{"id":26118,"date":"2023-09-02T10:13:11","date_gmt":"2023-09-02T04:43:11","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=26118"},"modified":"2023-09-02T10:22:37","modified_gmt":"2023-09-02T04:52:37","slug":"the-weekly-wrap-in-league-of-its-own","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/the-weekly-wrap-in-league-of-its-own\/","title":{"rendered":"The Weekly Wrap | In league of its own"},"content":{"rendered":"

This week, we talk about India\u2019s latest quarterly GDP numbers and how they could augur well for the country as it gets ready to host the G20 summit. We also talk about a shortfall in rain and about the multi-million-dollar deal between Viacom18 and the BCCI. And finally, we talk about the latest allegations to hit Adani Group and Vedanta.<\/span><\/i><\/em><\/p>\n

 <\/p>\n

Welcome to Kuvera\u2019s weekly digest on the most critical developments related to business, finance, and the markets.<\/em><\/p>\n

 <\/p>\n

tl;dr<\/strong>\u00a0Hear the article in brief instead?<\/p>\n

 <\/p>\n\n

 <\/p>\n

\"\"<\/p>\n

 <\/p>\n

\u201cGDP measures everything,\u201d former US Senator Robert Kennedy once said, \u201cexcept that which makes life worthwhile.\u201d<\/p>\n

 <\/p>\n

Now, Bobby Kennedy may have had his reasons for being so cynical, but India\u2019s economic growth numbers released this week should make Indian policy mandarins as well as economists and analysts quite happy.<\/p>\n

 <\/p>\n

India\u2019s gross domestic product grew by 7.8% in the April-June quarter of the current fiscal year (2023-24), compared with 6.1% in the January-March quarter of 2022-23, according to data released by the National Statistical Office.<\/p>\n

 <\/p>\n

This is significant as it means that India remains one of the fastest-growing major economies, especially as China’s post-pandemic recovery has slowed.<\/p>\n

 <\/p>\n

To be sure, assessing the economic health of a country as diverse and large as India, just from its GDP numbers, is a risky affair. Little wonder, then, that economists are treading cautiously and not jumping up with joy, at least not yet.<\/p>\n

 <\/p>\n

Economists, both in India and outside, have been revising growth estimates in the recent past. The Reserve Bank of India\u2019s first quarter estimates have varied from 6.7% (Aug 2022) to 7.2% (Sept 2022) to 7.1% (Dec 2022) to 7.8% (Feb and April 2023), and finally 8% (June and Aug 2023), as The Economic Times noted in an analytical piece.<\/p>\n

 <\/p>\n

But what is not in doubt is the fact that the growth number is driven by the services sector and greater capital expenditure. And the government is certain the economy will continue to power ahead.<\/p>\n

 <\/p>\n

India\u2019s Chief Economic Advisor V. Anantha Nageswaran said during the week the economy is expected to grow at 6.5% this fiscal year notwithstanding deficient monsoon rains. He also said inflation won\u2019t spike out of control as both the government and the RBI were taking adequate steps to maintain supply and keep prices under check.<\/p>\n

 <\/p>\n

These GDP numbers may also give Prime Minister Narendra Modi some bragging rights as he gets ready to host the leaders of the 20 wealthiest nations, including US President Joe Biden, for the G20 summit in New Delhi next week. While Vladimir Putin of Russia and Xi Jinping of China may not be in attendance, India will leave nothing to chance to show itself off as an attractive investment destination to leaders from the world\u2019s most powerful economies.<\/p>\n

 <\/p>\n

Cloud Over Monsoon\u00a0<\/b><\/strong><\/h4>\n

 <\/p>\n

The government can hope for a speedy economic growth that it can go to town with, but the rain gods have a mind of their own.<\/p>\n

 <\/p>\n

\"\"<\/p>\n

 <\/p>\n

Monsoon rainfall during 2023 is expected to be \u201cbelow normal\u201d or on the lower side of \u201cnormal\u201d after August ended with deficiency of 36%, the worst in 122 years, according to the India Meteorological Department (IMD).<\/p>\n

 <\/p>\n

This August was the driest and warmest for the entire country since weather records began being kept in 1901, the IMD said this week. In September, however, the rains are likely to be \u201cnormal\u201d although the month will be hotter than usual, the weather department said.<\/p>\n

 <\/p>\n

Why is this important? India, you see, is still hugely dependent on its agricultural sector that employs a vast majority of the rural population. A significant shortfall in rains will not only impact farm output, but also prices of both food and non-food commodities. Shortages could lead to inflation and this could, in turn, impact lending rates, which may not come down anytime soon, making the cost of borrowing higher for businesses and individuals alike.<\/p>\n

 <\/p>\n

In fact, retail inflation in July was at a 15-month high of 7.44%, not merely on account of a seasonal spike in prices of important vegetables such as tomatoes and onions, but also due to more obstinate inflation in cereals.<\/p>\n

 <\/p>\n

So, what can we do about this? Precious little, except praying to the rain gods, we say, and keeping a tight watch on our monthly spending.<\/p>\n

 <\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

UPI, Up & Away<\/b><\/strong><\/h4>\n

 <\/p>\n

Talking of spending, India\u2019s homegrown payments platform, the Unified Payments Interface (UPI), achieved an incredible milestone as its transactions crossed the 10-billion mark for the first time in a month, in August.<\/p>\n

 <\/p>\n

\"\"<\/p>\n

 <\/p>\n

\u201cDrumroll please! UPI has just shattered records with an astonishing 10 billion-plus transactions,\u201d the National Payments Corp of India (NPCI), which runs the payment platform, said on X, formerly known as Twitter.<\/p>\n

 <\/p>\n

UPI transactions as on August 30 stood at 10.24 billion, up from July\u2019s 9.96 billion and 9.33 billion in June. In value terms, the transactions totalled Rs 15,18,456 .4 crore, according to data shared by the NPCI on X.<\/p>\n

 <\/p>\n

The Game of Sports<\/h4>\n

 <\/p>\n

The NPCI was not the only one celebrating this week. The Board of Control for Cricket in India (BCCI), which manages India\u2019s most popular sport, won a jackpot of sorts, with the Mukesh Ambani-controlled media outlet Viacom18 winning media rights for 2023-2028 for both TV and digital category in an auction this week.<\/p>\n

 <\/p>\n

The exercise will make the Indian board richer by Rs 5,963 crore for 88 matches. This translates to a collective per match value of roughly Rs 67.8 crore, 13% higher than the Rs 60.18 crore paid by Disney Star in the last cycle.<\/p>\n

 <\/p>\n

To be sure though, the current value falls well short of the Rs 78.9 crore per match that Disney Star paid for bilateral cricket in 2023. This could mean that, overall, the business of cricket broadcasting may actually be stagnating a bit.<\/p>\n

 <\/p>\n

It also means that Ambani-led Reliance\u2019s streaming app Jio Cinema could well become the next big thing in the Indian OTT space. In fact, digital may be the way to go, with more and more people cutting the TV cord. The winning bid for digital was worth Rs 3,101 crore while for TV it was Rs 2,862 crore.<\/p>\n

 <\/p>\n

Incidentally, this was also the week when Ambani announced at his group\u2019s annual general meeting that the next generation of the family\u2014his kids Isha, Akash and Anant\u2014will join the board of Reliance Industries, while his wife Nita steps aside to focus more on her foundation.<\/p>\n

 <\/p>\n

With the gen-next taking charge, their priorities are clear, and they show!<\/p>\n

 <\/p>\n

The Insiders<\/b><\/strong><\/h4>\n

 <\/p>\n

While Ambani has been on a high, Gautam Adani, who competes with him for the top spot as the wealthiest Indian, may once again be in a spot of bother.<\/p>\n

 <\/p>\n

The Organised Crime and Corruption Reporting Project (OCCRP), an international network of investigative journalists, released a report this week with details suggesting that individuals \u2018closely associated\u2019 with the Adani family indulged in stock price manipulation amounting to violation of India\u2019s rules on stock holdings by promoters of a company.<\/p>\n

 <\/p>\n

The Adani Group has, however, said that it \u201creject(s) these reports in their entirety\u201d and termed them \u201crecycled allegations\u201d \u2014 a reference to the report released by New York short seller Hindenburg Research in February, in which it accused the conglomerate of \u201cbrazen stock manipulation and accounting fraud\u201d.<\/p>\n

 <\/p>\n

The Adani group was not the only conglomerate under scrutiny this week. The OCCRP also alleged that billionaire Anil Agarwal\u2019s Vedanta Group ran a \u2018covert\u2019 lobbying campaign to weaken key environmental regulations during the Covid-19 pandemic.<\/p>\n

 <\/p>\n

The OCCRP said Agarwal in January 2021 told then environment minister Prakash Javadekar that the government could add \u201cimpetus\u201d to India\u2019s economic recovery by allowing mining companies to boost production by up to 50% without having to secure new environmental clearances. It also alleged that Vedanta\u2019s oil and gas business, Cairn India, lobbied to have public hearings scrapped for exploratory drilling in oil blocks it won in government auctions.<\/p>\n

 <\/p>\n

Vedanta reportedly told the OCCRP that it operated \u201cwith an objective of import substitution by enhancing domestic production in a sustainable manner\u201d.<\/p>\n

 <\/p>\n

Market Wrap<\/b><\/h4>\n

 <\/p>\n

On July 20, the Sensex touched a lifetime closing high of 67,571 and the Nifty peaked at 19,979. Market pundits predicted at the time that both the indices will soon breach 70,000 and 21,000 levels, respectively.<\/p>\n

 <\/p>\n

Just over 40 days on, the two benchmark indices have scaled back somewhat, as both the global and Indian markets turned choppy. The Sensex and the Nifty have been sluggish over the past couple of weeks but this week was a tad different. The Sensex ended the week 0.8% higher and the Nifty climbed about 0.9%, thanks to gains on Friday.<\/p>\n

 <\/p>\n

The Nifty stocks<\/a><\/span> that were up the most were led by Tata Steel and JSW Steel, followed by Coal India, Hindalco and ONGC. Others that ended in the green were Maruti and Mahindra & Mahindra, Ultratech Cement, UPL and Cipla.<\/p>\n

 <\/p>\n

Nifty stocks that left their investors poorer were Dr. Reddy\u2019s, Adani Ports, Indian Oil, Hindustan Unilever, Bharat Petroleum and Bharti Airtel. Reliance Industries, Britannia Industries and almost all the major lenders\u2014ICICI Bank, Kotak Mahindra Bank, IndusInd Bank, State Bank of India and Axis Bank\u2014were among the losers.<\/p>\n

 <\/p>\n

This was also a difficult week for the Adani Group companies as it came under fire over allegations of financial fraud and round tripping.<\/p>\n

<\/h4>\n

Other headlines<\/b><\/h4>\n

 <\/p>\n