Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Stock markets closed at all-time highs on Thursday, with the Nifty surpassing 22,950 and the Sensex climbing 1,200 points, driven by strong performances in the Auto and Banking sectors. Large-cap and Midcap stocks led the gains, while Pharma stocks lagged behind.

BUSINESS

Major Ad Violators of FY24: Mamaearth, Patanjali, and Firstcry

What happened

In FY24, the Advertising Standards Council of India (ASCI) identified Mamaearth parent Honasa Consumer Pvt. Ltd as the top advertising violator with 187 non-compliant ads. Following closely were sports betting companies WinDaddy and Fun88 India, each with 98 violations. Honasa, which also manages brands like Dr. Sheth’s Skin and Hair Clinic and Aqualogica, topped the list, surpassing even Patanjali Ayurved Ltd. 

Patanjali had 28 violations, promoting products like DantKanti toothpaste and Ayurvedic medicines. Other notable violators included Urbanic's parent company Maysquare Lifestyle Pvt. Ltd, Rummy24, and Renee Cosmetics.

Why it matters

This crackdown by ASCI highlights the increasing issue of misleading advertisements, especially in the digital space. Digital platforms accounted for 85% of complaints, reflecting the shift in advertising mediums. The majority of violations involved betting and gambling ads, overtaking healthcare ads known for false claims of magical remedies.

Notably, over 1,300 illegal betting ads were reported, alongside 150 liquor and e-cigarette promotions. The rise in digital ads, which are less regulated than traditional media, exacerbates the problem, with many ads failing to include legally required information such as registration numbers and QR codes.

Zoom out

The surge in advertising violations calls for stricter oversight, particularly in the digital realm. The government's recent initiative to form a three-ministerial task force to address these issues indicates a step towards better regulation.

As brands increasingly turn to digital platforms, maintaining ethical advertising standards becomes crucial to protect consumers from deceptive claims. With healthcare ads booming post-pandemic and more businesses advertising online, regulatory bodies need to keep pace with these changes to ensure compliance and consumer safety.

BIG MONEY MOVES

OYO withdraws IPO plans, eyes refinancing of $450 million loan

Oravel Stays Ltd, the parent company of OYO, has pulled its draft red herring prospectus (DRHP) from SEBI and plans to refile after refinancing its $450 million loan. The Softbank-backed firm aims to complete refinancing in the next quarter through dollar bonds, led by JP Morgan, with an estimated interest rate of 9-10% per annum. OYO had initially filed for an IPO in September 2021 to raise ₹8,430 crore.

Founder Ritesh Agarwal revealed OYO's FY23 operating revenue of ₹5,463 crore, a 14% increase, and reduced losses by 38% to ₹1,286 crore.

Warburg Pincus arm sells 3.5% stake in Apollo Tyres

White Iris Investment, a subsidiary of Warburg Pincus, sold a 3.5% stake in Apollo Tyres. The transaction involved 22.4 million shares priced at ₹477.35 apiece, resulting in a total gain of ₹1,073 crore. Despite the shares being priced at a 3.97% discount to the previous day's closing price, the deal garnered interest from investors like ICICI Prudential and Morgan Stanley, who acquired stakes in Apollo Tyres at the same price band.

This divestment aligns with Apollo Tyres' recent financial updates, showing a 13.7% drop in net profit but a reduction in gross debt from ₹56 billion to ₹39 billion. 

BUSINESS

Metropolis Healthcare Expands Horizons: Aiming for 1,000 Towns

What happened

Metropolis Healthcare, a leading diagnostic chain based in Mumbai, is set to expand its reach to 1,000 towns within the next two years. Currently strong in 600 towns, the company plans to extend its services through both organic growth and strategic acquisitions.

CEO Surendran Chemmenkotil emphasized targeting northern and eastern states like Uttar Pradesh, Madhya Pradesh, Assam, Telangana, and Andhra Pradesh. Metropolis operates in 23 Indian states and has a presence in South Asia, Africa, and West Asia.

Why it matters

This expansion highlights Metropolis Healthcare's aggressive growth strategy in the fragmented diagnostics industry, which is expected to nearly double to $25 billion by FY28 from $13 billion in FY23. The company’s move to penetrate tier 3 and tier 4 towns, along with its focus on underserved regions like Assam and the northeast, opens up vast opportunities.

With a capital expenditure of ₹70 crore for organic growth and plans for 2-3 bolt-on acquisitions in FY25, Metropolis aims to set up 25 new labs this year, enhancing its footprint and service capabilities.

Zoom out

Metropolis Healthcare's expansion plans underscore its commitment to becoming a dominant player in the diagnostics industry. With 199 labs and 4,150 collection centres, the company is well-positioned to leverage its strengths and explore new markets. The company's Q4FY24 revenue saw an 11% y-o-y rise to ₹313 crore, with profits increasing by 8% to ₹36.1 crore, indicating a promising future ahead.

BIG PICTURE

Google to manufacture Pixel phones and drones in Tamil Nadu

Google is in advanced talks with Foxconn to manufacture Pixel smartphones in Tamil Nadu, aiming to boost its presence in India's premium smartphone market. Additionally, Google's parent company Alphabet will begin producing drones through its subsidiary Wing LLC in the state. This move follows a recent meeting between a Tamil Nadu delegation and Google executives in the U.S.

Tamil Nadu, already a major hub for Apple’s manufacturing, is emerging as a key player in advanced electronics manufacturing.

LinkedIn India and Satya Nadella fined for violating corporate norms

The Ministry of Corporate Affairs has fined LinkedIn India, Microsoft CEO Satya Nadella, and eight others a total of Rs 27,10,800 for violating Significant Beneficial Owner (SBO) norms under the Companies Act, 2013. The Registrar of Companies found that LinkedIn India and its officers failed to identify the SBOs, resulting in penalties of Rs 7 lakh for LinkedIn India and Rs 2 lakh each for Nadella and LinkedIn CEO Ryan Roslansky. 

BUSINESS

Adani Ports Charts a $3 Billion Course for Global Expansion

What happened

Adani Group is set to invest $3 billion in expanding its global port capacity over the next 3-5 years. This investment aims to acquire new ports and form strategic partnerships, especially in the Middle East, Southeast Asia, Africa, and the Mediterranean.

The focus is on strengthening Adani Ports' position along the vital trade corridor connecting India to Europe via Central and West Asia. The company targets a significant increase in cargo traffic, capitalising on the rising demand for iron ore and coal imports and the export of finished goods.

Why it matters

Adani Ports aims to increase its overall port capacity from 600 million metric tonnes per annum (MMT) to 800 MMT in two years, primarily through international acquisitions. By acquiring major ports in Europe, Africa, and Southeast Asia, the company plans to boost the contribution of its overseas operations to its total revenue from 10% to around 20-25% in the next three years.

This aligns with India's vision of enhancing trade ties with Europe, West Asia, and Africa, as seen in recent agreements establishing the India-Middle East-Europe Economic Corridor. This corridor will improve transportation and communication links between Europe and Asia, offering an alternative to the Suez Canal.

Zoom out

Currently, Adani Ports is India’s largest private port operator, managing 15 ports and terminals and handling a record domestic cargo volume of 420 MMT in FY24. This volume represents about 25% of India’s overall cargo volume of approximately 1,540 MMT. The company's international operations span countries like Israel, Sri Lanka, Indonesia, Tanzania, and Australia, with ongoing projects in Vietnam, Malaysia, and the Philippines.

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