Business News at 10:00 am on 27th June, 2024

Let’s begin with the top news. The government may announce a new scheme of concessional corporate tax rate for new manufacturing units in the Budget as it wants the private capex cycle to be uninterrupted. The new scheme is expected to be similar to an earlier one that offered a concessional rate of 15% compared with 22% for others, but ended on March 31, 2024. Since the “old scheme has already ended”, it could not be extended, an official source said. However, “a new scheme might be announced”, the person said, adding that its “details are not yet finalised”.
Meanwhile, Encouraged by the government’s incentive schemes, manufacturers of electronics and semiconductors are set to commit close to Rs 3 trillion as capital expenditure over the next five years. Companies, big and small, are setting up shop to make everything from smartphones and laptops to wearables. They are eyeing a huge market for electronics, estimated by the Confederation of Indian Industry, at $500 billion by 2030. As Ashok Chandak, president, India Electronics and Semiconductor Association, points out, “it is domestic demand and export potential that is driving the investment in the sector”. Indeed, India is looking to become a part of the global electronics value chain emulating other nations.
Moving on. The Securities and Exchange Board of India has made it significantly easier for insiders to trade in shares of their companies by amending the Prohibition of Insider Trading regulations. The amended norms provide flexibility in the ‘trading plan’ of a company’s key managerial personnel and will come into effect after three months. These new norms include a reduction in the cooling-off period, price limits of 20% at both the upper and lower side, and cancellation of the trading plan. Any person in a company who has access to unpublished price-sensitive information is considered an insider. Earlier, the insider had to inform the board of his buy/sell decision six months in advance. This time limit has now been reduced to four months.
On to industry. In one of the shortest spectrum auction, which concluded in less than one-and-a-half days, Bharti Airtel sprang a surprise by acquiring the maximum airwaves at Rs 6,857 crore. It bought a total of 97 MHz spectrum in 900 MHz, 1800 MHz, and 2100 MHz bands. This was also the first time since the auctions began in 2010 that the proceeds for the government came the lowest at Rs 11,340.8 crore. Reliance Jio, which was expected to bid the maximum, turned out at the third position, lower than Vodafone Idea by acquiring the least – it spent only Rs 973 crore to buy 14.4 MHz spectrum in the 1800 MHz band, according to data from the department of telecommunications.
Infosys is working on over 225 generative AI programs for its clients as they try to develop their internal AI strategies, Infosys chairman Nandan Nilekani said on Wednesday. Nilekani said the adoption of enterprise AI is anticipated to be gradual when compared to consumer AI. He further said the world is at the very early stages of the AI revolution and unlike consumer AI, which will roll out quickly, enterprise AI requires companies to do major changes inside their companies, organise their data, build responsible systems, follow the laws of many countries and so on. So, enterprise AI will take several years to unfold, and he thinks Infosys is well-placed for that.
Over to economy. Underpinned by the buoyancy in economic activity witnessed in the first quarter, a keen policy focus on investment and the expectations of a normal monsoon, India’s economy may grow by close to 7.5% in 2024-25, the National Council of Applied Economic Research said on Wednesday. Recently, the Reserve Bank of India raised its projections for India’s Gross Domestic Product growth to 7.2% from 7% in FY25. Growth projections have been upgraded by various other agencies as well with the median projection at 6.9%. GDP growth during 2024-25 may turn out to be higher than 7% and even closer to 7.5%, NCAER director general Poonam Gupta said. High-frequency indicators showed that the domestic economy continues to remain resilient.
lastly, the stocks in focus. These include Reliance Industries, State Bank Of India, IIFL Securities, Raymond, Bharti Airtel, and PI Industries among others. As stated earlier, Jio has strengthened its leadership position by acquiring the right to use spectrum in the 1,800MHz band in two circles for a provisional cost of Rs 973.63 crore. On the other hand, SBI, the country’s largest bank, announced it had raised Rs 10,000 crore through its fifth infrastructure bond issuance at a coupon rate of 7.36%. The issuance received an overwhelming response, with bids exceeding Rs 19,884 crore, oversubscribing the base issue size of Rs 5,000 crore by nearly four times. A total of 143 bids were received, indicating broad participation of investors.