Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Despite a volatile session, key benchmark indices hit new milestones, reflecting strong liquidity and investor confidence in India's long-term growth. Power and metal stocks like Tata Steel and Hindalco gained, while PSU Banks and FMCG stocks, including SBI Life and HUL, dragged the market down.

TOP STORIES

India’s Oil Demand Slows: Growth Drops 45% 

What Happened?

India’s oil demand growth has slowed dramatically, dropping nearly 45% this fiscal year compared to last. Diesel, the most consumed refined product, accounting for 38% of oil usage, saw only a 1% rise in sales, while petrol surged 8% and LPG 7%.

•  In August alone, diesel sales dropped by 2.5%, driven by heavy rainfall, lower power demand, and declining vehicle sales. 
  
  

• The April-August period recorded a modest 3.3% increase in overall petroleum product consumption, compared to a robust 6% growth in the same period last year.
  
  

Why It Matters?

As the world’s third-largest oil consumer, India plays a major role in global oil demand. This sharp decline in growth speaks of broader issues—heavy rainfall led to flooding, which disrupted movement, while a slowdown in power demand, from 240.5 GW in August 2023 to 216.9 GW this year, compounded the issue. 

• Commercial vehicle sales fell by 6%, and tractor sales plummeted by 11.4%, hurting diesel consumption. 

Meanwhile, the country’s refining sector is grappling with a 1.8% rise in domestic production, far slower than last year’s 3.7% growth. Export markets are no help either, with petroleum product exports falling 2.7% in volume and 6.7% in value in the same period.

Zoom out

India’s oil demand growth is losing steam, driven largely by stagnating diesel sales. The country’s domestic and export markets are both feeling the pinch, with slower production growth and falling exports. While petrol and LPG sales continue to show moderate growth, the overall picture suggests that India’s oil demand is unlikely to see a rapid recovery, especially with ongoing challenges in key sectors like transportation and power.

PAISON KA KHEL

SBI eyes ₹4 lakh crore credit boom

SBI Chairman C.S. Setty announced a massive ₹4 lakh crore credit pipeline, predicting a surge in private capital expenditure in the second half of the year. If that’s not enough, the government is also throwing in a whopping ₹11.11 lakh crore for 2024-25.

Big bucks are flowing into infrastructure— roads, renewable energy, and refineries. With both private and public spending set to soar, it’s looking like a blockbuster season for capital growth!

Aditya Birla Renewables powers up with ₹2,500 crore

Aditya Birla Renewables Limited (ABReL) has secured a whopping ₹2,500 crore through non-convertible debentures, all while keeping the interest rates at a sweet 8.6% per annum. This funding will help expand their capacity and pay off some debt.

With a current installed capacity of around 1 GW from 42 projects across 10 states, ABReL aims to double that to 2 GW by year-end. 

TOP STORIES

Can India’s Electric Two-Wheelers Outrace China?

What happened?

India is charging up its electric two-wheeler (E2W) market, positioning itself as a potential contender against China’s heavyweight status. 

• With a domestic E2W market booming, boasting a remarkable 30% growth to nearly 1 million units sold in FY24, the excitement is palpable. 

Union Transport Minister Nitin Gadkari has set the stage, envisioning India as a top exporter, thanks to established brands like Bajaj and TVS already making strides in international markets.

Driving the news

Indian manufacturers are seizing the moment with innovative launches and increasing production capabilities. The first quarter of FY25 has already shown promise, with E2W exports surpassing last year’s totals, indicating a burgeoning appetite for Indian electric models, particularly in emerging markets.

Yet, challenges loom on the horizon. The phase-out of FAME II subsidies could impact price competitiveness, while India’s dependency on imported battery components could stifle growth. As the government tightens its scrutiny of local manufacturing, the onus is on Indian manufacturers to innovate and establish a self-sufficient ecosystem for batteries and other essential components.

The reality check

Despite this momentum, the figures tell a stark story:

• India exported a mere 1,609 E2Ws in FY24, while China’s exports soared to 15 million units!
  
  

• It’s clear that while India has a two-wheeler production legacy—15.86 million units in FY23 alone—catching up to China’s electric giants will take more than just ambition.

GLOBAL NAZARA

TikTok music hits a high note and then calls it quits

TikTok Music is set to bow out on November 28, 2024, as ByteDance ends its music streaming experiment after a few years of trying to compete with giants like Spotify and Apple Music. Users have until October 28 to transfer their playlists before their data is deleted—so if you’ve got that one playlist you can’t live without, now’s the time!

Instead of fighting it out in the streaming arena, TikTok plans to redirect users to other platforms using its “Add To Music App” feature. 

Qualcomm eyes Intel in a bold gamble

Qualcomm might be making a move on Intel, but analysts are raising eyebrows—and calculators. If successful, this would be the chip sector's biggest-ever deal, uniting two giants but triggering global antitrust concerns. Qualcomm, with a $190 billion market cap, has the cash to swing it, but Intel’s losses in its manufacturing arm might make for a rocky road.

Intel's value has dropped below $100 billion, missing out on the AI boom, while Qualcomm focuses on diversification. However, running Intel's foundry business could be a challenge for Qualcomm, which has no experience owning a chip factory.

TOP STORIES

Burmans Exit the Race for HCCB Stake

What Happened?

The Burman family, known for their leadership in Dabur, has stepped back from acquiring a 40% stake in Hindustan Coca-Cola Beverages (HCCB). The decision, attributed to disagreements over valuation, leaves the field clear for the Bhartia family of Jubilant FoodWorks.

HCCB has pegged the stake’s worth between ₹10,000 crore and ₹11,000 crore, valuing the company at ₹25,000 crore to ₹33,000 crore. Discussions are now focused solely on the Bhartias, who aim to finalize the deal by year-end—just in time for holiday cheer!

Why It Matters?

Had the Burmans remained in the race, synergies between their beverage ventures at Dabur and HCCB could have made waves. But with the Burmans out, the Bhartias are keen to explore the potential benefits of adding HCCB to their portfolio, despite previously ditching Coca-Cola for Pepsi at their Domino’s outlets. 

In a fun twist, Coca-Cola recently invested in Jubilant’s food ordering platform, Thrive, showing that the fizzy drink giant is still very much in the mix. 

• Meanwhile, the bottled drink market is fizzing up, with Kantar noting a 50% increase in penetration and a 250 ml rise in average household consumption over the past two years.

Zoom out

As HCCB gears up for its IPO in two years, it’s retooling its operations by offloading bottling businesses in select regions. This move not only strengthens its position but also prepares it for an exciting public debut. With the Burmans stepping aside, the stage is set for the Bhartias to make their mark, proving that in the world of business, sometimes the best deals are just a soda pop away!

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