Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian markets stayed volatile but closed with slight gains, ending at 22,586 after a calm start and mixed sector trends. FMCG and realty sectors saw gains, while metal and banking sectors lagged, leading to a flat market breadth overall.

BUSINESS

RBI Approves Record Dividend for Centre in FY24

What happened

In its 608th meeting held in Mumbai, the Reserve Bank of India (RBI) made headlines by approving a record dividend of ₹2.11 lakh crore for the Central government for the financial year 2024. This staggering amount represents a jaw-dropping 141% increase from the previous fiscal year's dividend of ₹87,416 crore. The move, reported earlier by ET, is a significant boost for the Centre, aiding it in meeting its fiscal deficit target for the fiscal year 2025.

Why it matters

The unprecedented dividend is anticipated to assist the Central government in meeting its fiscal deficit goal of 5.1% of GDP for the fiscal year 2025. 

• This dividend, disbursed in May 2024, will be included in the government's accounts for FY25. 
  
  

• Additionally, it is expected to enable the government to reduce its gross borrowing projection of ₹14.13 trillion for FY25, thereby helping to decrease borrowing costs.

One major factor contributing to this bumper dividend is the notable rise in interest earnings from the RBI's foreign exchange assets, fueled by aggressive interest rate hikes by the US Federal Reserve. Additionally, the contingency risk buffer (CRB) has been increased to 6.5% from the previous 6%, signalling prudent risk management strategies by the RBI.

Zoom out

The RBI's decision to transfer such a substantial dividend to the Centre not only underscores the central bank's financial strength but also has broader implications for the economy. Experts predict that this surplus transfer will provide a significant boost to the Centre's resource envelope in the upcoming fiscal year, potentially leading to enhanced expenditures or sharper fiscal consolidation.

BIG MONEY MOVES

IPL insurance claims surge to ₹150 crore

This year's IPL has seen a spike in insurance claims amounting to ₹ 150 crore due to rain-affected matches and player injuries. The tournament, which secured ₹10,000 crore in insurance from New India Insurance, National Insurance, and United Insurance, faced significant disruptions. Matches involving Gujarat Titans, Kolkata Knight Riders, Rajasthan Royals, and Sunrisers Hyderabad were hit by rain, leading to washouts.

With the tournament now in the qualifiers, rain delays remain a concern. Claims are expected to push insurance premiums higher for next year's IPL.

DSFL's sweet success: Hits ₹1,000 crore mark

Dharampal Satyapal Foods Ltd. (DSFL), the confectionery division of DS Group, reported a sales turnover exceeding ₹1,000 crore in FY24. Achieving a compound annual growth rate (CAGR) of over 20% over the past three years, DSFL has outpaced the industry’s 9% growth. 

Aiming for ₹ 5,000 crore in sales over the next five years, DSFL plans to grow organically and through acquisitions. The company, which spent ₹ 100 crore on advertisements in FY24, recently acquired Bengaluru-based chocolate brand LuvIt.

BUSINESS

BCCI and Wonder Cement Strike ₹ 250 Crore IPL Sponsorship Deal

What happened

The Board of Control for Cricket in India (BCCI) has inked a ₹250 crore deal with Wonder Cement, making it the official umpire partner for the Indian Premier League (IPL) from 2024 to 2028. Wonder Cement replaces Paytm and joins other major sponsors like Tata Sons, My11Circle, AngelOne, RuPay, and Ceat.

This agreement will start with the IPL 2024 play-offs and will extend through the next five seasons, significantly boosting Wonder Cement's brand visibility across the country.

Why it matters

This sponsorship is a major score for Wonder Cement, enhancing its national presence through one of the most-watched sports leagues globally. 

• The deal places Wonder Cement in the elite company of high-profile sponsors. Tata Sons, for instance, shelled out ₹2500 crore for the IPL title sponsorship, while My11Circle committed ₹625 crore, AngelOne ₹410 crore, Ceat ₹240 crore, and RuPay ₹ 210 crore. 
  
  

• These investments underline the IPL's massive marketing appeal. With the sports sponsorship revenue in India rising by 24% to ₹ 7,345 crore in 2023, the IPL's contribution alone surpassed ₹3,000 crore, reflecting its dominance in sports marketing.
  

Zoom out

For Wonder Cement, this deal is not just about cricket; it's a strategic move to cement its brand in the minds of millions. Promoted by the RK Group of Rajasthan, Wonder Cement is already a top player in the North Indian cement market, recording a net profit of ₹250 crore and revenue of ₹6,020 crore in FY23. This partnership with the IPL will likely boost its brand recognition and market share further. 

BIG PICTURE

IIT Madras and Shell India launch energy research centre

Indian Institute of Technology Madras (IIT Madras) and Shell India have joined forces to establish the Shell IITM Centre for Energy Research (SICER). This five-year partnership aims to advance energy sector technologies through research, development, and the commercialisation of innovations.

The initiative will also support energy startups and foster knowledge exchange through the Shell Chair Professorship, with Satyanarayanan Seshadri appointed as the first chair professor.

Disney sells 30% stake in Tata Play to Tata Group

Disney has finalized a deal to sell its minority stake in Tata Play, a subscription television broadcaster, to Tata Group. This move, valuing Tata Play at approximately $1 billion, allows Disney to focus on merging its Indian unit with Mukesh Ambani's media arm.

The sale comes amidst a significant shakeup in India's media landscape, with Disney also signing a binding agreement to merge its India Unit with Viacom 18 Media Pvt, creating an $8.5 billion entertainment giant. 

BUSINESS

Jubilant FoodWorks to Open 5,500 Domino’s Pizza Stores Globally

What happened

Jubilant FoodWorks Ltd (JFL), the master franchisee of Domino’s Pizza has announced ambitious expansion plans. The company intends to grow its Domino’s Pizza presence from the current 2,793 outlets to over 5,500 stores across six countries, including India, Turkey, Bangladesh, Sri Lanka, Azerbaijan, and Georgia.

This announcement came alongside their recent acquisition of DP Eurasia, enhancing their footprint in Turkey and Georgia. In India, JFL is on the brink of operating 2,000 stores, currently standing at 1,995 outlets across 421 cities.

Why it matters

This expansion strategy signifies a major leap for JFL, positioning it not just as India's largest food service company but as a dominant player in emerging markets. The target to open over 5,500 stores underscores the company’s confidence in the growth potential of these regions. In India alone, the goal has been upped from 3,000 to 4,000 stores, reflecting robust market demand. 

The company's latest earnings reveal a stellar performance with a 23.9% increase in revenue to ₹1,572.8 crore and a whopping 632% jump in profit to ₹208.9 crore, thanks to strategic acquisitions and operational improvements. These financial gains demonstrate the effectiveness of JFL’s strategies and their potential to drive growth.

Zoom out

JFL's plan to double its global Domino’s footprint is a bold move that could reshape the food service landscape in several emerging markets. Their impressive financial results and strategic initiatives highlight their readiness to tackle this ambitious expansion. As JFL continues to enhance its regional infrastructure and refine its brand proposition, the future looks promising for Domino’s fans in these markets. 

MIRCH MASALA

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