Author: Rasmita Jena

Tata Power’s stocks are set to gain attention following the Delhi High Court’s request for answers from the Central government and other parties. This is about a case where Tata Power is disputing the coal ministry’s decision to cut its compensation for losing the Mandakini Coal Block in Odisha.

The High Court has ordered that no changes be made to the compensation ruling until December 4, when they will have another hearing. The authority in charge had lowered the compensation for Tata Power and others regarding the Mandakini Coal Block after a company called Karnataka Power Corporation (KPCL) received the coal block. Tata Power is claiming that this new decision is unfair and was made without proper consideration.

Tata Power argued that the authority, which is allowed to make these decisions under the Coal Mines (Special Provisions) Act, 2015, slashed the compensation from Rs 182.52 crore to Rs 114.91 crore, saying there was confusion over who the prior buyers were. Tata Power, along with two other companies, was listed as previous claimants for the coal block.

The company insisted that the authority incorrectly included IFCI Ltd as a secured creditor and awarded them Rs 102.47 crore without recognizing that IFCI hadn’t challenged the original compensation ruling, which had already been finalized.

Back in 2008, Tata Power and the other companies created Mandakini Coal Company Ltd (MCCL) to manage the coal block. They each owned an equal part of the company. The coal block was not mined, but MCCL borrowed Rs 140 crore from IFCI in 2014, which the companies guaranteed together.

After the Supreme Court cancelled the coal block allocations in 2014, IFCI demanded repayment of the loan by May 2015. IFCI later filed a claim of Rs 142.92 crore to receive compensation. They wanted the money because they were considered a secured creditor of MCCL.

While Tata Power and another company cleared their debts, IFCI reduced its claim to Rs 54.36 crore, related to the remaining company that went bankrupt. However, Tata Power’s compensation continues to be unpaid by the authority.

Meanwhile, MCCL has an appeal pending for more compensation, but neither KPCL nor IFCI has disputed the original compensation order.

Adani Power is in the news because Bangladesh owes the company $844 million (about ₹7,000 crore) for power supply. Bangladesh has now asked Adani to cut back on electricity because fewer people are using power during the winter season. A representative from Adani Power explained that they can still provide electricity as needed according to their agreement with the Bangladesh Power Development Board (BPDB).

Adani Power signed a 25-year deal with BPDB back in 2015, supplying about 1,600 MW of electricity. This makes up about 10% of Bangladesh’s electricity needs. Although BPDB paid $91 million in October and $103 million in November, the total amount owed still stands at $844 million. The November bill has not been sent out yet.

Bangladesh is struggling to make enough money in dollars to pay for the electricity and fuel it imports. On November 7, BPDB issued a new letter of credit worth $173 million to ensure Adani can keep supplying electricity. This came after Adani Power had to cut supplies by half due to unpaid bills. They also asked for an extra $15-20 million to resume full supplies.

Adani Power’s spokesperson assured that they are following BPDB’s instructions and currently supplying from only one power unit. The spokesperson also mentioned that there haven’t been any talks about changing the power purchase agreement with Bangladesh. In September, Gautam Adani, the chairman of Adani Group, reached out to a top advisor in Bangladesh to push for quicker payment of the unpaid amount. Adani Power had invested $2 billion to set up the plant and related infrastructure, completing it in just 3.5 years, despite challenges during the COVID-19 pandemic.

(Disclaimer: The views and opinions expressed are solely those of the experts and do not reflect the views of NiftyStat.)

Mumbai: In the past year, wealthy investors have parked ₹89,400 crore in arbitrage funds, which now have a total of ₹2.35 lakh crore. This shows that these funds are becoming very popular, making up 53% of new money coming into hybrid funds. Arbitrage funds are attracting investors because they usually give better returns than regular debt funds, and they are taxed more favorably.

Data shows that arbitrage funds made an average return of 7.25% over the last year. In comparison, liquid funds returned 7.13%, and overnight funds earned only 6.63%. Fund managers say that returns from arbitrage funds have decreased slightly lately due to high inflows and declining short-term rates. The market has been pulling back since the election results in June, prompting many investors to play it safe.

For short-term gains, arbitrage funds are taxed at 20%, while long-term gains are taxed at 12.5%. In comparison, debt funds can be taxed at higher rates based on income slabs. Experts believe arbitrage funds will keep doing well because 45 new stocks have been added to the futures and options market, and no rate cuts are expected soon.

Arbitrage funds work by buying and selling stocks to take advantage of price differences. They are less risky because they hedge their bets and don’t carry credit risk. Plus, since they invest mostly in stocks (at least 65%), they are taxed as equity funds. This tax advantage is leading many rich investors to choose arbitrage funds over other options like liquid funds.

On Tuesday, Ambuja Cements, part of the Adani Group, grabbed attention for teaming up with a company from Finland named Coolbrook. This partnership is super important because it aims to use a special new technology that helps reduce carbon emissions in making cement. Ajay Kapur, who runs the cement business for Adani Group, said this partnership shows their strong wish to reach Net Zero, which means producing no more carbon emissions. He believes they are leading the way in being environmentally friendly and continuously looking for new ideas that help them use less energy and produce less carbon in their cement production.

Ambuja Cements will use Coolbrook’s amazing RotoDynamic Heater (RDH) technology. This new technology can make really high temperatures using clean energy instead of relying on fossil fuels. This is a big deal because it helps them cut back on harmful emissions while making cement, which is so important for construction and many other things.

Joonas Rauramo, the CEO of Coolbrook, expressed that this partnership is a big step for them to change heavy industries with their clever technology. He believes that Ambuja Cements’ strong commitment to being sustainable makes them the perfect partner.

Ambuja Cements is focused on being innovative and is determined to find smarter ways to run its operations while taking care of the planet.

A judge in Delaware has ruled that Tesla cannot give Elon Musk a huge $56 billion payment for his work as CEO, even though many Tesla shareholders said they supported it. After the judge’s decision in January, Musk told Tesla’s board he wants a new pay package that’s almost as big. He also mentioned on social media that he might want more shares in Tesla or could think about making new products with his other companies, like SpaceX and Neuralink.

Can Tesla Appeal?
Musk and Tesla might decide to appeal the judge’s ruling, trying to change the decision at the Delaware Supreme Court. This process usually takes about a year. The case is unique and has some tricky legal details because Musk, even with only about 22% of Tesla’s shares, was seen as controlling the pay discussions.

Creating a New Pay Plan
Tesla’s board could come up with a new pay package, but it could be very costly. The original deal from 2018 gave Musk stock options that would only be valuable if Tesla met high goals—and Tesla did meet those goals, causing the stock to rise a lot. The company said that making a new plan that costs as much as the original might need to be more than 90% smaller.

Bringing Back the Old Plan?
Tesla could just give Musk the same stock options from 2018 again, but doing so might cause other problems. If shareholders want to challenge this decision, they would have to take the matter to Texas courts, as the company moved its headquarters. However, returning to the old plan would lead to a massive $25 billion charge for Tesla. This money would also be taxed heavily when Musk uses the options, resulting in a potential 57% tax rate.

Could They Settle?
Musk might think about settling the lawsuit brought by a Tesla shareholder and accept less money, but this goes against his usual strategy of fighting cases in court.

In November, trading in stocks and their related options fell sharply because many investors felt unsure about the market. The Securities and Exchange Board of India (Sebi) introduced new rules to help protect investors from high-risk trading in futures and options. These changes aimed to reduce speculation, which is when people try to make quick profits without properly understanding the risks involved.

Here’s what happened:

– Options Trading: The turnover (total money traded) in options, which many individual traders like, dropped by almost 16% in November. This was the steepest monthly drop in over four years. The total amount traded in options fell to ₹333.4 lakh crore, the lowest number since May 2024.

– Futures Trading: Trading in futures on the National Stock Exchange (NSE) also declined by 8.3%. The total for futures trading went down to ₹1.71 lakh crore, the lowest seen since December 2023.

– Stock Market Volumes: The overall daily trading volume in cash stocks fell by 6.23% to ₹1.07 lakh crore, which is the lowest since March 2024.

These changes come after Sebi noticed many retail traders (individual investors) were losing money—around ₹1.81 lakh crore from FY22 to FY24. New rules also limited the number of futures and options contracts traders can use each week and increased the minimum size for index contracts from ₹5 lakh to ₹15 lakh.

Experts believe that the new regulations, along with a drop in the market, have made investors more cautious. For instance, since September 27, the Nifty index (a major stock index) fell by 7.3%.

With the new contract sizes going up, trading volumes may fall even more. For example, the NSE increased the Nifty lot size from 25 to 75 shares, making it more expensive to participate.

Many in the market are waiting for a clearer direction, especially with upcoming U.S. elections.

Overall, the recent downturn and new regulations are causing investors to step back, and many are likely looking for safer bets before jumping back in.

On Monday, the Biden administration announced new rules to restrict advanced technology sales to China. These rules aim to stop China from making powerful computer chips used in military tools and artificial intelligence. The new restrictions include stopping the sale of special types of chips and machinery to China and adding over 140 Chinese companies to a trade blacklist.

This marks the third major update in three years to control China’s access to advanced tech. National security officials believe that allowing China to build these chips could be a danger to the U.S. because they could be used in cyberattacks or military weapons.

These new rules are expected to be among the last big changes before the upcoming presidential transition to Donald Trump. The Biden administration hopes these measures will help slow down China’s tech progress as part of its legacy.

The updated rules include banning sales of advanced memory chips to China and establishing worldwide restrictions on many types of chip-making equipment, starting December 31. U.S. companies will also have new guidelines to check the factories they sell to in China. However, some believe that the regulations have been influenced by industry lobbying and that there are exceptions that might benefit U.S. sellers.