report

October 7, 2023

India’s M&A activity declines to 56.6%, lowest in three years: Report

Online bureau Economic Trends, Economy mergers and acquisition, refinitiv, report

With a 24.6 per cent market share, the United States was the most targeted country for outbound mergers and acquisition activity, amounting to USD 4.8 billion, down 46.5 per cent year over year, said the report

India’s mergers and acquisition activity decreased to a three-year low in the first nine months of 2023, reaching USD 65.6 billion, down 56.6 per cent from the same period last year, but the number of announced deals increased by 3 per cent, according to a recent India investment banking review for Q3 2023 by Refinitiv.

It stated that target India mergers and acquisition activity hit USD 60.5 billion which is a decrease of 56.8 per cent from the previous year and the lowest first nine months by value since 2020. Domestic mergers and acquisition expenditures came to USD 44.1 billion, a 59.7 per cent decrease over the same time in 2022. Inbound mergers and acquisition reached USD 16.4 billion in 2018, a 46.6 per cent decrease from the previous year.

The Financials sector, which generated USD 30.6 billion in sales but saw a 55.9 per cent decline from the previous year and held 46.7 per cent of the market, was the focus of the majority of India’s deal-making activity.

Industrials made up USD 7.7 billion in total, a decrease of 32.4 per cent from the previous year, with a market share of 11.7 per cent. High Technology, which saw the most agreements announced in the first nine months of 2023, earned 9.0 per cent market share with deals worth USD 5.9 billion, down 71.7 per cent from the previous year, said the report.

October 5, 2023

GST Collections Need To Exceed Rs 1.65 Tn/Month In H2FY24 To Meet CGST Target: Icra

Online bureau Economy economy, GST, ICRA, India, report

The integrated GST collected on imported goods declined by 0.2 per cent year-on-year (YoY) in September 2023 after rising by a muted 3.5 per cent in August 2023

India’s goods and services (GST) collections need to exceed Rs 1.65 trillion per month during H2FY2024 to meet the budget estimate (BE) for central GST revenues of Rs 8.1 trillion, which appears feasible at the current juncture, the rating agency Icra has said in a report.

Gross GST collections rose to Rs 1.62 trillion in September 2023 from Rs 1.59 trillion in August 2023. Moreover, such collections averaged at Rs 1.62 trillion in Q2 FY2024, slightly lower than that seen in Q1 FY24 (Rs. 1.69 trillion), while substantially exceeding the year-ago levels (Rs 1.47 trillion).

Notably, the integrated GST collected on imported goods declined by 0.2 per cent year-on-year (YoY) in September 2023 after rising by a muted 3.5 per cent in August 2023; such collections have remained muted during H1 FY2024, in sync with the contraction seen in India’s merchandise imports amid the moderation in global commodity prices.

“Going forward, any contraction in the value of merchandise imports may continue to dampen the revenues from IGST, which is levied on an ad-valorem basis. Consequently, IGST settlement to CGST may also be impacted, given the substantial share of IGST on imported goods in total IGST (~48 per cent),” the report added.

The rating agency also stated that the YoY surge in direct taxes coupled with lower tax devolution led to a sharp uptick in net tax revenues in August 2023. The central government’s direct tax collections surged to Rs 1.7 trillion in August 2023 from Rs 0.3 trillion in August 2022, led by a multi-fold increase in personal income tax as well as corporation tax.

Moreover, while tax devolution in August 2023 (Rs. 0.73 trillion) was in line with the previous month, it was lower in YoY terms owing to the release of a double tranche in August 2022 (Rs 1.2 trillion), Icra added.

As a result, net tax revenues rose multi-fold to Rs 2.2 trillion from Rs. 0.3 trillion recorded in August 2022. This pushed up the YoY growth in net tax revenues to 14.8 per cent from April to August 2023, as against a contraction from April to July 2023.

“The GoI needs to release Rs. 6.4 trillion to the states during September-March FY2024 to meet the FY2024 BE (Rs 10.2 trillion), which is similar to the amount devolved during September-March FY2023 (Rs 6.3 trillion). This would aid in containing the incremental fiscal deficit in some of the ensuing months, as seen in August 2023,” it stated.

September 25, 2023

S&P Global Retains India’s Growth At 6% For FY23-24

Online bureau Economic Trends economy, growth, inflation, report, S&P Global

S&P Global Ratings kept India’s Gross Domestic Product (GDP) prediction financial year 2023 at 6 per cent, the report said on Monday given slowing global economy, an increased chance of below-normal monsoons, and a delayed impact of rate hike.

The rating agency believes the recent increase in vegetable price inflation is only temporary, but due to rising global oil costs, it increased its prior projection for full fiscal retail inflation to 5.5 per cent from 5 per cent.

“Growth this year will be weaker than in 2022, but our outlook remains broadly favorable. Notwithstanding the strong expansion in India in the June quarter, we maintain our forecast for fiscal 2024 (ending March 2024), given the slowing world economy, the delayed effect of rate hikes, and the rising risk of subnormal monsoons,” the report said. In the fiscal year 2022–23, which concluded in March 2023, the Indian economy grew by 7.2 per cent.

According to the report, Asia-Pacific continues to be a “multi-speed region” with regard to GDP and marginally increased its projection for 2023 to 3.9 per cent due to internal resilience.

Both developed and emerging Asian economies experienced an increase in GDP growth year over year in the second quarter. India was in the lead once more, with GDP increasing by 4.2 per cent from one quarter to the next and 7.8 per cent from a year earlier, it further added.

September 21, 2023

ADB slashes India’s GDP forecast to 6.3% for FY23

Online bureau Economic Trends ADB, economy, GDP, growth, inflation, report

The Asian Development Bank (ADB) slashed its growth forecast for India’s GDP to 6.3 per cent for financial year 2023 from 6.4 per cent, citing the effects of declining exports and irregular rainfall patterns that could reduce agriculture output.

The Bank’s experts also increased their projected inflation rate for the year from 5 per cent in April’s estimate to 5.5 per cent and kept their real GDP growth projection for 2024–25 at 6.7 per cent, driven by the assumption that private investment and industrial output would increase.

“The prediction for the subregion reduced from April’s estimates of 5.5 per cent and 6.1 per cent to 5.4 per cent and 6.0 for this year and next. This outlook is mostly influenced by India, whose economy makes up a large portion of that of the subregion. According to forecasts, growth for the fiscal year (FY) will continue strong, though slightly slower than anticipated in April,” stated the report.

In July, India’s food inflation resurfaced due to unfavourable weather, which also increased South Asia’s inflation rate. India, which exports more than a third of the world’s rice, increased export limits in July, causing rice prices to soar throughout Asia. India’s headline inflation rate estimated to drop from 6.7 per cent in 2022 to 5.5 per cent in 2023.

“India’s prediction has increased to 5.5 per cent for this year (from April’s forecast of 5.0 per cent) and has decreased to 4.2 per cent for 2024. The cost of fruit, vegetables, and rice increased as a result of the intense monsoon rains. The government has expanded public import buying of pulses and banned rice exports in an effort to slow the rise in food costs,” stated the report.

As vegetable prices somewhat decreased from the prior month, India’s retail inflation decreased to 6.83 percent in August from 7.44 percent in July, according to the National Statistical Office (NSO).

September 21, 2023

Almost 40% Graduates Under Age 25 Unemployed: Report

Online bureau Economic Trends Azim Premji, Inequality, Parity, report, SC/ST, Unemployment, Women Employment

The unemployment rate rises up to almost 40 per cent for educated young adults under the age of 25, according to the State of Working India report published by Azim Premji University.

For graduates over the age of 35, it dropped to less than 5 per cent which shows that graduates finally do find employment, but the nature of an occupation remains in question.

It also noted that post-Covid, unemployment is decreasing across all educational levels. However, it continues to be above 15 per cent for graduates, and more concerningly, it reaches a staggering 42 per cent for recent graduates. On the other end of the spectrum, it is between 2 and 3 percent for older, less educated workers.

Further, it encapsulated the social factors weighing on the employment patterns across caste and gender. It finds that owners of companies with more than 20 employees are hardly belong to SC or ST and the over-representation of the higher caste also rises with the size of the firm. Between the two extremes are the OBCs.

“Self-employment and women SC/ST employees experience the greatest income inequality. In salaried employment, women make 76 per cent of what males make on average; this percentage reduces to 40 per cent for self-employed individuals,” it stated.

It showed that women are also more likely to work outside the home in areas with a higher percentage of major businesses (those employing more than 10 people). When individual and household factors are taken into account, data also reveals that the likelihood of the wife having a job is low in households where the husband earns a high income. Although the religious disparity is smaller than the caste divide (SC/ST – Others), it is still similar at 76 per cent. More pronounced inequities develop where caste and gender overlap. Only 54 per cent of what women from upper castes make in waged work is earned by SC/ST women.

September 20, 2023

India’s Economy Likely To Grow To 6.3% In FY24: OECD

Online bureau Economic Trends economy, growth, inflation, OECD, report

The Indian economy is likely to grow more quickly than initially anticipated, with growth averaging 6.3per cent in the FY24 compared to 6per cent earlier, even though it confronts the possibility of increased inflation, according to the Organization for Economic Cooperation and Development (OECD) Economic Report.

India’s inflation rate was substantially increased by the OECD up from 4.8 per cent in June to 5.3 per cent. “Global GDP growth is projected to remain sub-par in 2023 and 2024, at 3per cent and 2.7per cent respectively, held back by the macroeconomic policy tightening needed to rein in inflation”, it said.

It also added that during 2023 and 2024, inflation is expected to progressively decline but in the majority of economies, it will still be higher than the central bank’s objectives. The G20 economies’ headline inflation is expected to decline to 6per cent in 2023 and 4.8per cent in 2024, while the advanced G20 economies’ core inflation will fall from 4.3per cent this year to 2.8per cent in 2024. The majority of G20 advanced nations have not yet experienced a significant decline in core inflation (excluding food and energy prices). The annual average core inflation rate for the G20 advanced economies is predicted to be 4.3per cent in 2023, somewhat higher than in 2022 despite a falling trend through this year, before declining to 2.8per cent in 2024 as cost pressures lessen and profit margins level out.

January 12, 2023

Gartner Reports Largest Quarterly Decline In PC Shipments Since Mid-90s In Q4 2022

Urvi Srivastava Financial Reporting Gartner, recession, report, shipments

The main reason for this decrease is the anticipation of a global recession, increased inflation and higher interest rates, which have impacted PC demand, the report said

A latest report by Gartner suggests that Worldwide PC shipments totaled 65.3 million units in the fourth quarter of 2022, a 28.5 per cent decrease from the fourth quarter of 2021.

Gartner said that this is the largest quarterly shipment decline since it began tracking the PC market in the mid-1990s. It reported that PC shipments reached 286.2 million units in 2022, a 16.2 per cent decrease from 2021.

The main reason for this decrease is the anticipation of a global recession, increased inflation and higher interest rates, which have impacted PC demand, the report said.

During the quarter, the US PC market declined 20.5 per cent in the fourth quarter of 2022, registering its sixth straight quarter of shipment decline. Echoing the trend of the global PC market, both consumer and business PC spending slowed due to economic conditions.

Meanwhile, the EMEA PC market had a historical decline of 37.2 per cent year-on-year (YoY), due to the intersection of political unrest, inflationary pressures, interest rate increases and a pending recession.

The Asia Pacific market excluding Japan declined 29.4 per cent YoY, mainly due to the market in China. While the fourth quarter has traditionally been peak season for China’s business PC market, budget cuts by the Chinese government and uncertainty around changing COVID policies led to a significant drop in overall PC demand.

In a statement, Mikako Kitagawa, Director Analyst at Gartner said, “Since many consumers already have relatively new PCs that were purchased during the pandemic, a lack of affordability is superseding any motivation to buy, causing consumer PC demand to drop to its lowest level in years.”

The report mentioned that higher PC inventory levels started building in the first half of 2022 and have become a bottleneck for the PC market. Low PC supply caused by high demand and supply chain disruptions through 2021 quickly turned into an excess of supply once demand quickly and significantly slowed.

The enterprise PC market has also been impacted by a slowing economy.

“PC demand among enterprises began declining in the third quarter of 2022, but the market has now shifted from softness to deterioration. Enterprise buyers are extending PC lifecycles and delaying purchases, meaning the business market will likely not return to growth until 2024,” added Kitagawa.

The top three vendors in the worldwide PC market remained unchanged in the fourth quarter of 2022, with Lenovo maintaining the top spot in shipments. The company maintained 24 per cent market share, the company experienced its steepest decline since Gartner started tracking the PC market. Lenovo’s shipments fell in all regions except in Japan, declining over 30 per cent in EMEA and Latin America.

“HP and Dell also experienced historically steep declines. HP was hit hardest in the EMEA market, where shipments decreased 44 per cent year-over-year (YoY). For Dell, weak demand in the large business market impacted shipments in the second half of 2022,” the report mentioned.

January 9, 2023

India’s E-Commerce Market Size Likely To Expand To $111 Bn By 2024: Report

Urvi Srivastava Financial Reporting e commerce, GMV, InGovern Research Services, market, report

The report stated that India’s social commerce gross merchandise value (GMV) is expected to reach USD 20 billion by 2026, with a potential reach of USD 70 billion by 2030

The India e-commerce market size is estimated to be USD 75 billion in 2022 and has the potential to expand to USD 111 billion by 2024 and USD 200 billion by 2026, with a compound annual rate growth (CAGR) of 20 to 22 per cent, as per a data released by InGovern Research Services.

The report stated that India’s social commerce gross merchandise value (GMV) is expected to reach USD 20 billion by 2026, with a potential reach of USD 70 billion by 2030.

It said that the Indian e-commerce industry has been driven by increasing mobile phone adoption.

As of 31 October 2022, there are 1,143 million mobile connections with 625 million urban and 518 million rural connections.

Amazon and Flipkart account for more than 60 per cent of the Indian e-commerce market.

Amazon India has over 10 lakh sellers on its e-commerce platform. Amazon started in India in 2013 with 100 sellers and has grown to be the preferred online destination for sellers across India.

Also, Flipkart, a marketplace, hosts 4.2 lakh sellers on its platform.

“For long a duopoly, there is now increasing competition from new entrants like Meesho, Nykaa, etc and Indian giants like the Tata group and Reliance group who are slowly increasing their presence in e-commerce,” it said.

Notably, the Indian e-commerce industry is controlled by stringent regulatory measures to prevent monopolistic and anti-competitive behaviour and control unfair trade practices.

“The online retail market in India is estimated to be 25 per cent of the total organized retail market and is expected to reach 37 per cent by 2030,” as per the data.

January 9, 2023

India’s E-commerce Market Size Likely To Expand To $111 Bn by 2024: Report

Urvi Srivastava Financial Reporting e commerce, GMV, market size, report