Author: oharipadanam

NEW DELHI: The Indian government is set to tighten quality norms in response to a significant increase in the dumping of substandard steel, primarily from China. This decision comes amid ongoing concerns about the impact of cheap steel imports on the domestic market and local manufacturers.

Recent Developments

– Anti-Dumping Investigations: India has initiated several anti-dumping investigations targeting various steel products imported from China, including a probe into Cold-Rolled Non-oriented Electrical Steel (CRNO), which is believed to be sold below market value, harming local producers.

– Government Response: Officials indicate that expanding stringent quality regulations is essential to combat the influx of low-quality steel and protect domestic industries. These investigations are part of a broader strategy to address the challenges posed by the surge in Chinese steel exports, driven by domestic oversupply in China.

 Context

– Global Market Impact: China’s steel production has significantly outpaced domestic demand, leading to increased exports at lower prices, a practice known as dumping. This has raised concerns in various countries, including India, where local manufacturers have reported unfair competition.

– Quality Concerns: The proposed tightening of norms aims not only to address pricing issues but also to ensure that imported steel meets specific quality standards, thereby safeguarding consumer interests and industrial integrity.

Conclusion

As the situation evolves, the Indian government’s measures reflect a growing trend among nations to impose stricter regulations on steel imports, particularly from countries accused of dumping practices. This initiative is crucial for maintaining fair competition and supporting local industries in an increasingly globalized market.

Noel Tata is likely to be appointed as Chairman of Tata Trusts, CNBC-TV18 reported, citing sources, though a formal confirmation is still awaited.

Mehli Mistry may also be appointed as a permanent Trustee on Tata Trusts, according to sources. Mehli Mistry is a director of the Meher Pallonji Group and a member of the executive committee that oversees the functioning of Tata Trusts.

The Tata Trusts board is meeting today in Mumbai to discuss the group’s succession plans, following the passing of the former Tata Group chairman on October 9 at the age of 86.

Corporate lawyer HP Ranina told CNBC-TV18 that Mehli Mistry has been managing the routine affairs of Tata Trusts for the past few years. He emphasized that the trust needs someone with the time to dedicate to its operations. If Mehli is appointed as a permanent trustee and Noel as chairman, the trust can proceed with making key decisions. Ranina expressed confidence that everything will be resolved with consensus, noting that the matter would have been discussed internally beforehand.

Amit Tandon of IiAS also shared his views with CNBC-TV18, stating that alignment between Tata Trusts, Tata Sons, and group companies is crucial, which was affected during the dispute with Cyrus Mistry. He added that the process behind these appointments is of great importance, and the trust is adhering to this procedure.

The passing of Ratan Tata has brought renewed focus on the future leadership of Tata Trusts, with Noel Tata, his half-brother, expected to play a key role in overseeing the trusts that govern the group’s holding companies.

Ratan Tata owned a small direct stake of 0.83 percent in Tata Sons, the holding company of the Tata Group. The majority of his net worth was derived from this stake.

In recent years, Noel Tata has gradually assumed more responsibilities within Tata Trusts. He is currently a trustee of both the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust, which are vital entities within the Tata Trusts network. These trusts not only manage the group’s philanthropic activities but also hold a majority stake in Tata Sons, the parent company of the Tata Group.

Under Noel Tata’s potential leadership, Tata Trusts are expected to continue playing a significant role in the operations of the Tata Group.

The group operates in over 100 countries across six continents. For the financial year 2023-24, Tata companies collectively generated revenue exceeding $165 billion and employed over one million people.

The World Bank on Thursday raised India’s economic growth forecast for the current fiscal year, ending in March 2025, to 7% year-on-year, up from April’s estimate of 6.6%. This improvement is driven by a rebound in agricultural output and increased private consumption.

“You have an emerging class of consumers in India that’s driving the economy forward. There are also recoveries from crises in Sri Lanka and Pakistan, alongside a tourism-led recovery in Nepal and Bhutan,” Martin Raiser, World Bank Vice President for South Asia, told Reuters.

On Wednesday, the RBI’s rate-setting panel retained its real Gross Domestic Product (GDP) forecast at 7.2% for FY25. The RBI revised its quarterly growth projections, with Q2 growth forecast reduced to 7% (from 7.2%), Q3 raised to 7.4% (up from 7.3%), and Q4 kept steady at 7.4%. For Q1 FY26, the growth rate is projected at 7.3%.

Meanwhile, the central bank left its inflation forecast for this fiscal year unchanged at 4.5%, despite caution over rising food prices and geopolitical tensions that could disrupt energy supplies and push crude prices higher.

“The MPC noted that the domestic growth outlook remains resilient, supported by domestic drivers – private consumption and investment. This provides headroom for monetary policy to focus on the goal of attaining a durable alignment of inflation with the target,” said RBI Governor Shaktikanta Das.

India’s central bank projection underscores the strength of the country’s macroeconomic fundamentals, with private consumption and investment playing a crucial role. The IMF has also revised India’s GDP growth upwards to 7.0%, citing improved prospects for private consumption, particularly in rural areas.

 

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October 09, 2024 / 10:45 IST
RBI Repo Rate Update: Global Economic Insights
RBI Governor Shaktikanta Das noted that the global economy remains robust, with India achieving a 6.7% GDP growth in Q1:2024-25, primarily fueled by private consumption and investment.

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October 09, 2024 / 10:33 IST
RBI Repo Rate Update: New Climate Risk Database
The RBI plans to establish a database called the RBI Climate Risk System, as announced by Das.

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October 09, 2024 / 10:30 IST
RBI Repo Rate Update: NBFC Self-Correction Preferred
The RBI is monitoring data related to credit cards and loans, urging banks and NBFCs to focus on inactive accounts and cybersecurity. Some NBFCs are expanding without solid underwriting practices, and the RBI is prepared to intervene if necessary.

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October 09, 2024 / 10:29 IST
RBI Repo Rate Update: Vigilance on NBFCs
Das assured that the RBI is closely observing the situation with NBFCs and will take appropriate actions as needed.

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October 09, 2024 / 10:22 IST
RBI Repo Rate Update: Stability of Indian Rupee
Das highlighted that the Indian rupee has remained stable and is among the least volatile currencies compared to other emerging markets.

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October 09, 2024 / 10:21 IST
RBI Repo Rate Update: Bond Yield Movements
Following a shift in stance to ‘Neutral,’ the yield on the 10-year benchmark bond eased by 5 bps to 6.7434 percent.

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October 09, 2024 / 10:20 IST
RBI Repo Rate Update: Inflation Management
Das mentioned that inflation is currently stable but requires careful monitoring.

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October 09, 2024 / 10:17 IST
RBI Repo Rate Update: Inflation Projections
The RBI forecasts inflation to rise to 4.8% in Q3, with overall FY25 projected at 4.5%.

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October 09, 2024 / 10:16 IST
RBI Repo Rate Update: GDP Growth Forecast
The RBI maintains its real GDP growth forecast for FY25 at 7.2%.

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October 09, 2024 / 10:14 IST
RBI Repo Rate Update: Growth Estimates
Projected growth rates include 7.0% for Q2, and 7.4% for both Q3 and Q4 FY25.

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October 09, 2024 / 10:13 IST
RBI Repo Rate Update: Improving Government Consumption
Despite an 8-core industries output decline of 1.8% in Q1, government consumption is on the rise.

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October 09, 2024 / 10:10 IST
RBI Repo Rate Update: Repo Rate Decision
The repo rate remains unchanged at 6.5%, with a shift in the policy stance to neutral.

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October 09, 2024 / 10:03 IST
RBI Repo Rate Update: MPC Meeting Commencement
Governor Das has commenced his speech regarding the MPC outcomes.

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October 09, 2024 / 09:59 IST
RBI Repo Rate Update: Context of US Fed Rate Cut
This marks the RBI’s first policy announcement after the US Fed’s recent rate cut, amidst speculation on India’s potential rate movements.

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October 09, 2024 / 09:47 IST
RBI Monetary Policy Update: Market Reactions
Markets opened positively ahead of the RBI’s policy meeting, anticipating no change in key rates for the tenth time.

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October 09, 2024 / 09:46 IST
RBI Monetary Policy Update: Importance of October MPC
This MPC meeting holds significant importance regarding rate decisions and inflation concerns amid geopolitical tensions.

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October 09, 2024 / 09:35 IST
RBI Monetary Policy Update: Watching the MPC Meeting Live
Updates on the MPC meeting outcomes will be provided live.

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October 09, 2024 / 09:29 IST
RBI Monetary Policy Update: Indian Rupee Status
The rupee opened at 83.9238 against the US dollar ahead of the policy announcement.

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October 09, 2024 / 09:28 IST
RBI Monetary Policy Update: Flexibility in Stance
The neutral stance offers the RBI flexibility to adjust rates based on future economic conditions.

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Hyundai Motor announced in a regulatory filing on Tuesday that it would sell 142 million (14.2 crore) of its Hyundai Motor India shares to make room for the company’s initial public offering (IPO). 

The South Korean automaker then declared that it would keep an ownership stake of 670 million (67 crore) shares, or 82.5%, in Hyundai Motor India.

Hyundai Motor stated that they have not yet set an indicative range for the IPO pricing. According to individuals who previously spoke to Reuters, the South Korean company intends to raise $3 billion at a valuation of about $20 billion.

This would make it the first carmaker to go public in India in two decades, following market leader Maruti Suzuki’s IPO in 2003.

Chinese stocks surged to two-year highs on Tuesday, extending a strong rally as markets reopened after the week-long holiday. Investors are betting on stimulus measures to boost the economy, pushing the blue-chip CSI300 up 10% in early trading, marking its highest level since mid-2022, while the Shanghai Composite climbed 9.7%, reaching its best level since December 2021.

In contrast, Hong Kong’s Hang Seng, which reached 2.5-year highs on Monday, dropped 2.8%. The yuan weakened sharply to 7.0502 per dollar, and five-year bond futures hit their lowest levels since July.

All eyes are now on a press conference from the National Development and Reform Commission, scheduled for 0200 GMT, which could provide further details on the stimulus measures fueling the market surge.

Before the holiday, China introduced its most aggressive stimulus package since the pandemic, leading to a 25% gain in the CSI300 over five sessions. Heavy buying activity strained trading systems, and both the CSI300 and Shanghai Composite recorded their biggest gains since 2008 last Monday.

Authorities have reduced interest rates and hinted at fiscal support to revive an economy that, by China’s standards, has been underperforming. Hedge fund manager David Tepper expressed optimism, telling CNBC that the stimulus measures were so encouraging he would “buy everything” in China.

However, after such significant gains, some are urging caution. Bank of America analysts noted that China’s weighting in the MSCI EM Index has risen from 24% in August to 30%, warning that continued outperformance could lead to a “self-reinforcing ‘pain-trade'” before the end of the year. They added that the “buy everything” phase may soon be over, citing market momentum, fiscal policies, earnings, and the U.S. election as factors to watch.

The analysts suggested consumer, property, and broker stocks as potential profit-taking opportunities, while recommending large-cap internet companies and high-yield state-owned enterprises (SOEs) as preferred investment options.

Apple Plans Further Expansion in India with Four New Stores and Enhanced Production

Apple is set to open four more retail stores in India as the US-based tech giant increases its investments in a country that is becoming an important market for its products. After successfully launching stores in Delhi and Mumbai in April 2023, the company now plans to expand its retail presence to Bengaluru, Pune, Delhi-NCR, and potentially one more location in Mumbai.

Continued Retail Expansion in Key Markets

Apple initially chose Delhi and Mumbai for its first two flagship stores in India, and their success has prompted further growth. The company is now focusing on major markets like Bengaluru, Pune, and Delhi-NCR as part of its second phase of expansion. Analysts believe this strategy will further strengthen Apple’s position in the premium device market.

Navkendar Singh, Associate Vice President at IDC India, stated, “With Delhi and Mumbai contributing more than one-fifth of Apple’s business, additional stores in these metros were necessary. This retail footprint expansion will further solidify Apple’s brand and provide customers with unmatched product and service experiences.”

Production of iPhone 16 Pro and Pro Max Begins in India

In addition to its retail expansion, Apple has confirmed that it will begin manufacturing the entire iPhone 16 lineup, including the iPhone 16 Pro and Pro Max, in India. The production will be carried out through its contract manufacturers Foxconn and Pegatron, with Tata Electronics also contributing to the base model production. This marks a significant milestone in Apple’s effort to diversify its supply chain and rely more on India for its global operations.

“Assembly of the iPhone Pro lineup in India is a game changer, both for Apple and for the country’s role in the global tech manufacturing landscape,” Singh added. “The key challenge now is how quickly Apple can scale production to meet both domestic and export demand.”

Expanding Workforce and Manufacturing Base

Apple has been steadily growing its workforce in India, now employing over 3,000 people in various roles. Its collaborations with local suppliers, including Foxconn, Pegatron, and Tata Electronics, have also created hundreds of thousands of jobs across the country.

India’s role in Apple’s global manufacturing strategy continues to grow, with the company aiming to produce a quarter of all iPhones in India within the next 3-4 years, up from the current 14%. In fiscal year 2024, Apple assembled $14 billion worth of iPhones in the country, according to the Economic Survey 2023-2024.

Future Ambitions: Beyond iPhones

India’s importance to Apple goes beyond iPhone production. The Indian government is urging Apple to expand its manufacturing capabilities to include other products such as iPads, MacBooks, and AirPods. Several states, including Karnataka and Tamil Nadu, are competing to attract further investments from Apple and its suppliers to support local manufacturing efforts.

As Apple continues to diversify its production away from China, the company is positioning India as a central hub for both its retail and manufacturing operations.

Key Changes for Indian Stock Market Investors Effective October 2024

As Indian markets maintain their upward trend, several crucial regulatory changes will take effect in October, which could influence investors’ strategies and profitability. These changes include revised transaction fees by major stock exchanges, a hike in the Securities Transaction Tax (STT) on futures and options (F&O) trading, and updated rules for share buybacks.

1. NSE and BSE Transaction Fee Revisions
Both the NSE and BSE have announced adjustments to their transaction fees, following the Securities and Exchange Board of India’s (SEBI) directive to adopt a uniform fee structure across market institutions. The key revisions are:
– BSE: For options contracts on Sensex and Bankex, the transaction fee will be Rs 3,250 per crore of premium turnover. Fees for other equity derivatives remain unchanged.
– NSE: The cash market will see a fee of Rs 2.97 per lakh of traded value, while equity futures will incur Rs 1.73 per lakh of traded value. For equity options, the fee will be Rs 35.03 per lakh of premium value. In currency derivatives, futures will be charged Rs 0.35 per lakh of traded value, and options will incur Rs 31.10 per lakh of premium value.

2. STT Hike on F&O Trading
In line with announcements made earlier in the year, the Securities Transaction Tax (STT) will increase for futures and options trading:
– Futures: The STT will rise from 0.0125% to 0.02%.
– Options: The STT will increase from 0.0625% to 0.1%.

 3. New Taxation Rules for Share Buybacks
From October, income earned from share buybacks will be taxed in the hands of shareholders, similar to dividends. The tax will be calculated based on the individual’s applicable income tax slab, shifting the tax burden from companies to shareholders.

These changes are expected to increase the cost of trading and affect overall profitability, particularly for those involved in high-frequency trading or derivatives. Investors should assess the impact of these revisions on their strategies going forward.

The Securities and Exchange Board of India (Sebi) is scheduled to hold a crucial board meeting on Monday, marking the first gathering since chairperson Madhabi Puri Buch faced allegations of conflict of interest. These accusations were raised by US-based Hindenburg Research and India’s Congress party. While the conflict of interest allegations and issues related to a withdrawn press release on employee matters are not officially on the meeting’s agenda, they may be informally discussed, according to insiders. One source noted that significant events involving the institution or its board members since the last meeting on June 27 must be addressed.

Between the last board meeting and the upcoming one on September 30, Sebi employees had complained to the finance ministry about what they described as a “toxic work culture.” Initially, Sebi attributed the unrest among employees to external forces but retracted this statement after staff protests.

During this period, Hindenburg Research accused Buch and her husband of having investments in offshore funds controlled by Vinod Adani, brother of Adani Group chairman Gautam Adani. These funds were allegedly used for stock manipulation within the Adani Group’s listed entities. It was also alleged that Sebi had modified rules related to real estate investment trusts (REITs) in a way that favored Blackstone, where Buch’s husband served as a senior advisor.

The Congress party further accused Buch of trading in listed securities, including selling employee stock options from her previous employer, ICICI Bank, during her tenure at Sebi. They also claimed she earned money through her advisory firm, which offered consultancy services to listed companies, thereby violating Sebi’s conflict of interest policy.

Both Buch and Sebi have denied these allegations, but the board has yet to express its stance. The board includes eight members: Buch, four whole-time members from Sebi, and three part-time nominees from the finance ministry, corporate affairs ministry, and the Reserve Bank of India.

This meeting will be the first for Deepti Gaur Mukerjee, the new corporate affairs secretary, and the last for M Rajeshwar Rao, the deputy RBI governor, who retires next month. External members may press for a discussion on the allegations against Buch, though it is uncertain whether these discussions would be formally recorded. The outcome of this meeting could shape Buch’s future as Sebi’s chairperson.

The board is also expected to address several proposals, including relaxing norms for rights issuances, introducing a new asset class, and implementing “mutual fund-lite” regulations for passive funds. The new asset class is intended to fill the gap between mutual funds and portfolio management services, allowing investments between ₹10 lakh and ₹50 lakh. Sebi is also considering tightening futures and options (F&O) trading rules, although this proposal may not require board approval, as it does not involve amendments to existing regulations like the SECC or the Securities Contract Regulation Act. Sebi has not responded to inquiries regarding Monday’s board meeting.

Promoters are seizing the opportunity presented by the ongoing market rally, selling shares worth over ₹40,000 crore across approximately 180 companies through open market transactions in the September quarter alone. This trend suggests that current valuations are compelling enough for owners to lock in profits by reducing their stakes. The significant surge in promoter offloading highlights the buoyant market conditions that have encouraged many to capitalize on the favorable pricing.

Year-to-date, promoters have sold shares worth more than ₹1 lakh crore through secondary market transactions, more than double the total for the entire year of 2023, which stood at ₹48,000 crore. This dramatic increase reflects the aggressive approach promoters are taking in response to high valuations. To put these numbers in perspective, the total value of promoter sales in 2022 was ₹25,400 crore, while in 2021 it was ₹54,500 crore.

The substantial rise in promoter share sales signals confidence in the current market environment and a strategic decision to unlock value from their holdings. Companies such as InterGlobe Aviation, Ambuja Cements, and Patanjali Foods are among the prominent names where significant promoter selling has been observed, underscoring the broad-based nature of this trend. The scale of these transactions also highlights the liquidity available in the market, enabling promoters to execute large sales without significantly impacting share prices.