MONEY PECHU – JULY 13

GOLD RATE TODAY AT ONE MONTH HIGH ON RATE CUT BUZZ IN US FED
MEETING. EXPERTS SEE MORE UPSIDE
 In the international market, spot gold price finished at $2,411 per ounce, while COMEX
gold price ended at $2,416 per troy ounce.
 Promising US job data further pulled down US dollar rates and US treasury yields,
fueling buzz about a potential US Fed rate cut in the upcoming September meeting.
 US inflation dip from 3.30% to 3.0%, which led to a new high in US equities as ten-year
bond yields dropped.

HCL TECH REVENUE SLIPS IN Q1, RETAINS WEAK FY25 PROJECTION

 HCL Technologies reported a 20.45% increase in net profit to ₹4,257 crore in
Q1FY2025 compared to ₹3,534 crore in Q1FY2024.
 Revenue from operations rose 6.69% to ₹28,057 crore in Q1FY2025, compared to
₹26,296 crore in Q1FY2024, exceeding market expectations.
 66% of revenue came from the Americas, with consecutive quarter growth in the region.
 EBIT margins were steady at 17.1% YoY.
 Interim dividend of ₹12 per share was announced for FY25 (issue date set for July 23).
 Attrition rate for the April to June quarter of FY2025 was 12.8%, with a total employee
strength of 2,19,401 as of June 30, 2024, and the addition of 8,080 employees, including
1,078 freshers.
 Revenue fell 4.1% in the Lifesciences and Healthcare vertical, 1.3% in Financial
Services, and 3.7% in Public Services YoY.
 Telecommunications, Media, Publishing & Entertainment vertical saw a revenue
increase of 69.2% YoY.
 A $2.1-billion managed network services deal with Verizon Business significantly boosted
telecom vertical revenue.
 New deal wins stood at $1.96 billion as of June 30, 2024.
 Expected revenue growth for FY2025 is between 3-5% YoY in constant currency terms.
 June quarter revenue fell 1.9% sequentially to $3.36 billion, in line with analyst
expectations.
 The decline is attributed to weakness in the automotive business and engineering, research,
and development (ER&D).
 No announcement on generative AI pipeline, unlike TCS with $1.5 billion AI/Gen AI
pipeline.
 HCL Tech shares closed 3.20% higher at ₹1,560.60 after Friday's trading session,
compared to ₹1,512 the previous close. Results were declared aftermarket hours.

AFFORDABLE MODELS TAKE BAJAJ, TVS CLOSER TO OLA

ELECTRIC IN E2W MARKET
 Bajaj Auto and TVS Motor Company have captured a combined 38.11% market share
of the e-2W segment, based on VAHAN registrations in the first 12 days of this month.
 Ola Electric holds a 35.53% market share, intensifying competition in the market.
 Bajaj Auto unveiled the Chetak 2901 in June, priced at Rs 95,998 (ex-showroom).
 TVS Motor Company launched a new variant of the iQube in May with a 2.2 kWh battery,
priced at Rs 94,999.
 Ola Electric previously launched models under Rs 1 lakh, including the S1X (Rs 74,999),
S1X+ (Rs 84,999), and S1X with a 4 kWh battery (Rs 97,499).
 In June, Ola Electric commanded over 47% of the overall market based on registrations,
while Bajaj and TVS together held 29.7%.
 As of July 12, TVS secured a 20.7% share, Bajaj held 17.41%, and Ather had a 10.25%
market share.
 TVS aims to make the iQube more accessible and affordable, with support from 600
dealers nationwide. The iQube offers a 75-kilometre range and a charger that can charge the
battery from 0% to 80% in two hours.
 Despite a relatively flat market, Ola's registrations surged by over 55% in Q1FY25, while
TVS saw an 11% decline and Ather a 41% drop. Bajaj posted 53% growth in the same
period.
 SMALL CARS BELOW INR6 LAKH ARE FACING A STIFF
COMPETITION FROM USED CARS: TATA MOTORS MD
 Shailesh Chandra, MD of Tata Motors Passenger Vehicles and Tata Passenger Electric
Mobility, discussed the decline of small cars in India and the rise of SUVs.
 The share of small cars or hatchbacks in overall passenger car sales decreased from
46.9% in FY19 to 27.7% in FY24, while SUVs increased from 23.1% to 50.3% in the
same period.
 The price of top trims of popular hatchbacks has increased by around INR2.5 lakhs to
INR9.5 lakhs between 2018 and 2024 due to added features.
 The biggest competition to small cars below INR6 lakh comes from the used-car market,
with used car sales reaching 5-5.5 million, surpassing the new-car market.
 Used cars are sold mostly at INR4 lakh-INR4.5 lakh price points.
 Used cars, typically three-four years old, are bigger and more feature-loaded at the price of
a new, smaller, and less feature-rich car.
 Tata Motors has no plans to introduce an electric small car below the Tiago EV, which
starts at INR8 lakh.
 The Tata Punch's success as India's best-selling car is attributed to its balance of
aspirations, regulations, and price in the entry car market.

HYUNDAI MOTOR RULES OUT ANY SPECIAL WORKER

SHARE ALLOCATION DESPITE STIR
 Hyundai Motor has ruled out any special allocation of shares to Indian workers in its
forthcoming Indian stock market listing, despite employee demands.
 Hundreds of workers at Hyundai's main Indian plant in Sriperumbudur near Chennai
demonstrated to demand a share allocation in the upcoming $3 billion listing.
 India is a crucial growth market for Hyundai, where it has invested $5 billion and plans to
invest another $4 billion over the next decade.
 The United Union of Hyundai Employees in India requested the allotment of shares to
employees as part of the flotation in a letter dated June 19.
 Hyundai's India IPO is an "offer for sale" where the South Korean parent will sell up to
17.5% of its stake in the Indian operation. There will be no fresh issue of shares.
 According to Indian IPO rules, in an offer for sale, the company can create a separate quota
for employees to buy shares but cannot offer the stock at a discounted price.

ADI GODREJ FAMILY ENTITY EXITS TWO GODREJ COMPANIES

 RKN Enterprises, owned by Adi Godrej's cousin Rishad Naoroji, sold its entire equity in
Godrej Agrovet Ltd. and Godrej Properties Ltd. via open market transactions on Thursday.
 The promoter entity sold 2.16% of Godrej Agrovet, for Rs 331 crore.
 Buyers for Godrej Agrovet shares include Jamshyd Naoroji Godrej (0.37%), Navroze Jamshyd
Godrej (0.37%), Freyan Crishna Bieri (0.24%), Nyrika Holkar (0.24%), and Smita Godrej
Crishna (0.24%).
 Adi Godrej and his brother Nadir Godrej will retain control of the five listed companies
of the Godrej Group, which have interests in consumer goods, real estate, agriculture,
chemicals, and gourmet retail.
 Cousins Jamshyd and Smita Godrej will receive the unlisted Godrej & Boyce Mfg. Co.,
along with its affiliates and a vast land bank.

GODREJ CONSUMER PRODUCTS DEVELOPS INDIGENOUS

MOSQUITO REPELLENT MOLECULE
 Godrej Consumer has developed ‘Renofluthrin’, a patented mosquito repellent molecule.
 Developed in collaboration with Shogun, following a decade of research and investment.
 The company did not disclose the amount spent on developing Renofluthrin.
 GCPL holds exclusive rights to use Renofluthrin in its products for six to eight years.
 Integrated into Goodknight Flash liquid vaporizer and agarbatti.
 The household insecticides category in India is around Rs 6,000 crore, with the illegal
agarbattis market nearly Rs 1,500 crore.
 GCPL holds a 50% market share in the household insecticides category.
 The new agarbatti with the R&F formula is positioned to counter illegal agarbattis
containing harmful Chinese molecules.
 TAX AUTHORITIES BOWL A GST GOOGLY TO AIFs MUMBAI
 India’s $100-billion private equity and venture capital world is being scrutinized by the
goods and services tax (GST) office.
 About a dozen alternative investment funds (AIFs) have received notices questioning why
their schemes, housing the fund pools, are not registered under GST.
 These funds raise significant amounts of money annually, supporting thousands of
startups and listed companies.
 The Central Board of Indirect Taxes & Customs (CBIC) is looking to have better control
and visibility over these fund entities amid growing assets under management of AIFs.
 The fund industry argues that AIF schemes or funds do not provide any 'service' and their
earnings do not attract GST, as the 'service' is provided by the fund manager.
 AIF earnings streams (interest and capital gains) are not subjected to GST.
 Regulated by the Securities and Exchange Board of India (Sebi), AIFs are privately pooled
vehicles collecting funds from savvy investors for deployment according to a defined
investment policy.
 Unlike mutual funds, AIFs cater to sophisticated investors who contribute at least Rs 1
crore, seeking returns from startups and early-stage ventures.
 AIFs are typically organized under trusts registered with Sebi, which can have multiple AIFs
and schemes, managed by asset management entities.

WHY IS RBI CONCERNED OVER MICROFINANCE CREDIT

GROWTH IN UP AND BIHAR?
 The RBI has advised microfinance lenders to ease up on loan approvals in Uttar Pradesh
(UP) and Bihar.
 Microfinance has been rapidly growing in UP and Bihar, which account for over a quarter
of total microfinance loans in India.
 UP and Bihar have been among the fastest-growing states in terms of Assets Under
Management (AUM) since 2019.
 The RBI is concerned about the rapid growth of microfinance lending in these states.
 Post-independence, banking services were limited, and people relied on local moneylenders
charging high interest rates.
 In the late 1980s, NABARD laid the foundation for formal microfinance operations
through Self-Help Groups (SHGs).
 Reports of predatory loan recovery practices in Andhra Pradesh led to the Krishna
Crisis, where borrowers struggled with high interest rates, some as high as 80-100%.
 The RBI is now concerned about potential issues in UP and Bihar due to massive lending
to subpar borrowers.

ICICI SECURITIES DEFENDS DELISTING: CLAIMS SHAREHOLDER

DEMOCRACY IN ACTION
 ICICI Securities defended its proposed delisting at the Mumbai bench of the National
Company Law Tribunal (NCLT).
 ICICI Securities argued that the applications filed against the delisting are against the
principle of shareholder democracy and should be dismissed.
 ICICI Securities, an affiliate of ICICI Bank, claimed the applicants have no legal standing to
file the applications or raise objections.
 ICICI Securities argued that the applicants, due to their minimal shareholding, are not
entitled to object to the scheme, making their application non-maintainable.
 Quantum Mutual Fund and investor Manu Rishi Guptha objected to the delisting,
arguing that the swap adversely affects minority shareholders. They hold 0.08% and
0.002% of the paid-up equity share capital of ICICI Securities, respectively.
 ICICI Securities noted that the delisting proposal was approved by 93.82% of the equity
shareholders in value and 71.89% of the public shareholders, well above the requisite
threshold under applicable law.

COSTLIER VEGGIES: EATING OUT TO GET PRICIER AS

RESTAURANTS MULL PRICE HIKES
 Eating out is expected to become more expensive as restaurants plan to raise prices due
to the rising cost of vegetables, such as tomatoes and capsicum.
 The price of tomatoes in Delhi markets surged to Rs 90 per kg from the usual Rs 30 due
to heavy monsoon rains.
 Continuous heavy rainfall in key tomato-producing states like Maharashtra and
Karnataka has disrupted transportation, leading to supply shortages and price hikes.
 Restaurant owners say this price hike is more severe than usual, affecting their profit margins.
 Anjan Chatterjee, founder of Speciality Restaurants (owners of Oh! Calcutta and Mainland
China), mentioned that a price review is underway due to shrinking bottom lines.
 Sagar Daryani, co-founder and CEO of Wow! Momo, indicated that if vegetable prices do
not decrease within 20 days, the menu could be revised for August-September.
 The Centre's statement noted that tomato picking has started in Karnataka’s Kolar and will
reach the market shortly.

INTERNATIONAL

NOVO NORDISK'S ONCE-WEEKLY INSULIN IS REJECTED BY THE FDA, IN

LATEST SET BACK FOR THE PHARMA GIANT
 Novo Nordisk announced that the U.S. Food and Drug Administration (FDA) has rejected its
application to sell once-weekly insulin ICODEC.
 The FDA sent a complete response letter requesting additional information related to the
medication’s manufacturing process and its use for type 1 diabetes.
 The FDA cannot complete its review until all requests are addressed.
 Novo Nordisk submitted its application to the FDA in April 2023.
 In May, an FDA advisory committee found that icodec carried a higher risk of
hypoglycemia for type 1 diabetes patients compared to traditional daily insulin.
 Icodec is already approved under the brand name AWIQLI in the E.U., Canada,
Australia, Japan, and Switzerland.
 A recent analysis found that Eli Lilly’s TIRZEPATIDE is more effective for weight loss
than Novo Nordisk’s active ingredient in Ozempic and Wegovy.

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