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Business and Finance News Highlights of the week transcript on 16 April 2023
Let’s begin – Once the largest public shareholder in Zee Entertainment, global investment management fund Invesco, exited the firm completely this week. The fund offloaded its remaining 5.11% stake in the company for Rs 1,004 crore, via block deals, after holding nearly 18% in the company till March last year. Stock exchange data on Monday evening showed that 49.11 million shares changed hands at a price of Rs 204.5 apiece. Invesco held its stake in Zee through OFI Global China Fund. Morgan Stanley, Goldman Sachs and Mauritius-based fund Segantii India Mauritius were among the buyers of the shares offloaded by Invesco this week, picking up a 1.6%, 0.7% and 0.9% stake. Invesco had been reducing its shareholding in Zee since it withdrew its demand seeking the reconstitution of the company board under MD & CEO Punit Goenka in March 2022.
Moving on – The World Trade Organisation‘s ruling against India on levy of import duties on information and communications technology products, including mobile phones, will not impact the smartphone production-linked incentive scheme, which enjoys the protection of such duties. Officials said that the government will be challenging the WTO panel’s ruling in the dispute settlement body and this would ensure that the order is kept in abeyance. However, since the appellate body is non-functional since 2017 with its seven-member judges having retired and the United States blocking appointment of new members since then due to lack of consensus, the smartphone PLI scheme as well as the one on IT hardware will complete the five-year tenure with duty protection remaining intact. The development will bring relief to the government as the smartphone PLI is the most successful of such schemes with exports doubling to Rs 90,000 crore in FY23, exceeding government’s estimate of Rs 75,000 crore.
In another development – Transactions of a section of non-resident Indians have come under the scanner of the income tax department, which suspects due taxes may not have been paid by them. According to sources, an unprecedentedly high number of NRIs have received notices from the tax authorities in recent weeks, asking them to correlate the funds in their bank accounts or investments made by them, with the incomes reported in their tax filings. In many cases, the notices are being sent under Section 148 (A), which means the authorities possess information to the effect that certain income has escaped assessment and believe more tax may be payable. Though no explicit tax demands have been raised in the current set of notices, tax experts say these could be precursor to assessment orders seeking higher taxes.
Meanwhile – After registering a four-fold jump in exports of iPhones to over Rs 40,000 crore in FY23, Apple is looking at doubling or trebling its growth and investments in the country in the coming years. One of the company’s unit in Chennai, operated by Vietnam’s Foxconn Hon Hai, has already emerged as the largest in the country in a single location in any sector, employing 35,000 people on the shop floor. Overall, along with its two other contract manufacturers, Wistron and Pegatron, Apple has generated 100,000 jobs in the last two years and is confident of doubling this in the years ahead. “I am very confident that this Apple-India partnership has a lot of headroom for investments, growth, exports and jobs – doubling and tripling over coming years,” Rajeev Chandrasekhar, minister of state for electronics and information technology, said. Chandrasekhar’s optimism comes from the fact that in the first year of its operation under the production-linked incentive scheme, ie FY22, Foxconn reached a total production of over Rs 7,500 crore.
In a separate development – The Reserve Bank of India’s fight against inflation is “far from over” and it will have to continue its efforts to bring inflation closer to the 4% target over a medium term, governor Shaktikanta Das said during the RBI’s monetary policy committee meeting held in April, according to the minutes released this week. “Global inflation is easing, but at a tardy pace. Central banks face a runway which is becoming narrower and bumpy for soft-landing. I am, therefore, of the view that we do a tactical pause in this meeting of the MPC,” he said.
Lastly – In line with the expectation of the insurance industry, life insurance companies like HDFC Life, Max Life, ICICI Prudential and SBI Life witnessed a high growth in their new business premiums for March, as they have relatively strong exposure to non-ULIP policies with annual premium of above Rs 5 lakh.The good growth in these companies’ new business premiums indicates a surge in their business as people rushed to pre-book such policies to escape the impact of taxation change announced in the Union Budget.
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