Bad debt worries RBI

Top of the Morning

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Monday, July 29, 2024. My name is Nelson John. Let's get started:

Some massive consolidation happened in the cements segment yesterday: UltraTech Cement is buying a 32.72% stake for nearly 4,000 crore rupees, and making an offer for 26% more, taking the deal to nearly 9,000 crore rupees. Anirudh Laskar reports that if things go as planned, UltraTech will own over 81% of India Cements. Meanwhile, Adani-owned Ambuja Cement is also increasing its production capacity to compete.

The Reserve Bank of India reported that bad loans in banks are expected to decrease to 2.5 percent by FY25 under normal stress conditions. Shayan Ghosh writes that the report highlighted improvements in the banking sector's health, with a record low bad loan ratio of 2.8 percent last year. Public banks lead in bad loan ratio, but the overall situation is improving due to fewer new bad loans and increased write-offs. Personal loans are a concern, and the RBI is closely monitoring the situation.

The 2024-25 budget introduces tax changes to benefit those involved in international transactions. It lowers the long-term capital gains tax for investing in foreign stocks and eases the process for remitting money overseas, among other provisions. Jash Kriplani writes that these changes aim to simplify tax calculations and make international investments more attractive for Indian investors.

Softbank Investment Advisors, a Japanese tech-focused investment firm, is expecting significant returns from its investments in the Indian market as several of its portfolio companies prepare to go public this year. Sneha Shah and Ranjani Raghavan write that Ola Electric Mobility, Firstcry, and Unicommerce are among the companies planning to go public. Softbank's India portfolio has nearly peaked to 14 billion dollars, and the firm has made over 5.5 billion dollars in exits from its India portfolio. Softbank is anticipating a wave of tech IPOs in India, and its other potential IPO investments include Flipkart, OfBusiness, Lenskart, and Oyo.

Artificial intelligence was tech's next big thing. Billions of dollars have been poured into it by every investor and big tech company. But where are the results? We were told that AI would change everything — but it's shown little utility so far. Research suggests that additional investments of 1 trillion dollars need to be made to make further advances in AI. Shelley Singh looks into the industry, and speaks to industry veterans who give their 2 cents on the future of everything AI.

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That’s all for today. Thank you for listening.

We're eagerly looking forward to our next Top of the Morning episode, which will be packed with fresh business news. Until then, have a great day!

Show notes:

Ultratech to buy out India Cements as Birla sharpens battle against Adani Group

RBI projects further moderation in bank NPA to 2.5%

How the budget has eased the rules for international transactions

Softbank eyes windfall as key portfolio companies line up IPOs

It’s swallowed billions of dollars, but has AI lived up to the hype?