Business News

There’s still two weeks to go before US President Donald Trump’s April 2 deadline for imposing reciprocal taxes on imports. But New Delhi already seems to have gone into damage-control mode, anticipating the worst.Over 24 hours last week, two of India’s largest wireless carriers, whose billionaire owners were staunchly opposed until now to Elon Musk getting a free pass to enter their market, independently announced partnerships with his Starlink Inc. A top government minister even posted (and then deleted) a welcome message on X, even though the satellite broadband service is yet to obtain local regulatory approvals.Narendra Modi didn’t respond to the opposition Congress Party’s allegations that the deals were orchestrated by his administration “to buy goodwill with Trump.” But throw in the flurry of news last month around the prime minister’s visit to the White House about how India might allow imports of Tesla Inc.’s cars at a much lower duty than the 110% it charges currently, and it’s pretty clear that New Delhi is changing its tune on trade and tycoons.In the past 10 years, Modi’s economic strategy has relied heavily on a small team of national champions. To protect them from foreign competition, tariffs that in 2011 had almost fallen to China’s 7% levels were raised to 12% by 2022, among the highest in the world.This preference for shielding oligarchs with hefty tariffs, favourable government contracts, as well as nontariff barriers like stifling rules for foreign-backed commerce, has been pretty well-known internationally. Robert Lighthizer, the US trade representative during Trump 1.0, kept the biographies of about 15 of them on his desk while negotiating with New Delhi. As he noted in his 2023 book, “In predicting Indian government positions, I would look to the interests of these men.”Academic research has corrobrated the growing heft of the richest businessmen — Mukesh Ambani and Gautam Adani — as well as the Mumbai-based Tata Group, cement czar Kumar Mangalam Birla and telecom tycoon Sunil Mittal. The top five groups’ share of nonfinancial assets rose from 10% in 1991 to 18% by 2021.The expansion picked up steam after Modi first became prime minister in 2014. That’s when the conglomerates “started acquiring larger and larger shares within the sectors where they were present,” according to Viral Acharya, a former central bank deputy governor who now teaches at the New York University. “Given the high tariffs, Big-Five groups do not have to compete with international peers” in many industries, Acharya noted in his 2023 study. Nor do they have to test their muscles overseas. They garner most of their revenues at home, in areas ranging from telecoms, media and retail, to ports, airports, building materials and autos.Under Trump 2.0, India’s so-called Billionaire Raj could grind to a halt. The Modi government has already started preparing domestic industry for April 2, with the commerce minister asking exporters to “come out of their protectionist mindset.” They’re not the ones who need a change of heart, though. The state has a strong political imperative for a course correction.In pushing India to buy more from America, the Trump administration has highlighted India’s 39% tariffs on agricultural products, eight times what the US charges. But Modi has a testy relationship with farmers in North India. They have rejected his offer of a more market-based pricing regime and continue to agitate for greater state protection. In a country where nearly half of the workforce is still in farming, any trade concessions on agriculture may be politically expensive. It may be safer to push the burden of Trump’s tantrums to local billionaires.But the tycoons will also lobby to protect their turf. According to media reports, India has asked manufacturers to replace Chinese-made parts and raw material with American alternatives. That’s a costly proposition. If the Modi administration pushes this line strongly, there’s bound to be resistance. Already there are murmurs in bureaucratic circles that the world’s most-populous nation has aligned itself too strongly with the West, allowing itself to be used as a pawn in US-China rivalry. Maybe it’s time to mend ties in the neighbourhood instead. If Tesla is to be given a red-carpet welcome, why not clear the long-pending application by China’s BYD Co. to make electric cars in India — with a local partner? That’s just one example. Any missteps in defining and protecting India’s national interests may upend an entire model in which a small group of national champions were galvanized to recreate an economic success rivaling China — but standing at an adversarial distance to it. That narrative is nowhere close to fruition. At 13%, factory output has a smaller share of gross domestic product than at any time since 1960. Meanwhile, the trade deficit with China has doubled in the past decade, a reflection of India’s growing dependence on the larger economy. Before Modi could do anything about that $100 billion annual shortfall, Trump is out to crunch India’s near-$50 billion trade surplus with the US, the South Asian nation’s biggest overseas market. It couldn’t come at a worse time. Domestic demand is slowing sharply, and stock markets are reeling under a $1.3 trillion rout. New Delhi’s best hope is to buy time for broader trade negotiations with Washington by delaying the threat of reciprocal tariffs, especially on politically sensitive agricultural products.The sudden enthusiasm for the businesses of Trump’s head of government efficiency has a clear message for India’s coddled billionaires: They’re being cut loose.

The BSE benchmark index Sensex jumped 1,131 points to revisit the 75,000 level on Tuesday, and the NSE Nifty surged 1.45 per cent, tracking a bullish trend in global equitiesStocks that were in focus include names like Paytm, which rose 8% and Cipla, which rose 1.1% and Bajaj Finserv, whose shares declined 1.34% on Tuesday.Here's what Riyank Arora, Technical Analyst at Mehta Equities, recommends investors should do with these stocks when the market resumes trading today.PaytmPaytm is facing strong resistance at 770 and 800, with a breakout level at 728. If the stock moves above this level with high trading volume, it may go up further. Strong support is at 710, which should be used as a stop loss. If it crosses 770, it could rise toward 800.CiplaCipla is showing signs of breaking out above 1500, with resistance at 1520 and 1540. The stock has strong support at 1450, which should act as a stop loss. If it stays above 1500, it may continue to rise. A move above 1540 could push the price even higher.Bajaj FinservBajaj Finserv is currently weak, and the chart suggests a negative trend, with possible downside levels at 1820-1800. The stop loss for short trades should be at 1910, as moving above this level could change the trend.The stock is under selling pressure, and it may fall further if it does not hold above 1820. Traders should be careful, as the overall outlook remains bearish.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

Mumbai: The proposed initial public offerings (IPOs) of two large non-banking financial firms-HDB Financial Services and Hero FinCorp-are facing delays in securing approvals from the country's capital markets regulator.According to sources familiar with the matter, the Securities and Exchange Board of India has held back its green light for the much-awaited public issues so far, as share sales by these companies could have inadvertently ended up violating rules that govern unlisted companies.The application for Hero FinCorp's proposed IPO has been pending with Sebi for the past eight months while HDB's application has been pending for four months.While the exact nature of the alleged breach could not be ascertained, it could have involved the pre-IPO share sales of these companies, they said.The Companies Act restricts unlisted companies from adding more than 200 shareholders in a financial year. Also, such firms cannot sell shares through private placement to over 50 persons at a time. Similarly, shares issued through private placement to public shareholders in a span of six months would be considered a public offer.Sebi did not respond to ET's queries. HDFC Bank said its subsidiary, HDB Financial Services, has filed its draft red herring prospectus with Sebi and is awaiting final observations. "We believe that there is no non-compliance," said an HDFC Bank spokesperson.119184027A Hero Fincorp spokesperson denied non-compliance with the Companies Act. "We unequivocally state that the company has not raised capital beyond the prescribed threshold of 200 investors at any time following the applicability of the Companies Act, 2013."Securities lawyers said selling by existing shareholders, which could have led to a broad-basing of the investor base in a financial year, could also be a reason.Hero FinCorp, an associate of two-wheeler major Hero MotoCorp, filed its draft red herring prospectus for its ₹3,668 crore public issue. HDB Financial submitted its draft documents for a ₹12,500 crore IPO.According to the processing status of draft offer documents on the Sebi website, comments have been sought from other regulators and government agencies for Hero FinCorp. For HDB Financial, the status indicates that the last communication was either issued or received on February 14, 2025.HDB now has more than 41,409 public shareholders. In 2024, the company issued over 1.7 million shares to employees through stock option exercises. Shares of HDB Financial are currently trading at around ₹1,050 in the unlisted market. Reserve Bank of India's guidelines require HDB Financial to be listed by September 2025 as the firm has been classified as 'upper layer' under Scale Based Regulation for NBFCs for 2024-25.Hero FinCorp had 7,452 public shareholders holding a 20.42% stake in the company as of August 2024. The company's shares are trading at ₹1,400-1,450 in the unlisted market.Lawyers said the regulator could consider easing some of these rules to allow faster listing of companies in such instances."Regulators should move towards a materiality-based approach, where companies can justify that a prior sale was not intended to circumvent IPO eligibility and still be allowed to proceed with listing," said Sonam Chandwani, managing partner, KS Legal & Associates. "The current rigid framework, while ensuring compliance, often hinders capital market access for legitimate businesses, necessitating a structured relaxation mechanism where issuers can rectify violations within a specified timeframe without outright rejection of their IPO plans."

Mumbai: IndusInd Bank has not sought any fresh capital from its promoters even though it suffered a huge loss in its net worth following an accounting discrepancy, IIHL chairman Ashok Hinduja said on Tuesday. IIHL, the investment arm of Hinduja Group, has recently got RBI's in-principle approval to raise its stake in IndusInd Bank from 16 per cent to 26 per cent. According to Hinduja, IndusInd International Holdings Ltd (IIHL) -- the Mauritius-based promoters of the private sector lender -- has committed to infuse capital into the bank in case there is a requirement. However, the bank has not sought any fresh infusion as the overall capital adequacy is at a comfortable level of over 15 per cent, he told reporters on the sideline of an event. He further said that this is an opportune time for the promoters to raise their stake given the dip in the stock price, even though it will not be so beneficial for the bank as an institution. "...at this price, we would like to. Why me? Any shareholder. See the book value, see the net worth at this value. These are panic situations. In the panic situation, everybody gets worried," Hinduja said. On March 10, IndusInd Bank disclosed that it has found some discrepancies in its derivatives portfolio, which could have an adverse impact of about 2.35 per cent of the bank's net worth as of December 2024. Analysts peg the discrepancy at Rs 2,100 crore in absolute terms. Soon after the disclosure, the bank's scrip witnessed a massive price correction. IndusInd Bank also said that an external auditor is reviewing the matter, with a report expected by the end of March 2024. Hinduja said the report by external auditor PwC will help determine who is responsible for the accounting discrepancy in the bank. He declined to comment on the reasons for the resignation of the CFO Govind Jain or why the RBI gave incumbent CEO Sumant Kathpalia an extension of only one year. The bank does not have any promoter-appointed person as a director because of a policy of the Hinduja family not to do so, he said.