Namaste! Aaj ka news roundup, Newswala style!
 

MARKETS

Markets: Positive global cues contributed to a three-session rise in key indices, particularly in the auto, power, metals, and oil & gas sectors, with Sensex surpassing the crucial 72000 mark and Nifty inching closer to 22000 in a generally positive yet range-bound market.

BUSINESS

Reliance and the Tata Group are Considering a Potential Partnership

What happened

Mukesh Ambani's Reliance Industries is ready to snatch up a substantial 29.8% stake in Tata Play, the satellite TV, and streaming service currently under the wings of Walt Disney . This potential move signifies a strategic leap for Reliance into the television distribution sector, aiming to carve out a dominant position in the ever-evolving Indian media landscape.

Tata Sons, the sturdy holding company of the Tata group, currently commands a majority stake of 50.2% in Tata Play. The remaining slices of the pie belong to Disney and Temasek, a Singapore-based investment firm.  The potential acquisition, if successful, would mark a historic joint venture between the Tata group and Reliance, propelling JioCinema's reach across the Tata Play platform.

Why it matters

This isn't just another deal; it's a groundbreaking collaboration between two corporate giants that have seldom joined forces. If the stars align and the deal goes through, it would not only reshape the ownership structure of Tata Play but also open doors for a collaboration that could redefine India's media landscape. As negotiations unfold, it's not the only chess move Reliance is making.
 

• Disney and Reliance are reportedly in the final stages of a mega stock-and-cash merger that aims to create India's largest media and entertainment business.

• As this high-stakes game unfolds, RIL’s share prices are hitting stratospheric highs. The recent surge propelled RIL's share price to a record-breaking ₹2,957, driving its market capitalisation beyond the ₹20 lakh crore mark.

Zoom out

RIL is positioning itself for a media takeover. The potential acquisition of Tata Play's stake from Disney is a step in creating a media behemoth. As the talks unfold and share prices soar, one thing is clear – Mukesh Ambani's Reliance is not just eyeing a stake; it's aiming for checkmate in the high-stakes realm of Indian media. 

BIG MONEY MOVES

PSP Projects clinches   ₹631 crore construction order

PSP Projects, a diverse construction and allied services provider secured a significant construction order worth ₹631 crore in Gujarat. The project involves building Gati Shakti Vishwavidhyalaya in Vadodara for Rail Vikas Nigam Ltd, with a completion timeframe of two and a half years. With this, the company's total order inflow for the fiscal year has reached ₹2,626 crore . 

Infosys lands $300 million deal with Pacific International Lines 

Infosys, rebounding from a billion-dollar deal loss in December, has started 2024 strong, securing two major contracts. The latest is a $300 million deal with Pacific International Lines, lasting until 2027. The agreement involves Infosys managing the shipping company's IT infrastructure and supporting its digital transformation. This comes after Infosys terminated a $1.5 billion AI contract in December, making the Singapore deal crucial. 

BUSINESS

RBI's Gold Purchases Hit a 6-Year Low

What happened

The Reserve Bank of India (RBI) scaled down its gold purchases in 2023, hitting the lowest levels since it began accumulating gold in 2017. By December 2023, RBI's gold holdings saw a modest uptick to 25.84 million troy ounces from the previous year's 25.32 million troy ounces. This marks a departure from previous years when larger quantities were added to diversify the central bank's foreign exchange reserves.

Why it matters 

The decline in RBI's gold acquisitions can be attributed to the increasing strength of the US dollar. 

• Despite a nominal increase of 0.52 million troy ounces in 2023, the lower gold purchases align with global trends as central banks worldwide trim their gold investments amid rising prices.
   

• Analysts suggest this move could be a strategic shift to focus on hard currency assets, considering the potential for mark-to-market valuation gains on existing gold holdings.

The proportionality could be influenced by the current high gold prices, a factor that may lead to a more conservative approach. The decision aligns with the RBI's historical approach, never selling its gold stock for profit, prioritizing safety, liquidity, and return optimization within its reserve management framework.

Zoom out

As of the end of September 2023, RBI's half-year report on forex reserves revealed a gold holding of 800.79 metric tonnes. Despite a decline in gold's share in total reserves, it rebounded to approximately 7.70% by December, surpassing China's 4%. On a global scale, RBI and the People's Bank of China collectively contributed to one-third of the 1,037 metric tonnes of gold purchased by central banks in 2023.

BIG PICTURE

🚗  India considers import duty concessions to welcome Tesla

The Indian government is reportedly nearing approval of a policy to extend import duty concessions on electric cars above ₹30 lakh for 2-3 years, potentially paving the way for Tesla's entry into the market. Tesla had sought a reduction in import duty to 15% for two years, promising a $2 billion investment . However, local automakers express concern over potential advantages for Tesla, emphasizing the importance of a level playing field and domestic industry strength.


🔽  Japan slips into recession losing the 3rd spot in the world ranking to Germany 

Germany has surpassed Japan to become the world's third-largest economy, with Japan slipping into recession. In 2023, Japan's nominal GDP grew by 1.9%, but due to the yen's significant decline against the dollar, its GDP stood at $4.2 trillion compared to Germany's $4.5 trillion. Both nations grapple with challenges such as ageing populations and economic pressures, but Germany's rise also faces hurdles like the impact of Russia's war in Ukraine, eurozone interest rate increases, and a shortage of skilled labour.

BUSINESS

Vedanta Promoter Nearing $1 Billion Stake Sale to GQG Partners

What happened

Vedanta Resources, the parent company of Vedanta Ltd, is reportedly in talks to sell approximately $1 billion worth of shares to investment firm GQG Partners through block deals, according to sources cited by ET Now. With Vedanta facing a substantial $6.4 billion outstanding debt, including a $4.5 billion payment due by fiscal 2025, this move aligns with the company's ongoing efforts to strengthen its financial position.

Why it matters

The stake sale is a strategic move by Vedanta's promoter to raise capital, part of the company's broader initiative to alleviate its consolidated net debt, which stood at ₹62,493 crore as of December-end. The billion-dollar share sale, expected to take place through block deals, could significantly trim debt by a third.

This move sends a clear message to the market that Vedanta's promoters are committed to managing debt, even if it means considering selling some of the family's silver.

• The discussions with GQG Partners come at a crucial time, aligning with Vedanta Resources' recent repayment of $779 million to bondholders as part of its debt restructuring exercise.
  
  

• A year ago, GQG Partners gained popularity in the Indian stock market by investing ₹ 15,000 crore in the Adani Group. And this happened along with the Adani-Hindenburg case which makes it clear that GQG is a fearless player. 

Zoom out

The company's response to the challenging debt landscape has been dynamic, with this potential deal marking a notable step in that direction. As Vedanta adapts to market dynamics and explores strategic partnerships, the outcome of this deal will likely have reverberations in the financial sector, indicating Vedanta's commitment to overcoming its financial hurdles and fortifying its position in the market.

MIRCH MASALA

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