Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: The stock market experienced volatility, with the Nifty closing at 22,302 and the Sensex at 73,466. Energy, Auto, and Metal sectors saw buying, while profit booking persisted in financial and private bank stocks.

BUSINESS

Air India Express Trims Flights Amidst Crew Woes

What happened

Air India Express, a Tata Group-backed airline, is cutting down its flight operations by 20% following a mass sick leave by a significant number of cabin crew members. Over 100 cabin crew, primarily senior staff, called in sick on 7th May, leading to the cancellation of more than 90 flights.

This development has prompted the airline to reduce its daily flight count by 48 flights, impacting its current operation of approximately 240 daily domestic and international flights.

Why it matters

The recent mass sick leave within Air India Express (AIX) has been attributed to grievances stemming from the ongoing merger with AIX Connect, formerly known as AirAsia India. This situation has raised concerns about the transition, especially regarding changes in roles and the cultural shift toward a more corporate environment. These concerns are highlighted in a letter sent to N Chandrasekaran, chairman of the Tata group, in April.

The letter pointed out significant changes in the compensation structure post-merger, including the removal of various allowances like HRA (House Rent Allowance) that were part of employees' compensation before the merger. This alteration has resulted in substantial salary cuts for employees, despite the airline consistently posting profits.

Zoom out

The Tata Group-backed airline, while navigating through these challenges, continues to focus on fleet expansion and market growth. The company currently has a fleet size of 73 aircraft including 28 Airbus A320. It is set to increase the fleet substantially over the next year as the airline plans to induct at least 50 out of the 190-Boeing 737 MAX aircraft that Air India ordered in February 2023.

BIG MONEY MOVES

Polaris secures ₹2,246 crore smart metering project in West Bengal

Polaris Smart Metering has clinched a significant contract worth ₹2,246 crore to deploy 2.2 million smart meters in West Bengal. The project encompasses supplying, installing, and maintaining these advanced meters for consumer and system metering over the next decade. These smart meters will revolutionise billing with prepaid options, real-time energy tracking, precise metering, and enhanced grid management capabilities.

This initiative aligns with Polaris's broader efforts across regions like Uttar Pradesh, Manipur, Bihar, and Ladakh, totalling orders exceeding ₹7,700 crore. 

Quadria Capital invests $102 million in NephroPlus

Quadria Capital has invested $102 million in NephroPlus, India's largest dialysis chain, acquiring a minority stake. This investment supports NephroPlus in meeting the increasing demand for dialysis services across India and Asia. Quadria predicts significant growth in dialysis demand over the next five years in its targeted markets.

NephroPlus operates around 450 dialysis centres in India, the Philippines, and Uzbekistan. This move reflects Quadria's ongoing commitment to investing in regional healthcare providers, including previous investments in Indian healthcare providers like Maxivision and HCG.

BUSINESS

Zoomcar's Ambitious Plan to Onboard 20,000 Cars

What happened

Zoomcar, a popular car-sharing platform, is gearing up for significant expansion as it eyes onboarding a whopping 20,000 cars by the end of the fiscal year 2025. This ambitious move follows closely on the heels of its plan to add over 5000 cars by the end of the current fiscal year 2024.

Zoomcar's growth strategy hinges on partnerships with industry giants such as Cars24, ACKO Drive, Spinny, and Droom. These collaborations aim to make car sharing more accessible and cost-effective for both hosts and guests.

Why it matters

This expansion isn't just about increasing the number of cars in Zoomcar's fleet. It's about meeting the surging demand for self-drive car rentals while also boosting economic stability and nurturing entrepreneurship in local communities. Hosts, on average, can earn up to ₹7 lakhs per year, making it a lucrative opportunity.

Zoomcar's recent initiatives, including enhanced incentives for hosts and exclusive deals through third-party partnerships, are key drivers of its growth. For instance, hosts partnering with Cars24 can enjoy discounts of up to ₹1 lakh while ACKO Drive offers savings of up to ₹ 85,000 on new car acquisitions, along with attractive incentives on car financing.

Zoom out

Zoomcar's market dominance in India, boasting a commanding 95% market share in the car-sharing sector, reflects its strong position and potential for further growth. With expansion plans extending to international markets like Indonesia and Egypt, Zoomcar is poised for continued success and expansion across multiple regions, including Southeast Asia, Sub-Saharan Africa, Latin America, and Central Asia.

BIG PICTURE

📄 India relaxes norms to attract more power equipment suppliers

India's power sector planning body has eased conditions for power equipment supplies in public projects, encouraging greater participation from private vendors. This change follows recent tenders that received minimal bids, including projects by NTPC and Damodar Valley Corporation. The Central Electricity Authority has revised pre-qualification requirements, allowing more companies to bid for projects, and promoting competition.

This move aims to address challenges in vendor response and enhance efficiency in power project execution.

💲 Walt Disney records $2 billion+ impairment charge linked to Star India

Walt Disney, in its second-quarter report, revealed a $1.3 billion non-cash goodwill impairment tied to its merger deal with Reliance Industries Limited. This brings the total impairment charges related to Star India and linear networks to over $2 billion. The merger is set to close by mid-2025, subject to approvals. Star India's assets total $4.1 billion with liabilities at $868 million, subject to change before the merger's completion.

The impairment assessment is based on future cash flow forecasts considering economic factors and industry growth.

FYI: Non-cash goodwill impairment refers to a reduction in the recorded value of an asset (goodwill) on a company's balance sheet, which is not an actual cash expense but reflects a decrease in the asset's estimated value.

BUSINESS

REC Eyes $1 Billion Loan from ADB, Korea Exim

What happened

REC, a state-run lender, is gearing up to raise funds from overseas sources to meet the growing credit demand in the power industry. They are looking to secure a blended loan of up to $1 billion from the Asian Development Bank (ADB) and Korea Eximbank.

Additionally, discussions are underway for another term loan of $500 million from KfW Development Bank, with a potential increase to $1 billion later. These initiatives align with the government's goal of doubling power capacities by 2032.

Why it matters

REC is setting ambitious targets, aiming for a loan book of ₹10 lakh crore by the fiscal year 2029-30. This goal includes a diversified portfolio, with 50-60% allocated to conventional power generation, transmission, and distribution projects, and a significant 30% focused on renewable energy initiatives. The company currently manages assets worth approximately ₹5 lakh crore.

Furthermore, REC Ltd's expansion into non-power infrastructure projects, including distribution and transmission sectors, showcases its adaptability and foresight. Initiatives like the Revamped Distribution Sector Scheme (RDSS) present lucrative opportunities for the company, with potential debt financing reaching 60,000-70,000 crore in the next few years.

Zoom out

Despite the Reserve Bank of India's (RBI) proposed project finance norms, REC remains confident about its profitability and capital adequacy. Moreover, REC's plans to infuse capital into its subsidiary in GIFT City for green energy projects and explore opportunities in aircraft leasing demonstrate its forward-looking approach towards sustainable finance and infrastructure development.

MIRCH MASALA

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