Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian benchmark indices initially dipped on Tuesday but rebounded to close higher, contrasting with the varied trends in global markets as they await upcoming inflation data releases in Europe and the US later this week. Notably, the realty and IT sectors saw positive movement, whereas the Oil & Gas and PSU Banks sectors faced a decline

BUSINESS

GIFT City Officials Seek RBI's Nod for Dollar Payment System

What happened

GIFT City officials are making waves in the financial scene, seeking guidance from the Reserve Bank of India (RBI) to revolutionize their dollar payment system . Currently facing delays in receiving dollars from overseas transactions, GIFT City envisions a new mechanism similar to the Real-Time Gross Settlement System (RTGS).

The proposal involves establishing a single 'settlement bank' in GIFT City, streamlining dollar transactions for enhanced efficiency.

Why it matters

The move aims to tackle the sluggish process of receiving dollars in GIFT City after transactions abroad. The proposed RTGS-like system, centred around a 'settlement bank,' promises a swift and efficient avenue for handling dollar balances.

The Clearing Corporation of India (CCIL) is speculated to play a key role, leveraging its expertise to facilitate seamless one-leg US dollar transactions. This shift aligns with GIFT City's ambition to expedite and modernize dollar-related dealings.

In June 2023, the RBI greenlit banks in the International Financial Services Centre (IFSC) to offer non-deliverable derivatives contracts using rupees. This move aimed to boost the onshore rupee non-deliverable derivatives contract market, providing flexibility for residents in hedging activities.

The recent discussions on the dollar payment system signal a strategic step forward, reinforcing GIFT City's commitment to staying at the forefront of financial innovation .

Zoom out

The development coincides with reports of the Abu Dhabi Investment Authority's plan to pioneer a $4.5 billion fund for Indian investments through GIFT City, marking a pivotal moment in the hub's global financial standing. This surge in GIFT City's prominence is attracting investments from various startups as well with Paytm recently announcing a significant ₹100 crore.

BIG MONEY MOVES

Alibaba powers up Chinese AI firm Moonshot AI with $2.5 billion investment

Alibaba, along with Tencent and others, is leading a groundbreaking $2.5 billion investment in Moonshot AI, a Chinese AI startup focusing on generative AI, akin to ChatGPT. The funding, valuing Moonshot at $2.5 billion, underscores Alibaba's commitment to growth in the AI sector. Moonshot AI, founded in March 2023, has quickly risen, launching its Kimi chatbot and a developer platform. Despite regulatory scrutiny , Alibaba's move aligns with its push into transformative technologies, such as AI and cloud services.

Vodafone Idea plans ₹45,000 crore fundraising blitz for 5G expansion

Vodafone Idea's board greenlighted a massive fundraising of up to ₹45,000 crore through equity and debt. The telecom giant plans to secure ₹20,000 crore via equity or equity-linked instruments, with the remaining funds sourced through debt. Shareholder approval is anticipated by April 2, 2024, and the equity raise is expected in the next quarter. The funds will propel 4G expansion, 5G rollout, and capacity enhancement, enhancing Vodafone Idea's competitive stance . 

BUSINESS

Government Set to Boost BSNL's Competitiveness Against Private Operators

What happened

Bharat Sanchar Nigam Ltd (BSNL) is contemplating a strategic overhaul. Government officials disclosed that measures under consideration include network upgrades , cost rationalization of staff, and an intensified focus on sales and distribution.

• BSNL, with approximately 59,000 employees, is grappling with high manpower costs despite a significant workforce reduction through voluntary retirements. 
  
  

• Even with a 38.4% staff cost as a percentage of total revenue in FY23, BSNL faces stiff competition from private players with significantly lower employee costs. For instance, Reliance Jio's employee cost is a mere 1.8% of its revenue.

Why it matters

While the company reported a narrower loss in FY23 compared to FY22, the looming challenge lies in catching up with private players in terms of both cost efficiency and technological advancements.

However, BSNL faces an additional challenge as it lags behind in the 4G race, losing subscribers to rivals like Jio and Airtel who have almost completed their 5G rollouts.

•  Despite posting an operational profit of ₹1,559 crore on revenue of ₹20,699 crore in FY23, BSNL ended the fiscal year with 103.5 million users, down from 113.6 million in FY22.

The government's efforts to enhance BSNL's productivity include a Memorandum of Understanding (MoU) with the Department of Telecommunications (DoT) and the implementation of a Key Performance Indicators (KPI)-based management system.

Zoom out

The government, recognizing the pivotal role of BSNL in the telecom sector, has implemented revival packages and infused fresh capital to enhance its operational capabilities. The recent allotment of 4G/5G spectrum with a total outlay of around ₹89,047 crore aims to position BSNL competitively in the evolving landscape.

BIG PICTURE

🦟  Takeda Partners with Biological E. to Scale Up Dengue Vaccine Production

Japanese pharmaceutical company Takeda will boost production of its dengue vaccine, Qdenga, through a partnership with Indian vaccine maker Biological E. By 2030, the companies aim to provide doses for national immunization programs in endemic countries .

Biological E. plans to increase manufacturing capacity to 50 million doses annually, contributing to Takeda's goal of producing 100 million doses per year within a decade. While available in countries like Indonesia and Brazil, the vaccine is not yet approved for use in India.

📈  Tata Capital's ambitious plan targets 1,000 branches, accelerates AI adoption

Tata Capital is all set to elevate its branch count from 700 to 1,000 by March 2025, emphasising geographical expansion. With assets totalling nearly $18 billion , the financial services company plans to intensify its focus on AI, utilizing it for marketing and credit processing. CEO Rajiv Sabharwal highlighted the current AI implementation, answering over 90% of customer queries.

BUSINESS

Ford Planning for an Electric Comeback in India

What happened

Global auto major Ford Motor is gearing up for a comeback in the Indian market, with an electrifying twist. Sources reveal the company's focus on hybrid and electric vehicles, with plans to utilize its Chennai manufacturing facility for production.

This strategic move comes amid a recalibration of Ford's electric vehicle strategy , reacting to a slowdown in EV sales attributed to high prices and limited charging infrastructure.

Recently, Ford faced a hiccup as it halted shipments of its F-150 Lightning plug-in pickup due to an undisclosed quality issue. The move follows production cuts of the battery-powered model, aligning with the company's shift towards boosting gas-electric hybrid models.

Why it matters

Ford's return to India takes place against the backdrop of a shifting automotive landscape. With EV sales facing challenges globally, the automaker's recalibration reflects the industry's need to adapt. The decision to focus on hybrid models aligns with a pragmatic approach, addressing both consumer preferences and market dynamics.

• In the broader context, a recent report anticipates a surge in Electric Vehicle (EV) sales in India, projecting a Compound Annual Growth Rate (CAGR) of 35%. 
  
  

• By 2032, annual volumes are expected to reach a staggering 27.2 million units. 
  
  

• The Indian government's commitment to nurturing the indigenous EV ecosystem is evident through the approval of a $3.5-billion Production-Linked Incentive (PLI) scheme, fostering the development of the EV supply chain.

Zoom out

Ford's re-entry into the Indian market signifies not just a return but a strategic adaptation to the evolving automotive landscape. As the company navigates the challenges in the EV market, the decision to use the Chennai facility for production underscores a commitment to local manufacturing.

MIRCH MASALA

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🥗 Anant Ambani and Radhika Merchant's pre-wedding extravaganza features 2,500 unique dishes