Morning Scan: Start your day with these big news

Morning Scan: 1. Disney and Reliance combine, and three CEOs will manage the Rs 70,352 crore media conglomerate

According to the Business Standard, Viacom18’s media and JioCinema businesses have been merged into Star India by Reliance Industries, Viacom18 Media, and the Walt Disney Company, forming a joint venture worth Rs 70,352 crore. Three CEOs will be in charge of the new organization. Sanjog Gupta will be in charge of sports, Kiran Mani will be in charge of digital, and Kevin Vaz will be in charge of entertainment.

Why it matters: Through the JioCinema and Hotstar streaming platforms, the combined company would run more than 100 television channels and provide services to more than 50 million users in India. It also has a wide range of sports broadcasting rights, such as those for football and cricket.

#2. Brookfield’s renewables assets will be partially purchased by clean energy company Gentari for $900 million.

According to the Economic Times, Brookfield Asset Management’s renewables portfolio will be purchased by Gentari, the clean energy division of Malaysia’s state-owned Petronas Group, for $900 million. An agreement between the parties states that Gentari will assume management of a 2.2 GW asset portfolio.

Why it matters: After constructing, purchasing, and running the green energy assets for five years, Brookfield is now making money off of a portion of its portfolio for the first time. The agreement also demonstrates the continued high level of investor interest in India’s renewable energy sector.

#3. The audio and wearables brand from India Boat anticipates a $300–500 IPO at a $1.5 billion valuation the next year.

According to the Economic Times, ICICI Securities, Goldman Sachs, and Nomura have been chosen as bankers by Boat, a local wearables and audio goods business, for a $300–500 million initial public offering (IPO) that is scheduled for next year. It aims for a valuation of more than $1.5 billion and plans to go public in the upcoming fiscal year. Plans for an IPO have been put on hold in 2022.

Why it matters: Boat joins a long line of modern businesses hoping to raise money from the public markets. Even though India’s wearables industry is growing quickly, there is intense competition and narrow profit margins because of a continuous pricing war.

#4. Bharti Group’s Del Monte Foods is totally acquired by Agro Tech Foods for Rs 1,300 crore.

Del Monte Foods, a joint venture between the Bharti Group (59.29 percent) and Del Monte Pacific (40.71 percent), has been totally bought by Agro Tech Foods, the company that makes ACT II popcorn, according to the Business Standard. Within nine months, the Rs 1,300 crore deal will be finalized.

Why it matters: Agro Tech will increase its footprint in the food services and retail industries with this purchase. Additionally, the renamed companies will assist Agro Tech in reaching more clients in the food service industry, quick-service restaurants, modern retail, and conventional retail.

#5. For the eighth consecutive quarter, India Inc. reports double-digit net profit increase in the September quarter.

With the exception of oil and gas businesses, which were negatively impacted by reduced refining margins and LPG under-recoveries, Corporate India recorded a double-digit increase in net profit in the three months ending in September, according to the Economic Times. While the rate of expansion has been slowing since the March quarter, it was the sixth consecutive quarter with double-digit profit growth.

Why it matters: With the overall stock market showing signs of weakness, experts are closely monitoring the trajectory of corporate earnings in anticipation of a comeback in the second half of the current fiscal year.

#6. After a sluggish start, the government incentive program for the car industry may pick up speed.

According to the Mint, the initial claims for India’s car production-linked incentives plan were merely Rs 500 crore, but this sum might increase significantly in the years to come. For 2023–2024, claims were filed by Ola Electric, Toyota Kirloskar Auto Parts, Mahindra Last Mile Mobility, and Tata Motors. The ambitious Rs 26,000 crore investment is part of the incentives program for breakthrough vehicle technology.

Why it matters: As India’s electric revolution picks up speed and domestically produced electric cars and bigger vehicles hit the market, a spike in incentive claims is anticipated between 2025 and 2026. A growing number of items are undergoing certification in order to make claims.

#7. In response to early indications of rising demand, Indian cement makers hike prices to preserve profitability.

According to the Hindu Businessline, cement companies are raising prices in an attempt to preserve profit margins following a poor September quarter, despite early indications of a resurgence in demand as the government resumes investing on infrastructure projects. According to statistics from Nuvama Research, large cement producers increased costs by an average of Rs 8 to Rs 342 per 50 kg bag.

Why it matters: Cement producers have been increasing output to preserve market dominance in spite of lackluster demand. Following significant actions taken by the Adani Group in the sector, the local cement business is also undergoing consolidation.

#8. Important shipments entering India use the Dubai route to get around new Chinese regulations

After China imposed export limits on minerals and machinery essential for sectors like semiconductors and for infrastructure projects like high-speed rail and metro rail, among others, Indian importers are turning to the Dubai route, the Mint said. These goods, which are made in China and other countries, are making their way to India via the Jebel Ali port in Dubai.

Why it matters: Although the rerouting is required to maintain project operations, it has resulted in a 10% increase in project expenses. The usual 15-day import period might be extended to up to three months due to shipment delays. Project budgets are being strained by the increasing costs of finance, storage, and logistics.

#9. The telecom sector is worried about proposed cybersecurity regulations that would grant broad authority.

According to the Economic Times, telecom executives and legal experts are concerned that the new cybersecurity regulations would increase the compliance cost for service providers and grant New Delhi broad access to possibly privacy-violating customer data. A regulatory framework that overlaps with the current cybersecurity regulations of the Ministry of Electronics and IT may also be developed by the telecom department, which is scheduled to publish the guidelines after soliciting comments in August.

Why it matters: Under the proposed regulations, telcos can be held accountable for subscribers’ abuse of telecom resources. Additionally, a probable overlap leaves space for a variety of interpretations and possible issues.

#10. The minister asserts that the Himalayan highway and infrastructure development is environmentally favorable.

According to the Mint, road transport and roads minister Nitin Gadkari stated that claims of environmental harm were “wholly untrue” and that infrastructure and roadway projects, particularly in the Himalayan states, are being constructed in an environmentally sustainable manner.

Why it matters: The minister’s assertion appears to contradict several analyses that demonstrate that the construction of new highways and road expansion in states like Uttarakhand, Himachal Pradesh, and portions of the northeast frequently results in landslides and cave-ins during the rainy season. Extreme weather events exacerbate the harm.