India’s GDP set to zoom in ’21
- As per a report, India could be the fastest-growing Asian economy in 2021. While the GDP in 2020 may be negative, the cyclical recovery could catapult growth in 2021 to 9.9%.
- The sharp rise in benchmark indices does resonate with the prevailing optimism. However, the government will also need to watch out for risks of rising expenditure leading to fiscal constraints and a spike in inflation.
FDI boost for defence
- The government has tweaked the FEMA (India’s forex act) to raise the foreign direct investment (FDI) limit in the defence sector from 49% to 74% via the automatic route.
- However, the 74% limit is solely for companies seeking new industrial licences. Shares of key defence companies responded positively. Bharat Electronics (+3.3%), Mazagon Docks (+3.9%), HAL (+1.6%) and Bharat Dynamics (+0.5%) saw gains today.
Electricity costs to drop
- At a recent event, Gautam Adani, Chairman of Adani Group, said that India will emerge as the least-expensive producer of renewable energy, thanks to the boom in the segment.
- Citing the example of the country’s astoundingly low mobile data rates, he said that a mix of solar, wind energy, storage and digitisation could be transformational in reducing the power costs. Meanwhile, the group’s renewable energy company, Adani Green (-1.7%), has been the top performers this year amongst the top 100 stocks in India.
MTNL plans a recharge
- As a part of its revival plan, MTNL could raise ₹2,138 crore using sovereign guarantee bonds. It has already raised ₹4,361 crore this year.
- MTNL is struggling to hold fort in an extremely competitive market. However, the news boosted the shares by 6.4% with a spike in volumes. The stock is trading at ₹10.75 (near the face value of ₹10)