#1. Cognizant to buy American engineering R&D firm Belcan for $1.3 billion in cash and stock
Cognizant Technology Solutions has agreed to buy US-based Belcan, a global supplier of engineering R&D services, for $1.3 billion in cash and stock, the Hindu Businessline reported. The purchase consideration will be $1.19 billion in cash and 1.47 million shares of Cognizant Class A common stock at a current value of $97 million. Belcan provides digital ER&D services in commercial aerospace, defense, space, marine, and industrial sectors, with 76 percent of revenue coming from aerospace and defense.
Why it’s important: To hasten revenue growth in a tough business environment, Cognizant has made its first move into aerospace and defense, joining other IT service firms in ramping up ER&D capabilities.
#2. Reverse merger with bankrupt firms emerges as a favored route to access markets
In 2023-24, at least 26 listed insolvent firms found new owners through the corporate insolvency resolution process, according to official data compiled by Mint. Of these, the likely motivation for the acquisition of at least 10 of the insolvent companies was to get listed through a reverse merger, experts said.
Why it’s important: The reverse merger route to the stock market is not new but is gaining traction in recent times. If the acquirer finds the right target company, such a maneuver makes getting listed far easier, quicker, and cheaper than launching an IPO.
#3. State-run banks ask government’s permission to offer incentives that bolster deposits
State Bank of India and other public sector lenders are urging the government to allow them to offer incentives to bolster deposits, the Economic Times reported. Deposit growth of banks in 2023-24 was below the rise in credit, forcing them to meet the funding gap through higher-cost certificates of deposit. They have asked the lock-in period for tax-saving fixed deposits should be reduced to three from five years.
Why it’s important: Indian savers are being lured away by bumper returns in equities, mutual funds, and tax-saving equity-linked savings schemes, preferring them to tax-saving fixed deposits. Reducing the lock-in period may address the imbalance though that’s far from certain.
#4. Bengaluru takes pole position in electric car registrations, surging threefold in 2023
Bengaluru outpaced Mumbai, New Delhi, and Pune in 2023 to become India’s leading city for electric car registrations, the Business Standard reported. Electric car registrations in Karnataka’s capital rose more than threefold in 2023 to 8,690 units, overtaking the expansion seen in the other three cities, according to data from Jato Dynamics. It has consistently held the top position for electric two-wheeler registrations over the past four years.
Why it’s important: The surge in electric car registrations in Bengaluru is due to increased acceptability, zero road tax, and subsidized power for EV charging. A wide charging station network contributed.
#5. JSW Energy starts building a battery energy storage system factory in Rajasthan
JSW Energy has begun the construction of a 1 GWh battery energy storage system project at Fatehgarh in Rajasthan, the Economic Times reported. The project consists of two installations, each with a 500 MWh storage capacity designed for two hours of storage in one cycle, the company said in a regulatory filing.
Why it’s important: As India ramps up green energy transition, battery energy storage systems have emerged as a critical link in boosting grid stability and integrating renewable energy sources.
#6. The average age of personnel at TCS and Infosys has risen beyond 30 years in the past two years
Tata Consultancy Services and Infosys, India’s top two IT services firms, have seen a decline in staff aged 30 years or less over the past two years, the Mint reported. Their share in TCS’s workforce has fallen from 59 percent in 2021-22 to 50.3 percent in 2023-24. For Infosys, the drop was to 55 percent from 60 percent. Once business expansion revives, the younger employee headcount might pick up.
Why it’s important: The decline is due to lower fresher hiring and weak growth of IT services companies in 202324, and not to the advance of artificial intelligence or generative AI taking over entry-level jobs. That could come later.
#7. Bullish Jubilant FoodWorks to double Domino’s Pizza store count in the medium term
India has become the first market outside of the US to have 2,000 Domino’s Pizza stores, the Hindu Businessline reported. Jubilant FoodWorks is looking to double this count to 4,000 in the medium term. The food services firm remains bullish on both dine-in and delivery segments and is ramping up investments in back-end commissaries, CEO and MD Sameer Khetarpal said.
Why it’s important: Sales growth among quick-service restaurants has remained sluggish on consumption and demand headwinds in the past few quarters. But the potential for growth remains undiminished.
#8. Russia may provide incentives to Indian drugmakers to build manufacturing units in that country
Moscow has proposed financial support for Indian pharma firms ready to build facilities in Russia and is seeking more pharmaceutical exports from India to meet domestic demand, the Mint reported. The Russian Direct Investment Fund is said to be ready to fund Indian companies who wish to tie up with local companies and work towards R&D.
Why it’s important: Russia, hit by Western sanctions, is looking to India for drug security at a time of shortages triggered by its war in Ukraine. Whether it gets an enthusiastic response remains to be seen.
#9. FirstCry, bound for an initial public offering, readies to scale up operations in global markets
FirstCry, India’s largest multichannel retailing platform for newborns, mothers, and kids, plans to scale up its operations in global markets, the Business Standard reported. The IPO-bound company plans to set up new stores and warehouses in Saudi Arabia. To solidify its position and replicate the India playbook, it proposes to spend Rs 155.6 crore towards the expansion plans overseas.
Why it’s important: FirstCry made a successful international foray by becoming the largest retail platform for babies and mothers in the United Arab Emirates. It is now turning its attention to Saudi Arabia.
#10. Hyundai Motors likely to file draft papers of an initial public offering in two weeks
The Indian unit of Korea’s Hyundai Motor is likely to file a draft red herring prospectus with the market regulator over the next two weeks, initiating the process for an initial public offering, the Economic Times reported. An investment banker said that Hyundai Motor India is likely to start investor roadshows in India and overseas starting next month.
Why it’s important: The public listing of Hyundai in India would mark the first IPO by an automaker in India in more than two decades since the listing of Maruti Suzuki in 2003.
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