Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On June 10, Indian benchmark indices closed flat to negative despite reaching an all-time high. The Nifty opened strong, hitting 23,411.90, but ended the day below 23,250 after a volatile session.

BUSINESS

JSW Energy Sparks Green Revolution with 1 GWh Battery Storage Project 

What happened

JSW Energy has kicked off the construction of a massive 1 gigawatt-hour (GWh) battery energy storage project in Fatehgarh, Rajasthan. This project, secured from Solar Energy Corporation of India Limited (SECI), involves two installations, each boasting a 500 MWh storage capacity, geared for storing energy for up to two hours per cycle.

The venture is set to operate under a Build Own Operate and Transfer (BOOT) model, with ownership transferring to the off-taker after a 12-year period, as stated by JSW Energy in a recent exchange filing. The company is targeting to have the project up and running by June 2025.

Why it matters

This development marks a significant stride in India's renewable energy sector. With a 1 GWh storage capacity, JSW Energy's project is poised to bolster grid stability and facilitate the integration of renewable energy sources into the power infrastructure. 

Additionally, the company signed an MoU with JSW Steel Ltd to supply up to 90,000 tonnes of green hydrogen and 720,000 tonnes of green oxygen annually by 2030, boosting renewable energy integration and grid stability.

Zoom out

JSW Energy's venture into battery energy storage not only showcases technological advancements but also highlights the growing focus on sustainable energy initiatives. The project's scale, coupled with the strategic partnerships in place, positions JSW Energy as a key player in the renewable energy space.

BIG MONEY MOVES

Sachin Bansal exits Ather Energy - Hero MotoCorp expands stake

Sachin Bansal has sold his remaining 7.5% stake in Ather Energy, following Hero MotoCorp's announcement of acquiring an additional 2.2% stake for ₹ 124 crore. Bansal's investment, totalling around ₹ 400 crore since 2014, was partly sold to Hero MotoCorp and the rest to Zerodha cofounder Nikhil Kamath.

Ather Energy, amidst market challenges, saw a consolidated revenue of ₹ 1,753 crore in FY2024 and aims for an IPO by 2025 after raising ₹ 286 crore for expansion. 

Cognizant boosts ER&D capabilities with $1.3 billion Belcan acquisition

Cognizant Technology Solutions is set to acquire Belcan LLC, an ER&D services firm, for $1.3 billion, marking its second-largest acquisition. The transaction includes $1.19 billion in cash and 1.47 million Cognizant shares worth $97 million. This strategic move aims to boost Cognizant's presence in the fast-growing ER&D sector.

Belcan, with over 6,500 employees, will enhance Cognizant’s engineering capabilities, particularly in aerospace and defence. The acquisition is expected to close by September.

BUSINESS

Banks Urge RBI to Relax Liquidity Rules to Boost Lending

What happened

Indian banks are asking the Reserve Bank of India (RBI) to relax the current liquidity coverage ratio (LCR) rules. These rules require banks to hold a certain amount of high-quality liquid assets (HQLA) to cover potential outflows during a 30-day stress period. Banks argue that the current mandates, which have runoff factors of 40% for non-financial corporate deposits and 100% for other legal entities, force them to tie up too much capital in liquid assets.

This request comes as the industry’s credit-deposit ratio nears 80%, with many banks selling bonds to meet the high demand for loans.

Why it matters

Relaxing the LCR rules could have significant implications for the Indian economy. If banks are required to set aside less money in liquid assets, they can channel more funds into lending. This would help support economic growth by providing businesses and individuals with easier access to credit.

However, this move is not without risks. The LCR was introduced globally after the 2008 financial crisis to ensure banks could withstand sudden financial stress. Lowering the LCR requirements could make banks more vulnerable in times of crisis.

The RBI is already considering stricter rules for retail deposits in light of recent events, such as the crisis at Silicon Valley Bank in the US, which saw massive retail deposit outflows exacerbated by instant banking channels.

Zoom out

The banks' plea to the RBI to ease the LCR requirements highlights the delicate balance between promoting economic growth and ensuring financial stability. While the potential benefits of increased lending capacity are clear, the risks associated with lowering liquidity buffers cannot be ignored.

BIG PICTURE

Elon Musk may exit Tesla if $56 billion compensation plan denied

Tesla Chairperson Robyn Denholm has cautioned shareholders that CEO Elon Musk might leave the company if his $56 billion pay package is not approved at the June 13 meeting. In a letter filed with the SEC, Denholm emphasized the unique nature of both Musk and Tesla, stating that conventional compensation methods won't suffice.

She stressed that rejecting the pay package could drive Musk to pursue other ventures, noting his numerous ideas and opportunities elsewhere. This vote, critical for Tesla's future, follows a previous one annulled by a Delaware judge. 

Havells India and Jumbo Group Unite in UAE

Havells India has teamed up with Jumbo Group to introduce kitchen appliances in the UAE. The partnership aims to boost brand presence and accessibility, starting with online sales on Jumbo.ae and expanding to retail distribution. After-sales service for Havells products in the UAE will be managed by Jumbo Serve. This collaboration showcases Havells' commitment to global expansion and innovation, aligning with its 'Make in India' ethos. 

BUSINESS

GAIL Announces ₹60,000 Crore Mega Ethane Cracker Project

What happened

GAIL, India's top gas supplier, is gearing up to establish the country's largest ethane cracker project in Madhya Pradesh's Sehore district, specifically at Ashta. This ambitious venture, with an estimated investment of ₹ 60,000 crore, marks a significant milestone in India's petrochemical industry.

The project aims to set up a 1500 Kilotons per Annum (KTA) ethane cracker, boasting a diverse product lineup of ethylene derivatives. GAIL has formally requested support from the Madhya Pradesh government to facilitate the necessary infrastructure for this colossal undertaking.

Why it matters

The Madhya Pradesh Industrial Development Corporation Limited has pledged around 800 hectares of land for this purpose, with the state government already initiating the requisite processes. 

The economic impact is substantial, with an estimated 15,000 jobs during the construction phase and 5,600 jobs during operations. Such employment opportunities are crucial for regional development and bolstering India's industrial capabilities.

Moreover, this venture aligns with India's vision for self-reliance in critical sectors. By investing in domestic petrochemical production on such a scale, India reduces its dependence on imports, enhancing industrial resilience.

Zoom out

GAIL's ambitious ethane cracker project signals a new era of growth and innovation in India's petrochemical sector. With the commencement expected in February 2025 and commercial production slated for the financial year 2030-31, this project is not just about numbers and investments—it's about building a more robust and self-sufficient industrial ecosystem.

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