Daily Pulse India: A Gift For You On Diwali, Modi Heads to London, A Fine Mahurat Session

A Diwali Gift: The government has relaxed foreign investment rules for 15 key industries, such as defense, retail and radio and television. The reason for the timing is quite clear. The crushing defeat in the Bihar elections has led to widespread worry about the future of economic reforms (a Bihar win would have increased PM Modi’s clout at the centre and allowed him to pass critical laws which have been blocked by the opposition) and sent the stock market index to a six-week low. This is the government’s way of reassuring investors that reforms will continue, regardless. Some key changes – Foreign partners in defense joint ventures can hold 49 percent, foreign portfolio investors can hold up to 74 percent (good news for capital starved lenders) and cable and television operators can have 100 percent foreign ownership and a relaxation of the 30 percent local sourcing rules for retailers like Ikea.

*** 

London-bound: After Chinese Premier Xi Jingping, it’s Narendra Modi’s turn. The prime minister is on a 3-day visit to UK, which will be more or less along the same lines. Modi’s agenda is fairly clear-cut: a defense deal, a nuclear deal and some discussion on more co-relation between the two financial markets (Modi will be launching a rupee bond for UK investors). No surprises here, this has been the theme of most of Modi’s foreign trips since he took over. And for UK PM David Cameron, this is another point in his favor for the British-Indian electorate.

*** 

Flying High: Indigo Airlines’ parent debuted on the stock exchange on Tuesday after a high profile IPO and its shares rose by about a fifth on the first day of trading. The lure of a profitable airline, especially now that aviation has become another important focus for the government, and lower fuel prices helped the stock. Investors have chosen to disregard legendary investor Warren Buffet’s advice to avoid airlines, although to be fair, the industry in India is at a very different stage, compared with its international peers. Of course, now that the market has spoken, there’s all the more pressure on Indigo to live up to the hype.

*** 

Me too: The revival of the IPO market (thank you Indigo, Coffee Day) has prompted one British company to retrieve an IPO plan for its Indian unit from the deep freezer. Telecom major Vodafone is now doing the initial legwork for its IPO in India, it has said. The road ahead for Vodafone is much clearer now that the long-standing dispute with the government over a tax demand has been resolved. Vodafone India could do with some extra cash with the mobile market getting tougher to crack and big competition in the form of Reliance Jio looming ahead.

***

Vrooming: The lower interest rates after the spate of cuts by the central bank, along with the festival cheer has pushed up auto sales considerably in October. Interestingly, the pickup is seen in light commercial vehicles, which bodes well for economic activity in the coming year.

***

Samvat: As the nation celebrated Diwali, stockbrokers were readying for mahurat trading. This is a tradition that’s unique to Indian markets. Mahurat trading is a token hour of trading at an auspicious time on Diwali day and is a way of worshipping Lakshmi, the goddess of wealth. This year, the government’s Diwali gift in the form of FDI perks helped the markets rise, which augurs well for the year ahead.

*** 

Cover Image: The other big news of the week is that Maggi Noodles are back. And available on Snapdeal. Can you hear the cheers of the Maggi lovers here?

 Have you read these yet? If not, you should!

India:

• Vani Kola ponders over the entrepreneurial spirit of Thomas Alva Edison on Diwali, the festival of lights.
• Why is Zuckerberg so in love with India and what’s in it for us?
• The Bihar Elections: Defeated by Anger?

International:

Global Daily Pulse: A Nightmare for Fantasy Sports, Will Work For Food (Discounts), Buh Bye, Betamax

• What should Apple do with its $200 Billion?
• Has Apple Made a Rare Misstep with the iPad Pro?
• The Story Behind the Guy Who Told VCs They Screwed Up

Every morning, we'll share the top news from India that professionals need to know. 

Click on the follow button above to not miss one. Follow the India in Business channel here

For more news, download the Pulse app. And for even more, follow us on Twitter and Facebook.