Oct 27 business news: Reliance gets its scions on the saddle

Reliance gets its scions in the saddle; Anant Ambani gets the nod, too

Reliance Industries Limited (RIL) shareholders have consented to appoint Isha Ambani, Akash Ambani, and Anant Ambani, children of chairman Mukesh Ambani, as non-executive directors, per a Bombay Stock Exchange filing. The decision was made through a postal ballot, with more than 98 per cent of shareholders supporting Isha and Akash's appointments. Anant’s appointment faced minor resistance, with approximately 7 per cent of votes against it, though close to 93 per cent were in favour. Notably, Institutional Shareholder Services Inc., an international advisory firm, had advised against Anant’s appointment due to his limited leadership experience. Another domestic proxy advisory firm, Institutional Investor Advisory Services, had on October 9 said “at 28 years of age," appointment of the young Ambani scion “does not align with our voting guidelines.”

What it means:

Seamless leadership transition: The induction of the Ambani scions onto the board signals strategic preparations for a seamless future leadership transition. With billionaire chairman Mukesh Ambani advancing in age, this strategic move is crucial in ensuring that the upcoming generation of Ambanis remains unified, minimising the risk of any potential disagreements or conflicts.

Central roles for the NextGen: Mukesh Ambani has clarified that his children will play pivotal roles within the company. They are already at the forefront, overseeing and managing critical sectors of RIL, encompassing retail, digital services, and energy and materials segments. Akash, the eldest, chairs the telecom division; Isha takes the lead in retail, e-commerce, and luxury sectors; while Anant is at the helm of the group's burgeoning new energy ventures, aligning with Reliance’s ambitious goal to achieve net-zero carbon emissions by 2035.

Collaborative leadership: The trio of Ambani siblings is set to function cohesively as a team, engaging in collaborative efforts with other board members. Their combined leadership is expected to steer the Reliance conglomerate, fostering growth across its various business domains.

Tatas to start making iPhones within two years; buys Wistron for $125m

Salt-to-software multinational the Tata Group will start manufacturing Apple iPhones in India, catering to national and international markets within two years, Rajeev Chandrasekhar, the Union Minister of State for Electronics & Technology, through a post on a social media platform on Friday said. As a result, Tata has become the first Indian company to produce iPhones, following the acquisition of a factory in the southern part of India from Wistron Corporation. In a recent meeting, Wistron, a Taiwanese electronics company, confirmed the sale of its subsidiary, Wistron InfoComm Manufacturing (India) Private Ltd., to Tata for $125 million. The deal was ratified by Wistron’s board. Taiwanese giants like Pegatron Corp. and Foxconn Technology Group predominantly assemble iPhones for Apple. Earlier this year, Union Minister Piyush Goyal said Apple Inc was keen to increase its production in India from 5 per cent - 7 per cent to up to 25 per cent.

What it means: This development is expected to pave the way for more Apple products to be made in India, which could lead to lesser dependence on China.

Nifty and Sensex regain ground after consecutive losses

The Nifty 50 and the Sensex, key stock indices in the country, rebounded on Friday after six consecutive sessions of losses. This was due to comprehensive buying influenced by positive global market trends and the news of the U.S. economy’s rapid growth from July to September despite elevated interest rates. Market participants are now anticipating the upcoming U.S. core inflation report, which could indicate a decrease in inflation rates. Nifty 50 saw a 1.01 per cent increase, closing 190 points higher at 19,047.25, while the Sensex ended the day at 63,782.80, up by 635 points or 1.01 per cent.

What it means: On Thursday, Sensex declined by 900 points in a single day, leading to a Rs 2.95 lakh crore reduction in investor wealth. Over the past six trading sessions, the loss stood at a staggering Rs 17.50 lakh crore. The yoyo trend witnessed during the last few sessions indicates that the markets haven’t come to grips with ongoing concerns regarding interest rates, bond yields, and geopolitical tensions.

Maruti’s net ip at all-time high as SUVs take the centre-stage:

Maruti Suzuki India Ltd. (MSIL) reported a record consolidated net profit of Rs 3,764.2 crore for the second quarter of the fiscal year 2023-2024. This marked a 78.2 per cent increase from the previous year’s corresponding quarter. The automaker also noted a 6.3 per cent increase in domestic passenger vehicle sales. However, sales in other vehicle categories experienced a decline.

What it means: Maruti, which had for long shunned getting into the SUV space and banked heavily on small cars, is now riding on the back of customers' increasing preference for these vehicles. India’s largest carmaker has also capitalised on reduced commodity prices, cost-saving initiatives, and advantageous foreign exchange rates.