Morning Scan: Your Daily Overview of Key Stories
Delhi News
#1. Regulator finds WhatsApp violated India’s competition law with 2021 service terms
Three years after a controversial update to WhatsApp’s privacy policy sparked user backlash, India’s competition regulator has found that Meta, WhatsApp’s parent company, violated the country’s competition laws by abusing its dominant position, according to the Mint. The Competition Commission of India is now expected to issue an order, which may include a fine.
Why it’s important: India is a key market for Meta and WhatsApp. The messaging app boasts nearly 536 million users, the largest user base globally. WhatsApp has also faced regulatory actions in other countries for abusing its dominant position.
#2. With Noel Tata in charge, Tata Group may reconcile differences with Shapoorji Pallonji
Seven years after a tense corporate dispute, the Shapoorji Pallonji and Tata groups may be moving toward reconciliation. According to the Hindu Businessline, Noel Tata, who is married to Aloo Mistry, daughter of the late Pallonji Shapoorji Mistry, has taken charge of the Tata Trusts. Known for his non-confrontational leadership, Noel Tata could serve as a key mediator in easing tensions between the two groups.
Why it’s important: Reconciling with the Tata Group could help alleviate Shapoorji Pallonji’s financial difficulties. However, the future of its stake in Tata Sons, which is valued at over ₹3 lakh crore, may pose a significant challenge in the negotiations.
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#3. Reliance Industries is in discussions to acquire a stake in Karan Johar’s Dharma Productions
According to the Economic Times, Reliance Industries is discussing acquiring a stake in Karan Johar’s Dharma Productions. Johar has been looking to monetize his ownership in the company. Still, previous deals have failed due to disagreements over valuation. He currently holds a 90.7 percent stake in Dharma Productions.
Why it’s important: This deal would enhance Reliance’s position in content production. Dharma Productions’ search for a partnership highlights the financial difficulties in the Hindi film industry, which include increasing production costs, declining theater attendance, and the rising popularity of streaming platforms.
#4. Ola Electric faces regulatory action for misleading pricing practices, may lose subsidy
The Automotive Research Association of India (ARAI) has expressed concerns regarding Ola Electric’s recent pricing practices. ARAI pointed out that Ola did not inform them about a price reduction for a model before launching a sale. The company sold its S1 X 2 kWh model for ₹50,000 but reported an ex-factory price of ₹75,001 to ARAI.
Why it’s important: India’s largest electric scooter manufacturer may face legal action and risk losing its subsidies. This comes after the ARAI was instructed to investigate consumer complaints related to the company.
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#5. India’s startups make small gains through IPOs but provide lucrative exits for investors
According to the Mint, in the current financial year 2024-25, offers for sale (OFS) comprised 64 percent of startup IPO share sales, the highest level in four years, compared to 51.21 percent in the overall IPO market. In contrast, during the 2021-22 financial year, OFS by investors represented 48 percent of total startup IPO share sales by value while accounting for 63.3 percent in the broader IPO market.
Why it’s important: IPOs have become the preferred exit strategy for startup investors aiming to capitalize on their investment in emerging companies. Although this trend results in startups raising less capital through IPOs, it creates more opportunities for new investors eager to participate in India’s startup boom.
#6. Companies mobilized a record Rs 88,678 crore via qualified institutional placements this year
Fundraising through qualified institutional placements (QIPs) has reached a record high in 2024, driven by favorable valuations and liquidity support that have led large corporate firms to launch significant offerings. According to the Business Standard, 71 companies have raised ₹88,678 crore through this method so far this year, marking the highest amount raised in a calendar year.
Why it’s important: Qualified Institutional Placements (QIPs) are the favored method for raising additional capital in a bull market due to their efficiency and cost-effectiveness. The recent gains in equity markets have allowed stocks to achieve higher valuations, enabling companies to raise capital while minimizing dilution.
#7. Regulatory panel mulls allowing mutual funds to offer schemes that invest fully in commodities
According to the Hindu Businessline, a committee established by the Securities and Exchange Board of India (SEBI) is considering whether mutual funds should be allowed to create a new category of actively managed funds that invest entirely in commodities through exchange-traded commodity derivatives (ETCDs). In 2019, SEBI permitted funds to invest in ETCDs, capping exposure to 30 percent of the net asset value for multi-asset schemes and 10 percent for other hybrid schemes.
Why it’s important: This segment may offer strong returns. If the regulator permits these schemes to hold net long positions, mutual fund investors could benefit financially.
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#8. India might raise the bar to restrict the entry of substandard steel from Chinese mills
According to the Economic Times, the central government may soon broaden its stringent quality standards in response to a rise in large-scale dumping of substandard steel, primarily from China. This decision follows a thorough review by the steel ministry in early October, which highlighted the sector’s growing susceptibility to global trade diversions.
Why it’s essential: India is a net importer of steel, and implementing stringent quality checks could help reduce import volumes. This comes as producers seek new markets in the face of sluggish demand and high tariffs imposed by the US and the EU.
#9. Infosys hands out promotions to 25 senior executives after exodus in past two years
According to the Mint, Infosys has launched one of its most extensive promotion drives, promoting at least two dozen senior executives this year after experiencing a significant senior management exodus over the past two years. The IT company has elevated 25 employees, most of whom have been with Infosys for at least 20 years, to executive vice president and senior vice president.
Why it’s essential: Infosys has issued promotions to retain its top executives and maintain continuity for its key clients. These promotions follow the company’s loss of high-level talent to competitors in the past two years.
#10. State Bank of India talent emerges as high-yielding assets for private sector banks
In the past six months, at least three former executives from the State Bank of India (SBI) have been appointed managing directors and CEOs of various private sector banks. According to the Business Standard, Partha Pratim Sengupta recently took the helm at Bandhan Bank. This brings the total to six private sector banks with CEOs from SBI, and Sengupta will soon make it seven. Additionally, there are three banks, including one public sector lender, where a former SBI official holds the position of non-executive chairman.
Why it’s essential: The banking regulator appears to support the concept of an SBI official leading other banks.
Appointment of a public sector banker as CEO provides stability to a private sector lender.