Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On June 6, Indian benchmark indices closed higher for the second consecutive session amid volatility, with the Sensex surging 692.27 points to 75,074.51 and the Nifty rising 201.10 points to 22,821.40. Gains were observed in the realty, IT, and PSU banking sectors, following a gap-up opening for the Nifty.

BUSINESS

ITC Shareholders Overwhelmingly Approve Hotel Business Demerger

What happened

ITC shareholders gave a resounding thumbs up to the demerger of the company's hotel business, with an overwhelming 99.6% majority vote in favour. The decision, made during a virtual meeting on June 6, paves the way for ITC Hotels to be listed as a separate entity. The new entity is expected to be listed within 15 months, marking a significant shift for the conglomerate known for its diverse portfolio, from cigarettes to luxury hotels .

Why it matters

This demerger is a strategic manoeuvre aimed at fostering focused growth within ITC’s hotel segment. Shareholders have been eagerly waiting for this demerger, and with a whopping 99.6% vote, it’s clear they see the potential. The demerger allows ITC Hotels to operate independently, which can lead to more targeted and effective growth strategies. 

• Under the scheme, ITC Hotels will issue equity shares directly to ITC shareholders, who will hold about 60% of the new entity, while ITC retains a 40% stake.
  
  

•  Notably, ITC’s hotel business contributed only 4% to the company’s revenue in fiscal year 2024, compared to 71% from its core consumer staples business.

Zoom out

With the plan set in motion and regulatory approvals in place, ITC Hotels is gearing up for its independent journey. The demerger is expected to bring more tailored growth and operational efficiencies to ITC's hospitality segment, which has over 120 hotels across 70 locations . As shareholders hold their breath for the tentative listing of ITC Hotels, the market has already responded positively, with ITC shares closing 1.28% higher at ₹435.80 on the BSE. 

BIG MONEY MOVES

BHEL lands ₹3,500-crore order from Adani Power

State-run Bharat Heavy Electricals Ltd (BHEL) has secured a significant ₹3,500-crore order from Adani Power for a 1,600 MW thermal power plant in Raipur, Chhattisgarh. This project involves setting up two 800 MW units. The boiler and turbine generator for this plant will be manufactured at BHEL’s facilities in Trichy and Haridwar, respectively. 

BHEL's stock saw a notable rise, closing at ₹277.95, up by 8.85%, reflecting investor confidence in this substantial deal.

KPI Green Engineering bags ₹351 crore orders for diverse projects

KPI Green Engineering has announced new orders totalling ₹351.35 crores for diverse projects , including railway track fencing crash barriers, solar projects, and electricity transmission line towers. Notably, ₹212.38 crore is allocated to solar projects, covering fixed tilt module mounting structures and tracker-type module mounting structures.

Additionally, orders worth ₹79.51 crore have been secured for transmission line towers and substation equipment. KPI plans to complete these projects within the current financial year.

BUSINESS

Bigbasket Explores Electronics Expansion in Quick Commerce with Croma Tie-up

What happened

Bigbasket, backed by Tata, is in talks with Croma to sell electronics and appliances through its quick commerce arm , BB Now. This move aligns with Bigbasket's strategy to expand its quick-commerce offerings, which have seen an increase in average order value and a wider range of products, including home improvement items, electronics, beauty products, and toys.

Why it matters

Founded in 2011, BigBasket's journey has seen a pivotal milestone with Tata Digital Ltd acquiring a majority stake a decade later. Despite this change in ownership, BigBasket retains its independence, showcasing a blend of partnerships and operational agility. 

The partnership between Bigbasket and Croma signals a strategic shift towards quick commerce dominance. While acquiring new online users remains a challenge, the average order value for quick-commerce platforms is on the rise, fueled by an expanded range of offerings including electronics and home improvement products.

This move not only reflects changing consumer preferences but also sets a new standard for ultra-fast delivery , challenging competitors like Zepto, Blinkit, Dunzo, and Swiggy Instamart.

Zoom out

Bigbasket's exploration of a partnership with Croma highlights the evolution of the quick-commerce sector and its strategic efforts to meet consumer demands for convenience and speed. With a focus on profitability and expanding product offerings, Bigbasket is positioning itself for success in the dynamic and competitive quick-commerce market.

BIG PICTURE

Software giant Zoho eyes semiconductor industry in India

Zoho, a major software company, is making a move into chipmaking! They've partnered with another company (details under wraps) to apply for a semiconductor manufacturing facility in India. This aligns with the Indian government's push to become a key player in the global chip market. Zoho's application is part of a larger government incentive program offering up to 50% subsidies for qualified applicants.

Brakes India and Japanese firm join forces for safer Indian cars

Brakes India has teamed up with ADVICS, a Japanese brake system supplier, to create a new venture focused on advanced braking technology for India's light vehicles.  This ₹500 crore (over $60 million) joint effort will see the development of new systems, including Electronic Stability Control (ESC), initially targeting electric and hybrid vehicles. 

BUSINESS

Raymond's ₹ 5,000 Crore Realty Ambitions

What happened

Raymond, the textiles-to-engineering conglomerate, is keen to capitalize on the real estate surge. The company is negotiating joint development agreements (JDAs) worth an impressive ₹5,000 crore . Chairman and MD Gautam Hari Singhania revealed that Raymond has already secured five to six JDAs and plans to sign more, reinforcing its status as a preferred JDA partner.

These agreements typically see landowners contributing land while Raymond handles development and sales. With a massive 11 million square feet of development potential in Thane alone, valued at ₹30,000 crore , the company is also targeting high-revenue projects in Mumbai areas such as Bandra, Sion, Mahim, and Chembur.

Why it matters

This ambitious push into real estate comes at a time when the sector is experiencing robust growth. Raymond's strategic focus on JDAs allows the company to leverage its expertise without heavy upfront investments in land. 

• In FY23, Raymond's bookings stood at ₹ 1,500 crore, and in FY24, they soared to ₹ 2,400 crore.
  
  

•  The company's expansion isn't limited to real estate; it plans to open 300 retail stores in FY25, the highest number in its history. 

This retail push includes a significant focus on its ethnic wear brand, Ethnix, with hopes bolstered by a potential free trade agreement with the UK. 

Zoom out

Despite challenges like high interest rates and potential market oversupply, Raymond's focus on quality and strategic locations appears to be a winning formula. As the company navigates these expansions, it continues to seek new opportunities, including in aerospace and defence, following its acquisition of Maini Precision Products.

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