Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: On Monday, the stock market saw mixed results with the Nifty dropping 33 points and the Sensex rising by 17 points. The PSU Bank index took a hit, falling 3.7%, while the Realty index stood out with a gain of over 2.5%.

BUSINESS

Mahindra Susten Reveals  ₹21,000 Crore Green Energy Investment 

What happened

Mahindra Susten, a key player in the renewable energy sector and part of the Mahindra Group, is gearing up for a significant green energy push. They have outlined a bold plan to invest a whopping ₹21,000 crore over the next five years. This substantial investment is aimed at developing a renewable energy asset portfolio with a capacity of nearly 5.5 GW, in collaboration with Ontario Teachers' Pension Plan.

Why it matters

The strategic partnership with the Ontario Teachers' Pension Plan, holding a 39% stake, shows Mahindra Susten's commitment to sustainable energy development. The company plans to utilize this investment to build peak capacity over the next four to five years, aligning with its long-term vision for renewable energy expansion.

With a focus on avoiding heavy debt burdens, the company aims to leverage asset flipping as a key financial strategy. This approach involves monetizing assets periodically to fund new projects, ensuring sustainable growth without excessive reliance on debt.

Furthermore, Mahindra Susten's entry into the hybrid renewable energy sector marks a strategic shift in its business model. The recent announcement of a ₹1,200 crore solar wind energy project in Maharashtra highlights their commitment to diversifying their portfolio and embracing innovative clean energy solutions.

Zoom out

Mahindra Susten's proactive approach to green energy investment reflects a broader trend of sustainable development within the industry. As they continue to expand their renewable energy portfolio and embrace hybrid energy projects, Mahindra Susten is well-positioned to contribute significantly to India's renewable energy goals while driving economic growth and environmental sustainability.

BIG MONEY MOVES

📈 Vi's subscriber loss improves in March amid record fundraise

Vodafone Idea (Vi) saw a noteworthy decline in subscriber losses in March, dropping just 680,000 subscribers. This positive trend follows its recent ₹18,000 crore fundraising, the largest by an Indian firm. The company's subscriber base stood at 219.8 million in March, making it the third-largest telco.

Halting the decline is crucial as Vi plans to invest in 4G networks and launch 5G services. Analysts believe these efforts could slow down subscriber losses and boost market share. 

Hinduja Group's BFSI business eyes $50 billion valuation by 2030

Hinduja Group's IndusInd International Holdings (IIHL) is set on a path to triple the valuation of its Banking, Financial Services, and Insurance (BFSI) business, aiming for a remarkable $50 billion by 2030. Chairman Ashok P Hinduja revealed this ambitious plan, emphasizing a growth trajectory from the current $17 billion to $30 billion in three years before reaching the $50 billion milestone.

This strategic move includes raising stakes in IndusInd Bank, potential acquisitions in European banking, and a focus on digitalization to enhance valuation through technology-driven innovations.

BUSINESS

India's National Election Impacting RBI's Liquidity Management

What happened

India's ongoing national election, spanning six weeks from April 19 to June 1, is creating liquidity challenges for the Reserve Bank of India (RBI). With government spending traditionally slowing during elections and picking up post-elections, the banking system has been in deficit liquidity since April 20.

To address this, the government recently announced a surprise bond buyback of ₹40,000 crore, injecting much-needed funds into the banking system. This move has already led to a decrease in bond yields, providing some relief to liquidity conditions.

Why it matters

The liquidity dilemma faced by the RBI is significant due to its impact on the overall economy. During election periods, government spending typically decreases, affecting liquidity in the banking system. This can lead to challenges in meeting credit demands and maintaining financial stability. 

Additionally, the RBI has intensified short-term liquidity infusions, injecting ₹1.7 lakh crore via variable rate repo auctions since mid-April. This proactive approach reflects the RBI's anticipation of delayed government decision-making post-election, potentially constraining spending and tightening liquidity further.

Zoom out

As India's national election progresses, the RBI's focus on managing liquidity becomes crucial. The bond buyback, coupled with short-term liquidity infusions, demonstrates proactive efforts to stabilize the banking system amidst election-related uncertainties.

BIG PICTURE

✈️ Qantas faces $66 million penalty for 'ghost flights' fiasco

Australian airline Qantas has agreed to pay a hefty $66 million fine and $13 million in compensation following a controversy involving "ghost flights." These flights, which were cancelled but still advertised, misled consumers and sparked criticism from the Australian Competition and Consumer Commission.

Qantas apologized for failing to inform customers of cancellations, impacting 86,000 travellers promptly. This incident adds to the challenges faced by the airline, including scrutiny over ticket prices and service quality. 

REC receives RBI nod to establish subsidiary in GIFT city

REC Ltd, a leading NBFC under the Ministry of Power, has secured the Reserve Bank of India's approval to establish a subsidiary in Gujarat International Finance Tech-City (GIFT) in Gandhinagar, Gujarat. This subsidiary will operate as a finance company within GIFT, engaging in various financial activities such as lending, investment, and other financial services.

The decision reflects REC's strategic move to diversify its portfolio and tap into the opportunities offered by GIFT, known for its conducive environment and world-class infrastructure for financial services. 

BUSINESS

Centre Mulls Lowering GST on Health Insurance to 12%

What happened

The Centre is considering a move to reduce the Goods and Services Tax (GST) on health insurance premiums from the current 18% to 12%, making health insurance more affordable for the masses. This proposal, which has been pending since February, aims to rationalize GST rates on insurance products, particularly focusing on health and term insurance policies.

Why it matters

The proposed reduction in GST from 18% to 12% for health insurance premiums could have a profound impact on the accessibility and affordability of healthcare for individuals and families across India. Presently, individuals are burdened with an 18% GST when purchasing health insurance policies, making coverage financially challenging for many. 

This potential shift could lead to various benefits for consumers, including lower premium rates or the ability to access additional health cover options. This could be especially beneficial for families, as a premium of up to ₹30,000 could secure a substantial sum insured of around ₹10 lakh per annum for a family of four members, depending on factors like coverage type and insured age.

Moreover, the ongoing Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme, offers free health cover of up to ₹5 lakh per year to 107 million impoverished households, accounting for a significant 40% of the population. This scheme has been a lifeline for many in accessing crucial healthcare services without the financial strain often associated with medical emergencies.

Zoom out

The potential reduction in GST on health insurance premiums is a promising step towards enhancing healthcare affordability and coverage in India. In addition to the GST discussion, the income tax regime limits deductions for health insurance premiums under section 80D to either ₹ 25,000 or ₹ 50,000, based on conditions. This limitation contrasts with the stark reality that many individuals are just one medical expense away from financial distress.

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