Namaste! Aaj ka news roundup, Newswala style!

MARKET

Markets:     Markets end higher! Nifty above 23,550, Sensex up over 300 points; Banking stocks lead the gains on June 18. Shriram Finance, Power Grid Corp, Wipro, ICICI Bank, and Titan Company were the top gainers on the NSE Nifty 50 on Tuesday June 18, 2024.

BIG MONEY MOVES

Coca-Cola India eyes $1 billion from HCCB Sale

Coca-Cola India plans to sell part of its wholly-owned bottling business, Hindustan Coca-Cola Beverages (HCCB), targeting $800 million to $1 billion . The company has approached top Indian business families, including the Bhartia family of Jubilant Group, the Burman family of Dabur, and the Parekh family of Pidilite Industries.

HCCB is also considering an IPO to support its expansion. In FY23, HCCB's revenue surged 40% to ₹12,840 crore. Recent refranchising efforts in the Philippines and India brought in net gains of $599 million and $293 million, respectively. Coca-Cola India remains optimistic about strong future growth.

Vodafone to sell 10% stake in Indus Towers for $1.1 billion

Vodafone Group is set to sell a 10% stake in Indus Towers for up to $1.1 billion as part of its debt reduction strategy. The sale involves approximately 268 million shares, priced between ₹310 and ₹341 each, with the mid-range offering a 4.5% discount to the recent closing price.

Vodafone aims to use the proceeds to pay down its $42.17 billion net debt. Bank of America, Morgan Stanley, Jefferies, and BNP Paribas are managing the sale. Block deals like this have become popular in India's booming stock market.

BUSINESS

LIC Mega Sale: Insurer Plans $7 Billion Real Estate Bonanza

What happened

The Life Insurance Corporation of India (LIC) is gearing up to raise a whopping $6-7 billion by selling its prized real estate assets across the country, according to sources. The state-run insurance giant has reportedly tasked an internal team to draft a sale plan, starting with properties in Mumbai. These premium assets include iconic buildings like the Jeevan Bharti building in Delhi's Connaught Place and the LIC building in Kolkata's Chittaranjan Avenue.

Despite this ambitious move, LIC has officially denied any such plans, dismissing media reports as incorrect.

Why it matters

LIC's potential sale of its real estate holdings is significant for several reasons. First, the sale could substantially boost LIC's financial position, with some estimates suggesting that the actual value of these assets could be five times their current valuation. This windfall comes at a crucial time as LIC faces stiff competition from private insurers, which has seen its market share drop to 58.8% in FY24.

Moreover, LIC's strategic expansion into Tier-2 and Tier-3 cities and rural areas requires substantial capital. The asset sale would provide the necessary funds to fortify its market position and enhance its reach.

Zoom Out

If the asset sale goes through, LIC could see a notable uplift in its profitability, potentially leading to higher dividends for shareholders. This move would also align with the government's push to monetise public sector assets. However, the process is not without challenges. Legal disputes over property ownership and valuation issues could complicate the sale.

Despite these hurdles, LIC’s assets under management have seen a significant increase, rising to ₹51.21 lakh crore by March 2024, up 16.48% from the previous year. As LIC navigates these turbulent waters, its strategic decisions will be critical in maintaining its dominance in the Indian insurance sector.

BIG PICTURE

China's industries slowdown while retail takes a flight

China's industrial growth slowed to 5.6% in May from 6.7% in April, falling short of forecasts. However, retail sales rose by 3.7%, beating predictions. Despite this consumer uptick, overall economic recovery remains fragile. Property investment fell by 10.1% in the first five months of 2024, and the urban jobless rate held steady at 5%.

Fixed-asset investment growth also slowed. Challenges persist with trade barriers and weak domestic demand. Efforts to boost consumption through incentives and subsidies are underway, but economists remain cautious about their long-term impact.

Britain reclaims top spot as Europe's largest stock exchange

Britain has surpassed France to become Europe’s largest stock exchange, following Emmanuel Macron’s unexpected election announcement, which wiped over £200bn from France’s major businesses. According to Bloomberg, as of Monday, French stocks were valued at $3.13 trillion (£2.47 trillion), just below Britain’s $3.18 trillion .

This shift comes after France took the lead 18 months ago during Britain's struggles with the energy crisis, high inflation, and Liz Truss’s tumultuous premiership. French stocks plummeted after Macron dissolved Parliament, causing the Cac 40 index to suffer its worst week since 2022. Conversely, London's FTSE 100 hit record highs, driven by new market activity.

BUSINESS

India and US Strengthen Ties in Semiconductors and Critical Minerals

What happened

India and the US have taken significant steps to enhance their cooperation in semiconductors, supply chains, and critical minerals. During the iCET meeting in New Delhi, led by India's National Security Adviser Ajit Doval and his US counterpart Jake Sullivan, the two nations launched a strategic semiconductor partnership.

Both countries agreed to work together to ensure a reliable supply of critical minerals , like lithium and rare earths, vital for clean energy technologies and other industries.

Why it matters

This collaboration is a game-changer for India’s semiconductor and ICT ecosystem. By partnering with the US, India aims to bolster its semiconductor manufacturing capabilities, which are crucial for defence, automotive, and telecommunications sectors.

• The US and India Semiconductor Industry Associations’ joint readiness assessment highlighted near-term opportunities and strategic long-term development plans. 

• Additionally, India’s approval of three semiconductor plant proposals, with an investment of ₹1.26 lakh crore, underscores its commitment to becoming a semiconductor powerhouse. 

• These projects, involving Tata Electronics, Taiwan's PSMC, and others, are set to boost India’s electronics manufacturing significantly.

The focus on critical minerals is equally important. As both nations work to secure essential minerals, they plan to co-invest in lithium projects in South America and rare earth deposits in Africa. This initiative aims to diversify and stabilize critical mineral supply chains, essential for various high-tech and green energy applications.

Zoom out

The new strategic semiconductor partnership and the push to secure critical mineral supplies highlight a shared vision for technological advancement and economic stability. The establishment of the Advanced Materials R&D Forum and joint efforts in mineral exploration further strengthen this alliance.

MIRCH MASALA

🏏  Virat Kohli Overtakes Shah Rukh Khan as India's Top Celebrity!

🌍 Earth's mysterious inner core behaviour threatens to change our day length!

🥑  Signs that you should not eat at a restaurant

👩‍❤️‍👨 Three ways that minimalism can improve relationships

📲 Is the dumb-phone replacing the smartphones?