Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Tuesday, March 19, 2024. My name is Nelson John. Let's get started:

On a day marked by wild gyrations of the Sensex and Nifty, the benchmark indices managed to end Tuesday on a positive note. Both Sensex and Nifty ended the trading session about 0.15 per cent above their previous close. Tata Steel, Mahindra & Mahindra, JSW Steel and Tata Motors emerged as the top gainers on Tuesday. 

Have you invested in a small cap fund? Or looking at the high rate of return, have you been tempted to? Market regulator Sebi put small and mid cap funds under a stress test to check if they can handle a large sum of money, especially in a space which tends to have less liquidity. But what was the need for this test? Mint Money’s Neil Borate and Jash Kriplani explain the move. Over the last two years, assets under management for small-cap mutual funds have more than doubled! This coupled with an average return value of more than 45 per cent, raised concerns with the regulator. Sebi asked small cap funds to rank companies under their management in descending order of liquidity. Days to liquidation vary from 12 days for 50 per cent liquidation for smaller funds, to 60 days for larger ones. Neil and Jash also tackle questions around the methodology of the stress test and whether you as a small-cap investor should be worried. 

Tata Sons, the parent entity of India's premier software services company Tata Consultancy Services, is reportedly planning to offload 23.4 million shares through block deals. The shares are to be sold at a price of 4,001 rupees each, totalling an estimated 9,300 crore rupees or about 1.1 billion dollars, as per a Bloomberg report. Tata Sons owns more than 72 per cent of TCS, which has seen its share value increase by 30 per cent over the last year. This strategic sale is speculated to be a manoeuver by the Tata Group to bypass the need for a public market listing for Tata Sons. Such a listing is a requirement set by the Reserve Bank of India for 'upper layer' non-banking financial companies to be listed on stock exchanges.

The issue of electoral bonds is more layered than was initially understood. Days into SBI releasing details of donations made by corporations to political parties, the data keeps on throwing up surprises. Mint’s Varun Sood unpacks more of it in this next story. Megha Engineering and Infrastructures Ltd , a prominent player in India's infrastructure sector, finds itself at the centre of a puzzling discrepancy about its political donations made through electoral bonds. According to Megha Engineering’s  last annual report, the company purchased electoral bonds worth 280 crore rupees. However, the Election Commission's data tells a different story. The commission’s data shows Megha and its subsidiary, EveyTrans, together only bought bonds totaling 199 crore rupees in FY23. This discrepancy raises serious questions about the accountability of such instruments, meant to channel money anonymously to political parties. 

Meanwhile, the Supreme Court, which deemed electoral bonds illegal in a landmark judgement last month, has told the State Bank of India to disclose all details. This includes the date of purchase and redemption, the name of the purchaser and recipient, denomination, and alphanumeric numbers and serial bonds. Mint’s legal correspondent Krishna Yadav reports on the Supreme Court’s strict and no nonsense approach towards electoral bonds. 

What’s common between Sachin Tendulkar in the early 2010s, Muhammad Ali in the 80s and Roger Federer in the late 2010s. They were all past their prime but were still going on. Now what if I told you a similar analogy can be drawn in the stock market with giants like HDFC, Hindustan Unilever (HUL), and Asian Paints. These companies were once the stalwarts of equity markets, with a widespread belief that investing in them was a surefire win. However, everything has an expiration date. In 2023, for the first time, shares of HDFC Bank, HUL, and Asian Paints all lagged behind the Nifty50's impressive 20 per cent increase. While Asian Paints saw a modest 10 per cent rise, HDFC Bank climbed by only 5 per cent, and HUL grew a mere 4 per cent. Mint’s national editor, Abhishek Mukherjee, offers an in-depth analysis of the downturn experienced by these once-iconic stocks.

New Delhi-based Azure Global Power, a renewable energy firm listed on the New York Stock Exchange, is considering strategic moves including selling a stake to a partner. People familiar with the development told Mint’s policy bureau chief Utpal Bhaskar, that the company is even mulling selling the entire business. Originally listed on the NYSE in 2016 and subsequently delisted in 2023, Azure Power has significant investment from Canadian pension funds CDPQ and Ontario Municipal Employees’ Retirement System, who own 53.4 per cent and 21.4 per cent of the company, respectively.

We'd love to hear your feedback on this podcast. Let us know by writing to us at [email protected]. You may send us feedback, tips or anything that you feel we should be covering from your vantage point in the world of business and finance.

Show notes:

Mint Primer: Why you shouldn’t stress out over new mid- and small-cap tests

Tata Sons to sell 23.4 million TCS shares worth ₹9,000 crore in block deal

At India’s second-largest engineering co, gaps emerge in electoral bond funding

Why Dalal Street’s one-time darlings are struggling to keep the romance going

Azure Power is navigating leadership churn; a stake sale may be next

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