Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Wednesday, January 1, 2024. This is Nelson John, wishing you a very happy new year.

Corporate India has a lot of cash on its hands. A study of Sensex 500 companies found that 66 companies collectively held ₹2.7 trillion in cash and equivalents at the end of FY24, of which ₹99,100 crore remains unallocated for any purpose.. This has prompted some calls for higher shareholder returns through dividends or buybacks. Despite these firms returning 54% of their profits back to shareholders, analysts argue there’s room for more, Nehal Chaliawala writes. Many firms like tech giants and industrial leaders are urged to establish clearer dividend policies tied to profits rather than cash reserves. The demand for larger dividends is only growing.

What's the connection between Apple's iPhone and Indian stocks? Both became increasingly desirable commodities in 2024. Abhinaba Saha writes that while the upper strata of society continued to buy iPhones, those with less disposable income continued to prioritise necessities. This is called a K-shaped recovery. The Indian stock market mirrored this consumption dynamic: Nifty Realty and Nifty India Consumption indices performed strongly due to a trend toward premiumization. However, FMCG companies struggled due to declining sales. Investors too have caught on to this trend, and are focusing on established premiumization trends, Abhinaba writes.

India's data centre capacity is expected to rise significantly next year. Data localisation laws are the primary cause, and thanks to rapid 5G usage, companies have more than enough data to store. Leslie D'Monte writes that current estimates forecast capacity could double to 2-2.3 gigawatts by 2027. Major players like AWS, Microsoft Azure, and Google Cloud are expanding their presence in India. An estimated investment of ₹55,000–65,000 crore is needed to fulfill these needs, Leslie adds.

Generative AI is becoming a major focus for global tech spending, and is set to account for 6.5% of budgets in 2025—a significant jump from 2024, according to ISG. GenAI’s use in customer service and chatbots is growing rapidly, but opinions on its impact on India’s $254 billion IT services industry are mixed. Some analysts Jas Bardia spoke to, like Keith Bachman from BMO Capital Markets, predict GenAI will drive pricing pressure as clients demand cost savings from efficiency gains. This could challenge revenue models for IT firms, especially during contract renewals. Others, like Axis Capital, argue that GenAI will fuel growth, enabling firms to innovate and create new opportunities, as cost savings are reinvested into advanced tech solutions.

The Indian Institutes of Technology (IITs) are becoming a key recruitment ground for private universities seeking to strengthen their faculty and improve in global rankings. Private institutions such as SRM Institute of Science and Technology, BML Munjal University, and Dayananda Sagar University are registering with IITs to recruit master's and PhD graduates in fields like mathematics, chemistry, and physics. These institutions offer median annual salaries of ₹12-15 lakh, comparable with those offered by top recruiters at older IITs. Universities are targeting IIT graduates to boost their research output and international reputation, report Pratishtha Bagai and Devina Sengupta. With IITs renowned for their research ecosystem and strong brand image, hiring from these institutes helps private universities attract better students and faculty.