Today’s News: Adani SEBI Probe, RBI’s Bond Strategy, and Global Trademark Disputes
Today’s financial landscape buzzes with SEBI’s scrutiny of Adani, RBI’s tactical bond buyback, and Tesla’s trademark lawsuit in India, among other significant economic updates.
India’s Adani Companies Face SEBI Scrutiny for Regulatory Breaches
India’s Securities and Exchange Board (SEBI) has issued notices to seven Adani Group companies for regulatory violations. The probe, initiated by allegations from Hindenburg Research, targets issues like undisclosed related-party transactions and auditor concerns. Despite the scrutiny, Adani’s management claims no significant impact on their financial statements.
Source: Reuters
India’s Massive ₹400 Billion Bond Buyback Announced by RBI
The Reserve Bank of India (RBI) plans to buy back ₹400 billion ($4.80 billion) in bonds to manage liquidity and yields. This strategic financial move, focusing on specific securities maturing in 2024 and 2025, aims to stabilize shorter-term fund visibility and government cash flows ahead of expected governmental changes.
Source: Reuters
Carlyle Group Cashes Out $173 Million Stake in Yes Bank
Carlyle Group has divested a nearly 2% stake in Yes Bank, valued at $173 million, reducing its shares after recently increasing its holding to over 9%. This transaction marks Carlyle’s second major sell-off this year in the Indian bank, amid fluctuating share prices.
Source: Reuters
India’s Service Export Growth Slows to 3-Year Low at 4.9%
In FY24, India’s service exports grew by only 4.9%, a three-year low, totaling $341.1 billion. Despite this slowdown, net services exports saw a robust increase of 13.6% to $162.8 billion, as imports shrank by 2%. Factors like high interest rates in developed markets affecting demand contributed to this decline.
Source: Reserve Bank of India
Asian Development Fund Boosts to $5 Billion to Aid Vulnerable Asian Nations
The Asian Development Fund (ADF), the main grant source of the Asian Development Bank (ADB), is set for a significant boost with a $5 billion replenishment, up 22% from previous funds. This effort, part of the ADF’s 14th replenishment, will enhance support from 2025–2028, aiding Asia Pacific’s most vulnerable regions, particularly against climate impacts and socioeconomic challenges.
Source: Press Trust of India
Tesla Takes on “Tesla Power” in Trademark Lawsuit in India
Elon Musk’s Tesla Inc. has sued an Indian battery manufacturer, Tesla Power, alleging trademark infringement for using the name “Tesla Power” in their branding. The lawsuit, filed in New Delhi’s High Court, seeks damages and a permanent injunction to stop the Indian company from using the Tesla name. The case highlights the challenges of global brand protection and is set for further hearing on May 22.
Source: Reuters
India’s Forex Reserves Drop $2.4 Billion in Three Weeks
India’s foreign exchange reserves decreased by $2.4 billion to $637.9 billion over the third consecutive week. Foreign currency assets, including euro, yen, and pound, diminished by $1.2 billion. Gold reserves declined by $1.3 billion, while special drawing rights and IMF reserves slightly increased.
Source: FE Bureau
GST Collections Surge to Record ₹2.10 Lakh Crore but Miss Pre-GST Marks
Despite reaching a record ₹2.10 lakh crore in April 2024, India’s GST collections as a percentage of GDP at 6.1% still fall short of pre-GST levels after seven years. Former CEA Arvind Subramanian points to the need for focusing on net revenues after refunds, not just headline numbers.
Source: Nikita Prasad, Mint
Oil Prices Drop 6% Amid Economic Concerns and Interest Rate Speculations
Brent and WTI crude both fell around 6% this week, the largest drop in three months. Investors worry that sustained high interest rates might hinder economic growth, particularly in the U.S., a major oil consumer. Despite geopolitical tensions and potential OPEC+ output cuts, factors like the U.S. job data and interest rate outlook have cooled oil market sentiments.
Source: Nikita Prasad, Mint
Government’s Expected RBI Dividend for FY25 Pegged at Rs 75K-85K Crore
The Government of India anticipates a dividend between Rs 75,000 and 85,000 crore from the RBI for FY25, marking a slight decline from the FY24 transfer of Rs 87,416 crore. Supported by interest on foreign and rupee securities, this projection forms part of a larger Rs 1.02 trillion budgeted surplus from RBI and PSBs, with no detailed breakdown provided.
Source: FE Bureau
RBI Raises Provisioning for Under-Construction Projects to 5%
The Reserve Bank of India (RBI) has introduced new guidelines requiring lenders to set aside a 5% provision for under-construction project loans, a significant increase from the previous 0.4%. This measure aims to strengthen financial safeguards, with provisions adjustable down to 1% upon meeting specific operational and financial milestones. Public feedback on these draft rules is open until June 15.
Source: Piyush Shukla, Financial Express
India-Nigeria Set to Seal Local Currency Trade Deal
India and Nigeria are poised to finalize a Local Currency Settlement System Agreement, facilitating trade using their domestic currencies. This initiative, discussed at the Joint Trade Committee in Ajuba, aims to boost bilateral trade and economic ties, which saw a dip to $7.8 billion in 2023–24 from $11.8 billion. The agreement also includes cooperation on the UPI system.
Source: FE Bureau
