Oct 26 business news: Sensex drops 900 pts, Narayana Murthy wants 70-hour work weeks

Sensex plunges 900 points; investors lose nearly Rs 3 lakh crore

The Sensex saw its sixth consecutive decline on Thursday, dropping roughly 900 points, pushing it under the 64,000 mark.

This decline was primarily attributed to a widespread selloff, exacerbated by escalating tensions in the Middle East.

Contributing to the downturn were sluggish global market movements, significant hits in the auto, finance, and energy sectors, and renewed sales by foreign investors, as observed by market analysts.

Reflecting this bearish trend, the cumulative market capitalisation of BSE-listed companies saw a sharp fall, resulting in a Rs 2.95 lakh crore reduction in investor wealth, bringing the total to Rs 306.27 lakh crore.

Over the past six trading sessions, the loss stood at a staggering Rs 17.50 lakh crore. The NSE Nifty's 50-share index mirrored this decline, dropping 1.39% to reach 18,857.25, while the BSE's primary index, the Sensex, went down by 1.41% or 900.91 points to 63,148.15.

The BSE Sensex, consisting of 30 shares, settled at 63,148.15, a drop of 900.91 points or 1.41%. During trading hours, it had even touched a low of 63,092.98, reflecting a decline of 956.08 points or 1.49 per cent. In parallel, the Nifty registered a drop of 264.90 points, settling at 18,857.25.

NRN underlines significance of long working hours for India's youth

Infosys co-founder NR Narayana Murthy, 77, in a recent podcast episode of 3one4 Capital’s 'The Record', emphasised the importance of long working hours for India's youth. In a conversation with the former Infosys Director, Mohandas Pai, he said India’s work productivity is among the lowest in the world.

To compete with countries like China, India’s youngsters must work extra hours – as Japan and Germany did after World War II. He also blamed other issues like corruption in the government and bureaucratic delays, which were impacting productivity.

While NRN’s views are worth considering, wages in India are among the lowest in the world, and hence, emphasising productivity rather than just working hours might be a more sustainable approach.

Ola Electric gets Rs 3,200 crore funding to set up battery plant

Ola Electric, which makes Ola electric scooters, has raised Rs 3,200 crore, led by Temasek, to expand its EV business and set up India's first lithium-ion cell manufacturing facility in Krishnagiri in Tamil Nadu.

Ola is one of the companies that has been raising funds successfully since it started its electric scooter business, while others have struggled. Ola is also the market leader, with over 30 per cent share.

The latest funding round is expected to put India on the map as a significant player in the EV market. However, Tesla reported disastrous third-quarter earnings, leading to a loss of $28 billion, prompting Toyota, which backs hybrid vehicles, to say that EVs were never an option.

According to a study, customers in Scandinavian countries want to opt out as rising electricity prices neutralise any positive impact of choosing EVS.

Moderate performance in H1 National Highway Awards, but Sept sees increased momentum

The year's first half saw a tepid response to national highway awards. However, a resurgence in September resulted in only a 6% year-on-year decline in Q2.

The projected awards for FY24 stand at approximately 10,500 km, falling short of MoRTH's (Ministry of Road Transport and Highways) expected target.

The upcoming Vision 2047 might supersede Bharatmala Phase 2, introducing numerous high-capital greenfield projects in the sector, according to an SBI Capital Market report on the road sector.

While smaller entities still dominate the awards, recent changes in bidding guidelines have shifted larger projects toward publicly listed developers. Over the last two and a half years, the mean project size for these developers has risen by 27 per cent. In contrast, it has declined by 10 per cent for non-listed entities.

Notably, half of the projects awarded to these listed developers in the first half of FY24 have opted for the HAM (hybrid annuity model where the Ministry pays 40 per cent and the developer pays the rest) mode.

The considerable bitumen consumption in Q2 suggests a promising second half, following a subdued H1. Anticipations for national highway construction in FY24 are set at around 10,500 km.

The Union has earmarked a historic capital expenditure budget of approx—Rs—260,000 crore for MoRTH in FY24. By the close of H1, more than 60 per cent of this budget has been utilised, positioning the Ministry well to hit its FY24 objective.

Tolls remain a primary funding avenue. Remarkably, Fastag revenues soared by 24 per cent year-on-year in the first half of FY24. Indicators like GST collections and fuel sales hint at FY24 witnessing peak toll revenues nearing Rs. 67,000 crore.

However, FY25 might slow down due to modest toll hikes, NETC (National Payments Corporation of India) onboarding reaching saturation, and prior-year comparisons. Accelerating monetisation initiatives is crucial to allocate future toll earnings towards fresh greenfield projects.

The current fiscal has observed restricted activity via the TOT (toll-operate-transfer) method, with multiple bundles being shelved over valuation disagreements.

Four piles, now in progress, might contribute around Rs. 15,000 crore in FY24; another two are in the preliminary stages.

The InvIT avenue is predicted to pick up in the latter half, following a slow start to the year.

Addressing monetisation challenges will be essential to attain the Rs 45,000 crore goal for FY24, ensuring the continuous ascent of India's economic trajectory.