Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Despite choppiness in various sectors, energy, auto, and pharma performed well, while metal and banking sectors ended lower; investors are advised to seek buying opportunities on dips as long as Nifty holds above 24,200, focusing on stock selection amid mixed sector trends and closely watching global indices, especially in the US, for further cues.

BUSINESS

Goyal Sets $50 Billion Export Target for Leather and Footwear Industry

What Happened

Commerce and Industry Minister Piyush Goyal has challenged India's leather and footwear industry to achieve $50 billion in exports by 2030. During a meeting with industry stakeholders, Goyal assured that the ministry will streamline quality control orders (QCOs) to simplify certification procedures.

Manufacturers have until June 30, 2024, to sell off old stock declared before August 1, 2023. Micro and small units and imports of soles for export production are exempted from these orders.

Why It Matters

India is the world's second-largest footwear producer, contributing 10.7% of global production. The leather and footwear sector significantly impacts the national economy, contributing around 2% of India's GDP and employing approximately 4.42 million people, predominantly young individuals and women.

However, exports of leather and related products fell by 3.64% to $1.05 billion in April-June of this fiscal year, and by about 10% to $4.28 billion in 2023-24. Goyal's ambitious target aims to revitalize the industry and position India as a global leader in leather and footwear exports.

Zoom out

The government's Indian Footwear and Leather Development Programme aims to bolster the sector by developing infrastructure, addressing environmental issues, attracting investments, generating employment, and boosting production.

Goyal's call for the industry to aim higher was met with participation from over 120 stakeholders, including major brands like Puma, Nike, Adidas, Reebok, Bata, and Reliance. 

BIG MONEY MOVES

New kids on the UPI block nudge PhonePe and Google Pay

PhonePe and Google Pay saw their UPI transaction shares dip slightly in June. PhonePe’s share dropped to 48.37% from 48.67%, while Google Pay slid to 36.76% from 37.18%. The UPI network processed 13.88 billion transactions, a 1% drop from May.

Axis Bank’s UPI transactions jumped 17% to 75 million, and Navi app’s transactions rose 20% to 35.7 million. Flipkart launched super.money, and Jio Financial Services introduced JioFinance. Paytm held steady at 8%, despite regulatory hurdles and a Q1 net loss of 8.39 billion rupees ($100 million). The big players might need to share their sandbox a bit more!

Oxfam Pushes for 8% Wealth Tax on Billionaires at G20 Summit 

Oxfam, a renowned NGO fighting for equality, is urging the G20 summit in Brazil to adopt an annual net wealth tax of at least 8% on extreme wealth, highlighting that the world's richest 1% amassed $42 trillion over the past decade — 36 times more than the wealth of the poorest half of the population.

Despite this surge, taxes on the ultra-wealthy have dropped to historic lows. The proposal to tax billionaires will be debated at the summit, with countries like France and Spain supporting it, while the U.S. opposes it. Oxfam warns of "obscene levels" of inequality and calls for global action to address this disparity.

BUSINESS

Mankind Pharma Buys Bharat Serums for ₹13,630 Crore

What happened

Mankind Pharma, a Delhi-based pharmaceutical company, has agreed to acquire Bharat Serums and Vaccines (BSV) from private equity firm Advent International for ₹13,630 crore. This deal includes a 100% stake in BSV, an enterprise specializing in women's health, fertility, and critical care.

The acquisition will be finalized after closing-related adjustments. Mankind Pharma's strategic move aims to position itself as a leader in the Indian women's health and fertility drug market, along with gaining access to high-entry barrier products in critical care.

Why it matters

This acquisition is a major milestone for Mankind Pharma, significantly boosting its presence in the women's health and fertility segments, which are expected to see strong global growth. BSV's speciality R&D platforms and complex product portfolio align with Mankind's vision of expanding into high entry barrier markets.

The deal also highlights the competitive landscape of the pharmaceutical industry, where companies are moving up the value chain through strategic mergers and acquisitions.

Zoom out

With a robust portfolio spanning acute and therapeutic areas, and a strong foothold in both metro and Tier 1 to 6 cities, this acquisition is expected to enhance Mankind's product offerings significantly. BSV's business will synergize with Mankind's existing portfolio, expanding EBITDA margins and solidifying its position as a market leader.

BSV, with revenues of ₹1,723 crore in FY24 and an annual growth rate of 21% over the last three years, brings a significant boost to Mankind's growth trajectory. This deal also reflects Mankind's commitment to innovative and specialized healthcare solutions, setting the stage for future growth and expansion in both domestic and emerging markets.

BIG PICTURE

Microsoft blames EU for global outage from faulty antivirus update

A faulty CrowdStrike antivirus update caused a global outage, disrupting flights and banking services. Microsoft blames the European Commission (EU) for the chaos, citing a 2009 agreement that required Windows to grant third-party security software kernel-level access.

This level of access, while promoting competition, led to vulnerabilities like the recent outage. In contrast, Apple restricts third-party software to user mode, preventing similar issues on Macs. Its EU commitments tie Microsoft's hands, whereas Apple's stricter controls shield its systems from such problems.

U.S. jobless claims drop amid labour market stability

The number of Americans filing new unemployment claims fell by 10,000 to 235,000 for the week ending July 20, as weather and temporary automobile plant closures' impacts waned. This exceeded economists' expectations of 238,000 claims.

Despite recent fluctuations, layoffs remain historically low. The decline in new claims follows a surge the previous week due to Hurricane Beryl and auto plant retooling. Continuing claims, a hiring indicator, decreased by 9,000 to 1.851 million. The unemployment rate reached a 2.5-year high of 4.1% in June. 

BUSINESS

Adani Energy Eyes $597 Million Share Sale to Rebound from Hindenburg Fallout

What happened

Gautam Adani's power transmission unit, Adani Energy Solutions Ltd., is gearing up to raise at least ₹50 billion($597 million) through a share sale. This marks the Indian conglomerate's first venture into public equity markets since a damaging report by a short-seller wiped away billions in shareholder value.

The company plans to raise the funds through a Qualified Institutional Placement (QIP) and aims to complete the sale by mid-August. This move follows the board's approval in May to raise up to ₹125 billion through various means.

Why it matters

This fundraising effort is a significant step towards recovery for the Adani Group, which was hit hard by accusations of fraud and corporate misconduct by US short-seller Hindenburg in early 2023. The report led to a massive rout, wiping over $150 billion off the conglomerate’s market value. While the group has largely bounced back, a successful QIP would signal strong investor confidence in Adani, who had to cancel a $2.5 billion share sale earlier under investor pressure.

Adani Energy aims to attract more institutional investors, including some from the US, through this share sale. This expansion of the investor base is also intended to draw more research analysts to cover the firm, enhancing its market visibility.

Zoom out

Adani Energy Solutions, India's largest private-sector power utility, operates over 21,100 circuit kilometres(ckm) of transmission lines. The company has ambitious plans to ramp up to 30,000 ckm by 2030, leveraging both organic and inorganic growth opportunities.

While the road ahead may still hold challenges, Adani's move to tap into public equity markets shows a strategic push towards resilience and growth. If they pull this off, it might be time to dust off those party hats in the boardroom!

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