Below is a shortlist of all the important articles from newspapers.
Monsoon covers 2/3rds of India, 15 days in advance
After making a late entry, the southwest monsoon has progressed steadily and, in the first fortnight, covered almost two-thirds of the country, says Business Standard. This is almost 15 days ahead of schedule.
How it is important: A quick progress of the southwest monsoon should spur planting of kharif crops such as paddy, soybean, pulses, and cotton, and thus boost their yields.
The monsoon is crucial for India’s $2.7trillion economy, as it delivers nearly 70 per cent of the rain needed by farms, besides replenishing reservoirs and aquifers.
The India Meteorological Department data says India received close to 28 per cent more rainfall than the average, between June 1 and June 14.
Almost 75 per cent of the estimated 694 districts received normal or above normal rain during this period.
Mauritius, Cayman funds under watch for ownership info gaps
The Sebi is keeping an eye on funds based in Mauritius and the Cayman Islands that may not have provided adequate information about their ultimate beneficial owners, Business Standard reported citing its sources.
How it is important: There are concerns that a number of such funds could have a high NRI holding and be used by Indian promoters for roundtripping and manipulating share prices.
This could also give a false sense of confidence to investors by virtue of a higher foreign portfolio investor (FPI) holding.
According to the current norms, no single NRI can be the beneficial owner of more than 25 per cent of any foreign fund’s asset under management.
There are 600 FPIs based in Mauritius investing into India, of which 408 are category I, according to the NSDL website.
There 336 funds from Cayman, of which 277 belong to category II.
As on May 31, 2021, the website showed at least 10 funds from Mauritius that had their accounts or International Securities Identification Numbers frozen.
Construction projects still short of hands
Over a week after construction activity got the go-ahead, Delhi’s PWD officials said that while the number of workers had started to increase, they were still short of hands to complete projects in time, The Times of India reported.
What it means: Private construction firms were also struggling to get all their labourers back to the capital.
Projects were on the verge of completion as well but with the second wave being so damaging, it is taking all the more time for things to come back to normal.
Normalcy may return in the coming weeks but as of now, it is certain that the deadlines will not be met this time.
Online gaming gains traction amid Covid
As many as 360 million Indians going online for gaming last year against 300 million in 2019, The Times of India reported.
Getting stronger: The 20% growth in gamers and heightened activity online also saw an 18% rise in revenues from gaming.
The revenues are estimated to have touched Rs 7,700 crore in 2020 against Rs 6,500 crore in the previous year.
How it is important: Traditionally limited to smartphones, gaming has now started to spill over to desktops, laptops and bigger screens that provide enhanced user experience through better graphics and display, easier controls, and rich sound.
The trend has been accentuated further as many are taking up gaming as a career for credible long-term prospects, according to a study by HP.
As the craze intensifies, demand for specialised personal computers meant for gaming has seen a surge, and volumes in the category have shot up by three times.
Companies such as HP see a “massive business opportunity” in the trend and are strengthening their gaming PC portfolio to cater to the demand.
Sebi may put framework in place to allow SPAC listing in India
The capital market regulator plans to build a dedicated framework on Special Purpose Acquisition Companies (SPAC) to allow such ‘non-operational’ entities to also raise funds in initial share sales and list locally, says a report published in The Economic Times report.
What the plans are: To allow SPACs in India, Sebi has to either introduce a separate law or amend current regulations to allow listing of ‘non-operating or ‘investment’ companies.
Under SPAC, first, a company is listed on the capital market and raises a particular sum.
A company is created for the sole purpose of raising capital through an IPO.
SPACs would only declare what they plan to do — the types of M&A targets on their radar. Then within a specific time period, they acquire these firms. But if they can’t, they return the funds to the investors.
Regulators could take steps to protect retail investors, minority stakeholders in such structures.
SPACs would largely target bulge-bracket foreign investors that want a piece of some unlisted companies, such as Indian unicorns, which may get listed abroad in the future.
NHAI plans to expand InvIT size
The NHAI plans to increase the size of its proposed infrastructure investment trust (InvIT), says The Economic Times.
How it is important: It is expected to raise as much as ₹15,000 crore in two rounds.
InvITs are popular among investors in long-term revenue-generating assets such as toll roads and power-transmission projects.
Since the operating infrastructure assets provide stable and long-term yields under the InvIT structure, global investors remain aggressive on trusts floated by domestic entities.
NHAI plans to sell about 32 more operational road assets spanning1,500 km as well as upcoming toll-operate transfer projects.
Out of the 32 roads, about 20 totalling 1,000 km will be brought under the proposed private-listed InvIT in the second round.
Tax breaks and other sops offered to pension funds and sovereign investors are another reason for increased interest in such assets.
Banks, borrowers dig in their heels over personal loan guarantees
Banks and borrowers are getting into a tug of war over personal guarantees after the Supreme Court allowed invocation of personal guarantees against defaulting promoters, reports The Economic Times.
What it means: While lenders are asking promoters to furnish a negative lien letter on assets owned by them, promoters are pushing back as their personal assets are sure to go under the hammer in the event of a default, despite the limited liability nature of the companies.
Lenders are insisting on a declaration by promoters that allows banks first charge rights over all of their movable and immovable assets, and they have to take the consent before selling any asset.
In the past, lenders have faced issues where the promoters disposed of assets despite giving those as guarantee, but with a negative lien letter and the personal bankruptcy law, they won’t be able to get away with it.
Banks say that they are demanding proper documentation because several promoters have parked their assets in a trustee company or moved proceeds of a sale to overseas locations after promising property, shares and other assets as part of a personal guarantee.
ONGC Videsh plans to raise $525 million
ONGC Videsh is in the process of raising $525 million in foreign currency loans from a mix of domestic and foreign lenders, reports The Economic Times.
How it is important: It is to repay bonds maturing next month.
ONGC Videsh is in talks with half a dozen foreign and domestic banks for the loan and expects to close the deal this month and drawdown next month.
The loan will likely come with about a 1.5% interest rate and a five-year term.
The company is borrowing from banks instead of issuing fresh bonds as it would help save about 1 percentage point in interest cost.
Rupee may see better days as RBI eases forward intervention
The Reserve Bank of India has reduced its intensity of intervention in the foreign exchange market’s forward segment, Mint reports.
How it is important: The reason behind this move is one factor that may determine the fortunes of the Indian rupee going forward.
The foreign exchange market’s forward segment has witnessed an upheaval of sorts in the past two months.
The premium expected to book dollars at a future date had soared consistently at first up until March and then dropped sharply this month.
Growth recovery needs interest rates to be low, and liquidity in surplus.
A weaker currency is also necessary because that makes exports competitive.
That explains the RBI’s forex interventions in the wake of sustained dollar inflows.
But when the RBI buys dollars, it adds rupees into the system.
To avoid this, the central bank buys dollars at a future date, in the forward market.
Govt may extend EV scheme till 2024
The Centre may extend its ambitious scheme to promote electric mobility by two years till March 2024, Mint reports.
How it is important: The scheme is designed to support the electrification of public and shared transport, and help create charging infrastructure.
The marquee scheme signals the government’s intent to reduce vehicular emissions and dependence on fossil fuel.
However, the scheme has failed to take off, with only 5%, or ₹492 crore, of the ₹10,000 crore allocated under its second phase spent till March.
Money allocated under Fame-2 is to be spent to subsidize 500,000 electric three-wheelers, 1 million electric two-wheelers, 55,000 electric passenger vehicles and 7,090 electric buses.
The government aims to turn the country into a global hub for EV manufacture, and has approved a ₹18,100 crore production linked incentive scheme to make advance chemistry cell battery to attract investments of ₹45,000 crore.
Funding frenzy has just begun for homegrown D2C brands
The homegrown direct-to-consumer (D2C) brands attracted over $250 million from venture capital investors in first 5 months of ’21, says Mint.
How it is important: It is nearly as much as the total invested in such businesses in all of 2020.
Investor appetite for D2C brands, whetted last year by pandemic tailwinds, has accelerated across categories, from personal care to health and nutrition to packaged food.
Investors had struck 49 deals in the five months to May, against 135 in 2020.
Several brands caught the attention of investors as they have turned profitable in a relatively short period.
Digital may overtake TV ad spends by 2024, says report
Ad revenue in India is forecast to rebound strongly by 2025, following a 27% plunge in 2020, with ad spends on digital media overtaking those on television (TV) by 2024, reports Mint quoting a Media Partners Asia (MPA) study.
How it is important: The gap between ad spends on TV and digital is narrowing every year.
Digital, at 35% market share, has overtaken print (16%) and is closing the gap with TV (45%).
Overall, ad revenue is expected to grow at a compound annual growth rate of 13% to touch $13.3 billion by 2025.
India’s advertising market will expand by 20.5% in 2021 to $8.7 billion, given the low base last year.
The internet, which was a major beneficiary of the lockdown, will continue to grow steadily and expand its share of advertising from 36.6% in 2021 to 40.1% in 2025.
This includes fast-growing categories such as online gaming, ed-tech, and food and delivery platforms, which will outpace TV to become the largest advertising segment by 2024.
Restaurants reopen with a mouthful of caution, footfall low at Delhi malls
Several people stepped out cautiously for outings at malls and restaurants across the city as dine-in services reopened after nearly two months on Monday, but the footfall was low considering the Covid-19, says Hindustan Times.
How it is important: As part of the unlock process, all shops in malls were allowed to run from 10am to 8pm from Monday.
Restaurants, too, were also allowed to open their doors for dine-in patrons, restricted to 50% seating capacity to ensure physical distancing, while salons and barbershops also catered to customers.
