Business Bulletin Weekly 10 June 2023
10 June Weekly Business Bulletin
In today's business bulletin, let's look at some important news. Latin America and India are strengthening their trade relations. Bajaj Finserv is launching its mutual fund business. Wipro shareholders have approved a Rs 12,000 crore share buyback. BYJU will launch the IPO of Aakash Education Services Limited next year. Nikhil Kamath, a co-founder of Zerodha, has taken significant initiatives for social causes. TCS has highlighted a notable change in women's fear of quitting jobs. RBI has not made any changes to the repo rate. For more information on these news items, stay tuned to our video!
Latin America-India: Overcoming the Middle-Income Trap with Digital Technologies
Trade relations between Latin America and India are growing stronger. Latin America is utilizing new digital technologies to escape the middle-income trap caused by slow and asymmetrical growth. Trade relations with China have boosted investment in Latin America. India has also enhanced its trade relationship with Latin America, with countries such as Venezuela, Chile, Colombia, and Peru being significant partners. Ecuador, Paraguay, the Dominican Republic, Panama, and Guatemala also offer trade and investment opportunities for India. Latin America is a crucial trade frontier for India, and both countries are working to strengthen their economic ties.
Bajaj Finserv's Mutual Fund Business: Doubling Speed, Doubling Power, New Game Begins!
Bajaj Finserv has joined the list of companies launching their mutual fund business, riding the increased interest in mutual fund investments in India. The average assets under management (AUM) in the mutual fund industry have grown from ₹24.70 lakh crore in March 2020 to ₹40.04 lakh crore in March 2023. Bajaj Finserv has obtained registration from the Securities and Exchange Board of India (SEBI) and has the opportunity to launch its mutual fund business in March. Bajaj Finserv Mutual Fund will launch seven schemes, including liquid, money market, overnight, arbitrage, large and mid-cap, balanced advantage, and flexi-cap funds. Debt funds will be launched first, followed by equity offerings. The company aims to diversify its retail franchise and leverage the strength of its existing businesses by launching the mutual fund business. As a late entrant in the market, Bajaj Finserv faces some challenges. However, it hopes to leverage its distribution network, and customer reach through lending and insurance businesses. Additionally, Bajaj Finserv will adopt a unique investment philosophy to differentiate itself from existing players.
Wipro's Shareholders Approve Rs 12,000 Crore Share Buyback Program
IT company Wipro's shareholders have approved a share buyback program worth Rs 12,000 crore. The Wipro board has approved to purchase 26.96 crore equity shares for Rs 445 per share. The resolution for the share buyback received 99.9% of votes in favor. Wipro's promoters and promoter group members also intend to participate in the buyback. This news may be relevant for investors or those interested in Wipro.
Aakash Education Services Limited's IPO: A New Path for BYJU'S Expansion
BYJU'S, a fast-growing edtech company, plans to launch the Initial Public Offering (IPO) of Aakash Education Services Limited next year. Aakash, which currently operates 325 centers serving over 400,000 students nationwide, aims to raise Rs 4,000 crore in the IPO and achieve an EBITDA of up to Rs 900 crore in the financial year 2023-24. The test-prep market is expected to grow at a compound annual growth rate (CAGR) of 9.3% from 2020 to 2025, with the online test-preparation segment expected to grow at a CAGR of 42.3%. Aakash plans to leverage this growth further to enhance its engineering and medical entrance exam offerings. The company seeks to raise funds through the IPO to strengthen its infrastructure and expand nationwide access to high-quality test preparation education.
Nikhil Kamath, Co-founder of Zerodha, Pledges to Donate Wealth for Philanthropic Cause
Nikhil Kamath, co-founder of the trading app Zerodha, has pledged to donate a significant portion of his wealth for philanthropic purposes. Kamath has joined "The Giving Pledge," an initiative started by Bill Gates and Warren Buffett in 2010, where wealthy individuals commit to giving a substantial part of their wealth to support social causes. As one of the youngest billionaires in India and the fourth Indian to join this initiative, Kamath aims to utilize at least 50% of his net worth in areas such as renewable energy, education, and healthcare. Through his involvement in various organizations like Rainmatter, Giving Pi, Bridgespan, British Asian Trust, and YUVA, Kamath intends to impact society and address critical issues positively. He has also initiated his program called "Young Indian Philanthropic Pledge (YIPP)."
TCS: More Women Employees Quitting Compared to Men, Amid Work-from-Home Transition
TCS (Tata Consultancy Services) has observed an unusual trend where the attrition rate among women employees is higher than among men, potentially influenced by the end of the work-from-home setup. Milind Lakkad, TCS's Vice President, stated that historically the fear of quitting jobs has been lower or similar among women compared to men, but this time the trend is "unique." He speculated that working from home during the pandemic disrupted some women's routines, and even after normalization, they have refrained from returning to the office. TCS acknowledges the rise in attrition among women as a setback to its efforts to improve gender diversity and has directed attention toward addressing this trend.
No Change in Repo Rate, Home Loan Borrowers Concerned
The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged, causing concerns among home loan borrowers. This suggests that the expectations for reducing the repo rate in the coming months have diminished. RBI Governor Shaktikanta Das highlighted issues such as inflation reaching up to 4% and the vulnerabilities associated with changing weather conditions and global central bank policies. As a result, the repo rate is expected to remain stable for an extended period, dampening hopes of a rate cut in the near term. The future will reveal how the situation unfolds.
BSNL Revival Package: Boost for Digital India with Rs 89,047 Crore Investment and 4G/5G Spectrum
The Indian Government has approved a new revival package for Bharat Sanchar Nigam Limited (BSNL) amounting to Rs 89,047 crore. The package includes the allocation of 4G/5G spectrum to BSNL. BSNL's authorized capital will be increased from Rs 1,50,000 crore to Rs 2,10,000 crore. With this package, BSNL will become a stable telecom service provider, extending connectivity to the remotest parts of the country. The spectrum allotment will enable BSNL to provide 4G and 5G services nationwide, expand 4G coverage in rural and uncovered areas, and offer high-speed internet. The previous revival packages in 2019 (Rs 69,000 crore) and 2022 (Rs 1.64 lakh crore) have brought stability and improved the financial condition of BSNL. Additionally, BSNL has witnessed significant growth in the home fiber segment, with over 1 million new connections monthly and revenue of Rs 2,071 crore in the previous year. BSNL aims to contribute to the digital transformation of India.