The looming threat of a US recession

Top of the Morning

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Friday, September 6, 2024. My name is Nelson John. Let's get started.

Indian equity markets fell for a second consecutive day on Thursday. The benchmark Nifty index was down 0.21 percent, while Sensex dropped 0.18 percent.

Concerns are growing over the possibility of a US recession, with rising unemployment rates and inflation serving as key indicators. However, as N. Madhavan points out, the US GDP growth remains strong despite these warning signs. Some economists suggest a potential soft landing, where inflation is controlled without leading to a full-blown recession. In his primer, Madhavan explores these scenarios and their potential impact on India.

The market has seen a frenzy of SME IPOs, with many getting oversubscribed by over a thousand times, despite warnings from regulators about potential malpractices. Some of these could soon become penny stocks. Aprajita Sharma highlights the warning signs investors should be mindful of, noting that SME stocks, with their relatively low market cap, are more susceptible to manipulation. In her story, she emphasizes the importance of thorough research to avoid falling victim to promoters looking to offload their holdings at inflated prices.
Change is indeed afoot in Bollywood, with actors becoming more selective about projects they take on. Many are opting out of films that may not resonate with today’s post-pandemic audience, industry insiders told Lata Jha. Biopics and dramas, once staples of the big screen, are now increasingly seen as better suited for streaming platforms. A notable example is Ayushmann Khurrana stepping away from a Sourav Ganguly biopic. So, what’s driving this shift? While the rise of the OTT industry plays a major role, the evolving dynamics of the film industry run deeper. Audiences have raised their expectations, and stars are adjusting by being more cautious about their choices.

This year is proving highly lucrative for lawyers as India's top law firms engage in an intense competition for talent. With retention and discretionary bonuses, faster paths to partnership, and larger salary hikes on offer, firms are pulling out all the stops to retain their best employees. Leading law firms are even bringing in consultants to overhaul their compensation structures. Neha Joshi and Devina Sengupta spoke to insiders who revealed that firms are incentivizing talent primarily through two strategies: offering a quicker path to partnership and enhancing performance-linked incentives. Law firms typically have two types of partners—equity partners, who generate business and receive a share of the firm's revenue, and non-equity partners, who are paid a fixed salary with bonuses. The latter group is now the main focus of these efforts.

Diageo, the world’s largest spirits company, plans to invest $100 million in the Indian market over the next three years, aiming to expand its portfolio of premium spirits. Over the past decade, Diageo has already poured around $3.5 billion into India, focusing on expansion, acquisitions, and investments in cricket properties such as the Indian Premier League. Varuni Khosla and Suneera Tandon report that the company now plans to introduce "craft spirits" for both domestic and international markets, seeking to further boost its dominant market share.

Show notes:

Mint Primer: The chances of a US recession and its impact on India

SME IPO frenzy: The red flags that investors shouldn't ignore

Talent War in Legal Sector: Firms Boost Pay and Partnership Opportunities

Bollywood sees flight to safety as moviegoers raise the bar

Diageo to invest $100 mn to craft new products in India, says top boss