Business and Finance News Highlights of the week transcript on 11 March 2023

Let’s begin with the news that made headlines this week. Firing a scathing attack on India’s slow growth rate, former Reserve Bank of India Governor Raghuram Rajan said that India is ‘dangerously close’ to the Hindu rate of growth, referring to a prolonged period of slow economic expansion. The culprits, Raghuram Rajan said, are the country’s subdued private sector investment, high-interest rates and slowing global growth. India recently released the GDP data for the Oct-Dec 2022 quarter, which slowed to 4.4 per cent from 6.3 per cent in the second quarter and 13.2 per cent in the first quarter. This is close to the estimated 4.5 per cent year-on-year.

On to market. Adani Enterprises, Adani Power, and Adani Wilmar have been included under the National Stock Exchange’s short-term additional surveillance measures framework from Thursday. The update came two days after it was announced that Adani Enterprises would be excluded from the exchange’s ASM. The decision to add the firms’ shares into the surveillance framework is following the steep rise in the share price over the past few sessions. Adani Green Energy and NDTV shares will be moved to stage 2 of NSE’s long-term ASM framework, according to a circular released by the exchange.

Meanwhile, the Securities and Exchange Board of India has, in the last two months, returned at least half a dozen offer documents to investment bankers or companies involved with the initial public offerings. These include offer documents of Oravel Stays, the parent company of travel-tech firm OYO and Go Digit General Insurance, a firm backed by Canada-based Fairfax Group. On Friday, Sebi returned offer documents of Pune-based integrated facilities management company BVG India, and Fincare Small Finance Bank, which had refiled its draft prospectus with the regulator in August last year.

Speaking of Sebi, It is nudging founders with a stake of 10% or more in their companies to classify themselves as promoters at the time of filing the draft prospectus for public share sales, said two people in the know. The move could impact companies wanting to go public, especially startups where the founder holding is low and put the brakes on the growing number of professionally managed companies in India. The promoter tag will also put higher regulatory obligations on the founders. Until now, founders holding 25% were deemed as promoters by having negative control and the power to block the special resolution. Founders holding a stake below this threshold have the option of not classifying themselves as promoters.

On to money matter. The Department of Pension and Pensioner’s Welfare has given a one-time option to some Central Government Employees to get their pension as per the CCS (Pension) Rules 1972 (now 2021). This will apply to only those employees who were appointed against a post or vacancy, which was notified/advertised before the date of the notification of the National Pension System. The NPS was notified on 22nd December 2003. Eligible employees can exercise the one-time option by 31st August 2023, according to DoPPW. Eligible Central Government civil employees, who do not exercise the one-time option by 31st August, will continue to be covered by NPS. The DoPPW said that the option once exercised will be final.

Moving on. The Reserve Bank of India is likely to continue with its razor-sharp focus on inflation and not pause the repo rate hike cycle in the April monetary policy committee meeting, a poll of economists conducted by FE showed. The poll showed that 67% of the participants believe that the RBI will go in for a 25 basis point hike to 6.75%, as the January consumer price inflation jumped to a three-month high of 6.52% in January. As per Ritesh Bhusari, treasury head at South Indian Bank, the RBI should have “ideally” paused rate hikes at 6.50%. However, the recent inflation data and expectation that US Federal Reserve will also hike its key policy rates, have played spoilsport. Bhusari says the RBI will go ahead with a 25-bp rate hike in April and then pause.

Lastly, some good news for automobile lovers. The sedan share in the automobile market has shrunk to a mere 9 per cent but that hasn’t dissuaded the torch bearer of the mid-size saloons, Honda, to launch a spruced-up and safer 2023 City. The Japanese manufacturer has decided to give the diesel engine the boot and the City is now available in petrol and hybrid avatars. The manual petrol City is priced from Rs 11.49 lakh to Rs 14.72 lakh while the CVT automatic is from Rs 13.62 lakh to Rs 15.97 lakh, ex-showroom Delhi. The 2023 City hybrid is now available in two variants— the V at Rs 18.89 lakh and the ZX ad Rs 20.39 lakh, ex-showroom Delhi.