Here’s your Business Planner for the week (May 7 to May 13).
Industrial production data release
The government will release industrial production data for March on Friday. India’s industrial output grew 7.1% in February from a year earlier. In addition, the government will also unveil inflation data based on consumer price index (CPI) for April. Retail inflation stood at 4.28% in March, slowing for the third straight month from a 17-month high, according to data released by the Central Statistics Office.
Policy Movement
Expect the government to go the public-private partnership (PPP) way for the Employees Provident Fund Organisation (EPFO) and the Employee State Insurance Corporation (ESIC). A decision to switch the two schemes over to the public-private partnership (PPP) mode is likely to be taken soon. The private companies will work on behalf of the state social security boards in the areas of fund management, point ofthe presence, service delivery, benefit disbursement, record keeping and enabling the PPP system for social security. Additions to the EPFO are on the rise after job incentive schemes for employers were announced in the budget. It indicates formalisation of the country’s workforce as casual workers are brought into the safety net, rather than job growth.
Start-up Push
A) Much awaited announcements for two start-ups – Flipkart and ShareChat.
Flipkart, which is being wooed by both Walmart and rival Amazon, is in the final stages of making a decision. Media reports, last week, said that Walmart made a $15 billion offer to buy a 75% stake in the Indian e-commerce retailer and Alphabet Inc, Google’s parent company, will join Flipkart as a new investor. Softbank is likely to sell its existing 20 per cent stake in Flipkart.
ValueChat, which counts SAIF Partners, Lightspeed Ventures and Xiaomi as its investors, is likely to announce the investors for the $100 million fundraise. Those interested include Tencents, Naspers and Amazon. The three-year old regional language social platform founded by three alumni of IIT Kanpur has 10 million daily active users, 65% in the 14-22 years age group.
B) The government will soon unveil hybrid instruments to boost start-up funding. A wide array of hybrid instruments, on the lines of those available in developed markets, will allow promoters to retain control of an entity even with a minority stake. This will make fundraising easier. Hybrid instruments have the characteristics of debt and equity and come with differential voting rights. Promoters may hold less than 15 per cent equity but exercise full control. The US has different classes of shares with differential control. China has a variable interest instrument that allows foreign investors to have only an economic interest in companies in restricted sectors.
Quaterly Results scheduled this week
ICICI Bank, Tata Chemicals and Tata Coffee are slated to announce January-March results on Monday, while ABB India and Jubilant FoodWorks will unveil on Tuesday. Eicher Motors and JSPL are scheduled to announce results on Wednesday.
Adani Enterprises, Asian Paints, Nestle India, Tata Communications, Titan Company, Union Bank of India and Zee Entertainment Enterprises will release their quarterly numbers on Thursday. Gillette India and Tata Global Beverages will announce January-March numbers on Friday.
Global Watch
A) Whether the United States walks away from a deal with Iran and instead re-imposes sanctions on Tehran on Saturday will have a bearing on oil prices which has touched the late-2014 highs of about $75/barrel.
B) Announcements and cues expected from Federal Reserve, Bank of England and Bank of Japan. Fed officials including Tom Barkin, Robert Kaplan, and Charles Evans are scheduled to speak in public events on May 7, Raphael Bostic on May 9, and James Bullard on May 11. Fed chair Jerome Powell will speak on May 8, on a panel at a conference in Zurich. Bank of England’s policy meeting on Thursday is in focus amid expectations it will keep its key rate unchanged for now. Bank of Japan’s monetary policy meeting minutes will be unveiled on Monday, 7 May 2018.
C) Talks to update the NAFTA trade deal enter a make-or-break week on Monday, as ministers from Canada, the United States and Mexico seek to resolve an impasse in key areas before elections in Mexico and the United States complicate the process.