

 

Changes in regulations for UCBs

In the past, the classification criteria of small-value loans for UCBs was credit up to Rs. 25 lakh or around 0.2 percent of Tier I capital. The limit of the loans per borrower was about Rs. 1 crore.

 

Reserve Bank of India made changes in the classification of small-value loans of UCBs making it more flexible. It has raised the ceiling limit of loan to Rs. 3 crore per debtor. It also gave the right to categorize loans as small-value loans in case of loans of up to 0.4 percent of Tier I capital or Rs. 25 lakh. These changes in norms will be applicable by immediate effect. 

 

UCBs in India can now categorize big loans as small-value credits as well. This announcement of RBI came following the business restriction on New India Co-operative Bank and also the board of the bank was superseded. The reason for this is lack of governance in the bank.

 

Changes in regulations of Housing loans

Apart from increasing the limit on small-value credits, RBI has taken steps to increase the total exposure limit for residential loans to around 25 percent of its total credits and advances. It allowed UCBs to now allocate a bigger portion of their loan portfolio for residential mortgages. Except for housing loans, the exposure of UCBs in the real estate sector is limited to 5 percent of their total loans and advances. It highlights RBI’s actions to diversify loan portfolio as well as make it balanced. 

 

Reserve Bank of India has made some changes in the limits on residential loans for individuals for various tiers of UCBs. These new changes are in the band of Rs. 60 lakh to Rs. 3 crore. According to central bank of India’s information, the limits on housing credits for individuals in tier-I and tier-II are Rs. 60 lakh and Rs. 1.40 crore, respectively. The limit for tier-II and tier-IV are Rs. 2 crore and Rs. 3 crore, respectively. 

 

Extension of timeline for provisioning on security receipts

Reserve Bank of India extended the time limit for keeping aside money for investments in security receipts (SRs). Earlier, the time limit was till the financial year 2025-2026. The time limit is extended till the financial year 2027-2028. It will aid in UCBs having a substantial amount of time to comply with the regulations and also manage their finances better. Despite this extension, the provisions made for the specified SRs earlier should be maintained in the future as well.

 

In the previous financial year, RBI extended the timeline to achieve the target of minimum percentage of small value credits in the total loans and advances of the UCBs until March 2026. 

 

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Hindalco Industries plans to invest Rs. 15000 crore in Madhya Pradesh

 

 

 

 

 

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Hindalco Industries plans to invest Rs. 15,000 crore in Madhya Pradesh
Equities, Markets - February 25, 2025

Hindalco Industries plans to invest Rs. 15000 crore in Madhya Pradesh

Hindalco Industries plans to invest Rs. 15000 crore in Madhya Pradesh

 

 

In the Madhya Pradesh Global Investors Summit 2025, Hindalco Industries announced investment of Rs.15,000 crore in Madhya Pradesh in order to strengthen its aluminum smelting capacity over the period of upcoming two years.

 

About Hindalco Industries

In 1958, Hindalco Industries Ltd. was established. The company is a flagship firm of the Aditya Birla Group and involves in the business of production of copper and aluminium. It is also a manufacturer of extrusion, aluminium sheet, and light gauge products used for the purpose of can, foil products, beverage and food, etc. in the packaging market. 

 

Investment plans of Hindalco Industries

The company plans to inject funds of around Rs.15,000 crore in Madhya Pradesh for the upcoming two years. These funds will be from Hindalco Industries only. Additionally, it plans to create a large mine named as Banda through Aditya Birla Group, parent company of Hindalco Industries Ltd. 

 

Hindalco’s investment in Madhya Pradesh is not for the first time. In the past, the company has made investments to create a large footprint in the state. It has already made an investment funding of Rs.25,000 crore in the past. It led to the establishment of its world-class aluminium smelter in the region of Mahan, Singrauli district. 

 

The company’s present plan of Rs.15,000 crore of investment’s goal is to expand the company’s presence and also to push the local economy of Madhya Pradesh higher. 

 

Impact of international trade policies

Managing Director of Hindalco Industries, Satish Pai states that the impact of US tariffs will remain in the range of neutral to positive. The reason for this is Novelis, a big American subsidiary of Hindalco Industries operating in the USA. In this current situation, Novelis is set to get some benefits of operating in the USA. Further, Hindalco Industries in India exports only a small amount of aluminium to the USA. 

 

Aditya Birla Group’s investment plans in Madhya Pradesh

Apart from Hindalco Industries’ investment plan, other major subsidiaries of Aditya Birla Group also plan to invest in various projects in Madhya Pradesh. UltraTech Cement is a flagship company of Aditya Birla Group in the cement sector. Aditya Birla Group’s Grasim’s Viscose Staple Fibre (VSF) is a major global producer of Viscose Staple Fibre (VSF). Both these companies are planning to invest in Madhya Pradesh to start their independent projects.

 

Overall, it highlights the commitment of Aditya Birla Group towards the industrial growth of Madhya Pradesh. 

 

Outlook of GIS-2025 in Madhya Pradesh

The government of Madhya Pradesh has appreciated the investment plans of Hindalco Industries. It will help the state to enhance its position as a crucial hub for aluminium manufacturing and also for industrial development. This investment plan is anticipated to bring large job opportunities in the state. It will also lead to economic growth of the state. 

 

The Global Investors Summit is anticipated to strengthen economic growth in the state by attracting important investments  and also creating partnerships with global entities. The summit included major industrialists, international trade organizations, and diplomatic representatives. The main aim of the GIS-2025 is to make Madhya Pradesh, a key investment hub in India. 

 

 

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Gold imports in India is expected to hit 20-year low

 

 

 

 

 

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Titan Company Rides High on Gold: Quarterly Revenue Soars Amid Price Surge
Equities, Markets - February 25, 2025

Gold imports in India is expected to hit 20-year low

Gold imports in India is expected to hit 20-year low

 

Overview

In light of record-high gold prices, the second-largest consumer of the precious metal, India’s gold imports are predicted to fall 85% from a year ago in February, hitting their lowest level in 20 years. Even during the wedding season, which is usually a peak time for gold purchases, there is a noticeable drop in demand.

 

Gold demand takes a hit

Given that the nation is currently experiencing the wedding season, when demand typically increases, the steep decline in February imports was out of the ordinary for the jewelry business. Gold purchases in India are largely driven by weddings, as jewelry made of bullion is a common present from family and friends and an essential component of a bride’s outfit.

 

Record prices for the precious metal are stifling demand, and India’s gold imports are expected to drop 85% from year-ago levels in February to their lowest levels in 20 years. India’s trade deficit might be reduced and the rupee, which is now trading close to a record low against the dollar, may be supported by fewer imports of gold.

 

On Monday, the price of spot gold reached a record high of $2,956.15 per troy ounce. According to the official, India’s February gold imports are expected to drop from 103 tons in February 2024 to about 15 metric tons, the lowest amount for the month in at least 20 years. India has imported 76.5 tons of gold in February on average during the last ten years.

 

January imports lacked demand

Just a tiny quantity of gold has been released from customs by banks and jewelers this month. It is unlikely that import numbers would improve unless prices plummet in the next two to three days. Demand for the gold brought in January was eliminated by the price spike. According to the head of a gold-importing bank’s bullion division in Mumbai, there was no use in importing more in February.

 

Imported gold transferred to the US

Last week, domestic prices in India hit a record high of 86,592 rupees for 10 grams. Since the Indian market was trading at a discount, at least two banks transferred imported gold that was kept in a customs-free area in India to the United States. There is no need to sell in India at a $35 per ounce discount when the U.S. market is paying almost a 1% premium.

 

Geopolitics affecting gold demand

Despite efforts by both countries to strengthen border security and stop the flow of fentanyl into the United States before a deadline of March 4, Trump stated on Monday that tariffs on imports from Canada and Mexico remain “on time and on schedule.” According to data released Monday by the San Francisco Fed, investors and economists anticipate that the U.S. Federal Reserve would react “strongly and systematically” to shifts in the labor market and inflation.

 

Further, in terms of geopolitics, Trump and French President Emmanuel Macron’s divergent approaches to Ukraine revealed a rift between the US and Europe over Trump’s request for a speedy ceasefire agreement with Russia.

 

Due to such uncertainties, gold remains a stable investment option which led to significant increase in the gold prices worldwide with, spot gold was barely moving, trading at $2,949.46 an ounce as of 0105 GMT, $7 below the previous session’s all-time high of $2,956.15, while U.S. gold futures were holding steady at $2,965.

 

Conclusion

To sum-up, the all-time high prices of gold have greatly reduced Indian gold imports, wherein a staggering 85% decline is expected in the month of February, a drop which would set a new record low in the past 20 years. Though wedding season is still in full swing and tends to result in higher demand, the relentless surge of gold prices has severely reduced buying interest amongst consumers, translating to neglected imports and an absence of demand for gold trades in the month of January. It is anticipated that the sluggish demand for gold imports will help in reducing India’s trade deficit and strengthen the currently weak Indian Rupee against the dollar. On the other hand, the persistent rise in the price of gold globally is due to gold’s strong geopolitical position and its reliability as an investment vehicle. Therefore, in an unexpected turn of events, Indian gold traders have even started exporting gold to the USA owing to the difference in gold prices.

 

 

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Bain Capital likely to close Manappuram Finance Deal

 

 

 

 

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Equities, Markets - February 24, 2025

Gold Prices hit all time high amid Trump Tariffs

Gold Prices hit all time high amid Trump Tariffs

 

Overview

Gold prices remain stable, poised for an eighth straight weekly rise, owing to fears over US President Donald Trump’s tariff plans, which could spark trade wars and drive inflation. On Thursday, the spot gold price touched an all-time high of $2,954.69. Officials at the United States Federal Reserve are warning of increased inflation concerns as a result of Trump’s initiatives.

 

As of 0020 GMT, spot gold was stable at $2,934.82 per ounce. The U.S. gold futures fell 0.1% to $2,950.10, while bullion reached an all-time high of $2,954.69 on February 20, 2025. Bullion is viewed as a hedge against geopolitical dangers and inflation, but rising interest rates reduce the non-yielding asset’s appeal. Gold has increased over 12% so far this year, setting numerous records as economic and geopolitical uncertainty increase.

 

Trump’s Tariffs so far

Trump stated last week that he would announce new tariffs within the next month or sooner, adding lumber and forest products to already announced taxes on imported vehicles, semiconductors, and pharmaceuticals. This comes after an additional 10% fee on Chinese goods and a 25% tariff on steel and aluminum.

 

On the geopolitical front, Trump shifted course on Friday, stating that Russia had indeed invaded Ukraine and that Kyiv would soon sign a minerals agreement with the US as part of attempts to end the war.

 

Meanwhile, gold exports from Switzerland increased year on year in January as shipments to the United States reached their highest level in at least 13 years, offsetting decreased deliveries to top users China and India, according to Swiss customs statistics released on Thursday.

 

Demand for physical gold remains muted

Physical gold demand in China and India remained minimal last week, as buyers avoided purchases due to record-high prices. Spot silver fell 0.1% to $32.58 per ounce. Platinum rose 0.7% to $976.25, while palladium climbed 0.4% to $972.93.

 

Traders eye Fed Rates

Traders are eagerly watching the Federal Reserve’s interest rate trajectory for signals, as Trump’s policies are viewed as inflationary. If strong inflation causes the Fed to keep rates steady, gold’s appeal as a non-yielding asset will wane. Markets will now look to the Fed’s preferred inflation measure, the Personal Consumption Expenditures (PCE) index, which is coming on Friday, for more confirmation of the central bank’s rate path while central banks continue to add to their gold stockpiles, while gold ETFs change from net sellers to marginal purchasers, further bolstering prices.

 

Gold Prices in India

Going into 2025, gold has not only reversed the price reduction witnessed in November-December (a 6% decrease), but it has also consistently achieved new highs. So far in 2025, the LBMA gold price AM in USD has increased by $286/oz, or 10%, to $2,938/oz. Domestic prices have risen in tandem with international pricing, jumping 14% to a record INR86,831/10g, with the bigger gains owing to the INR’s weakness versus the USD (1.1% depreciation y-t-d). According to the World Gold Council’s study, the rise in gold prices is due to a combination of geopolitical uncertainties, growing inflation fears, and increased investment flows.

 

RBI increases its gold reserves

The RBI resumed gold purchases in January, after suspending in December after 11 months of buying. The central bank added 2.8t of gold to its holdings last month, bringing its total gold reserves to a new high of 879t. This fresh buying signals that the RBI will continue to accumulate gold, following a big purchase of 72.6t in 2024, which made it the third largest buyer of gold among world central banks that year.

 

In addition to increasing its gold holdings, the RBI has been increasing the proportion of gold in its foreign exchange reserves, which increased from 7.7% in January 2024 to 11.31% in early February 2025. Along with a decrease in its holdings of foreign currency assets (from 88.5% to 85.2%), this increase shows the RBI’s efforts to diversify its foreign exchange reserves.

 

Conclusion

The prices of gold reached record levels in 2025 owing to gold prices skyrocketing due to US tariff policies, inflation concerns, and ongoing geopolitical tensions. While demand is low in vital markets, gold continues to be a strong hedge against economic risks. Gold’s influence will be affected by the Federal Reserve’s interest rate policies, while the gold price will be sustained by actions such as increasing reserves of gold at the Reserve Bank of India which point towards diversification.

 

 

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Bain Capital likely to close Manappuram Finance Deal

 

 

 

 

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Equities, Markets - February 24, 2025

Bain Capital likely to close Manappuram Finance Deal

Bain Capital likely to close Manappuram Finance Deal

 

Overview

An agreement for Bain Capital to buy a majority share in Manappuram Finance is almost finalized. A secondary share sale by promoters and further funding from Bain are part of the deal, which may raise Bain’s ownership to 46%. It is anticipated that the deal will result in early joint operations and a new CEO.

 

Details of the Deal

Bain Capital is negotiating a deal with Manappuram Finance’s promoters to acquire a majority share in the Kerala-based gold loan provider and non-bank lender. The Reserve Bank of India removed limitations on the latter’s subsidiary, Asirvad Micro Finance, a month ago. The promoter group, led by managing director and CEO Nandakumar VP, currently owns 35.25% of Manappuram, which has a market valuation of Rs 17,000 crore based on its BSE closing share price of Rs 200.85 on February 21, 2025.

 

While the preferred allocation is expected to be priced at a premium of 12.5-15% over the current market price, the secondary share sale will be priced at 22.5-25% above Friday’s closing price, according to the sources.  The blended price is likely to be Rs 237-240 per share.

 

The transactions, which will result in Bain acquiring a quarter of the company, will be followed by a voluntary open offer for an additional 26% interest due to a change of control, at a price comparable to the secondary share sale.  If the open offer is fully subscribed to, Bain might wind up controlling up to 46% of the new equity capital base, spending Rs 9,000–10,000 crore.

 

Managerial changes on the way

Even though the company will initially be controlled jointly, Bain is considering affirmative rights, which will give it management control. The Boston-based fund will also hire a new CEO, with Nandakumar and his family members taking on non-executive roles in the organization.

 

Stock Performance of Manappuram

Manappuram’s stock has climbed 36.67% in the last three months ahead of the transaction.  However, the regulatory intervention in October of last year, which barred IPO-bound Asirvad Microfinance from making new loan disbursements due to inadequacies in its pricing policy and evaluation of borrowers’ income and debt, caused a 37.5% drop in the share price from its 52-week high.

 

Manappuram Finance shares rose 4% to a high of Rs 209 on the BSE in early trade on Monday, after negotiations between the company Bain Capital neared a conclusion.

 

Manappuram’s history for buy-ins or M&A

Manappuram has flirted with many PE and shadow banks, including IDFC and Poonawalla Finance, as well as PE funds like Carlyle, over the years to investigate a buy-in, business carve-out, or even a merger of operations, but nothing has come of it. Nandakumar’s succession was called into question when his daughter Sumitha Jayasankar was appointed executive director to the board and many anticipated her to take over the reins.

 

Financial Performance of Manappuram

Manappuram’s consolidated assets under management (AUM) increased 9.5% year on year to Rs 44,217 crore by the end of December. The AUM, however, fell 3.3% sequentially due to the regulatory ban on Asirvad’s expansion. Manappuram’s core gold loan business increased 18.8% year on year to Rs 24,504 crore, accounting for 55.4% of the combined AUM.

 

Asirvad, like its microfinance peers, is still under pressure, requiring Manappuram management to provide direction on a shift toward secured lending — both gold and non-gold loans. The company lost Rs 189 crore in the third quarter due to a 5.8% increase in gross non-performing assets, despite wiping down bad loans worth Rs 400 crore.

 

It also violated financial covenants governing its borrowings and is negotiating with its lenders for a waiver of their right to seek quick repayment of debts.  So far, no lender has requested immediate payback following this noncompliance. Manappuram owns 97.6% of the microfinance subsidiary, which the group acquired in 2015 and expanded in quest of higher returns.

 

Potential Risks

Asirvad’s profitability has been impacted by collection challenges in the microfinance sector caused by a variety of factors, including climatic disruption, dilution of the joint liability group model, weekend borrower discipline, and external influences on microfinance borrowers, according to Nandakumar in a post-earnings analyst call. Furthermore, he stated that it has implemented extensive corrective steps to rationalize the cost and disbursement with rigorous underwriting.

 

Expert views

The organised gold loan market is expected to grow to Rs 15 lakh crore by March 2027, from Rs 7.1 lakh crore at the end of FY24. Morgan Stanley analysts believe the company’s valuations are low, with a standalone share price of about nine times estimated profits per share for fiscal 2026, which it claims is among the lowest in the industry in terms of return on equity.

 

Conclusion

Thus, Bain Capital’s acquisition of a majority stake in Manappuram Finance will mark a remarkable change for the company and could increase Bain’s stake to 46%. Even with recent shifts in regulation and scrutiny on the microfinance subsidiary Manappuram, Asirvad, the company’s gold lending division is prospering.  In addition to the change in a recently appointed CEO, the new structure will drive further focus toward the facilitation of secured loans. Manappuram is likely to experience some growth in revenues due to the anticipated expansion in the gold loan market, but the doubts raised from Asirvad’s problems still linger.

 

 

 

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Surge in adoption of EV in quick commerce led to expansion in business for battery-swapping companies

 

 

 

 

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