Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Following a recent surge, the Indian market showed mild consolidation as uncertainty prevails with the upcoming election. The BSE Sensex dropped 220 points to 75,170, and the NSE Nifty50 to 22,868, reflecting caution in the market.

BUSINESS

LIC Dips a Toe in the Health Insurance Pool

What happened

The Life Insurance Corporation (LIC) is making waves by considering a dive into the health insurance sector. LIC Chairman Siddhartha Mohanty recently revealed that the company is evaluating potential acquisition opportunities to facilitate this expansion. This move aligns with a government proposal to allow composite insurance companies, which could potentially be enabled by amending the Insurance Act of 1938. 

Currently, insurers can't offer life, general, and health insurance under one roof due to regulatory constraints. The push for composite licenses is seen as a way to reduce costs and regulatory burdens for insurers.

Why it matters

LIC's potential foray into health insurance could significantly impact the Indian insurance market. With India's health insurance coverage notably under-penetrated—only 2.3 crore health insurance policies cover about 55 crore people as of the end of 2022-23—LIC's entry could be a game-changer. 

Government and regulators are advocating for increased issuance of health insurance policies, and LIC's move could catalyse growth in this sector. The prospect of composite licensing also offers exciting benefits: it can cut costs, simplify compliance, and provide consumers with more value through bundled policies that cover life, health, and savings. This change could boost insurance reach and awareness in India, making insurance more accessible and affordable for the masses.

Zoom out

LIC's interest in health insurance isn't just a splash; it's a potential tidal wave for the industry. With total income for the quarter rising to ₹2,50,923 crore and first-year premium income improving to ₹13,810 crore, LIC's financial muscle could drive substantial growth in the health insurance market. As LIC eyes this new pool, the insurance landscape in India might soon witness a refreshing wave of change.

BIG MONEY MOVES

Reliance strikes oil deal with Rosneft in roubles

Reliance Industries has inked a one-year deal with Russia's Rosneft to buy at least 3 million barrels of oil monthly, paid for in roubles. This agreement, driven by President Putin's push for alternative payment systems, helps Reliance secure discounted oil amid Western sanctions.

India, now a major buyer of Russian crude, benefits from this shift as the world's third-largest oil importer. Payments will be processed through HDFC Bank and Gazprombank.

Coal India ventures into coal-to-chemicals business

Coal India has launched a new subsidiary, Bharat Coal Gasification and Chemicals Ltd (BCGCL), focusing on the coal-to-chemicals sector. Coal India holds a 51% stake in BCGCL, with Bharat Heavy Electricals Ltd (BHEL) owning the remaining 49%. This joint venture, cleared by NITI Aayog and DIPAM, aims to produce ammonia, nitric acid, and ammonium nitrate.

Additionally, Coal India signed an MoU with GAIL to establish a coal-to-synthetic natural gas project in Burdwan, with an estimated cost of ₹13,052 crore.

BUSINESS

Indian Fertilizer Industry Set to Blossom to ₹ 1.38 Lakh Crore by 2032

What happened

The Indian fertilizer industry is on a robust growth trajectory, expected to reach a market size of ₹ 1.38 lakh crore by 2032, with a Compound Annual Growth Rate (CAGR) of 4.2 % from 2024 to 2032. This growth underscores the sector's vital role in supporting India's agricultural productivity and food security.

In 2023, the Indian fertilizer market size stood at ₹ 94,210 crore, driven by increased agricultural demands and strategic governmental interventions. Fertilizer production in FY24 was recorded at 45.2 million tonnes, reflecting the Ministry of Fertilizers' successful policies.

Why it matters

Government initiatives like direct income support schemes from both central and state governments have bolstered farmer liquidity, enhancing their ability to invest in fertilizers. Programs such as PM-KISAN and PM-Garib Kalyan Yojana have received endorsements from the United Nations Development Programme for their contributions to food security.

Zoom out

Aligned with the Atmanirbhar Bharat initiative, the industry is decreasing dependency on imports, with significant reductions in urea, DAP, and NPK imports in FY24. Initiatives like 100% Neem coating on subsidized urea and advancements in nano agricultural inputs highlight India's strides towards self-sufficiency and environmental sustainability in the fertilizer sector. 

BIG PICTURE

📈 Apple's iPhone sales soar 52% in China

In April, Apple witnessed a remarkable 52% surge in iPhone sales in China compared to the previous year, rebounding strongly from earlier sluggish performance amidst tough competition from Huawei. March also saw a notable 12% increase following a 37% sales dip earlier in 2024. These numbers reflect Apple's resilience in the high-end smartphone market in China.

Overall smartphone sales in the country rose by 25.5% to 22.7 million units in April, as reported by the China Academy of Information and Communications Technology (CAICT).

📡 T-Mobile acquires U.S. cellular operations in $4.4 billion deal

T-Mobile announced it will purchase U.S. Cellular's wireless operations and some spectrum assets for $4.4 billion. This deal will grant T-Mobile 30% of U.S. Cellular's spectrum and includes a master license agreement for over 2,000 towers. U.S. Cellular customers will soon benefit from T-Mobile's extensive 5G network, enhancing their coverage and speed. The transaction, which comprises cash and up to $2 billion in assumed debt, is expected to close by mid-2025. 

BUSINESS

Food Delivery Giants Surge Challenges QSR Sales

What happened

The rapid expansion of food delivery giants like Zomato and Swiggy is set to shake up the quick-service restaurant (QSR) landscape. The report highlights that this expansion is happening at a time when the QSR sector is already grappling with sluggish demand.

• Zomato, in particular, has seen a significant surge in its average monthly active restaurant partners, soaring from 61,000 in FY19 to a whopping 270,000 by FY24. 
  
  

• This surge far exceeds the 5,300 stores collectively owned by listed QSR brands during the same period. 
  
  

• Swiggy has also shown robust growth, boasting 272,000 active restaurants by the end of FY23.
  
  

Why it matters

While the expansion of these food delivery platforms offers consumers more choices, it also presents challenges for QSR companies. Reports suggest that the increased options are fragmenting sales, exacerbating the already weak daily sales figures in the QSR industry.

The proliferation of delivery partners has notably expanded customer reach, benefiting smaller restaurants significantly. Zomato, for instance, now boasts a restaurant base 51 times larger than the total branded QSR stores, a significant jump from 22 times in FY19.

Zoom out

Despite facing another weak quarter due to demand softness, QSR players remain steadfast in their expansion plans. They have not altered their store opening strategies or capital expenditure guidance, indicating their long-term vision for growth.

Initiatives like Jubilant FoodWorks' Jubilant Food Park and Devyani International's plans for net new stores underscore the industry's resilience and determination to navigate challenges and capitalize on emerging opportunities.

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