Below is a shortlist of all the important articles from newspapers.
Paytm to lend founder’s firm ₹743 cr before IPO
One97 Communications Ltd, the operator of the Paytm online payments app, is set to extend ₹743 crore funding to two companies owned by founder Vijay Shekhar Sharma ahead of its $3 billion initial share sale planned this year, Mint says.
The proposal, among others, will be put to vote at the company’s annual meeting on 30 June.
What the proposal is: Paytm will buy ₹491.93 crore worth of optionally convertible debentures to be sold by VSS Holdings Pvt. Ltd, in which Sharma is a director.
The debentures will mature in 10 years and bear annual interest of 15%.
The funding will be done in one or more tranches.
Paytm will own 96% in VSS HoldCo on converting the debentures into shares, which can be done at any time.
What the fund is for: VSS HoldCo will utilize the funds for its primary business activities.
VSS Holdco is involved in activities closely related to financial intermediation, except insurance and pension funding.
Kinetic Green, Hero Electric, M&M unit eye EV contract
Hero Electric, Mahindra Electric Mobility and Kinetic Green Energy and Power Solutions are among firms in talks with Convergence Energy Services Ltd for supplying electric two and three-wheelers as part of India’s biggest-ever push for green mobility, Mint says.
What the new scheme is: CESL, a subsidiary of Energy Efficiency Services Ltd (EESL), signed an agreement to procure more than 30,000 electric two- and three-wheelers for Goa and Kerala.
CESL aims to supply 200,000 two-wheeled electric vehicles and 300,000 three-wheeled EVs across India.
But there is no commercial agreement with any of the EV manufacturers yet.
Corinth Group wants to be a global player in the ESG arena
Switzerland-based private investment firm Corinth Capital Fund’s CEO, Andreas Matsas, in an interview with Mint said that while it is still early days to talk about the structure of the India-focused fund, the investment firm sees both acquisition and greenfield opportunities in India.
How it is important: The investment was made through its global fund, but Corinth Group is already in the process of launching an India-focused alternative investment fund.
Corinth Capital Fund is a licensed and registered alternative investment fund with Cyprus Securities and Exchange Commission (CySEC). CySEC is part of the European Securities and Markets Authority, an independent European Union authority.
India is the first country outside the EU that they decided to focus on and made our first investment in the country in Morepen.
They will be expanding their operations very soon in India.
Some sectors of interest apart from pharma is logistics, infrastructure and renewable energy.
India’s daily Covid cases lowest in two months
Daily cases in the country dropped to the lowest level seen in over two months with a little over 100,000 new infections across India on Sunday, Hindustan Times says.
How it is important: It underlines the country’s turnaround after the brutal second wave of the viral outbreak.
On Sunday, 101,237 new infections were reported across the country and 2,446 new deaths.
The total number of confirmed infections in India to 28.9 million and deaths to 349,247, according to HT’s Covid-19 dashboard.
While the daily cases were the lowest since April 4, or in 62 days, the number of reported daily deaths in the country touched a low of a month-and-a-half.
The second wave of the pandemic has now seen a steady drop for four consecutive weeks across the country.
Govt may look at central vaccine procurement: FM
The government may look at centralised procurement of vaccines, finance minister Nirmala Sitharaman said in an interview with Economic Times, even as she hit out at opposition-ruled states for tardy pace of vaccination and high wastage.
The Centre has provided ₹35,000 crore for vaccination in the budget for this fiscal year and more funds can be provided if need be, Sitharaman said.
The Centre had on April 19 announced a ‘liberalised and accelerated’ Phase 3 policy, opening vaccination to everyone over the age of 18 years beginning May 1.
Central officials say that since health was a state subject, the government had accepted the demand for flexibility in procurement.
India has administered 233 million vaccine doses so far. The government expects the supply of more than two billion doses by December.
Firms offer deep discounts on beverages, snacks to clear shelves
Consumer goods, especially beverages and snacks, are being deeply discounted across ecommerce and supermarkets to clear out inventory, says Economic Times report.
Lockdown Blues: Snacks and beverages have a short shelf life.
Inventory piled up in the past two months or so when sales fell sharply due to lockdowns amid the second Covid wave.
Many items are being sold at a third of their price tags online.
All manufacturers had expected demand to go up after the sharp recovery in the previous quarter.
Discounts of 30-70% have been applied on aerated drinks, juices and other cold beverages, potato chips, bridges and other snacks at online platforms such as Big-Basket, Grofers, JioMart and Amazon as well as the apps and stores of food and grocery retail chains.
The June quarter contributes three-fourths to overall sales of the ₹20,000-crore packaged beverages category, and out-of-home channels typically account for 75% of soft drink sales, the report said.
Tata Steel likely to pay $1bn offshore loans early
Tata Steel is considering prepaying up to $1 billion (₹7,315 crore) of foreign loans, taking advantage of a commodity price super cycle that has boosted the company’s cash position, Economic Times reported.
How it is important: The steel major looks to cut debt as cash flow increases amid strong demand and high steel prices.
The steelmaker has already cut its debt by more than $3 billion in the past three years.
With debt reduction, it seeks to lower interest cost and increase future profitability.
The company needed funds for expansion projects, it could raise debt at a lower cost as interest rates had come down in India and globally.
Pfizer wants vaccine disputes only in the US courts
Pfizer wants disputes related to its Covid vaccine supplies to India adjudicated only in US courts, says Economic Times report.
It is also seeking indemnity against any adverse effects from the jab.
But the government isn’t too keen to give in on legal jurisdiction.
The government has taken several measures to enhance vaccine supplies, including advance payments without guarantees. But restricting jurisdiction to overseas locations won’t pass muster in Parliament.
Why it is important: Manufacturers have sought such indemnity as vaccines have been developed at a rapid pace to fight the pandemic and the side effects are not yet fully known.
Delhivery to list in 6-8 months, targets $500 million
New age logistics and supply chain startup Delhivery plans to go public in India anytime between December this year and March 2022, Economic Times report says quoting its cofounder and chief executive Sahil Barua.
Unless there is a severe third wave of Covid-19 affecting market sentiment, it is unlikely to postpone its IPO timeline.
The company is still working out details of the issue, including its size.
PSB’s ‘buy-sell swap’ cools down forward premiums
The Reserve Bank of India is said to have directed state-owned banks to cut a derivative deal known as “buy-sell swap” in the currency market, pulling down the forward premiums by as much as 193 basis points in four trading sessions, Economic Times said, quoting dealers.
Why it is important: The fall in premiums to enter forward contracts to exchange currencies will help companies with overseas liabilities to cover their currency risk at a lower cost. This should also boost hedging activities by foreign portfolio investors.
The RBI turned active in the forward currency market after the premium saw a spike. On its direction, government banks bought dollars in the spot market and sold forward contracts in a single transaction, pulling down the premium.
Start of a new profit cycle is driving a multi-year bull run
The equity market is in a multi-year bull run as the economic impact of the Covid-19 pandemic on India is likely to be transient, Economic Times interview with Ridham Desai, Head of India Research at Morgan Stanley, said. Desai said mid- and small-cap stocks are likely to see a pause in the rally, while large-caps will make a comeback. Edited excerpts:
He said, there is no permanent economic damage. There is massive coordination between central banks and governments across geographies.
About markets, he said it’s a multi-year bull market and market has many more legs before it gets exhausted. The fundamental premise is that we are at the start of a new profit cycle.
Domestic cyclicals will beat those facing outside because India is likely to beat the world in terms of growth, he said.
Should India print more money to boost economy?
In a special feature, The Times of India said there have been calls from sections of India Inc for a large fiscal stimulus, including printing money, to nurse the economy back to health and help sectors flattened by the virus. The report spoke to former central bank governors on this.
C Rangarajan said there is no doubt that government expenditure has to remain high. The actual stimulus is a consequence of the level of deficit that is being maintained. D Subbarao said the current situation does not call for the RBI directly monetising the deficit. The cost of doing that will be much more than the benefits.
Central Bank, IOB may be taken up for privatisation
The Centre may sell its stake in Central Bank of India and Indian Overseas Bank (IOB) as part of its mega privatisation initiative unveiled in the Union Budget in February, The Times of India said.
While the two banks have been recommended for disinvestment by government think tank NITI Aayog, Bank of India (BoI) may be a potential candidate for sale.
How it is important: The proposal from the government think tank is being vetted by the disinvestment and financial services departments.
The exercise is part of a multi-stage process for finalising entities that are to be taken up for privatisation.