Morning Scan: All the big stories to get you started for the day

Recovery pushes hiring intent to 15month high in Q2

Job seekers can hope for better days ahead, reported The Economic Times.

Why it's important: India Inc’s ‘intent to hire’ in July-September marks its highest level in the past 15 months, according to a survey of 700 small, medium and large companies across 21 sectors.
The latest TeamLease Employment Outlook Report showed that 38 percent of the companies surveyed intend to hire in this quarter, despite fears of a possible third wave.
The numbers had plummeted to their lowest in 2020— to an average of 18 percent in the two successive quarters to September.

A combination of factors, such as easing of restrictions, uptick in consumption and rise in economic activity, are driving both white- and blue-collar employment generation.

Birlas not planning to raise Vi stake

The Aditya Birla Group (ABG) has no plans to exercise its option under an existing shareholder pact to buy shares of Vodafone Idea from co-promoter, the UK's Vodafone Group, and increase its 27.66 percent stake, reported The Economic Times.

Why it's important: Under the pact, ABG has the option to buy additional shares at Rs 130 apiece from Vodafone Group.
It will raise its holding in Vi to 35.5 percent within three years of the closure of the merger between Vodafone India and Idea Cellular, which took place August 31, 2018.
It can also buy the shares at the prevailing Vi stock price in the fourth year of the merger closing, under an agreed equalisation formula.
If equalisation of stakes doesn’t happen even in four years, the UK telecom major can sell its holdings to reach ABG's level from the start of the fifth year to the 10th.

Vodafone holds 44.39 percent of Vi.

Amex to resume India business from August 7

American Express is set to partially resume its business in India next month by acquiring merchants, reported The Economic Times.

Why it's important: Amex is working to fix the issues of compliance related to data localisation of its card users that led to a regulatory ban on new card issuance.
The company has asked its partner banks and payment operators in India to recommence onboarding of new merchants on its network from August 7.
This, however, does not translate into American Express resuming full fledged operations since it is not yet in compliance with the RBI mandate that all data related to Indians and domestic businesses be kept in India only.

Any data regarding transactions in India, if captured in servers overseas, need to be erased within 24 hours.

LIC IPO only after 3 other PSU selloffs

The government is looking to complete at least three public sector disinvestment transactions before rolling out the mega IPO of Life Insurance Corporation of India early next year, reported The Economic Times.

Who the three are: At least three firms – National Fertilisers Ltd, Mishra Dhatu Nigam Ltd and Rashtriya Chemical & Fertilizers Ltd – will be divested through offer on sale route within the next quarter.
The government is simultaneously pursuing strategic disinvestment in companies such as Air India and BPCL.
It may also launch the initial public offer of WAPCOS Limited where it plans to offload 25 percent stake.

Earlier this week, the government sold an 8 percent stake in Hudco through the OFS route.

‘Most have similar or higher fuel taxes’

Chief Economic Adviser Krishnamurthy Subramanian is confident of robust growth in 2021-22 against the backdrop of the second COVID-19 pandemic. In an interview to The Times of India, he says inflation should come within a comfortable range soon.

What the CEA says: The overall economic impact of the second wave is not likely to be very large.
Most essential activities and inter-state movement were not impacted.
1991 was like the 1983 World Cup, from a socialist era to free market reforms.
But this set of reforms is like the 2011 World Cup win where there has been expectation that we must have a Mahendra Singh Dhoni-like performance and the expectations are likely to be fulfilled.
As the restrictions have been removed, we should be able to get the inflation numbers within range.
Food inflation (currently) accounts for almost 50 percent of CPI. The weight of petrol and diesel in CPI basket is less than 3 percent.

Except for the US, every other country has fuel taxes that are very similar or higher than India.

SEBI to ease rules for startups to go public

India’s markets regulator plans to introduce rules that will hold the controlling shareholders of companies accountable, Mint reported.

Why it's important: It is departing from the concept of regulating promoters, as dozens of investor-backed and entrepreneur-led startups are set to go public.
The proposed rules aim to make it easier for startups that are majority-owned by investors to access capital markets in India.
The changes will release financial investors such as SoftBank and Tiger Global from onerous regulations, including restrictions on stock sales, that apply to promoters.

SEBI Chairman Ajay Tyagi: “We are revisiting the concept of promoters and controlling shareholders. There is an increasing number of companies that do not have any clear promoters.”

‘India’s crypto industry needs regulations, not prohibition’

Nischal Shetty, CEO of WazirX, in an interview to Mint, spoke about the #IndiaWantsCrypto campaign, which completed 1,000 days on July 28, key challenges that the industry faced during the past three years, and what the campaign would aim to achieve in its next 1,000 days.

What the CEO says:
2018 was really bad for the Indian crypto industry, and people thought of existing at that point in time.
But campaigns like #IndiaWantsCrypto kept people motivated.
Crypto has always been a challenging sector because of the lack of regulatory clarity
The Indian crypto industry has grown from four-five million people in 2018 to 15-20 million investors now.
Second, from a handful of startups, a lot of companies are now working in the crypto sector.

To catch up with the rest of the world, we first must have banking access.

FMCGs make steady recovery, surpass pre-COVID-19 levels

In spite of the bruising second wave of the COVID-19 pandemic and the deep disruptions in public life, the country’s FMCG sector is emerging as one of the most resilient segments of the economy, Business Standard reported.

Why it's important: Early numbers and estimates for the June quarter point towards a steady recovery in the sector, with top companies overtaking their pre-pandemic levels.
The countrywide lockdown from March 2020 had severely impacted FMCG revenues.
Despite widespread panic buying on the part of consumers, the sales and profitability of all leading FMCG manufacturers were hit, dragging the sectoral revenue below 2019 levels.
During the second wave, between April and June this year, lockdowns and restrictions on retail activities also affected business.
How it manged: Consumer buying patterns were more disciplined this time.

Better penetration, supply chain efficiencies, a targeted push for relevant products and a massive digital push by FMCG manufacturers helped them minimise the dip in sales.

Post-IPO, Nykaa family to continue holding 51 percent stake

The promoter family of beauty and fashion start-up Nykaa will continue to hold a 51 per cent stake in the company following the proposed IPO Business Standard reported.

Why it's important: The promoter family has three members in the top management team: founder Falguni Nayar, daughter Adwaita who is the CEO of Nykaa Fashion and son Anchit, CEO of the beauty e-commerce platform.
They will continue to play a key role in running the business.
The company has a diversified range of investors which include Fidelity, TPG, Steadview Capital, Sunil Munjal, and Bollywood star Katrina Kaif, among others.

The IPO will include an offer for sale from existing shareholders as well as the fresh issuance of shares.

Ashok Leyland draws up electric road map

Ashok Leyland lined up its electric vehicle road map, setting a target of becoming one of the world’s top 10 CV brands, Business Standard reported.

Why it's important: To launch EVs in December through UK-based Switch Mobility, a combined entity of Ashok Leylands electric CV operations and the erstwhile Optare of the UK.
These vehicles will be manufactured in India and sold under the Switch brand.
The group has plans to invest $150-200 million in the EV space.
Ashok Leyland has invested around $136 million in Switch Mobility.The company's strategy is to use India as a manufacturing hub to make use of its existing facilities in India, in addition to its facility in Leeds.