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India’s stock market concluded the financial year 2023-24 on a buoyant note, with the Nifty jumping nearly 28.6%, making it one of the top-performing markets in the world. 108865061The index’s performance is also its second-best in the previous 10 years. Mid- and small-cap stocks were the top performers in the April-March period, while the financial year witnessed the resurgence of investment themes such as power, capital goods, and PSUs, which were mostly out of favour since 2008. 108865067About one-fifth of the Nifty 500 stocks doubled in FY24. Tata Motors and Bajaj Auto, with 135% gains, were the top gainers among Nifty stocks, while HUL, HDFC Bank and Shree Cement lost value. 108865074The broad-based rally cemented Tata Group’s position as the country’s most valuable business house with market capitalisation topping `30.20 lakh crore. 108865078

Mumbai: The Tata Trusts and Tata Sons are said to be closely monitoring the Shapoorji Pallonji (SP) Group's bid to raise ₹20,000 crore from state-run institutions to refinance debt taken against stakes in the Tata Group holding company. The Mistry family-promoted SP Group holds an 18.37% stake in Tata Sons, all of which is pledged against loans. The Tata Trusts own a controlling 66% of the holding company.The Tata Trusts and Tata Sons have been discussing the question of whether the institutions are aware that the Tata Sons Articles of Association, 57-61, regulate the transfer of shares in the event of a shareholder default, said people with knowledge of the matter. There can be no transfer of shares without board approvals, they said."Indian lenders and their credit committees would need to evaluate whether their inability to transfer or sell the security in a default situation represents an acceptable risk," said one of the persons.108864877 'No Question of Default' "They also need to contemplate the possibility of getting embroiled in litigation with Tata Sons in order to be able to enforce the security," the person said.Another person said: "This is relevant for locally regulated institutions, whilst it might not have been so for foreign unregulated entities. A potential lender by virtue of being a regulated entity would need to get comfortable that such a loan is compliant with local regulations given the imperfect nature of the underlying security."Once close associates, the two sides turned foes after the late Cyrus Mistry was ousted as Tata Sons chairman in October 2016. Since then, the Mistry family's holding in Tata Sons has been a bone of contention. The SP Group's financial troubles have sharpened the divide.The SP Group said the question of default doesn't arise and there is no restriction on its Tata Sons equity. It's been in talks with lenders to refinance $2.2 billion borrowed from Ares SSG and US hedge fund Farallon Capital at over 18% in June 2021, with a tenor of 3.5 years. The debt is held by the Mistry family through Sterling Investment Corp. Pvt. Ltd (SICPL), which owns a 9.182% stake in Tata Sons. The remaining stake is held by another unit, Cyrus Investments Pvt Ltd (CIPL)."This loan is likely to be rolled over by both the funds as it is high cost," said one of the persons.Under the AoA (Articles of Association), any transfer of Tata Sons shares will need board approval, said the persons cited above.Tata Sons and the Tata Trusts did not comment. PFC and REC, the financial institutions said to have been approached by the SP Group, didn't respond to queries.The SP Group said there are no curbs attached to its Tata Sons shareholding as per a Supreme Court ruling."It is a matter of record that the Tatas sought to restrain the SP Group from raising money against the pledge of its 18.37% ownership of Tata Sons by filing an interlocutory application in the Supreme Court," an SP group spokesperson said. "The (court) vide its final judgment dated March 26, 2021, dismissed all interlocutory applications filed by the parties, including the IA filed by the Tata Group. Pursuant to the judgment referred above, it is clear that there is no restriction on the SP Group's ownership over the shares and their rights to raise capital against these shares."Mainstream lenders have been hesitant to step in due to their existing relationships with the Tata Group, according to people who didn't want to be named. Still, while the Tata Group is concerned over the matter, it is also averse to another legal spat with the SP Group, said the people cited above."All lenders are fully aware of the AoA of Tata Sons," said a person close to the SP Group. "There is no question of any default on any debt backed by Tata shares. The group has been going through a temporary challenging phase and it has more than sufficient assets to repay all its lenders. The funds raised against Tata shares are not even a fraction of the value of the Tata shares. Therefore, to doubt a lender's scrutiny would be foolish."In June 2023, SP Group unit Goswami Infratech Pvt Ltd raised Rs 14,300 crore through bond sales at a high yield of 18.75% by pledging the 9.185% that Cyrus Investments held in Tata Sons. It was used to largely refinance upcoming maturities of CIPL debt. Deutsche Bank AG and Standard Chartered Bank were lead arrangers for this deal, which saw several special situation funds and private credit funds including Cerberus Capital, Varde Partners, Canyon Capital and Davidson Kempner participating.Earlier this month, Goswami Infratech floated a plan to repay debenture holders to the tune of Rs 7,000 crore, leveraging the monetisation of Afcons Infrastructure, an SP Group company, according to a consent note sent to existing holders of the 18.75% bond maturing in June 2026.In 2020, the Tata Group sought to restrain the creation of any direct or indirect pledge on the Tata Sons shares, stating that this would amount to a transfer of shares. Under the AoA, it said, the Tata Sons board has the right of first refusal on any shares being sold by a stakeholder at fair market value.Tata Sons had moved the Supreme Court challenging pledges made by SP Group units in December 2019 and April 2020, as well as a fresh move to do so in favour of Canadian private equity firm Brookfield Asset Management. The SP Group had then approached the apex court to dismiss the petition as "creation of pledge does not amount to transfer of shares".The final Supreme Court order in March 2021 stated that the valuation of shares held by the SP Group depends on the value of the stake in listed equities, unlisted equities, immovable assets and also perhaps the funds raised by Mistry-led conglomerate against these shares. "Therefore, at this stage, in this court, we cannot adjudicate on the fair compensation," it had said.

Pakistani Finance Minister Ishaq Dar raised more than a few eyebrows last week when he said — almost as an aside — that his country’s new government would “seriously look into matters of trade with India”. A resumption of trade would be something of a climbdown for Pakistan, which cut off economic ties when Indian Prime Minister Narendra Modi unilaterally withdrew Kashmir’s special constitutional status in 2019. Until now, Pakistani leaders have insisted they wouldn’t restore relations until the decision was reversed.Dar’s statement should not come as a complete surprise. His party, the Pakistan Muslim League-N, has a very particular class basis: It’s an alliance between the semi-urban petty bourgeoisie and large industrialists such as its leader, former Prime Minister Nawaz Sharif. These constituencies have always seen the benefits — for themselves and for Pakistan — of normalizing trade ties with a large and growing India.Those gains are potentially substantial, especially for a country as desperate for hard currency as Pakistan is today. The World Bank estimated in 2018 that Pakistan’s exports could increase by as much as 80% — about $25 billion at that point — if trade with India reached its potential.At this point, Pakistan simply can’t afford to forego billions of dollars. Its economy is on life support, stumbling from handout to handout. It just managed to secure the last tranche of a $3 billion bailout from the International Monetary Fund, and Prime Minister Shehbaz Sharif — Nawaz’s brother — indicated that more money would soon be needed. Without further cash, he said, restoring macroeconomic stability would be impossible.The problem is that Pakistan needs India far more than India needs Pakistan. The Indian economy is stable and India remains deeply reluctant to open its markets to other developing countries who might put local producers out of business.If anything, Indians seem to have collectively decided that we can afford to ignore the nuclear-armed nation of 230 million people on our western border. India’s economy is more than 10 times the size of Pakistan’s. In the 1970s, Pakistan’s per capita income was about twice India’s; today India’s is 50% higher.When Pakistan does intrude into India’s insular politics, it generally isn’t for good reasons. Modi won re-election in 2019 after he sent fighter jets across the Line of Control in Kashmir following an attack on an Indian army camp.So, Islamabad is going to have to be very careful about how it attempts to restore the bilateral relationship. Pakistani diplomats should certainly wait, for example, until after India’s general elections wrap up in a few months. If Modi is re-elected — as most expect — that should be a propitious moment to begin the conversation. Modi will likely have one eye on his legacy at that point and could be ready for a grand, magnanimous gesture.At the same time, Pakistan shouldn’t be too passive. Modi gets along reasonably well with Nawaz Sharif, famously dropping by Sharif’s house for his granddaughter’s wedding on Christmas Day 2015. There’s no reason to suppose that whichever Indian leader follows Modi will be as interested in the international plaudits that would follow peace with Pakistan.Indeed, aside from Modi, Pakistan currently has few potential advocates in India. Dar pointed out last week that “Pakistani businessmen want trade with India to resume.” There is no equivalent constituency within India; developing one will have to be a priority for Pakistan. India’s dynamic, profit-seeking private sector could be a powerful voice for closer ties if companies believe normalization will be in their interest as well.For many, it most certainly would be. Moreover, for India, trade can’t just be about profits. It must be viewed strategically, as a method of strengthening the classes in Pakistan that desire stability, not chaos, and weaning the Pakistani economy away from its dependence on China.Above all, Indian leaders from Modi on down should remember that a Pakistan focused on trade and growth will be one that’s less likely to descend into extremism and militancy. If Pakistan really is ready to climb down, India should meet it halfway.

A Chinese company has halted civil works and let go of hundreds of workers at a hydropower project in Pakistan following a deadly suicide attack that claimed the lives of five Chinese nationals. The incident occurred at the Dasu hydropower project in the Khyber Pakhtunkhwa province, where a vehicle laden with explosives targeted a bus carrying personnel, killing six people. This was the second suicide attack on individuals associated with a China-backed project in the region since 2021.Power Construction Corporation of China (PCCC), the company overseeing the Tarbela 5th Extension Hydropower Project in the same province, took the decision to suspend operations and lay off over 2,000 workers in light of the security concerns arising from the recent attack, Dawn reported quoting government sources.Despite the suspension of work, the general secretary of the Awami Labour Union at the project assured that the delay in the project's completion timeline would be minimal. The Tarbela extension project (T5) is scheduled for completion by May 2026, with financial support from the World Bank and the Asian Infrastructure Investment Bank. The workers affected by the layoffs are entitled to receive half of their salaries until they are called back to resume their duties, as per labour laws.The Dasu hydropower project, where the fatal attack occurred, is situated approximately 300 km north of Islamabad and is being developed by China Gezhouba with funding from the World Bank. The Chinese nationals working on this project have been targeted previously, with a similar attack in July 2021 resulting in casualties among both Chinese and Pakistani workers.Meanwhile, China strongly condemned a suicide bomb attack and demanded probe into the incident.Pakistan Prime Minister Shehbaz Sharif has ordered a thorough joint investigation to identify the perpetrators and ensure the safety of Chinese personnel working on various projects in the country. The presence of Chinese workers in Pakistan is part of the China-Pakistan Economic Corridor (CPEC), a multi-billion dollar initiative aimed at enhancing connectivity and economic cooperation between the two countries.(With inputs from TOI)