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Good morning. In today’s edition — what America’s empathy towards UnitedHealthcare CEO Brian Thompson’s killer reveals; industry leader Asian Paints could face pressure on margins; and a new bill for unregulated digital lending.

JANUS VIEW 

CEO's Killing Brings Up Popular Disgust Against US Health Insurance Industry

Luigi Mangione, the Ivy League graduate who had been arrested for shooting dead United Healthcare CEO Brian Thompson a fortnight ago in New York City, was charged with murder this week. One more man being shot dead should cause more than passing horror in the US, the land of school shootings, where the National Rifles Association triumphs over reason. But widespread empathy on social media, indeed, outright praise from many, for the health insurance boss’s killer has forced people to do a double take.

Are Americans at large turning enthusiasts of vigilante justice? Or is this a manifestation of popular disgust with the way insurance companies work in the US? 

PODCAST

Markets Fall Again, on Hawkish US Interest Rate Stance

On Episode 463 of The Core Report, financial journalist Govindraj Ethiraj talks to Krishen Arora, Indirect Tax National Leader and Partner at Grant Thornton Bharat.

• Markets fall again, on hawkish US interest rate stance.

• Rupee crosses Rs 85 per USD now.

• Time to brace, consumer product companies are hiking prices sharply.

• The US is considering banning router maker TP-Link which also commands a significant share of Indian market.

• An important GST meeting coming up might see some rates being reduced, so what will go up?

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CO:RELATION

Asian Paints Blues

Asian Paints, the industry leader in decorative and industrial paints, has had a tumultuous year in the stock market. The share price has performed poorly as the competitive pressure from new entrants intensifies. In addition, two senior executives have quit. They were into key segments like home improvement, décor, retailing, and services. The competitive pressure is intense in these segments. There is a lot of conversation in analyst conference calls on the tinting process at the end of paint retailers. These machines are used to tint the standard paint base colours. The retailer can dispense two or three shades with the same base. It has become a key ingredient of the business, according to Asian Paints. However, competitors like Indigo Paints actively focus on paint products that do not require tinting. These are putty, primer, and enamels sold as premixed and ready-made shades. According to their conversation with analysts, that has helped companies like Indigo Paints expand volume growth with better margins. Competition also puts pressure on talent. A market leader like Asian Paints would face pressure on margins as costs for retailing paints to maintain market leadership and retain talent go up.

CORE NUMBER

Rs. 3,626 crores

This is the total "early payment" telecom operator Bharti Airtel made to the Indian government, settling all its liabilities for spectrum acquired in 2016. With this payment of Rs 3,626 crore, Airtel claimed in a filing to the stock exchanges that it has now repaid all its spectrum dues from 2016 auctions including interest costs of around 8.65%. This follows an earlier payment of Rs 8,465 crore towards the same liabilities in September. While Bharti Airtel disclosed that it has paid a total of Rs 28,320 crore of spectrum liabilities in 2024, it did not reveal its overall spectrum liabilities payable to the government.

FROM THE PERIPHERY

—📉 A recent dipstick study by JP Morgan reveals that several offline grocery stores in Mumbai are experiencing a decline in sales volumes due to the growing popularity of quick commerce apps. The study, conducted across 50 stores in seven suburban Mumbai localities, found that 60% of respondents reported a decline in sales, with 82% attributing this decline to quick commerce. Notably, 77% of respondents reported a sales drop of over 30%. These findings contradict claims by quick commerce companies like Swiggy and Zepto, which have asserted that their services do not negatively impact traditional kirana stores. The Core had reported earlier this year on how kiranas are innovating to fight against quick commerce. 

—🧑‍⚖️ The central government has proposed a new bill, BULA (Banning of Unregulated Lending Activities), to address the growing problem of unregulated lending, including digital lending. The bill seeks to make unregulated lending a cognisable and non-bailable offence, with penalties including imprisonment of up to 10 years. This move comes after years of reports on fake loan apps scamming borrowers with high interest rates and hidden fees. The draft law aims to ban all unauthorised persons or entities from engaging in public lending, effectively aiming to weed out unregulated lending activities and protect consumers from predatory practices.

—⚙️ Electronics company Micromax and Taiwan's storage chip company Phison have launched MiPhi, a joint venture to locally design and manufacture artificial intelligence-enabled storage chipsets in India. Based in Noida, Micromax holds a 55% stake, while Phison owns 45%, The Business Standard reported. The partnership focuses on creating storage chipsets for servers, crucial for security and strategy and aims to reduce graphics processing unit (GPU) costs by 90%, disrupting India’s AI landscape and beyond. MiPhi plans to finalise designs within two years, employing 1,000 engineers trained by Phison. The venture targets sectors like IoT, automobiles, data centres, and mobile devices, with commercial shipments starting in early 2025. 

—✈️ SpiceJet announced an amicable settlement with aircraft lessor Genesis, resolving a $16 million dispute. As part of the agreement, Genesis will acquire $4 million in SpiceJet equity at Rs 100 per share, while the airline will pay $6 million. Both parties will withdraw ongoing litigations upon fulfilling the settlement terms. This marks another step in SpiceJet’s efforts to stabilise financially, following a Rs 3,000 crore fundraising. In September, Carlyle Aviation converted $30 million in lease arrears into equity, and similar settlements were reached with multiple other lessors..

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