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The Indian stock market could be on its way to reclaim the second spot on the MSCI Emerging Markets Index from Taiwan. After a rebound in domestic equities, the weight of Indian stocks in the gauge has risen from 12.97 percent at end January to 14.21 percent now, the highest rise among peers in the basket. MSCI India has rallied 9 percent so far this year, compared with the MSCI Emerging Markets’ 3 percent increase.
Why it’s important:
- Passive funds typically structure their investment basket in emerging markets on the basis of index weights.
- Once India’s position improves, there is a likelihood of increased fund inflows.
The Ant Group has transferred 44 percent of its stake in One 97 Communications, which operates Paytm, to founder and chief executive Vijay Shekhar Sharma. Resilient Asset Management BV, an overseas entity owned by Sharma, will acquire ownership of 10.3 percent stake in the company held by Antfin Netherlands, formerly known as Ant Financial.
Why it’s important:
- The deal is part of an effort to reduce the Chinese group’s ownership in the Indian fintech firm.
- It also makes Sharma the largest shareholder in Paytm.
The promoters of Adani Group have raised about $500 million by selling a part of holdings in Adani Green Energy to investors, including INQ Holding, a unit of sovereign fund Qatar Investment Authority. It is one of the several recent stake sales by billionaire Gautam Adani to cut promoter-level debt and free stock pledges. At current market rates, around $3.75 billion is required by the promoters to release pledged shares in five key group firms.
Why it’s important:
- The investment by the Qatar sovereign fund is a vote of confidence in the Adani Group.
- The Adani Group has been scrambling to restore investor trust after a market rout earlier this year.
Reliance Industries, which topped corporate profits for more than a decade, has ceded its pole position to State Bank of India in the June quarter. India’s biggest lender reported a consolidated net profit of Rs 66,860 crore in the trailing 12-month ended in June, ahead of Reliance’s net profit of Rs 64,758 crore.
Why it’s important:
- The pandemic and its aftermath has changed the economic landscape in more ways than one.
- Financial services sector in India growing its heft at the cost of energy firms.
The recently proposed 28 percent goods and services tax on online games involving real money will not impact the taxation on e-sports like as FIFA and League of Legends, or titles on PlayStation, Xbox, and Nintendo. The higher tax rate will be levied only on pay-to-win games, such as fantasy sports, rummy, and poker, which have the scope of monetary gains.
Why it’s important:
- Video games and e-sports will continue to attract tax at the rate of 18 percent.
- The government has now clarified the demarcation between them and pay-to-win games.
Byju’s and New York’s Davidson Kempner Capital have started negotiations to settle a dispute over the breach of a loan covenant linked to Aakash Institute, a unit of the Indian edtech unicorn. Byju’s has offered to repay the funds it has so far availed of from the sanctioned loan, along with the interest on that amount. Davidson Kempner is seeking interest on the entire amount for a period of 1-2 years instead of a quarter.
Why it’s important:
- The speedy resolution of the loan dispute will settle one of the several crises Byju’s has been grappling with in recent times.
- Its troubles are far from over.
The Institute of Chartered Accountants of India is likely to flag concerns about the preparation of financial statements by Think and Learn that runs Byju’s to the ministry of corporate affairs after a review of its 2019-20 and 2020-21 accounts. Separately, a disciplinary committee of the institute is expected to issue notice to Deloitte Haskins & Sells’ audit partner, who signed off on these financial statements for not having done enough regarding weaknesses in the accounts.
Why it’s important:
- There has been allegations of material weakness in Byju’s internal financial controls that the start-up has been unable to dispel.
- Its losses could be much more than it has reported till now.
Essel Group founder Subhash Chandra is on the verge of settling debt of Rs 6,500 crore held by JC Flowers Asset Reconstruction Company for around Rs 1,500 crore to regain ownership of his family’s stake in Dish TV, Zee Learn, and three properties, including a bungalow in central Delhi. Chandra’s Essel Group close to signing a definitive agreement to repay the settlement amount in a phased manner by March 31.
Why it’s important:
- It is yet unclear as to where Chandra will get the money to settle the debt.
- It could sell an infrastructure asset, people in know have said.
The cost of preparing a vegetarian thali at home has surged by 28 percent in July from the preceding month due to a sharp rise in prices of vegetables and spices. The cost of a non-vegetarian thali rose by a relatively moderate 11 percent, according to a study by Crisil.
Why it’s important:
- The soaring prices of vegetables have placed a heavy burden on the poor, who spend the bulk of their income on food.
The Board of Control for Cricket in India has dropped the base price of title sponsor rights for international cricket matches played in India to Rs 2.4 crore per match from Rs 3.8 crore that MasterCard and Paytm paid in the last cycle. The base price for the three-year title sponsor rights would total Rs 134.4 crore. They will start in September and end in August 2026.
Why it’s important:
- The slash in base price underscores the tepid demand for high-cost cricket properties and the exit of new-age firms that now have lot less cash to burn.
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