Expresso Business and Finance News Highlights of the Week on 13 August 2023

Let's begin with the news that made headlines this week. The Reserve Bank of India on Thursday announced its bimonthly monetary policy, and decided to keep its key lending rate — repo rate — unchanged. RBI Governor Shaktikanta Das said that the six-member Monetary Policy Committee (MPC) has unanimously decided to keep the repo rate unchanged at 6.50 per cent. The MPC maintained that the focus would be on the withdrawal of accommodative policy stance to ensure that inflation progressively aligns with target, while supporting growth. The central bank also raised its inflation projection for FY24 from 5.1 per cent to 5.4 per cent, while retaining its GDP projection at 6.5 per cent.

Meanwhile, Global investment firm Carlyle has entered into an agreement to acquire a significant minority stake in Singapore-headquartered engineering services firm Quest Global Services. While terms of the deal were not disclosed, sources close to the development said the PE firm was acquiring a 25-28 per cent stake at an enterprise value of close to $2 billion. The stake could be valued at $500-560 million. The company will route the investment through funds managed and advised by entities affiliated with Carlyle Asia Partners, it said in a statement. Further, current minority stakeholders Bain Capital and Advent International will exit Quest Global following the transaction. Quest Global will repurchase the company’s shares, while chairman and CEO Ajit Prabhu will increase his stake to about 40%.

On to some exciting news. To cater to the ever-growing needs of the automobile sector, Indian Railways will introduce new rakes designed especially to ferry SUVs. According to sources, the Research Designs and Standards Organisation has approved new designs of rakes that can accommodate SUVs, which are taller and wider than almost all hatchbacks and sedans. At present, older rakes can accommodate around 200 hatchbacks, however, they can only take in about 100-120 SUVs in a single-deck configuration. The increasing production of SUVs due to high demand as well as the preference for using railways on account of cost-effectiveness and environment-friendly factor warranted the development of newer rakes.

In the MSME sector, the India Exim Bank is planning to tap into the factoring segment of trade financing. India Exim Finserve IFSC Private Limited, the newly inaugurated subsidiary of India Exim Bank, will exclusively focus on factoring finance growth and development among MSMEs. Speaking at the inauguration of its GIFT unit, Harsha Bangari, managing director, India Exim Bank, said, quote, “In 2022-23 the exports from India stood at $774 billion, double the exports in 2013-14. The growth of Indian exports, despite the slowdown in advanced economies, continuing geopolitical conflicts and tightening monetary policies across the economies, shows the resilience and sustainability of the Indian economy. Additionally there is a great untapped export potential among the MSMEs in India,” unquote.

Next up, disbursements by mortgage lender LIC Housing Finance will see a rise in the September quarter as challenges relating to the rejig of its offices and technological upgrades have now been addressed, managing director and chief executive officer Tribhuwan Adhikari said on Monday. Adhikari said, quote, “In the September quarter, we are aiming for and are pretty sure that this declining trend in disbursements that have been witnessed in over three quarters will be taken care of,” unquote. The housing financier’s disbursements fell to Rs 10,856 crore in the June quarter from Rs 15,202 crore a year ago.

In the aviation sector, The committee of creditors of Jet Airways on Monday asked the Jalan Kalrock Consortium to pay Rs 350 crore, adding that it may not pursue the appeal for transfer of ownership if the said amount is paid. Last month, the JKC had sought clarity from the NCLAT on the transfer of ownership of the grounded airline, claiming that the lenders were creating hindrances in restarting operations. The counsel for SBI said that the consortium had not infused any funds in the airline and had not complied with any of the conditions laid down by the NCLT’s order for the transfer of ownership. In January 2023, the NCLT had laid down condition precedents for JKC to fulfil the transfer of the airline’s ownership.

Lastly, Goldman Sachs and TVS Capital-backed InsuranceDekho is looking to turn profitable at the end of the current financial year as it plans to double its business during the year. For the insurtech company, an initial public offering is quote unquote “some time away”, because right now it wants to be a good scalable organisation, its CEO and co-founder Ankit Agrawal said. At present, two of the four business lines of the company are profitable. However, it is still burning cash in direct-to-consumer business and some new initiatives. The company is looking to exit the current financial year at an annualised premium run rate of Rs 5,000 crore and doubling the business.