Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: After initial volatility, Indian benchmark indices closed marginally higher on June 20. The market's focus now turns to the upcoming Union budget and monsoon progress. FII inflows strengthened due to lower US bond yields. Notable sector performances included Metal and Realty leading with over 1.80% gains, while profit booking impacted the Auto sector. Pharma lagged, and Chemical and Fertilizer stocks saw significant upticks of around 10-20%.

BUSINESS

Binance Returns to India with $2.25 Million Fine

What happened

Binance, the globe’s top cryptocurrency exchange, can now resume operations in India, but there’s a catch. After being suspended in December 2023 for ignoring India’s anti-money laundering rules, Binance must now pay a hefty $2.25 million fine. India’s Financial Intelligence Unit (FIU-IND) slapped Binance with the fine, citing its failure to comply with the Prevention of Money Laundering Act (PMLA) of 2002.

Binance was previously flagged for providing services to Indian clients without adhering to the necessary regulations. The fine and a stern warning to follow the rules came through a notice issued on December 28, 2023.

Why it matters

This is significant for several reasons. Firstly, Binance’s re-entry into India could shake things up for local crypto exchanges like WazirX and CoinDCX. Since India’s 30% tax on crypto earnings and 1% tax deducted at source on trades were introduced in 2022, these homegrown exchanges have seen their daily trading volumes plummet by up to 90%. Now, with Binance's vast reserves and diverse token offerings, traders might flock back to it, potentially stifling the recovery of Indian platforms.

Additionally, Binance has had its share of global controversies. In November 2023, its founder Changpeng Zhao pleaded guilty to money laundering charges in the US and stepped down as CEO, agreeing to a $4.3 billion settlement.

These incidents put Binance under a critical spotlight, making its compliance with Indian laws even more crucial. FIU-IND has made it clear that Binance needs to strictly follow the regulations this time around, which could set a precedent for the crypto industry in India.

Zoom out

Binance’s return to the Indian market is a double-edged sword. On one hand, its compliance and hefty fine could bring more legitimacy and structure to the crypto sector in India. On the other hand, it could spell trouble for local exchanges still reeling from stringent tax policies.

As Binance navigates its way back, the real test will be its adherence to Indian regulations and whether this move can foster a more robust and compliant crypto ecosystem. For traders and stakeholders, this development is one to watch closely, promising both opportunities and challenges in equal measure.

BIG MONEY MOVES

💰️ Nvidia tops Microsoft to become the world’s most valuable company

Nvidia has overtaken Microsoft to become the world's most valuable company, closing with a market cap of $3.34 trillion on Tuesday, surpassing Microsoft's $3.32 trillion. Apple ranks third with a $3.27 trillion market cap. Nvidia's stock soared by 3.5%, while Microsoft and Apple saw slight declines of 0.5%and 1.1%, respectively.

Known for its AI chips, Nvidia has seen its stock skyrocket by 174%this year, leading the tech-driven market rally. The company’s recent 10-for-1 stock split and a stellar quarter, with a 262% revenue jump and a 462% profit increase, highlight its dominance.

💸 India faces exodus of 4,300 millionaires in 2024 amid global wealth migration trends

The Henley Private Wealth Migration Report 2024 indicates that India will witness a notable departure of 4,300 millionaires this year, a decline from the previous year's figure of 5,100. This reflects broader global trends influenced by geopolitical tensions and economic uncertainties.

The United Arab Emirates emerges as a top destination for Indian millionaires, projecting a record net inflow of 6,700 wealthy migrants in 2024 due to its tax policies, golden visa programs, and luxurious lifestyle. The global trend sees a surge in millionaire migration, with destinations like the United States, Singapore, Canada, and Australia experiencing significant inflows, emphasising the economic impact of high-net-worth individuals.

BUSINESS

Accenture Lowers Revenue Forecast Again Amid Economic Uncertainty

What happened

Accenture, the global IT services powerhouse, has revised its revenue forecast for fiscal year 2024 once again. The company now expects full-year revenue growth to fall between 1.5% and 2.5 %, a slight decrease from its previous forecast of 1% to 3%.

This adjustment reflects the ongoing economic uncertainty that has prompted clients to tighten their belts on consulting services. Interestingly, despite this cautious outlook, Accenture's shares saw a 6.5% jump in premarket trading on the New York Stock Exchange.

Why it matters

Accenture's performance is often seen as a bellwether for the IT industry, especially in India, where a significant portion of its workforce is based. The company's revised forecast suggests a challenging environment ahead for Indian IT firms as well. The first quarter of fiscal year 2024-25 earnings season kicks off on July 11, with Tata Consultancy Services (TCS) leading the pack.

Accenture’s Q3 revenue stood at $16.5 billion, a 1% decline from the previous year, with new bookings reaching $21.1 billion, marking a 22% increase. However, the operating margin remained flat at 16.3%. Last month, Accenture’s competitor Cognizant also reported weaker-than-expected results, citing reduced discretionary spending by clients. 

Zoom out

Accenture's revised outlook highlights the broader challenges faced by the IT sector amid global economic uncertainties. Despite the hurdles, the company’s push into generative AI, with over $900 million in new AI bookings this quarter, signals a strategic pivot towards emerging technologies.

Accenture aims to double its data and AI workforce from 40,000 to 80,000 by the end of FY26, betting on AI as a catalyst for future growth. As businesses navigate these turbulent times, Accenture's adaptability and strategic investments could position it well for long-term success, even if the immediate future looks rocky.

BIG PICTURE

Indian funds in Swiss banks hit a 4-year low at ₹9,771 crores, decline 70%

Indian funds in Swiss banks dropped significantly by 70% in 2023, reaching a four-year low of ₹9,771 crore, according to official data from Switzerland's central bank. This decline, seen for the second consecutive year, was driven by a sharp fall in funds held through various financial instruments.

However, these figures do not reflect the amount of alleged black money. Switzerland actively supports India in combating tax fraud and evasion, with an automatic exchange of financial information in place since 2018.

Allied Blenders and Distillers Ltd. unveils IPO price range

Allied Blenders and Distillers Ltd., a major player in Indian-made foreign liquor, is launching its Initial Public Offer (IPO) at ₹267-281 per share. The IPO, with a total value of ₹1,500 crore, opens on June 25 and closes on June 27. The company plans to utilise ₹720 crore from the fresh issue for debt repayment and the rest for general corporate purposes.

With a strong market share of 11.8% in the Indian whisky market and a revenue growth of 17.2% in FY23, Allied Blenders presents a promising investment opportunity.

BUSINESS

Coal India Partners with Private Sector for Mine Revival

What happened

Coal India has handed over 23 previously discontinued underground mines to the private sector. This move is part of a revenue-sharing model due to the mines' financial non-viability for the state-owned company. The cumulative peak-rated capacity of these 23 mines is 34.14 million tonnes, with total extractable coal reserves estimated at 635 million tonnes.

Originally, 34 mines with good-quality coal reserves were identified but were halted due to financial constraints. Coal India then decided to invite private players to take over these mines, sharing a portion of the revenue with them. Non-disclosure agreements have been signed with the private operators, with contracts extending up to 25 years and a minimum revenue share of 4%.

Why it matters

This strategic move by Coal India is significant as it allows the company to leverage private sector efficiency and investment to revive its financially non-viable mines. The private operators are granted the freedom to use their preferred technology and mining machinery, potentially increasing productivity. They can also utilise existing infrastructure without additional payments, reducing startup costs. 
 
The move is expected to stimulate the mining sector, generate employment, and ensure a steady supply of coal to meet industrial demand.

• By auctioning coal at market-driven prices, Coal India aims to enhance transparency and maximize revenue.

• The inclusion of coal gasification and liquefaction in the revenue-sharing model further diversifies the usage of coal, making it more versatile and valuable.

Zoom out

Coal India's initiative to transfer 23 underground mines to the private sector on a revenue-sharing basis is a proactive step towards revitalizing its non-viable assets. The move is poised to benefit both Coal India and the private operators, ensuring a more robust supply chain for coal.

As the company identifies more mines for similar arrangements, it opens up new opportunities for private participation, potentially transforming the landscape of India's coal mining industry

MIRCH MASALA

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