💰️ International fundraising

Good morning. Returning to work after a long weekend feels like starting a car with a dying battery.

On the bright side, it’s a 4 day week and chai/coffee exists. So pick your poison and have a great day ahead ☀️☕️ 

- Ruchirr Sharma & Shatakshi Sharmaa

TABLE OF CONTENTS

• 💰️ International fundraising

• 🏥 India protects against potential Mpox outbreak

• 🗞️ Bite-sized summaries

  • 📉 Selling Zomato shares

  • ⚡️ Nepal to export electricity to India

  • 🛣️ Cognizant on the right track

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian stock markets closed flat on Monday despite a strong start. BSE Sensex ended slightly down, while NSE Nifty50 was marginally up. Hindalco and BPCL led gains, while M&M and IndusInd Bank declined. Broader markets outperformed, with mid and small-cap indices rising. Metal and PSU Bank sectors gained, while Auto and Private Bank sectors fell.

🌍️ International

• Global stocks rose and the dollar fell, following positive market sentiment fuelled by expectations of Federal Reserve interest rate cuts. Analysts noted that while economic fundamentals remain fragile, recession fears have diminished, prompting a cautious optimism in market outlooks.

MONETARY POLICY

💰️ International fundraising

According to the latest RBI Bulletin, Indian companies are increasingly turning to international markets for fundraising, indicating a significant shift in the domestic credit landscape. 

This trend is driven by three main factors: growing global investor interest, improved liquidity conditions, and reduced hedging costs.

Here’s what’s happening: 

• The rising reliance on international markets for funding comes at a time when foreign direct investment (FDI) in India has sharply declined, plummeting from $49.3 billion in 2022 to just $28.1 billion in 2023. 

• This drop has resulted in India falling to 15th place in the World Investment Ranking, highlighting a challenging environment for domestic investment.

• In response to this decline, Indian banks are planning to raise approximately ₹40,000 crore in equity funds during the second half of the current financial year. 

• The reason? To strengthen their balance sheets and support capital expansion, reflecting a proactive approach to stabilizing their financial health amidst shifting market dynamics.

Furthermore, banks and non-banking financial companies (NBFCs) are diversifying their funding sources, with a particular emphasis on issuing bonds in foreign markets. 

The offshore syndicated loan market has become increasingly attractive, as many companies anticipate a cycle of interest rate cuts, prompting both existing and new borrowers to engage in large-scale issuances of debt (i.e. borrow a ton of money at lower rates).

But there are still some challenges ahead: 

• Despite these positive developments, the Reserve Bank of India (RBI) has cautioned that banks may face challenges in raising funds domestically. 

• A significant factor is the low percentage of low-cost current and savings deposits within total deposits, which may limit banks' ability to secure funds through cost-effective means. 

• This situation could pressure their profit margins, leading to a tighter alignment between loan growth and deposit growth.

• Additionally, there are emerging signs of stress in the unsecured loan segments, particularly in personal loans and credit card portfolios. This stress may further influence banking behaviours and strategies as institutions adapt to the evolving credit market landscape.

Overall: As the credit market continues to evolve, it will be crucial to observe how Indian companies and financial institutions navigate these changes in the coming months. 

The shift towards international fundraising highlights both opportunities and challenges, underscoring the need for strategic financial planning in a fluctuating economic environment.

Read more: Economic Times

HEALTH CARE

🏥 India protects against potential Mpox outbreak

This is no longer a drill. 

As of Monday this week, India's Union Health Ministry has implemented robust measures to prepare for a potential Mpox outbreak. 

The ministry has issued guidelines to airports and land ports along the Bangladesh and Pakistan borders, urging vigilance for symptoms among international travellers.

Here’s the TL;DR: 

• In New Delhi, three hospitals—Ram Manohar Lohia, Safdarjung, and Lady Hardinge Medical College—have been designated as nodal centres for Mpox patient care. 

• State governments have been instructed to identify similar facilities in their jurisdictions.

Since 2022, India has reported 30 Mpox cases, with the most recent detected in March 2024. As the global case count surpasses last year's figures, India remains vigilant in its preparedness efforts.

While no current Mpox cases have been reported in India, authorities are enhancing surveillance and testing preparedness nationwide.

Why? Because the World Health Organization (WHO) has officially declared Mpox a Public Health Emergency of International Concern, with over 99,000 cases recorded globally since 2022.

Overall: Despite the current strain being more virulent and infectious, the risk of a large outbreak with sustained transmission in India is deemed low.

The Health Ministry has directed officials to bolster surveillance and implement effective detection measures. 

• Thirty-two laboratories across India are now equipped for Mpox testing. 

• Authorities are also focusing on raising awareness among healthcare providers about the disease's symptoms and the importance of timely reporting.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

📉 Selling Zomato shares - Antfin Singapore plans to sell a 1.54% stake in Zomato worth ₹3,420 Cr. ($408 million) in a block deal. The sale will be at a 4% discount to Monday's closing price (₹252.71). Antfin has been systematically reducing its stake in Zomato, despite its stock surging 110.6% year-to-date, outperforming the Nifty 50. A big reason? To cash out early and take home good profits. The company reported a net profit of ₹253 crore in the June quarter, with revenue up 74% year-on-year. Some investors like Alipay and SoftBank have also been cashing out with significant gains. UBS has maintained a buy rating on Zomato's stock, increasing its target price to ₹320.

⚡️ Nepal to export electricity to India - Nepal has agreed to export nearly 1,000 megawatts of electricity to India, as announced by Indian External Affairs Minister S Jaishankar following talks with Nepalese counterpart Arzu Rana Deuba. The ministers discussed enhancing cooperation in energy, trade, connectivity, and infrastructure development. Given that Nepal, sharing borders with five Indian states, heavily relies on India for the transportation of goods and services, Deuba's five-day visit to India, her first official trip abroad as Minister, aims to strengthen the long-standing relationship between the two countries.

🛣️ Cognizant on the right track - Cognizant CFO Jatin Dalal reports positive signals in IT demand after a prolonged slowdown. The company recently closed five large deals exceeding $100M each and has awarded pay hikes to 290,000 associates globally and promoted 125,000 associates from 2022 to July 2024. The company is seeing progress in its turnaround efforts, with 2.1% sequential growth in the June quarter. Cognizant aims to expand its presence in tier-2 Indian cities for future growth.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Paytm may achieve profitability by 2027, upside lies in being acquired by banks or corporate.

• ED investigates Indian links of foreign gambling apps, suspects over ₹1 lakh cr bets.

• Apple India business value exceeds ₹2 lakh Cr.

• Security flaw in Microsoft's macOS apps may allow hackers to spy on users.

• Disney+ Hotstar content may merge into JioCinema after RIL-Disney deal to create India's largest streaming service.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Premier League updates: Leicester City drew Tottenham 1-1. Leaderboard here.

• US talk show host Phil Donahue passes away at 88.

• The Buckingham Murders update: Kareena Kapoor confirms the release date of teaser aka tomorrow.

• Official teaser for Vicky Kaushal's Chhaava out now.

• Saif Ali Khan to return in ‘Race 4’ as franchise gears up for a reboot.