Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: The markets edged up by nearly half a percent, continuing the trend. After a flat start, the Nifty saw selective buying in the final hour, closing near the day's high at 24,770. FMCG, pharma, and metal sectors gained, while profit-taking in banking and financials limited the upside.

TOP STORIES

GST on Health Insurance Fuels Affordability Debate

What happened

Finance Minister Nirmala Sitharaman faced calls to scrap the Goods and Services Tax (GST) on health and life insurance. Despite her clarifying that these taxes existed even before GST, the debate highlighted India's ongoing struggle with insurance affordability.

With a revenue of ₹3,274 crore last year, the tax on medical insurance remains a significant concern, especially as high medical inflation and claim rejections add to the strain. The GST of 18% on insurance premiums has become a hefty burden, impacting policyholders and deterring many from securing coverage.

Why it atters

India’s insurance penetration is lagging behind, with around 40 crore people lacking any financial protection for health. High premiums, exacerbated by GST, make insurance less accessible, particularly for the elderly and low-income groups. According to a report, insurance premiums can increase by 10 to 20% annually, a tough pill to swallow for many.

Experts argue that reducing or removing GST could lower premiums and encourage more people to buy insurance, ultimately improving health security. With India’s low insurance penetration, reducing this tax could serve as a crucial step towards broader coverage.

Conclusion

As the debate continues, the question remains: should the government rethink the GST on health insurance? While a complete tax exemption might be unlikely, adjusting the rate could ease the financial burden and make insurance more affordable. As India strives to enhance its healthcare infrastructure, addressing this tax issue could pave the way for better health coverage and financial protection.

PAISON KA KHEL

L&T Finance and Cred team up for lightning-fast loans

L&T Finance (LTF) has joined forces with Cred to offer unsecured personal loans to members with stellar credit scores. In partnership with digital lender Newtap Finance, this deal promises quick loan approvals, flexible repayment options, and competitive interest rates—perfect for those who like their credit fast and easy.

Kunal Shah, founder of Cred, is excited about empowering high-credit members with loans from one of India’s top lenders. 

• LTF's loan book is already looking healthy, with a 13% growth, hitting ₹88,717 crore by June 2024. 
  
  

RIL makes ₹1,000 crore bet to boost coal bed methane production

Reliance Industries (RIL) is ready to dig deep—literally—with a ₹1,000 crore investment to stop the slide in coal bed methane (CBM) production at its Sohagpur blocks in Madhya Pradesh. With output dwindling to 0.64 million standard cubic meters per day (mscmd) from a peak of 1 mscmd in FY21, RIL plans to drill new wells and ramp up production to 1 mscmd over the next three years. 

The company's efforts are already showing promise, with the first 20 wells from a new multi-lateral drilling program boosting output. 

TOP STORIES

NCLT Clears the Way for ICICI Securities’ Delisting Plan

What happened

The National Company Law Tribunal (NCLT) has ruled in favour of ICICI Securities, allowing it to proceed with its plan to delist and merge with its parent company, ICICI Bank. This decision came after minority shareholders, including investor Manu Rishi Gupta and Quantum Mutual Fund, filed petitions opposing the move.

These dissenting shareholders, who hold a tiny fraction of ICICI Securities' equity, argued that the delisting and the proposed share swap would harm their interests.

The Backstory

In June 2023, ICICI Securities announced its intention to delist and become a wholly-owned subsidiary of ICICI Bank. Shareholders approved this plan in March 2024, with 72% voting in favour. The deal involves exchanging 100 shares of ICICI Securities for 67 shares of ICICI Bank. Despite this, concerns about the valuation and fairness of the share swap persisted among some investors.

The Impact

The NCLT's decision is crucial for ICICI Securities as it clears a significant hurdle in its merger plans. The delisting will simplify the corporate structure, integrating ICICI Securities directly with ICICI Bank. However, the controversy highlights ongoing issues in shareholder rights and the fairness of such deals.

Plus, this case sheds light on the broader issue of stock valuations and shareholder influence in major corporate decisions. The share swap, seen as disadvantageous by some, reflects the ongoing debate about how to equitably handle mergers and delistings.

GLOBAL NAZARA

Puma races to the top with new sports focus

Puma is shifting into high gear, aiming to lead as a sports and performance brand. After a strong 10% sales increase last year, hitting ₹3,274 crore, Puma is boosting its game by focusing more on sports gear. The brand has teamed up with the Athletics Federation of India and the Indian Olympic Association to provide top-notch equipment to over 400 athletes. 

Royal Enfield ready for growth with fresh models and first-time buyers

Royal Enfield is banking on fresh launches and first-time buyers to boost its sales. With new models like the Hunter 350, Himalayan, and Guerrilla 450 hitting the market, the company is targeting younger riders and newcomers to the biking world.

The company is eyeing young, first-time riders with the Hunter 350, their most affordable option at ₹1.5 lakh, which is already attracting plenty of attention. 

TOP STORIES

Highdell Sells ₹1,300 Crore Stake to Kalyan Jewellers' Promoter

What happened

Highdell Investment is cashing out a bit of its glittering investment in Kalyan Jewellers. On August 21, the foreign investor decided to sell a 2.36% stake, translating to 2.42 crore equity shares, to Kalyan’s promoter, Trikkur Sitarama Iyer. The deal, priced at ₹535 per share, totals a substantial ₹1,300 crore.

As a result, Kalyan Jewellers’ promoter and promoter group will boost their stake from 60.59% to 62.95%. Following the news, Kalyan Jewellers’ shares ended the day 2.6% higher, closing at ₹556 apiece.

Why it matters

This transaction isn't just about the exchange of crores; it shows the confidence of the promoters in the company's growth trajectory. Over the past year, Kalyan Jewellers has been a shining star on the BSE, delivering a whopping 149.56% return, compared to a more modest 24.06% rise in the Sensex. 

• The company’s strong performance, including a 24% year-on-year jump in net profit to ₹177 crore in the June quarter and a 26.5% rise in revenue to ₹5,535.5 crore, reinforces its bullish outlook. 

With plans to make its online subsidiary, Candere, wholly owned, Kalyan is clearly not resting on its laurels.

Final words

Highdell’s partial exit from Kalyan Jewellers might seem like a golden handshake, but for the company, it’s an opportunity to consolidate its ownership and continue its ambitious expansion. With the stock turning into a multibagger over the last three years, advancing nearly 787%, Kalyan Jewellers seems well-poised to keep shining in the crowded jewellery market.

MIRCH MASALA

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