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MARKETS

Markets: The market was mostly covered in green today!

BUSINESS

Coal roars back in India

What happened

India is set to supercharge its power generation capacity with a sizzling 12 gigawatts (GW) boost in coal-based power generation by the end of this financial year, as revealed by Power Minister RK Singh. This electrifying announcement comes as a response to the nation's skyrocketing power demand, which has surged by a dazzling 20% in each of the past three months.

Why it matters

The addition of a whopping 12 GW in coal-based power is like handing India's power grid a double espresso shot. The significance of this development is that India is making a mammoth push to add 80 GW of thermal plants to cater to the ever-growing hunger for electricity. This, as Minister Singh emphasized, necessitates a strong infusion of private investments into coal-based power generation.

However, the plot thickens when we discover that some states are not fully utilizing their power plants, opting to tap into the central power pool instead.  Interestingly, power companies are now required to supply power through contracts first, and any extra energy can be sold on exchanges to secure their fixed charges.

Zoom Out 

Stepping back, we see that India's power landscape is undergoing a radical transformation to keep pace with the surging power demand. They're on a mission to boost thermal capacity by a whopping 80,000 MW, strategically placing a significant portion near coal mines for a smoother coal supply. The nation is making a firm statement that coal isn't going anywhere soon, despite the rise of renewable energy sources. 
After all the EV and solar revolution fuss, coal is like:

BIG MONEY MOVES

👡 Bata India steps into style with Nine West licensing deal  

Footwear giant Bata India has inked a licensing and manufacturing deal with Authentic Brands Group to introduce and market the Nine West lifestyle brand in India. Bata India will hold the rights to produce, promote, and distribute Nine West shoes and accessories through its stores across India. Nine West, renowned for its premium footwear, bags, and watches, joins Bata India's strategy of portfolio casualization and premiumization, alongside other brands like Hush Puppies and Marie Claire.

✅ Government initiates comprehensive review of GST and Indirect Tax processes

During November, the government is set to conduct a series of meetings aimed at assessing and streamlining various aspects of indirect taxation, particularly the Goods and Services Tax (GST). The focus is on enhancing the GSTN portal, improving indirect tax procedures, and simplifying return filings. The Central Board of Indirect Taxes and Customs (CBIC) aims to optimize internal processes, given the upcoming budget is a vote on account due to impending elections.

BUSINESS

Jaiprakash's Debt Debacle: Rs 4.2B Default

What happened

On November 6, Jaiprakash Associates, the flagship firm of the crisis-hit Jaypee Group, plunged into financial turmoil, defaulting on loans worth a colossal Rs 4,258 crore, comprising both principal and interest amounts. This dire situation emerged as Jaiprakash Associates missed repayment deadlines on October 31, falling short on a principal debt of Rs 1,733 crore and accruing interest of Rs 2,525 crore.  

In the midst of these financial tribulations, ICICI Bank, acting under the guidance of the RBI (Reserve Bank of India), has instigated proceedings against Jaiprakash Associates under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016. 

Why it matters

This financial turmoil at Jaiprakash Associates is emblematic of the challenges facing companies in India's corporate landscape. Debt defaults of this magnitude can have far-reaching consequences, impacting not only the company but also its creditors and the broader financial system. 

The legal disputes and regulatory interventions in response to these financial struggles further emphasize the complexities and uncertainties involved in such matters. As key lenders like ICICI Bank and SBI engage in legal proceedings, the outcome of these cases could significantly influence the financial destiny of Jaiprakash Associates.

Zoom out

Jaiprakash Associates' journey from a prominent conglomerate to a company grappling with debt woes serves as a cautionary tale for the corporate world. Their strategic decisions, including divestment in the cement business, signify the imperative need for companies to adapt and restructure when faced with financial challenges.
The outcome of the legal battles involving prominent lenders like ICICI Bank and SBI will shed light on how Indian corporate debt defaults are managed and resolved within the framework of the Insolvency and Bankruptcy Code (IBC) 2016.

BIG PICTURE

US Boosts Indians with 5-Year Employment Cards

The US Citizenship and Immigration Services (USCIS) has announced a significant update benefiting Indians awaiting US green cards. Employment Authorization Documents (EAD) for certain non-citizens, including green card applicants, will now have a maximum validity of five years, aimed at reducing processing times and backlogs. The backlog for employment-based green cards, with 63% of cases from India, has reached a record 1.8 million.

FYI: A Green Card, (Permanent Resident Card), is a document issued to immigrants to the US as evidence that the bearer has been granted the privilege of residing permanently.

Morgan Stanley's Bold Confidence in India's Economic Outlook

Morgan Stanley remains optimistic about India's economy, citing strong data and performance. They believe policy rates are appropriately calibrated, supported by stable inflation, comfortable current account balances, and structural reforms. India's Rupee has shown resilience amid rising US rates, but challenges may arise with higher oil prices potentially straining macro stability. Election outcomes will play a role in continuing supply-side reforms.

BUSINESS

Byju's contemplates selling 'Epic' for $400M

What happened

Byju's, the beleaguered Indian education giant, is currently in advanced discussions to part ways with its American-based children's digital reading platform, Epic! Creations Inc. The aim of this intricate deal is to alleviate the mounting financial pressures that have been dogging the company.

This potential divestiture of Epic! Creations Inc. is poised to serve as Byju's financial lifeline, equipping them with the necessary funds to address a looming debt predicament totalling a staggering $1.2 billion. This debt debacle was spawned by Byju's ambitious global expansion initiatives during the pandemic, which were predominantly financed through a sizeable term loan. 

Why it matters

Byju's, officially operating under the moniker Think & Learn Pvt., has been on an ardent quest to slash costs and curb losses, post the deflation of the pandemic-driven online learning bubble.

A peek behind the curtain reveals that Byju's recent financial results, released over the weekend, displayed only modest reductions in losses, despite the robust business climate during the pandemic.

Zoom out

The potential sale of Epic! Creations Inc. holds a twofold significance. 

• First, it provides Byju's with a lifeline to address their looming debt challenge, potentially bringing some much-needed financial stability. 

• Secondly, it emphasizes the immense challenges faced by the once-thriving ed-tech industry, reminding us that even giants can stumble and need to adapt to a swiftly changing landscape.

The world of finance and technology continues to be a stage for captivating drama, where unexpected actors often take center stage.

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