Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: In a day marked by steady yet limited trading, Indian benchmark indices closed with slight gains on Monday. Extending their winning streak to four days, the Nifty 50 reached a new all-time high during early trades but later retraced some of the gains.

BUSINESS

Tata Motors to List Commercial and Passenger Vehicle Businesses Independently

What happened

Tata Motors (TML) has declared its decision to demerge into two separate listed entities, splitting its commercial vehicles (CV) and passenger vehicles (PV) businesses. The demerger follows the earlier subsidiarisation of passengers and electric vehicle (EV) businesses in 2022, allowing each segment to pursue distinct strategies for enhanced growth and agility.

Tata's CV, PV+EV, and Jaguar Land Rover (JLR) businesses have operated independently since 2021 under their respective CEOs. Tata Motors aims to execute the demerger through an NCLT scheme of arrangement, assuring shareholders of identical shareholding in both entities.

Why it matters

This move signifies Tata Motors' commitment to unlocking optimal value for its businesses. The demerger is set to empower each business segment with focused strategies and greater accountability. Tata Sons Chairman, N Chandrasekaran, highlighted the positive impact on customer experience, employee growth prospects, and shareholder value.

All Tata Motors shareholders will maintain identical holdings in both entities. The demerger is expected with no adverse effects on employees, customers, or business partners.

• Tata Motors reported a growth of 8% in sales for February 2024, with domestic commercial vehicle sales declining by 4% while domestic passenger vehicle sales grew by 20% year-on-year.
  
  

• The automobile giant has seen a remarkable 154% surge since January 2023, outpacing the 21% gain in BSE Sensex during the same period.

The board's approval marks a pivotal step, but the demerger process awaits necessary approvals, which could take 12-15 months. Tata Motors' stock, closing flat at ₹989 on the day of the announcement, reflects the cautious market sentiment amid this transformative decision.

Zoom out

Tata Motors has revealed robust sales figures for February 2024, totalling 86,406 vehicles globally, marking an 8% increase from the same period last year. Domestically, the company witnessed a 9% YoY surge in total sales, reaching 84,834 units.

As of now, analysts are highlighting the potential to capitalize on growth opportunities in segments such as EVs, autonomous vehicles, and vehicle software, particularly with a focused approach post-demerger.

BIG MONEY MOVES

Apple slapped with a record $2 billion fine by EU

In a major antitrust move, Apple faced a staggering $2 billion fine from EU regulators for alleged unfair rules in its app store. The European Commission's yearslong investigation found Apple guilty of restricting music-streaming app developers, leading to potentially higher subscription prices for iOS users.

Apple plans to appeal, dismissing the decision as lacking evidence of consumer harm. The decision precedes a new European law requiring changes to tech giants, set to take effect soon.

Flipkart Internet secures $111 million boost in fresh funding splash

Flipkart Internet, the e-commerce powerhouse's marketplace arm, received a robust fund injection of approximately ₹924 crore ($111 million) from its related entities based in Singapore.

The funding news comes hot on the heels of Amazon's aggressive investments in its Indian entities, crossing the ₹1,000 crore mark. Amazon's ₹830 crore infusion into Amazon Seller Services and a ₹350 crore investment in its fintech unit, Amazon Pay, reflects the fierce competition in the Indian e-commerce arena.

Flipkart, not one to be left behind, is reportedly in talks to raise a staggering $1 billion, with parent company Walmart pledging a robust $600 million commitment.

BUSINESS

Digit Insurance Triumphs Regulatory Hurdles, Sets Sail for $3.5 Billion IPO

What happened

India's markets regulator, the Securities and Exchange Board of India (SEBI), has finally given the nod to Digit Insurance for its much-anticipated Initial Public Offering (IPO). The green light comes after a rollercoaster of compliance issues that had initially derailed Digit's IPO plans in August 2022.

Digit, valued at a hefty $3.5 billion, found itself at a crossroads as Sebi hit the brakes not once, but twice, expressing concerns about the legality of certain share issuances. However, after a meticulous revisit of its paperwork and addressing Sebi's reservations, Digit, backed by heavyweights like Canadian billionaire Prem Watsa's Fairfax Group and A91 Partners, resubmitted its IPO papers last March. And now, the regulatory hurdle has been overcome.

Why it matters

Digit Insurance, a player in the competitive general insurance sector, is gearing up to woo investors in the coming month as it eyes a listing by May. The company, buoyed by the support of big names in the investment arena, including Fairfax Group and A91 Partners, plans to raise a substantial 12.5 billion rupees ($151 million) through its IPO. In addition to this primary offering, an intriguing twist is the sale of 109.4 million existing shares, as disclosed in its prospectus.

The timing of Digit's IPO pitch aligns with the crescendo of activity in India's stock markets and public listings. As 2024 shapes up to be a record-breaking year for IPOs in the country, Digit steps onto the stage, adding its weight to the flurry of companies seeking public capital.

Zoom out

With the regulatory hurdles now behind them, Digit is gearing up for an intensive marketing campaign to attract potential investors over the next month. As they set their sights on a May listing, all eyes are on Digit's performance in the dynamic landscape of India's stock markets. 

BIG PICTURE

👢 Italian luxury shoemaker set for expansion in India

Italian luxury shoemaker Santoni is set to expand its presence in India, with plans for two new boutiques in Mumbai and Hyderabad by 2026. Partnering with Luxerati Retail, the company earmarks ₹15 crore for the expansion. Luxerati reports a 15-20% YoY growth, aiming to close the fiscal year with ₹8 crore in sales.

Santoni, known for artisanal processes since 1975, may also launch an exclusive online storefront for India. Despite India's growing luxury market, stricter regulations pose challenges for global luxury footwear brands, impacting their exclusivity.

🥇 Jindal Stainless unveils India's first green hydrogen plant

Jindal Stainless Ltd (JSL) has unveiled India's first commercial-scale green hydrogen plant at its Hisar unit, marking a significant leap in the country's stainless steel sector. Developed and operated by Hygenco India, the plant is set to produce 78 tonnes of green hydrogen annually.

The pioneering 20-year agreement between JSL and Hygenco represents India's inaugural long-term commercial green hydrogen offtake commitment. With the new facility, JSL aims to cut carbon emissions by 2,700 tonnes per year, contributing to a greener future.

BUSINESS

Foxconn, Samsung, and More to Pocket 4,400+ Crores in Incentives

What happened

Apple's Indian partners, including tech titans Foxconn, Wistron (now Tata's BFF), and Pegatron, along with the Samsung squad and hometown heroes Dixon Technologies, are about to hit the jackpot. They're in line to receive a staggering ₹4,400 crore-plus in incentives for meeting FY23 targets, thanks to the Indian government's production-linked incentive (PLI) scheme for smartphones.

Hold onto your iPhones, though; not everyone's sipping from the incentive fountain. Rising Star (Bharat FIH), the Xiaomi ally, seems to be struggling to hit targets since the PLI scheme's grand entrance in FY21. Meanwhile, Lava and Optiemus Electronics, the underdogs in the PLI race, seem to be facing an incentive drought for not meeting the lofty targets set by the government.

Why it matters

The PLI scheme, designed to marry tradition with innovation, is propelling India's smartphone export game to new heights. 

• Riding high on the PLI wave, mobile phone exports surged to a jaw-dropping $10.5 billion between April and December 2023.
  
  

• With the government releasing around ₹2,500 crores under the scheme so far, Samsung is leading the charge, pocketing ₹500 crores for hitting the year one target.
  
  

• While some companies might not be hitting bullseyes, the overall fiscal stimulus is pushing mobile phone exports to shoot for the stars, reaching an estimated $14-15 billion by the end of this fiscal year.

Zoom out

While some companies are basking in incentives and others are left yearning, the broader impact on India's electronics export scene is undeniable. Apple's contract manufacturers, both global and local players, are becoming key players in this economic symphony. So, whether you're a tech geek, an investor, or just curious about where your next gadget might come from, keep an eye on the PLI drama!

MIRCH MASALA

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