Business News Today LIVE: Nifty 50 settles below 25,000, Sensex ends 600 points higher

India aims to slash taxes on small cars and insurance premiums as part of a sweeping reform of its goods and services tax, a government source said on Monday, as Prime Minister Narendra Modi's plan sparked a rally in stock markets.

Modi's administration revealed plans of the biggest tax overhaul since 2017 over the weekend, and consumer, auto and insurance companies are likely to emerge as the biggest winners when product prices drop from October, once the reform is approved.

Mahanagar Telephone Nigam Ltd. (MTNL) has defaulted on loan repayments yet again, raising further questions on the revival of the state-run telecom operator.

The Mumbai-based company has failed to pay ₹8,659 crore (about $990.48 million) principal and interest to seven public sector lenders, including State Bank of India and Punjab National Bank, according to an exchange filing on Monday. It includes ₹7,794 crore in principal and ₹865 crore in overdue interest. These repayments were due between 12 August 2024 and and 3 February 2025.

In July, MTNL had disclosed defaults of ₹8,585 crore to the same lenders.

Maruti Suzuki India Ltd. and Hero MotoCorp Ltd., India's largest four-wheeler and two-wheeler makers, respectively, powered Nifty Auto's nearly 5% jump today. That, after PM Modi announced GST rationalisation by Diwali this year.

“The expectation is that most of the goods and services will be in the 5% and 18% GST slabs,” said VK Vijayakumar, chief investment strategist at Geojit Investments Ltd. “Sectors like autos and cement which are presently in the 28% tax slabs are expected to benefit.”

Modi had announced the proposal to reform the GST law in his Independence Day speech on August 15 from the ramparts of the Red Fort.

In upcoming sweeping reforms, GST on automobiles—currently in the highest tax bracket of 28%—will be restructured as per engine capacity and vehicle size, ultimately benefiting the common man, according to government sources. A compensation cess, ranging from 1% to 22%, is levied on top of this rate, depending on the type of vehicle.

The Centre’s proposal for moving the GST system to a two-tier rate structure of 5% and 18% and a 40% slab for a select few items, automobiles will be placed in a slab to put an end to disputes arising due to the classification of cars by engine capacity and length.

A lower GST rate will boost demand and sales, as cars will become affordable. Thereby boosting consumption, a key idea behind the GST overhaul proposal mooted by the Centre.

Clean Max Enviro Energy Solutions, a provider of commercial and industrial renewable energy provider, has filed for a ₹5,200-crore IPO.

The proposed issue comprises a fresh issue of shares worth up to ₹1,500 crore and an offer for sale of shares valued at ₹3,700 crore by promoters and a key shareholder, according to the draft red herring prospectus filed with the Securities and Exchange Board of India.

The proceeds from the fresh issue amounting to ₹1,125 crore will be used to repay debt, while the balance will go towards general corporate purposes.

The company may also consider a pre-IPO placement of up to ₹300 crore, which would proportionally reduce the fresh issue size.

India's JSW Steel Ltd. and POSCO Group of South Korea have joined hands to explore setting up of a 6 MTPA steel plant in India.

As part of the next steps, JSW and POSCO will undertake a detailed feasibility study to finalise the plant's location, investment terms, resource availability, and other critical factors. Given its natural resource base and logistical advantages, Odisha is among the key locations being considered.

India's top AC makers Voltas Ltd. and Blue Star Ltd. surged as much as 6% on Monday after PM Narendra Modi announced his government's plans for GST rationalisation by Diwali this year.

The rupee edged higher by 20 paise to 87.39 against the US dollar in early trade on Monday, amid a positive trend in domestic equities.

Forex traders said the uncertainty over the trade tariffs issue between India and the US is likely to keep market participants cautious.

At the interbank foreign exchange market, the rupee opened at 87.46 against the US dollar, then touched 87.39, registering a gain of 20 paise over previous close. On Thursday, the rupee settled for the day at 87.59 against the US dollar.

The forex and equity markets were closed on Friday due to Independence Day.

The benchmark indices Sensex and Nifty surged in early trade on Monday, buoyed by plans for GST reforms likely by Diwali and S&P upgrading India's sovereign credit rating.

Auto, consumer discretionary and consumer durables stocks propelled the rally in the equity market.

The 30-share BSE Sensex jumped 1,021.93 points to 81,619.59 in early trade. The 50-share NSE Nifty surged 322.2 points to 24,953.50.

Maruti Suzuki India Ltd., Bajaj Finance Ltd., Mahindra & Mahindra Ltd., UltraTech Cement Ltd., Trent Ltd. and Bajaj Finserv Ltd. were among the major gainers. Larsen & Toubro Ltd., ITC Ltd., HCL Technologies Ltd. and Infosys were the laggards.

“There are strong tailwinds for the market with potential to take it higher. Declarations by the prime minister on the next major reforms in GST by Diwali are a big positive,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd. “S&P upgrading India’s sovereign credit rating is another major positive.”