Debt-free days for Anil Ambani’s power producer

Good morning! For the third day in a row, we’re kicking off the newsletter with a nugget about AI. Blame the recent juicy developments. Footy fans, especially Premier League diehards, will either love or hate this one: AI coaches are here… almost. Google DeepMind has developed a computerised coach called TacticAI in partnership with Liverpool FC. In a paper published in Nature Communications, DeepMind dished about its graph neural network, trained on the data of about 7,176 corner kicks from the 2020 to 2021 seasons. Based on this, it suggested corner kick positions to increase goal-scoring chances. Experts ended up favouring its advice 90% of the time “over existing strategies”. Will Liverpool manager Jürgen Klopp use TacticAI before he departs in May? More importantly, does the arrival of AI tacticians spell the end of team data analysts?

🎧 Mustafa Suleyman dumps his startup for Microsoft AI. Also in today's episode: Zomato lands in a “pure veg” soup. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

Soumya Gupta also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: US Federal Reserve chair Jerome Powell did not budge despite the pressure piled on the central bank by massive Wall Street bets to cut rates early. Investor insistence was so high that JPMorgan chief Jamie Dimon, now the elder statesman of Wall Street, publicly called for caution and supported Powell’s holding-for-longer stance until he was convinced inflation was firmly secured on its leash. 

Yet, the Fed hinted it is still on for a three-step rate cut this year, which gave patient investors comfort that they could yet look forward to borrowing becoming cheaper. US indices responded positively to the Fed. So did Asian equities on Thursday morning. 

With India preparing for general elections, investors have switched to their wait-and-watch mode. Also, companies and individuals are busy with year-end financial closure and tax planning. The GIFT Nifty indicates a flat or positive opening.

COMMODITIES

Steeling The Limelight

The private capital expenditure that the Indian government was hoping for is perhaps happening after all. India’s biggest steelmakers are poised to add about 22 million tonnes of steelmaking capacity. Analysts estimate that Tata Steel could spend up to $1.51 billion in 2024-25. JSW Steel may spend up to $2.2 billion as it competes with Tata for output.

Rapid infrastructure expansion and buoyant construction are expected to raise domestic steel consumption by 8-10%, rating agency S&P Global estimates.  

The capacity addition comes when there’s an iron ore shortage to the point where a section of the industry has called for an export ban. That section, comprising manufacturers of sponge iron—a relatively porous form used as feedstock for steel—argues that steelmakers are prioritising exports, possibly to make the most of global price corrections.

PODCAST

Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.

Today, he speaks to Nasscom’s chief strategy officer and senior VP Sangeeta Gupta about the big IT industry shifts that will determine 2024 trends.

ENTERTAINMENT

Us? Obscene? 

South Asian art is no stranger to obscenity accusations. Writers Saadat Hassan Manto and Ismat Chugtai fought such charges all their lives, arguing that it isn’t a crime to depict the realities of our society. 

A century later, the fight goes on. This week, the Supreme Court quashed a case of obscenity against the makers of OTT series College Romance, ruling that abusive language in art did not “deprave or corrupt minds” and that censoring it infringes on free speech. 

Overreach: The Indian government thinks otherwise. In a draft bill (pdf), it has proposed that all OTT platforms appoint Content Evaluation Committees to self-certify all their shows and serials as safe for the public before releasing it online, much like a miniature CBFC or Censor Board, the authority that certifies films in India. Perhaps this Supreme Court judgement will help platforms push back against all the regulatory overreach. 

CORPORATE 

How Reliance Power Became Debt-Free

Industrialist Anil Ambani’s Reliance Power Ltd (RPL), which had fallen on bad times and had to sell its distribution utilities, is coming out of its debt-laden winter. 

Days before the end of FY24, RPL declared in a BSE filing that it had repaid its debts to ICICI Bank, Axis Bank and DBS Bank India. “The entire obligations with respect to the borrowings of the company has been settled,” it said.

Long road: RPL first signed a debt deal in September 2022 to borrow about Rs 1,200 crore from global alternative investment fund Varde Partners to refinance its loans. The first tranche of approximately Rs 1,000 crore helped pay off asset reconstruction company JC Flowers–which had taken over YES Bank’s bad debts–-in March 2023. That brought the total debt down to Rs 680 crore from Rs 1,701 crore.  

In July 2023, Authum Investment and Infrastructure pumped in about Rs 152 crore in equity in RPL. 

It received another equity infusion of Rs 240 crore from Varde arm VFSI Holdings last week. As per a March 1 filing, RPL had accumulated debt and interest totalling Rs 785 crore.

FYI

Steamrolling ahead: Despite widespread opposition, India’s Ministry of Electronics and Information Technology will amend the IT Rules 2021 to appoint the Press Information Bureau as the sole arbiter for fact checking government matters.

Widening the net: The US may sanction several firms, including suppliers, associated with Huawei’s chip ecosystem in China, according to Bloomberg.

Keeping at it: Aircraft lessor Wilmington Trust has filed an insolvency plea against SpiceJet in the National Company Law Appellate Tribunal after its earlier petition was dismissed by the National Company Law Tribunal.

Not our blokes: India’s probe into US claims of an attempted assassination against Sikh separatist leader Gurpatwant Singh Pannun has found that “rogue operatives not authorised by the government” were involved with the plot, Bloomberg reports.

THE DAILY DIGIT

15%

The rate at which shares of Kering fell after a tepid sales forecast for Gucci due to weakening demand in Asia. The French luxury giant lost nearly $8 billion in market value as a result, its steepest intra-day decline since 1992. (Bloomberg)

FWIW

Making up for lost time: We’re bookending this edition with another sports story. The 2021 Tokyo Olympics enforced an intimacy ban because of the C-word (Covid-19, that is. Take your mind out of the gutter). This year will be different, but also kind of the same. Organisers of the 2024 Paris Olympic and Paralympic Games will hand out 300,000 condoms to athletes in the Olympic Village so they can “have their moment”. The practice isn’t new: record numbers of condoms were handed out during the 2016 Rio Olympics, continuing a tradition that began in 1988 to raise awareness about HIV/AIDS. Whatever it takes to encourage safe sex.

Correction: An earlier version of the edition wrongly attributed a Jindal Steel and Power Limited advertisement to the JSW Steel Limited. We regret the error.