India Stocks: Summary of Top Articles

International private equity firm TPG, along with local energy company JSW Energy and Inox Wind, are reported by the Economic Times to be competing in the acquisition battle for Siemens Gamesa Renewable Power. The Indian division of Siemens Gamesa, a wind energy provider, could be valued at up to $0.5 billion, but the deal may be influenced by contingent liabilities, acting as a deterrent and potentially affecting the valuation.

Siemens is considering selling its wind turbine business in India to reduce losses and enhance profitability. While deal activity is picking up in India's renewable energy sector, Siemens Gamesa faces litigation over contracts in the country, potentially impacting the company's valuation.

Tata Sons, the owner of Air India, has requested the management to carefully proceed with the merger with Vistara and ensure the continuation of Vistara's excellent flight experience to avoid alienating Vistara's loyal customer base, as reported by Economic Times. The merger is scheduled to take effect on November 12th.

There is a concern that any misstep could jeopardize the success of the integration, balancing Vistara's established goodwill and business. The expectations for passenger quality on Air India have increased after Tata Group acquired India's flag carrier.

According to Business Standard, the sluggish M&A in India increased by 13.8%, reaching $69.2 billion in the January-September period of 2024 (compared to $60.8 billion in the same period of 2023), as reported by Bloomberg. Local companies and private equity firms led the way with 2,301 transactions taking place from January to September.

Compared to developed markets in North America and Europe, the market size and growth potential in India have become increasingly attractive to investors, leading to an increase in deal activity. However, existing valuations are high, and returns are expected to be further out.

Companies like Vikram Solar, Aditya Infotech, Varindera Constructions, and more than 12 others submitted preliminary documents to the Securities and Exchange Board of India in a single day, likely heralding an IPO wave hitting Dalal Street. These companies are expected to raise at least a total of 800 billion rupees. The sectors of IPOs, trade sizes, new issuances, and offerings are diverse.

The primary market is attracting strong interest from issuers and investors. Already, 62 companies have raised 6,400 billion rupees on the main board, a 29% increase from 4,943.6 billion rupees raised by 57 companies in 2023.

Business Standard reported that according to data from the Indian Economic Monitoring Center, private companies announced factory establishments and other new projects worth 4.1 trillion rupees in the first 3 months up to September. When combined with the government's announcement of new projects worth 1.4 trillion rupees, the total project announcements for the September quarter reached 5.49 trillion rupees.

In recent years, the government has been boosting infrastructure investments, while private sector investments have been lagging. Supported by generous business incentives, the manufacturing sector seems to be taking the lead, signaling a changing landscape.

India's Central Consumer Protection Bureau reportedly issued notices to major alcohol manufacturers such as Bacardi, Pernod Ricard, United Breweries, Radico Khaitan, and William Grant regarding surrogate advertising where alcohol brands endorse products other than alcohol.

The authorities play a crucial role in enforcing consumer rights. Despite past strict regulations, surrogate advertising continues to persist. This development came while the government was finalizing rules aimed at curbing this practice.

According to the Economic Times, despite a slight slowdown in the economy midway through the fiscal year following a strong summer, experts suggest it to be temporary and anticipate that the festive season will enhance sentiment, supporting growth. GST collections for September saw a marginal increase of 6.5%, while manufacturing activity fell to an 8-month low.

The momentum in manufacturing for September softened from the robust growth of summer. Strong monsoons and festive season demand are expected to lift the economy.

The Reserve Bank of India showing caution towards financial resources is believed to be due to the rapid growth of financial resources, but Mint reports that asset classes with collateral like gold are still associated with less risk seen in personal loans. The outstanding gold loan balance in August increased by 41% year-on-year to 1.4 trillion rupees, which is double the growth rate compared to August last year.

Due to the scrutiny of regulatory authorities, some well-positioned enterprises may attract more demand. As central banks emphasize the shortcomings of using third parties for loan procurement, it may impact financial institutions heavily reliant on fintech companies and business correspondents.

Despite the government initiating the 'Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement,' concerns have been raised within the industry regarding the non-payment of subsidies under the PM e-Drive scheme incorporated in the traditional Electric Mobility Promotion Scheme 2024. The EMP Scheme was allocated 77.8 billion rupees from April 1st to September 30th.

Electric car companies are currently paying incentives in anticipation of receiving subsidies promptly from the government. There is a possibility of a significant blow if vehicle deliveries are delayed due to issues with the incentive certification portal.

For online retailers like Flipkart, Amazon, Myntra, and Meesho, the festival sales season started off great, as reported by Hindu Businessline. According to estimates by e-commerce and industry executives, the total sales in the first four days increased by 24% compared to last year. The order volume during this period, which usually lasts 40-45 days, is expected to record a 20% growth.

After the pandemic, e-commerce has been performing well, and with the start of the festival shopping season, consumer demand is expected to be strong, bringing great profits to online retailers, with benefits extending to the entire supply chain.