The week in charts: Rainfall woes, Fed rate cut, Tupperware crisis

Abundant rainfall this year has boosted kharif crop sowing, but excess rains in September may lead to crop damage and add risks to India's inflation trajectory. Meanwhile, the US Federal Reserve has announced a steep rate cut after four years.

Problem of plenty

After last year's below-normal monsoon and reduced crop production, India saw abundant rainfall this year, supporting the sowing of kharif crops in August. However, the 8% above-normal rainfall so far in September now poses a threat to crops ahead of the harvest season, adding pressure to India's inflation outlook. While states like Telangana and Rajasthan experienced significant excess rainfall, key wheat-growing regions such as Bihar and Punjab remain deficient, a Mint analysis of data from India Meteorological Department (IMD) showed.

Policy pivot

After a four-year hiatus, the US Federal Reserve cut its benchmark lending rate by 50 basis points, marking the first reduction since the onset of the pandemic. The policy rate now ranges between 4.75% and 5%. This move, following months of monetary easing by several countries, aims to prevent a slowdown in the US labour market as inflation begins to ease. The Fed has also signalled further cuts: another 50 basis points before year-end, with an additional 100 basis points anticipated in 2025.

Tupperware trouble

$700 million: That's the estimated amount of loans that the kitchenware firm Tupperware has failed to repay its lenders. After months of negotiations, the company has now filed for bankruptcy protection, listing assets between $500 million and $1 billion, and liabilities between $1 billion and $10 billion. Founded in 1946, Tupperware had become a household name for its food storage containers. However, the company has been struggling to maintain its financial position amid falling sales and growing competition.

Price paradox

Global crude oil prices have plummeted, with India's crude variant now trading at around $73 a barrel, the lowest since November 2021. Despite increasing demands for petrol and diesel price cuts, no reductions have been made since March. Over the past two years, the decline in crude oil prices has significantly boosted margins for Indian refiners, rising from ₹39 per litre to ₹57 in June 2022. However, petrol prices have only seen a modest ₹2 drop during the same period, an analysis by howindialives.com shows.

The IPO pie

The participation of retail investors in initial public offerings (IPOs) has increased significantly for both the mainboard and small and medium enterprises (SME) offerings. Over the past five years, around 45.5% of IPOs in both segments were oversubscribed more than 10 times by retail investors, a Mint analysis of data from primedatabase.com showed. Despite this strong interest, the chances of securing IPO allocations remain slim, with retail investors receiving only 22.8% of total IPO mobilization for the mainboard in 2023 and 38.3% for the SME segment.

Moon mission

₹2,104 crore: That is the amount the government has earmarked for the Chandrayaan-4 mission. Following the successful demonstration of safe and soft landing of Chandrayaan-3, the Union cabinet has approved the mission, which aims to achieve foundational technological capabilities that will enable a successful return back to earth. Key objectives include successful docking, undocking, landing, and the collection of lunar samples for scientific analysis. The mission is expected to be completed within 36 months of the government's approval.

Utilisation gap

The government last week announced the extension of the Ayushman Bharat health insurance scheme to all citizens aged 70 years and above, regardless of income. The expansion, targeting around 60 million seniors with a ₹3,437 crore outlay, comes amid concerns over the scheme’s underutilization of funds. Since its 2018 launch, the claims settlement ratio has dropped from 97.5% to 81.7% in 2023-24, raising doubts about its capacity to manage a growing number of beneficiaries effectively, a Mint analysis shows.

Chart of the week: Payout frenzy

Vedanta Group's large Q1 dividends boosted India Inc’s total payouts to a five-year high even as the number of companies rewarding shareholders fell to its lowest since April-June 2019, a Mint analysis shows. Vedanta and its subsidiary Hindustan Zinc accounted for a third of the nearly ₹43,000 crore dividend, with 176 companies announcing payouts.

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