The week in charts: Election surprises, policy pivot, Hyundai IPO

The Bharatiya Janata Party (BJP) has won Haryana and the National Conference-Congress alliance has grabbed Jammu and Kashmir. Meanwhile, the Reserve Bank of India (RBI) has changed its monetary policy stance.

Close battle

The BJP defied expectations by securing a third consecutive term in Haryana, while the National Conference, in alliance with Congress, returned to power in Jammu and Kashmir after a decade. BJP's victory in Haryana followed a tightly fought contest with Congress. A Mint analysis of election results reveals that the BJP faced slightly more close contests this time than in 2019, winning 12 out of 48 seats with a margin of less than 5%, compared to 11 seats in the previous election.

Policy pivot

The RBI has paved the way for potential monetary easing by shifting its stance from ‘withdrawal of accommodation’ to ‘neutral,’ while maintaining the policy repo rate at 6.5%. This was the first meeting since the US Federal Reserve's rate cut and the appointment of three new external members to the six-member Monetary Policy Committee (MPC). The Indian central bank left its FY25 inflation forecast steady at 4.5% but adjusted its quarterly projections. With the change in stance, experts anticipate a possible rate cut in December.

Bumper IPO

₹27,870 crore: That is the amount Hyundai Motor plans to raise through its initial public offering (IPO), set to open next week. It is being touted as India's largest IPO till date, surpassing surpassing LIC’s over ₹21,000 crore offering. The company has fixed the price band at ₹1,865- ₹1,960 apiece, with the issue open for subscription from 15-17 October. The IPO will see the company’s South Korean parent selling 142 million shares, representing a 17.5% stake in the Indian subsidiary.

Price pain

Tomato and onion prices have been surging rapidly due to crop damage in some parts of the country following heavy rainfall in late September. Tomato prices, mirroring last year's trend, have jumped from ₹43 to ₹67 per kg since the start of September, even crossing ₹100 per kg in some areas. This spike has prompted the government to intervene, selling tomatoes and onions at discounted rates in Delhi, amid growing concerns over the impact of food price volatility on the country's moderating inflation trajectory.

Cementing firms?

The Adani Group is reportedly planning to merge its two cement companies, Ambuja Cements Ltd and ACC Ltd, into a single entity, potentially creating a cement giant valued at over ₹2 trillion, Mint reported. The combined entity, under Adani Cement Ltd, will continue to sell cement and construction materials under existing brand names. Jefferies and Axis Capital have been appointed to advise on the merger, which is expected to be executed through a share swap. Integration of operations has already commenced.

Upbeat sentiments

68.2: That was the business confidence index in the quarter ended September, which marked an improvement from 67.3 in the previous quarter, according to industry body Confederation of Indian Industry (CII). India Inc is more upbeat due to policy continuity post-elections and improved economic momentum, CII said. Stronger domestic demand also fulled the confidence. More than half the businesses surveyed expected an improvement in sales and new orders in the September quarter, while 45% expected a rise in profit.

Incentivising sales

The government is planning to boost sales of televisions and air conditioners by removing several tax barriers. The plan involves the abolition of basic customs duties on open cells for television panels, which can reduce the price of large-screen TVs, Mint reported. Currently, open cells are imported from China, Taiwan, Vietnam, Thailand and Malaysia, leading to most of the revenue generated from television sales flowing out from India. For air conditioners, the production-linked incentives programme for white goods is expected to be extended.

Chart of the week: No fair game

Cab aggregators Ola and Uber and logistics platform Porter have scored zero on the working conditions of gig workers by Fairwork India Ratings. The report also showed that only two of the 11 platforms evaluated had a minimum wage policy in place.

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