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Adani Green Energy Reports 39% Profit Drop in Q4 FY24, Full-Year Profit Up 29%

Adani Green Energy, a part of the Adani group focusing on renewable energy, saw a 39% decrease in its profit in the last quarter of FY24, dropping to Rs 310 crore from Rs 507 crore in the same period last year.

The company's total revenue also fell by 6% to Rs 2,806 crore in the last quarter of FY24, compared to Rs 2,977 crore in the same period last year. However, for the full year, its profit increased by 29% to Rs 1,260 crore in FY24 from Rs 973 crore in FY23.

AGEL's operational capacity increased by 35% year-on-year to 10,934 MW, with the addition of 2,848 MW of new renewable capacity, including 2,418 MW of solar and 430 MW of wind projects.

Amit Singh, the CEO of Adani Green Energy, stated, "Our aim is to complete at least 5 GW of hydro pumped storage projects by 2030. We are committed to providing affordable clean energy on a large scale and have set a higher target of 50 GW by 2030, contributing to India's goal of 500 GW of non-fossil fuel capacity."

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Yes Bank Sees Record UPI Transactions After Paytm Partnership

Yes Bank's MD and CEO, Prashant Kumar, recently announced that their bank has seen a significant increase in monthly transactions on the unified payments interface (UPI) after partnering with Paytm. Before the partnership, Yes Bank had about 3.3 million transactions, but now they are seeing a record 5 million monthly transactions on UPI.

Yes Bank and Axis Bank joined the Paytm app on March 15, allowing users to create new handles. Yes Bank has introduced the @ptyes handle for its users.

Kumar mentioned that Yes Bank now holds around 55% market share in UPI transactions by merchants. This gives the bank an advantage in fee income and may lead to future opportunities for cross-selling products to merchants.

The partnership between Yes Bank and Paytm officially began on the last day mandated by the Reserve Bank of India (RBI) for Paytm Payments Bank Limited (PPBL) to cease its banking activities. PPBL previously supported UPI payments on Paytm's platform. With the transition, Paytm users are being shifted to alternate partner payment service provider (PSP) banks, including Yes Bank.

In a recent press release, Paytm stated that after receiving approval from the National Payments Corporation of India (NPCI), they have integrated with Axis Bank, HDFC Bank, State Bank of India (SBI), and Yes Bank under the multi-bank model. This integration allows users and merchants to continue UPI transactions and AutoPay mandates seamlessly.

Overall, the partnership between Yes Bank and Paytm has led to a significant increase in UPI transactions and market share for Yes Bank, providing new opportunities for revenue and customer engagement.

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Policy Predictions Drive Indian Stock Market: Insights from RBI Study

A recent study by the Reserve Bank of India (RBI) found that Indian stock markets are more affected by expectations of future monetary policy changes than by actual policy rate surprises announced by the RBI. This aligns with the idea that stock markets are forward-looking. The study also noted that volatility in stock markets is influenced by both the announcement of policy changes and expectations about future policies, as traders adjust their portfolios throughout the day.

The study revealed that while surprises in repo rate changes have almost no effect on stock returns, expectations about future policy changes remain significant. This indicates that stock markets focus more on predicting future policy actions than reacting to actual rate changes. The analysis covered the period from January 2014 to July 2022, during which India adopted a flexible inflation targeting regime.

Overall, the study suggests that Indian stock markets are highly sensitive to expectations regarding future monetary policy, highlighting the importance of understanding market sentiments and expectations in analyzing stock market behavior.

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RBL Bank Reports Strong Q4 Results: 30% Increase in Profit, 22% Growth in Deposits

RBL Bank had a good quarter from January to March this year. They made a profit of Rs 353 crore, which is 30% more than what they made last year, which was Rs 271 crore. They also received deposits of Rs 103,494 crore, which is 22% more than before. The bank's board decided to give a 15% dividend to its shareholders.

The bank's operating profit increased by 49% compared to last year, reaching Rs 8,887 crore. Their total revenue for the quarter was Rs 2,475 crore, which is 7% more than the previous quarter. Their profit after tax (PAT) also went up by 51% compared to the last quarter, reaching Rs 233 crore.

The bank's bad loans also improved. Their gross non-performing assets (GNPA) decreased by 72 basis points to 2.65%, and their net non-performing assets (NNPA) decreased by 36 basis points to 0.74%.

The stock price of RBL Bank closed at Rs 266.30 on the NSE, which was down by 1.27%. Overall, RBL Bank had a good quarter, with increased profits, deposits, and improvements in bad loans.

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Understanding NPCI's Role in Shaping India's Digital Payments Future

By the end of this year, the National Payments Corporation of India (NPCI) might change its decision about limiting the market share of companies offering Unified Payments Interface (UPI) services to 30%. The deadline for this limit to take effect is December 2024.

A source in the industry told Business Standard that the 30% cap on transaction volume for UPI services will be reviewed by the end of the year.

In November 2022, a 30% cap on transaction volume for third-party app providers was proposed. UPI players were asked to limit their market share to 30% within two years.

In March, the NPCI discussed UPI growth with new players and strategies to empower them in the UPI ecosystem. This included encouraging third-party payment apps to attract users through investments and incentives.

Brands like Cred, Slice, Fampay, Zomato, Groww, and Flipkart are trying to attract users and promote their UPI services.

Last year, NPCI introduced an interchange fee on prepaid payment instrument (PPI)-based merchant transactions through UPI. The interchange fee for PPI issuers on transactions over Rs 2,000 is up to 1.1%, but it applies only to PPI-based merchant UPI transactions. UPI transactions in India increased by 56% in volume and 44% in value in FY24 compared to the previous year.

Google Pay, PhonePe, and Paytm were not invited to a recent meeting. This was because these three companies control more than 90% of both the number and value of UPI transactions.

NPCI wants to hear from different people about how they can make things fairer for smaller companies in the payment system.

Earlier this week, NPCI said One 97 Communications (OCL), Paytm's parent company, can move its users to new banks for UPI payments. This means Paytm can now offer UPI services through other banks.

In March, NPCI also let OCL work as a Third-Party Application Provider (TPAP) using many banks.

"After NPCI said yes on March 14, 2024, to let OCL work as a Third-Party Application Provider (TPAP) using many banks, Paytm has made it easier to move user accounts to Axis Bank, HDFC Bank, State Bank of India (SBI), and YES Bank. All four banks are now ready to help Paytm with this," the company said in a stock exchange filing.

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Indian Economy Shows Growth and Expansion

Private credit is becoming more popular for Indian projects as entrepreneurs prefer short-term debt over giving up ownership. This is happening because new private equity (PE) investments are decreasing, and many PEs are leaving through public markets.

Several companies are planning to enter capital markets soon to provide money to PE fund investors.

"Private credit demand is going up. Big credit funds are investing lots of money in Indian companies, both struggling and doing well," says Bhavin Shah, a partner at PwC India.

PE firms offer private credit at slightly higher rates than shared loans and also provide global expertise to entrepreneurs.

Tax uncertainty worries PEs in India, with many still getting income-tax notices despite efforts to clarify the system," Shah notes.

"This is India's decade, with global PE investors planning big investments," says Eric Janson, global head of private equity at PwC.

In 2021, India saw record private investments, leading to record exits for early investors. In 2023, there were also record exits through public market sales.

Global PE funds usually hold their investments for 6-7 years and make returns of 3.5x–4.5x on their original investment in CY22 and CY23.

M&A activity increased in Q1 2024, with 455 deals worth $25.6 billion, a 24% increase from Q4CY23, showing a market change.

Dinesh Arora, a partner at PwC India, says: "Amid opportunities, the Indian economy is doing well. Q1 2024 is the best in six quarters, showing growth and a desire for expansion."

While M&A average deal sizes stayed the same, PE deal sizes fell 39%, with most deals under $50 million, especially in the lower- and mid-market segments.

The biggest deal was in media and entertainment, with Reliance Industries and Walt Disney forming a joint venture.

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PayU Secures RBI Approval for Payment Aggregator Operations

PayU, a fintech company backed by Prosus, has received preliminary approval from the Reserve Bank of India (RBI) to operate as a payment aggregator. This means they can now start adding new merchants to their platform.

"This license is important for us to build a strong digital payment system in India. Our goal is to advance financial inclusion and digitization, particularly for small businesses," stated PayU CEO Anirban Mukherjee.

It typically takes six months to a year after the initial approval for a company to receive the final approval from the regulator. Once PayU gets the final nod from the RBI, it will join other companies like Razorpay, Cashfree Payments, and CCAvenue.

Last year, the RBI asked PayU to reapply for a payment aggregator license due to its complex corporate structure. In August, PayU sold part of its financial technology business to Rapyd for $610 million, excluding its operations in India, Turkey, and Southeast Asia.

Mukherjee mentioned that the company has already implemented many of the structural simplification proposals recommended by the RBI. PayU is now focusing on the Indian market and currently has over 500,000 merchants in the country.

PayU operates in three business sectors—payments, credit, and PayTech—and generates over $60 billion in annual volumes. They are also looking to enter the consumer credit space, targeting a young and increasingly affluent demographic. PayU Finance, their lending arm, provides short-term loans to small and medium-sized businesses.

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NSE Announces No Transaction Charges for Nifty Next 50 Index Futures and Options

The National Stock Exchange of India Ltd (NSE) has announced that it will no longer impose transaction charges for Futures and Options contracts on the Nifty Next 50 Index, effective from April 24, 2024.

This decision aims to encourage active participation in trading these contracts. The Nifty Next 50 index comprises 50 companies from the Nifty 100 after excluding the Nifty 50 firms.

The exchange will provide three consecutive monthly cycles of index futures and index options contracts. Cash-settled derivatives contracts will expire on the final Friday of the expiry month.

As of March 29, 2024, the market capitalization of index constituents was ₹70 trillion, representing about 18% of the total market capitalization of stocks listed on NSE.

The aggregate daily average turnover of index constituents stood at ₹9,560 crores, accounting for approximately 12% of the cash market turnover in FY24.

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Government Support Drives Renewable Energy Stocks to New Heights

Renewable energy stocks have seen significant growth recently, with some companies like Inox Wind Energy and KPI Green Energy surging 450-500% over the last year. Others, like SRM Energy, SJVN, JP Power Ventures, and Adani Power, have jumped 200-350% in the same period.

 India has set ambitious goals for renewable energy, aiming for 50% of electricity generation from non-fossil fuels by 2030 and 'net zero' emissions by 2070. Government support, including subsidies, nodal agencies, and incentives, has fueled investor interest.

 Continuous monitoring, infrastructure development, and policy clarity are expected to drive further growth. Experts believe the sector will remain attractive in the long term, especially with the government's commitment to energy independence and renewable energy targets.

With robust power demand and environmental awareness, companies in the renewable energy sector are poised for growth. Stocks like SJVN and Sterling & Wilson Solar are expected to benefit, making them attractive investments. Companies specializing in solar power, wind energy, and energy storage solutions, such as Tata Power and Waaree Renewables, are also worth considering for long-term investors.

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HDFC Mutual Fund Introduces the HDFC Manufacturing Fund for India's Thriving Sector

HDFC Asset Management Company Ltd, the investment manager for HDFC Mutual Fund, has unveiled the HDFC Manufacturing Fund. This innovative scheme is dedicated to India's burgeoning manufacturing sector, with a primary focus on equity and equity-related securities of manufacturing companies.

The NFO (New Fund Offer) for HDFC Manufacturing Fund commences on April 26, 2024, and concludes on May 10, 2024.

India's manufacturing sector is on the cusp of remarkable expansion, fueled by factors such as escalating consumption, investments, and exports, coupled with government reforms and incentives promoting self-reliance. The HDFC Manufacturing Fund aims to capitalize on these trends, providing investors with an opportunity to partake in India's evolution into a manufacturing powerhouse.

The fund's investment strategy encompasses a core portfolio with a minimum of 80% invested in manufacturing-related stocks spanning various sectors. It has the flexibility to invest in companies of varying sizes, offering investors exposure to a broad spectrum of opportunities within manufacturing.

Navneet Munot, Managing Director and CEO of HDFC Asset Management Company Limited, expressed, "We take pride in introducing the HDFC Manufacturing Fund. At HDFC Mutual Fund, our objective is to provide a diverse array of financial solutions. The HDFC Manufacturing Fund enriches our extensive product lineup."

The fund will be overseen by Rakesh Sethia, a seasoned Fund Manager with over 19 years of experience in equity research. He articulated, "Our investment philosophy is centered around meticulous research to pinpoint companies with robust long-term growth prospects. We endeavor to construct a well-balanced portfolio by incorporating both established industry leaders and emerging disruptors within the manufacturing realm."

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SEBI Proposes New Pricing Rules for Listed Investment Companies

The Securities and Exchange Board of India (SEBI) has proposed a new framework for determining the share prices of certain types of listed companies. These companies are known as investment companies (ICs) and investment holding companies (IHCs). SEBI wants to address situations where the market price of these companies' shares is much lower than their book value.

ICs primarily earn revenue from interest and capital appreciation, excluding rental income. IHCs are companies that own 51% or more of another company.

SEBI's proposal includes a special trading mechanism called a call auction without a price band for listed ICs and IHCs with shares trading at a significant discount to their book value. Stock exchanges will work together to implement this mechanism.

Price bands are currently used to manage risks and ensure fair trading. Some ICs and IHCs have shares that are rarely traded but at prices much lower than their book value.

SEBI suggests criteria for identifying eligible companies, such as being listed for at least a year, complying with all listing regulations, and having at least 50% of their assets invested in shares of other listed companies. The 6-month average price should be less than 50% of the book value.

Once identified, stock exchanges will announce a special call auction without a price band for these companies with a 7-day notice.

SEBI is seeking feedback from stakeholders by May 10, 2024.

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India's Economy Poised for 6.5% Growth in 2024

According to a recent UN report, India's economy is set to grow by 6.5% in 2024. This growth is fueled by strong public investment and a thriving services sector, boosted by local and global demand. The report also highlights that more multinational companies are choosing India as a manufacturing hub, which will benefit Indian exports.

The report mentions that investment in South Asia, especially in India, is strong. However, other countries in the region, like Bangladesh, Pakistan, and Sri Lanka, are experiencing slower economic growth due to IMF programs requiring strict monetary policies and spending cuts.

Globally, the economy is expected to grow by 2.6% in 2024, slightly slower than in 2023. Despite challenges such as trade disruptions and climate change, some countries like China, India, and the United States have avoided major financial issues.

China's economy is projected to grow by 4.9% in 2024, but it faces challenges like uncertain external conditions, a troubled housing market, and lower consumer spending. The report warns that while there is hope for economic improvement, issues like low growth, lack of investment, and inequalities need more attention.

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RBI Governor Raghuram Rajan's Vision for India's Workforce

Raghuram Rajan, the former RBI governor, recently talked about how India is missing out on the benefits of its young population, known as the demographic dividend. He explained that this demographic dividend happens when a large proportion of the population is of working age, leading to potential economic growth.

However, Rajan pointed out that India's current economic growth rate of around 6% is not as high as it could be, especially compared to China and Korea when they were going through their demographic dividends. He mentioned that this lower growth is because many young people in India are not getting the jobs they need to contribute to the economy.

To make the most of India's demographic dividend, Rajan suggested two key things. First, he said that we need to improve the skills of young people so that they can do the jobs that are available. Second, he suggested that we need to create more jobs, especially in sectors where there is a lot of potential for growth.

Rajan also talked about how some government policies, like subsidies for chip manufacturing, might not be the best way to create jobs. Instead, he suggested focusing on industries like leather, which can create a lot of jobs.

In conclusion, Rajan emphasized the importance of creating more opportunities for young people in India. He said that if we can improve their skills and create more jobs, we can make sure that India's young population becomes a driving force for economic growth.

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Jio Financial Services and BlackRock Announce Joint Venture for Indian Wealth Business

Jio Financial Services and BlackRock, a US-based investment company, have joined hands to start a new wealth management and broking business in India. This collaboration has already boosted Jio Financial Services' shares by 5% in the first hour of trading on Tuesday, April 16. The shares are currently trading 3.78% higher than before, at 367.75. This move follows a 50:50 joint venture agreement between Jio Financial Services and BlackRock.

They plan to establish a wealth management company and later a brokerage company in India. This new venture is taking place amidst a bullish market trend, with India's stock indices nearing record highs. Jio Financial Services' stock has already seen a 40% increase since it was separated from the Reliance Group last year.

This partnership between Jio Financial Services and BlackRock aims to capitalize on India's growing wealth business and the increasing number of retail investors.

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Zerodha's Nikhil Kamath Launches WTFund: A Game-Changer for India's Young Entrepreneurs

Announcing a major development for India's startup ecosystem, Zerodha founder Nikhil Kamath has launched WTFund, an innovative initiative aimed at supporting young entrepreneurs aged 25 and under. WTFund offers a non-dilutive grant of Rs 20 lakh, allowing founders to keep full ownership of their ventures. Unlike traditional venture capital funding, this grant does not require giving up any equity.

In addition to the grant, WTFund provides access to mentorship, a supportive community, a Go-To-Market studio, beta testing, feedback opportunities, and talent acquisition channels through internships, a fractional CXO database, and moonlighting opportunities.

WTFund is the first of its kind in India, targeting individuals with innovative ideas and strong visions. It offers more than just financial support, providing a comprehensive growth platform for young founders, creators, and dreamers to connect, share ideas, and learn from each other.

The selection process will choose forty outstanding entrepreneurs aged 25 or younger over a year, seeking the top 1% of young entrepreneurs in India. They will receive personalized support until they secure their first round of institutional funding. WTFund is open to investing in all sectors and originated as a podcast by Nikhil Kamath, evolving into a platform promoting disruptive thinking and access to opportunities.

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Food Prices Propel India's Wholesale Inflation to Three-Month High in March

India's wholesale price inflation increased to 0.53% in March, the highest in three months, up from 0.2% in February. This rise was mainly driven by a 4.65% increase in food prices, especially cereals, which surged to a 12-month high. Prices of paddy, potato, and onions also saw significant increases, with inflation rates of 11.7%, 53%, and 57% respectively.

The inflation rates for pulses and vegetables remained high at 17.2% and 19.5% respectively. However, fuel and power, as well as manufactured products, continued to see deflation, although the rate of price decline moderated to about 0.8% in March compared to a year ago.

On a month-on-month basis, the Wholesale Price Index (WPI) rose by 0.4%, the first increase in four months. The food index increased by 1.01%, and primary articles rose by 0.9%. Manufactured products and fuel and power categories saw increases of 0.21% and 0.06% respectively. The Commerce and Industry Ministry also revised the WPI for January 2024 to 0.33% from the earlier estimate of 0.27%.

In terms of food articles, there was some relief as prices of eggs, meat, and fish decreased by 1.86% at the wholesale level. However, retail prices for these items increased by more than 10% for eggs and over 6% for meat and fish. Milk inflation eased to 4.7% in March from 5.5% in February, but wheat prices almost tripled from 2.34% to 7.43% last month.

The Ministry stated, "Positive rate of inflation in March, 2024 is primarily due to increase in prices of food articles, electricity, crude petroleum & natural gas, machinery & equipment and other manufacturing, etc."

For the full year 2023-24, wholesale prices remained in deflationary mode, averaging -0.7%, the lowest since 2015-16. However, with the tensions between Iran and Israel and the rise in crude oil prices beyond $90 a barrel, India Ratings and Research expects the first quarter of 2024-25 to see an average rise of 2.4% in wholesale prices.

"International commodity prices are showing signs of increased pressure. Going ahead, continued escalation in international crude oil prices, heat wave conditions impacting electricity demand and vegetable inflation, remain key causes of concern," said Bank of Baroda economist Sonal Badhan.

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RBI's Inflation Targets and Projections for 2024

In March, India's retail inflation dropped to a ten-month low of 4.85% from 5.1% in February. However, food prices remained high, with inflation at 8.52%, similar to February's 8.66%. Rural areas experienced slightly higher inflation at 5.45% in March, compared to 5.34% in February, while urban areas saw a decrease from 4.8% to 4.14%.

Prices for cereals and meat went up, while vegetables, pulses, spices, and eggs remained expensive. The overall Consumer Price Index stayed the same, but the food price index increased by about 0.2%. Economists are worried that the ongoing heatwave could lead to higher food prices in the coming months.

Although current inflation is above the Reserve Bank of India's (RBI) target of 4%, the average retail price rise for the last quarter of 2023-24 was 5.01%, matching the RBI's projection. The RBI expects inflation to ease to an average of 4.5% this year from 5.4% in 2023-24, with an average of 4.9% in the April to June quarter.

Food prices, especially for cereals, vegetables, spices, and pulses, are under pressure. Recent price hikes by fast-moving consumer goods firms are also a concern. While core inflation is decreasing, the risk of high and volatile food inflation due to the heatwave remains. Interest rate cuts are expected only in the latter half of the fiscal year, depending on factors like the monsoon, crude oil prices, and the US Fed's rate easing cycle.

ICRA expects food and beverages inflation, which was 7.8% in March, to remain over 7% in April. A favorable monsoon is crucial to keeping food inflation in check and managing inflationary expectations.