Petrol Consumption India | SBI Debt Instruments | BSNL 4G, 5G | PayTM Loan Disbursals | India’s GDP Growth – Business News This Week
Check out the Top 5 Prime Business News this week in the NF World Latest News section below. This section covers the weekly summary of Economic, Stocks, Industry and Cryptocurrency related Business News.
India’s Petrol and Diesel Consumption Hits Record High, Defying Global Concerns
India continues to demonstrate robust demand for transportation fuels, with the consumption of petrol and diesel reaching another record high in May, according to official data. Despite global concerns over fuel demand, India stands out as a bright spot in terms of demand outlook.
Diesel consumption, the most popular refined petroleum product in the country, increased by 12.8% year-on-year and 5% month-on-month to 8.22 million tonnes in May. Petrol consumption also saw significant growth, with a year-on-year increase of 11% and a month-on-month increase of 16.4% to reach 3.35 million tonnes.
These frequent highs in consumption highlight the sustained strength of India’s fuel demand. Overall petroleum product consumption, which serves as a proxy for crude oil demand, rose by 9% year-on-year and 8% month-on-month in May, reaching 20.03 million tonnes. However, it fell slightly short of the record level achieved in March this year, which stood at 20.50 million tonnes.
India, the world’s third-largest consumer of crude oil, relies on imports to meet over 85% of its requirements. With the country’s refining capacity currently at around 250 million tonnes per annum, plans are underway to increase it to approximately 450 million tonnes per annum in the coming years to meet the rising oil demand.
The International Energy Agency projects that India’s oil demand could increase from 4.7 million barrels per day in 2021 to 6.7 million barrels per day by 2030 and 7.4 million barrels per day by 2040. Annual petroleum product consumption in the financial year 2022-23 reached a record high of 222.30 million tonnes, and it is projected to increase further to 233.81 million tonnes in the current financial year, as per the Petroleum Planning & Analysis Cell’s forecast.
Diesel consumption is expected to rise to 90.56 million tonnes, while petrol consumption is predicted to reach 37.80 million tonnes in 2023-24. The previous record for petroleum product consumption was recorded at 214.13 million tonnes in 2019-20, with a decline in demand in 2020-21 due to the pandemic followed by a modest recovery in 2021-22.
State Bank of India to Raise ₹50,000 Crore via Debt Instruments in FY24
The State Bank of India (SBI) has announced its plans to raise up to Rs 50,000 crore through the issuance of debt instruments to both Indian and overseas investors in the current financial year. The decision to raise funds was approved by the central board of the bank.
In a filing with stock exchanges, SBI stated that it has received authorization to raise funds in Indian rupees or any other convertible currency through the issuance of debt instruments, including Long Term Bonds, Basel III compliant Additional Tier 1 Bonds, and Basel III compliant Tier 2 Bonds. The funds will be raised through private placement mode.
However, SBI mentioned that the fundraising is subject to approval from the government of India, wherever necessary. In the previous quarter, SBI, the largest state-owned lender, reported a consolidated net profit of Rs 18,094 crore, marking a 90% increase compared to the same period last year.
On a standalone basis, SBI’s net profit saw a significant jump of 83% to Rs 16,695 crore, while the net profit for the entire fiscal year 2023 was 58% higher at Rs 50,232 crore. These figures represent the highest-ever quarterly and annual profits for SBI.
Despite its strong financial performance, SBI experienced a decline in its stock price, with a 1.68% decrease, closing at Rs 578.60 in the Nifty50 index. Investors may be closely monitoring the bank’s fundraising plans and other market factors that could impact its stock performance.
Cabinet Approves Rs 89,000 Crore Revival Package for BSNL to Launch 4G and 5G Services
The Union Cabinet has given its approval to a third revival package for Bharat Sanchar Nigam Ltd (BSNL), a state-owned telecom operator, with an allocation of Rs 89,000 crore for the allotment of 4G and 5G spectrum through equity infusion. This decision paves the way for the struggling telco to finally launch 4G services and eventually expand into 5G services.
Notably, the Cabinet has made provisions to allocate airwaves to BSNL in the highly sought-after 700 MHz band, making it the second telco, alongside Reliance Jio, to have access to spectrum in this frequency range. The 700 MHz band is ideal for providing coverage in densely populated areas and is well-suited for data networks and consumer-focused services.
BSNL has been allotted spectrum in various bands, including 10MHz in the 700 MHz band, 70MHz in the 3300 MHz band, 800MHz and 650MHz in the 26GHz band, and 20MHz in the 2500MHz band. The total value of the spectrum allotment is estimated at Rs 92,515.93 crore.
According to Minister of Communications Ashwini Vaishnaw, BSNL has achieved an operational profit of around Rs 1,500 crore in the fiscal year 2022-23 and has reduced its debt burden by Rs 10,500 crore following the second revival package. He further stated that BSNL is on track to become debt-free within the next three years.
Vaishnaw emphasized that the spectrum allocation to BSNL was carried out at prices discovered during auctions, including applicable GST charges. In the previous spectrum auction, which took place last year, the government received bids exceeding Rs 1.5 lakh crore, with Reliance Jio emerging as the top bidder, securing nearly half of the total airwaves sold for over Rs 88,000 crore.
Paytm’s Loan Disbursals Skyrocket 169% YoY, Reaching Rs 9,618 Crore in April-May 2023
Paytm, the digital payment and fintech company, witnessed a significant surge in loan disbursals during the first two months of the fiscal year 2023 (April and May). According to a regulatory filing by its parent company, One97 Communications, Paytm’s loan disbursals grew by 169 percent year-on-year to reach Rs 9,618 crore ($1.2 billion). In the same period last year, the disbursals amounted to Rs 3,576 crore.
Furthermore, Paytm reported a 54 percent increase in the total number of loans, which rose to 85 lakh from 5.5 million in the corresponding period of the previous year.
The company highlighted its focus on the distribution of Postpaid and Personal Loans, partnering with large non-banking financial companies (NBFCs) and banks. Currently, Paytm has seven lending partners, with plans to onboard three to four more partners in the fiscal year 2024.
Paytm also experienced substantial growth in its consumer base, with average monthly transacting users (MTU) expanding by 24 percent year-on-year for the quarter to date (April and May 2023), reaching 9.2 crore. In the same period last year, the average MTU stood at 7.4 crore.
Another achievement for Paytm was in offline payments, as the number of merchants paying a subscription for payment devices surged by 118 percent to 75 lakh, up from 34 lakh in May 2022. The company emphasized its leadership in this domain, with 75 lakh merchants currently subscribing to payment devices.
Paytm’s Merchant Payment Volumes (GMV) for the quarter to date also showed strong growth, increasing by 35 percent year-on-year to reach Rs 2.65 lakh crore, up from 1.96 lakh crore.
On the stock market front, Paytm’s shares were trading marginally lower at Rs 714.70 on the BSE at the time of writing.
India’s GDP Surpasses $3.75 Trillion, Becomes the 5th Largest Economy in the World
India’s gross domestic product (GDP) has reached a significant milestone, crossing the $3.75 trillion mark in 2023, as confirmed by the office of Union Finance Minister Nirmala Sitharaman. This substantial growth is remarkable considering that India’s GDP was around $2 trillion in 2014. The Finance Ministry announced that India now stands as the fifth largest economy globally. In terms of current price terms, India’s GDP amounts to $3,737 billion, ranking below the United States ($26,854 billion), China ($19,374 billion), and Germany ($4,309 billion).
Notably, India’s GDP at current prices outshines other major economies such as the United Kingdom ($3,159 billion), France ($2,924 billion), Canada ($2,089 billion), Russia ($1,840 billion), and Australia ($1,550 billion).
The Finance Ministry highlighted this achievement in a tweet, stating that India’s GDP growth has propelled it from being the 10th largest to the 5th largest economy worldwide. India is now recognized as a bright spot in the global economy.
However, rating agency Moody’s has forecasted a lower growth rate of 6% to 6.3% for the Indian economy in the June quarter, compared to the Reserve Bank of India’s (RBI) prediction of 8% growth. Moody’s cited an expected growth rate of around 6-6.3% for the first quarter of the current fiscal year, similar to the 6.1% growth recorded in the previous quarter of fiscal 2022-23.
In its recent monetary policy committee (MPC) meeting, the RBI projected India’s GDP growth at 6.5% for the current fiscal year. The central bank estimated growth rates of 8% for Q1, 6.5% for Q2, 6% for Q3, and 5.7% for Q4.
The substantial increase in India’s GDP reflects the country’s remarkable economic progress and positions it as a prominent player on the global stage.