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India Inc sees resilient investments at $6.7 billion across key sectors in May

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New Delhi, June 6 (IANS) India Inc saw resilient private equity (PE) investments amid elections as the month of May witnessed 145 deals worth $6.7 billion, a report showed on Thursday.

The key sectors like real estate, e-commerce, healthcare, and financial services saw a surge in investments, according to the report by Grant Thornton Bharat Dealtracker.

“The surge in PE deal values, driven by investments in select sectors despite stable volumes, signals resilience in the market,” said Shanthi Vijetha, Partner, Growth at Grant Thornton Bharat.

“The policy and reform direction of the new government will be pivotal in shaping the investment climate and driving future deal activity,” Vijetha added.

The mergers and acquisitions (M&A) landscape saw 38 deals at $1.1 billion. The top deal was Google’s investment in Flipkart for $350 million.

The PE landscape saw 99 deals and deal values surged by 49 per cent to $4 billion, the second-highest monthly deal value after January, driven by nine high-value deals exceeding $100 million each.

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The top PE deal was Brookfield India Real Estate Trust’s substantial investment of $723 million in Bharti Enterprises.

In May, the IPO landscape saw significant activity, with five IPOs raising a total of $1.2 billion.

Additionally, the QIP (qualified institutional placement) landscape included three QIPs, which collectively raised $0.5 billion.

The retail sector topped in deal volumes, primarily due to two high-value e-commerce deals totalling $625 million, the report mentioned.

–IANS

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Kolkata Port slashes rates to attract more cargo

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Kolkata, June 12 (IANS) The Syama Prasad Mookerjee Port in Kolkata (SMPK) has announced a volume-based rebate scheme for 2024-25 to enhance the volume of cargo.

SMPK handled a record 66.4 million tonnes of cargo in 2023-24, despite challenges such as paucity of draught in the riverine channel that connects the port facilities in Kolkata and Haldia to the sea. It now wants to surpass that figure.

Under the scheme, concession will be provided if there is augmentation in cargo like coal, manganese ore, iron ore, and limestone. The rebate can go up to Rs 100 per metric tonne.

This will significantly reduce cargo and vessel-related charges.

There are also incentives to attract new customers to the Haldia Dock Complex (HDC) under SMPK.

The HDC is better placed than the Kolkata Dock System (KDS) when it comes to available draught. Larger vessels with greater parcel loads can enter HDC easily as compared to KDS.

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To highlight this strategy and attract customers, SMPK organised an interactive session with the key stakeholders on Monday. Among those present were Rathendra Raman, Chairman, SMPK, A.K. Mehra, Deputy Chairman, HDC, and Samrat Rahi, Deputy Chairman, KDS.

“We are committed towards fostering growth and prosperity for our stakeholders. This rebate scheme is a testament to our dedication towards supporting our customers and driving economic development in the region. I urge all users to maximise their cargo throughput and fully benefit from the scheme,” Raman said.

–IANS

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Ports, roads to get major investment boost in India, cargo volume to grow up to 8 per cent: Report

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New Delhi, June 12 (IANS) The cargo volumes in India are expected to grow 6-8 per cent in the current fiscal year on the back of healthy growth in the container and coal segments, amid increased government capital outlay across roads, ports, and airport infrastructure, a report said on Wednesday.

Credit agency ICRA forecasts increased spending on transportation infrastructure projects, including on roads, ports and airports over the coming years, benefiting from solid government support, rising capital outlays and a large pipeline of projects.

The government has planned a large capex under its ‘Maritime India Vision 2030’ to augment port capacity and infrastructure over the next decade.

This could bring about supply-demand mismatches in a few clusters, resulting in increased competition and pricing pressure for ports, said the report.

ICRA expects India’s government to maintain a strong focus on road sector investments through increasing capital outlays.

The Ministry of Roads, Transport and Highways’ (MoRTH) budgetary allocation for the sector has increased by more than 8 times over the past decade to Rs 2.7 lakh crore in fiscal 2025, reflecting a 22 per cent compound annual growth rate.

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“India’s road construction will likely grow 5-8 per cent to 12,500 km-13,000 km in fiscal 2025, following a robust expansion of around 20 per cent in fiscal 2024. This pace of execution will be supported by a healthy pipeline of projects, increased government capital outlay and greater focus on project completion by MoRTH,” said Girishkumar Kadam, ICRA’s Senior Vice President and Group Head, Corporate Ratings.

According to the rating agency, investments in airport infrastructure will also remain healthy at around Rs 55,000 crore-Rs 60,000 crores of committed capex over the next 3-4 years channelled toward projects including new greenfield airports, brownfield development and airport expansions under the Airports Authority of India (AAI).

Overall passenger traffic at airports will likely grow at a healthy 8-11 per cent to around 407 million-418 million passengers in fiscal 2025 from fiscal 2024, the report said.

–IANS

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Indian corporates' large capex to need offshore funding amid steady economic growth

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New Delhi, June 12 (IANS) Indian corporates’ large capex will need to rely on offshore funding despite improving domestic liquidity and companies’ earnings growth, a new report showed on Wednesday.

As per Moody’s report, capacity expansion, inorganic growth, refinancing and working capital needs, along with shareholder payments, will keep capital requirements high for non-financial corporates in India.

“While India’s domestic liquidity and companies’ internal cash flow can largely cover their capital needs, offshore funding will remain key despite its share reducing to 12 per cent of India Inc’s total funding due to its higher costs and rising domestic liquidity,” said Vikash Halan, a Moody’s Managing Director.

The report also mentioned that Indian corporates have the capacity to incur additional debt to meet funding needs. Over the past decade, the corporate sector has steadily cut debt to 55 per cent of GDP from 72 per cent while leverage has remained stable.

Meanwhile, ICRA, a Moody’s affiliate in India, noted that the Indian corporate sector saw steady business momentum in the fiscal year (FY) ended March 31, 2024, supported by both consumption and investment activity.

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Still, rural areas have so far faced subpar monsoons and inflationary trends that have dampened consumption.

Conversely, urban-focused businesses such as residential real estate, hospitality, airlines, jewellery and automobiles have continued their robust momentum, the report noted.

“Despite the likely higher debt, India Inc. will continue to report stable credit metrics due to stabilising inflationary pressures and a steady interest rate regime. The forecast of a normal monsoon season should support a nascent recovery in rural markets,” said K. Ravichandran, ICRA’s Chief Ratings Officer.

ICRA expects the pace of private sector capex to be moderate in the first half of FY2025 due to the likely pause in infrastructure activities before the general elections.

–IANS

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Indian financial institutions well placed to ride on robust economic growth: Moody's

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Mumbai, June 12 (IANS) Indian banks and non-bank finance companies (NBFCs) are well placed to seize opportunities from the country’s strong economic prospects through lending growth in sectors such as infrastructure, energy transition, manufacturing, small businesses and retail, a Moody’s report said on Wednesday.

The credit quality of India’s financial system has strengthened over the past 3-4 years. Record-high profitability, low delinquencies and stable domestic-oriented funding underpin financial institutions’ stable credit ratings. Their capitalisation has also improved with healthy internal accruals and capital raising from buoyant debt and equity markets, the report mentioned.

“For India’s financial institutions, leadership in technology adoption as well as their risk management, governance, customers’ experience and balance-sheet buffers will separate winners from losers over the next 2-3 years,” said Amit Pandey, a Moody’s Vice President and Senior Analyst.

Moody’s expects loan growth of 12-14 per cent over the next 12-15 months as loans grow in line with deposits. According to the report, system-wide net interest margins will soften selectively as banks reprice maturing deposits at higher rates to reflect previous increases in interest rates. Still, the system-wide return on assets will remain healthy with low loan-loss provisions despite a slight increase from cyclically muted levels, while banks’ capitalisation will remain stable, said the report.

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The Reserve Bank of India’s (RBI) initiatives to pre-emptively manage credit growth in high-risk segments such as unsecured loans, along with tighter scrutiny on areas such as customer protection, risk management, cyber security and IT infrastructure, will enhance financial stability.

Meanwhile, ICRA, an affiliate of Moody’s in India, said the extent of growth of systemic liquidity and deposits in India will continue to remain a key driver for the credit growth for banks amid strong demand for credit. The estimates suggested that despite a moderation in growth, credit is set to increase from Rs 19 trillion to Rs 20.5 trillion in the fiscal year ended March 2025 (FY25), which would be the sector’s second-highest increase.

“Corporate asset quality continues to remain stable; however certain asset classes in retail unsecured segments are seeing increased stress. Reduced credit flow could further pressure asset quality in these segments, but overall fresh slippages and credit costs will remain benign for banks,” said Karthik Srinivasan, ICRA’s Senior Vice President and Group Head.

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The rating agency projected that growth in the NBFC sector will moderate, especially in the non-mortgage retail loan segment, on the back of expanded assets under management (AUM) following the high growth rates seen in the past two fiscal years.

–IANS

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India's industrial production clocks 5 pc growth in April

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New Delhi, June 12 (IANS) India’s Index of Industrial Production (IIP) recorded a 5 per cent year-on-year growth during April this year compared to the corresponding figure of 4.6 per cent in April 2023, according to the latest data released by the Ministry of Statistics on Wednesday.

The growth rates of the Mining, Manufacturing and Electricity sectors in April 2024 are 6.7 per cent, 3.9 per cent and 10.2 per cent respectively over the same month last year.

Within the manufacturing sector, the growth rates of the top three positive contributors to the growth of IIP for April 2024 are — ‘Manufacture of basic metals’ (8.1 per cent), ‘Manufacture of coke and refined petroleum products’ (4.9 per cent), and ‘Manufacture of motor vehicles, trailers and semi-trailers’ (11.4 per cent), the figures showed.

Data on use-based classification shows that the output of consumer durables such as refrigerators, washing machines and TVs grew by 9.8 per cent which appears to be a positive sign of demand for these goods picking up in a growing economy.

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The output of construction goods also grew by a robust 8 per cent indicating the investments being made in the infrastructure structure.

The production of capital goods, which comprise machines that produce goods and thus reflect the real investment taking place in the economy, grew at 3.1 per cent.

–IANS

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