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Thursday, July 1, 2021

livemint.com

mint primer QUICK EDIT

What is in store Marginal

for accredited impact
There’s little doubt that the role
investors in India? of independent directors on
company boards needs regula-
tory attention if corporate gov-
BY NEIL BORATE ernance in India is to improve.
The Securities and Exchange Board of India (Sebi) has come up with a However, it’s not altogether
framework creating so-called accredited investors, with relaxations for clear if tightening existing
high-value investment vehicles. While details are awaited, a previous norms will achieve very much.
Sebi consultation paper provides an outline. Mint takes a look: This week, the Securities and
Exchange Board of India raised
New investor class the minimum proportion of
The concept of high net-worth investors accredited by Sebi is likely to independent directors that a
transform the financial services industry, with rules being relaxed for financial firm’s nomination and remu-
services providers serving such investors. neration panel must have from
Benefits of being an No. of US dollar millionaires (equivalent) half to two-thirds. Also, their
accredited investor in India by net worth appointment and removal will
Number of require a special resolution that
MINIMUM ticket size adults with
relaxation in PMS/AIF would take a three-fourths vote
wealth
764,000 698,000 above rather than a simple majority of
MORE flexibility in
PMS/AIF (2019) (2020) $50 million shareholders to be approved.
4,600 A few other measures have
INVESTMENT
advisory fees can be
also been announced to protect
set mutually, without the independence of such
(dollar millionaires have wealth around 7.5 crore, the limit set by
regulatory caps Sebi for accredited investors) directors from ownership-
Source: Credit Suisse Global Wealth Report 2021 aligned managements. Broadly,
the idea is to empower them to
Who is an accredited What relaxations has keep watch on a company’s
1 investor?
A Sebi consultation paper in
2 the regulator proposed?
Currently, those interested in
affairs on behalf of stakeholders
who are not promoters. But a
February 2021 defined an portfolio management schemes quantitative tilt in their favour
accredited individual investor as (PMS) and alternative investment and higher voting thresholds
someone who satisfies at least one funds (AIFs) must invest at least won’t do much to curb business
of three conditions. One, the ₹50 lakh and ₹1 crore, respectively; misgovernance if shareholder
investor has a net worth of these thresholds won’t apply to democracy remains weak in the
₹7.5 crore, with at least half of it in accredited investors. Second,
country. Non-aligned directors
financial assets. Two, the investor current rules mandate AIFs to
has an annual income greater than make diversified investments, with need to derive their voice from
₹2 crore. Three, the individual has strict conditions for launch of those they represent. Share-
an annual income greater than ₹1 schemes, and extension of tenure. holder apathy, though, lets
crore and net worth greater than Sebi has proposed to allow the C-suite executives hold sway.
₹5 crore with at least half this formation of AIFs where these
amount in financial assets. For rules are more relaxed, creating a
trusts and body corporates, the net potential high-return, high-risk
worth threshold is ₹50 crore. The investment avenue, but open only
primary residence of an individual
cannot be counted in the net
to accredited investors. They must
invest a minimum of ₹70 crore in
MINT METRIC
worth calculation. such AIFs. by Bibek Debroy

A lawyer has gift of the grab

3 How do such investors get
accredited?
The Sebi paper says there will be
And argues against the jab.
accreditation agencies to conduct the
As vaccines start to heal,
process, likely to be stock exchanges, What does one do to anneal
depositories or subsidiaries of stock
exchanges/depositories. The accreditation
Those intent on forming a scab?
will be valid for one year from the date of
accreditation. It is not clear if Sebi will
prescribe any knowledge or expertise test
in the final accreditation framework. QUOTE OF THE DAY
One of the paradoxes of our era
4 What are the changes
for advisers? 5
Accredited investors will have the
Are there any concerns
about the framework?
The focus on net worth rather than
is that the real problems are all
flexibility to determine the limits financial knowledge or experience
global. Climate change is global,
and modes of fees payable to the in the consultation paper can be terrorism is global, pandemics
investment adviser through somewhat restrictive. There may
mutually negotiated contractual be wealthy individuals who are not
are global. But our response
terms. For other investors, Sebi has financially savvy or highly tends to be national.
fixed a ceiling of ₹1.25 lakh if a flat knowledgeable small investors who
fee is charged, and 2.5% of assets do not satisfy the net worth
under advice if a fee linked to assets requirements for accreditation.
is charged. Investment advisers can Basing income and net worth on a
only collect fees for a maximum of single year’s income tax return, as S. JAISHANKAR
two quarters in advance. This suggested in the paper, may not be FOREIGN MINISTER
structure may not be suitable for comprehensive enough. It may
high net-worth investors who may also create a new ‘class system’ in
be willing to pay a high flat fee. financial services with greater
Accreditation will solve this issue. flexibility for the privileged few.

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 PLAIN FACTS

Many religions coexist

in India, but uneasily
BY RUKMINI S.

I
ndians profess respect for all religions but want to live their own lives among co-religionists, a new survey conducted by
the Pew Research Centre shows. A majority across religions believe that stopping inter-religious marriage should be a
high priority, the data shows.
Pew conducted a nationally representative face-to-face survey among 30,000 Indian adults across the country between
November 2019 and March 2020, a period that happened to coincide with the passage of the Citizenship Amendment Act
in Parliament in December 2019, and the mass protests that followed until the pandemic hit. The findings were released
on Tuesday evening.

Hindu antipathy to Muslim neighbours

is higher than caste-based antipathies
Building Ghettos
% respondents THE MAJORITY of people across all religions say the freedom
to practise all religions freely is important to their own religion,
and to their identity as Indians. But most Indians across religions
36% 29% feel they have little in common with those from other religions—
Hindus who don't Brahmins just 23% of Hindus feel they have a lot in common with Muslims,
want a Muslim who don't want and just 29% of Muslims feel the same way about Hindus. Most
neighbour an SC neighbour
Indians make friends within their own religious groups only—
even Sikhs and Jains who are numerically small groups.
19%
The foundations of India’s segregated cities and villages are
16%
OBCs/ MBCs clear: 45% of Hindus and 36% of Muslims would not be willing to
Muslims who
don't want a who don't accept a person of a certain other religious group as a neighbour.
Hindu want an SC Among all religious groups, the neighbourly antipathy is highest
neighbour neighbour
towards potential Muslim neighbours. This is especially true of
Source: Religion in India: Tolerance and Segregation
Jains, Hindus, and Sikhs. Antipathy towards Dalit or scheduled
(Pew Research Centre, June 2021) caste (SC) neighbours is much lower in comparison.

No to Intermarriage All social groups are opposed to

inter-group marriage, Muslims most of all
EIGHTY FIVE years after B. R. Ambedkar wrote that the “real
remedy for breaking Caste is intermarriage. Nothing else will
serve as the solvent of Caste”, most Indians remain firmly Who say it is important
to stop women
opposed to interreligious and inter-caste marriage, saying that of the community from 66% 62%
stopping it is a high priority for them. Eighty percent of Muslims marrying outside
say it is very important to stop Muslim women from marrying the religion
outside their religion, and 67% of Hindus in turn want to prevent Brahmins Dalits
Hindu women from marrying outside their religion, the Pew Muslims Hindus
report shows. A marginally lower share feel the same way about Who say it is important
men from their communities. Unsurprisingly, fewer than 1% of to stop women
people say they are married to someone from a different religion. 80% 67% of the community from
Majorities of people across castes and most religious groups marrying outside
also consider stopping inter-caste marriage a high priority the caste
(although the opposition is lower than to interreligious
marriage). People opposed to inter-caste marriage are a minority Source: Religion in India: Tolerance and Segregation
(Pew Research Centre, June 2021)
only in the south.

Discrimination Tales More Muslims in the north, Dalits in the

south report discrimination
HINDUS, MUSLIMS and Christians all believe that the % respondents experienced religious or
community that faces the most discrimination is their caste-based discrimination in the preceding year
own. The reported experience of discrimination, Muslims Scheduled Castes
however, is the highest among Muslims. Roughly one in 40
North
five Muslims said they had experienced religious 22
discrimination in the year preceding the survey. The Central
18
share of Hindus who claimed the same was similar. 16
Muslims in the north reported higher discrimination 17
East
than those in other parts of the country. More religious 14
Muslims were more likely to report discrimination. 36
North-east
38
Despite this, a majority feel they are free to practise their
faith in India and feel a sense of national belonging. 15
West
8
Around 19% of Dalits reported having experienced
19
caste-based discrimination in the year preceding the South
30
survey. A higher share of Dalits in the south said they
Source: Religion in India: Tolerance and Segregation (Pew Research Centre, June 2021)
have experienced caste-based discrimination.

BJP supporters see their Hindu and Hindi, Hindu, Hindutva

national identities as overlapping
% Hindu respondents BJP supporters Not BJP supporters MOST INDIANS see ‘civic’ values as important to a national
Would be willing to accept 51 identity—standing for the national anthem, respecting the army
a Muslim neighbour 64 and laws. But nearly two-thirds of Hindus say it is very important
Stopping inter-religious 72 to be Hindu to be “truly” Indian. Most Hindus especially in north
marriage is a high priority 57 India also link Indian identity with being able to speak Hindi.
Would be willing to accept 71 Hindus who closely associate their religious identity and the
a Dalit neighbour 77 ability to speak Hindi with being “truly Indian” are much more
Stopping inter-caste 69 likely to vote for BJP, compared to Hindu voters who feel less
marriage is a high priority 54 strongly about both these aspects of national identity. The
Being Hindu is 65 centrality of Hindi is, as would be expected, less important to
important to being Indian 45 Hindus in the south. The BJP-leaning group also tends to be more
Speaking Hindi is 64
religiously observant and conservative: 95% say religion is very
important to being Indian 45 important in their lives, and roughly three-quarters say they pray
Source: Religion in India: Tolerance and Segregation daily. In comparison, among other Hindu voters, a smaller
(Pew Research Centre, June 2021)
majority say religion is very important, and about half pray daily.

Religious Fundamentals South Indians appear to be more

liberal in their religious beliefs
THE DATA points to the success of “culture wars”in redefining % share of respondents, region wise
what religion means to believers. Respondents were asked what Person Person
Opposed Religion cannot be cannot be
behaviours would preclude a person from being accepted as part to very Hindu if Muslim if
of their group. For a majority of Hindus across castes, the greatest inter-caste important they eat they eat
marriage personally beef* pork**
transgression was eating beef, while for Muslims it was pork. Not
believing in God or praying irregularly mattered much less. A North 72 85 83 72
majority of people from both religions also view celebrating each Central 83 82 83 92
other’s festivals as incompatible with belonging to their religion.
East 64 88 79 76
People in the south are the least likely to say religion is important
in their lives or that they pray every day. They are also the most North-east 51 86 74 74
liberal in accepting people of other castes and religions, as well as West 67 87 68 71
of inter-caste and inter-religious marriage. The coexistence of
South 37 69 50 63
people of multiple faiths is often seen as one of India’s successes.
*Question asked to Hindus only, **Question asked to Muslims only
The report shows deep suspicion, even antipathy, underlies this Source: Religion in India: Tolerance and Segregation
coexistence and it stands in danger of fraying further. (Pew Research Centre, June 2021)
Rukmini S. is a Chennai-based journalist. AHMED RAZA KHAN/MINT

PEANUTS by Charles M. Schulz

 NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 15 NO. 155 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 9.50 (FOR DELHI & NCR) 20 PAGES

Thursday, July 1, 2021

The direct-to-consumer wave China’s economy flashes hints

livemint.com is sweeping India uP10 of weakness in June uP8

SENSEX 52,482.71 66.95 NIFTY 15,721.50 26.95 DOLLAR ₹74.33 ₹0.10 EURO ₹88.35 ₹0.03 OIL $75.23 $0.47 GOLD ₹46,504 ₹278

Govt charts course for Dressed with stress

Stress tests by the Reserve Bank of India have overstated the
extent of stress on banks' books in recent years.
Gross non-performing assets as a % of total loans
IPOs raise
₹27,417 cr in
DON’T MISS

usage of new-age fuel 15

12

9
Actual Stress test baseline projection 2021, highest
in 10 years
Refineries, fertilizer plants may have to start using green hydrogen 6
Nasrin Sultana
nasrin.s@livemint.com
3 MUMBAI
Utpal Bhaskar Output of India’s core sectors
GOING GREEN
I
utpal.b@livemint.com NA NA rises 16.8% in May over a low base
0
Mar Sep Mar Sep Mar Sep Mar Sep Mar 2022
ndian companies raised
NEW DELHI 2018 2019 2020 2021 ₹27,417 crore through initial India’s eight infrastructure sectors grew 16.8%
Source: RBI
Fertilizer plants and oil refineries may have to ramp up use of green hydrogen to public offerings (IPOs) this in May because of the low base of last year,

I
ndia is considering a proposal to
make it mandatory for fertilizer
plants and oil refineries to use
green hydrogen as part of plans
to cut the nation’s dependence
on fossil fuels.
A draft note prepared for the
a tenth of their hydrogen requirements by 2030, a Union cabinet draft note said. PARAS JAIN/MINT
year, the highest in at least a while statewide lockdowns because of the
Proposed green hydrogen
consumption obligation
12
Annual hydrogen
consumption in India
Current 2030*
Loan stress looms decade compared to six months
of previous years, driven by
abundance of liquidity and
second wave of the coronavirus pandemic
meant the output actually contracted 3.7%
from April. >P2
(in %)
10 6.8
(in million metric tonnes)

but lenders have investor euphoria.

Union cabinet and seen by Mint said
fertilizer plants and oil refineries
may have to use green hydrogen to
meet 0.15% of their total hydrogen
requirements, starting 2023-24,
and ramping it up to a tenth of their
total requirements within six years.
Private equity and venture
capital funds took advantage of Brazil suspends $320 mn deal
buoyant stock markets to exit with Bharat Biotech for Covaxin
more capital now
8
4.6
their investments. Brazil has suspended the contract for 20
3.6 Data showed that amid the million doses of Bharat Biotech
3.1
robust liquidity chasing pri- International’s Covaxin worth about $320
4 Aparna Iyer lacking in capital to weather this mary markets, most of the million following a controversy over alleged
aparna.i@livemint.com stress. The capital risk- funds raised through IPOs were irregularities in pricing, which was set at $15-20
weighted assets ratio of banks used to offer an exit to existing for export markets. >P9
0.15
NA 0.3

Indian companies, including Reli-
ance Industries Ltd, have been gear-
ing up to leverage opportunities pre-
sented by the transition to cleaner
energy. RIL has announced plans to
build an electrolyzer giga factory and
a fuel cell giga factory as part of its
pivot towards clean energy.
The government plans to imple-
ment the Green Hydrogen Con-
sumption Obligation (GHCO) in fer-
tilizer production and petroleum
refining, similar to what was done
with renewable purchase obliga-
tions (RPO). RPOs require electricity
distribution companies to buy a
fixed amount of renewable energy to
cut reliance on fossil fuels. India’s
total hydrogen demand is expected
to touch 11.7 million metric tonnes
(mmt) by 2029-30 from the current
0 ndia’s banks should brace for
FY24 FY30*
Source: Government *Projection
6.7 mmt.
India’s strategy will be to leverage
scale for its ambitious green hydro-
gen plan on the likes of its renewa-
ble energy programme, leading the
country to run the world’s largest
clean energy programme.
According to the draft cabinet note,
GHCO is proposed to be raised from
0.15% in 2023-24 to 0.25% in 2024-25
and 0.5% in 2025-26. Subsequently, it
may be raised to 1.5%, 3.5% and 6.5% in
2026-27, 2027-28 and 2028-29,
respectively, with the 10% mark tar-
geted for 2029-30.
The draft cabinet note has been
I
Refineries Ammonia Other sectors
manufacturing
for fertilizer
SARVESH KUMAR SHARMA/MINT
circulated by the ministry of new and
renewable energy (MNRE) to the
departments of fertilizer, economic
affairs, heavy industries, science and
technology, revenue, promotion of
industry and internal trade, NITI
Aayog and the ministries of petro-
leum and natural gas, power, road
transport and highways.
Around 54% or 3.6 mmt of India’s
annual hydrogen consumption of
6.7 mmt is utilized in petroleum
refining and the rest in fertilizer
production. This is, however, ‘grey’
TURN TO PAGE 6
another wave of stress as bad
loans may touch 9.8% of their
loan book by the end of the fiscal
year from 7.5% in FY21, a draft
version of the Reserve Bank of
India’s (RBI) financial stability
report (FSR) said. The second
wave of the pandemic is expected
to have had an adverse impact on
the income prospects of both cor-
porate and individual borrowers.
“As the impact of the second
wave plays out and regulatory
forbearances are withdrawn,
banks face the risk of incipient
challenges to asset quality mate-
rializing,” the report said. Mint
has seen a copy of the report.
However, unlike in the past,
lenders won’t find themselves
may fall marginally to 15.5% by
March 2022 as the base-case
scenario from 15.8% as of March
this year. In the worst-case sce-
nario where severe stress results
in bad loans rising to 11.2% of
total loans, banks may find capi-
tal adequacy ratios drop to
13.3%. All these outcomes on
capital are higher than the mini-
mum regulatory requirement of
11.5% that includes 2.5% of capi-
tal conservation buffer. The
stress tests assume a 9.5%
growth in gross domestic prod-
uct (GDP), a 5.1% average retail
inflation and metrics for four
other macroeconomic data for
various scenarios.
TURN TO PAGE 6
PE or VC funds or existing
shareholders and promoters—
rather than for growth capital
for companies.
Investors and promoters
raised around 62.5% or ₹17,140
crore through offer-for-sale
(OFS) out of the total money
raised through IPOs, according
to data from primary market
tracker Prime Database. The
remaining ₹10,278 crore, or
37.5%, went towards fresh capi-
tal raising by companies.
The dominant contribution
of secondary share sales in the
overall fundraising in the first
six months of 2021 is a continu-
ation of a trend seen in the past
TURN TO PAGE 6
Voda Idea narrows March
quarter loss to ₹7,023 crore
Vodafone Idea on Wednesday said fiscal
fourth-quarter loss narrowed to ₹7,022.8
crore from ₹11,643.5 crore in the year
earlier.Total income during the quarter ended
31 March declined by around 19% to ₹9,647.8
crore from ₹11,920.4 crore last year. >P5
Government set to invite global
bids for rural broadband project
India will soon invite global bids to bring
broadband to 361,000 villages across 16
states in public-private partnership mode
with government aid, Union minister Ravi
Shankar Prasad said. The project will be
bundled into nine packages. >P6

SpiceJet posts₹257 cr quarterly Reserve Bank tightens leash

loss, plans to raise ₹2,500 crore on cooperative lenders’ ops
Rhik Kundu Shayan Ghosh The fines in 2021 range from
rhik.k@livemint.com shayan.g@livemint.com ₹5,000 on Walchandnagar
NEW DELHI MUMBAI Sahakari Bank Ltd, Pune, to
₹1.12 crore on Andhra Pradesh

S T
piceJet Ltd on Wednes- he Reserve Bank of India Mahesh Cooperative Urban
day approved raising up (RBI) has significantly Bank Ltd, Hyderabad.
to ₹2,500 crore as the tightened the screws on Experts said these efforts
loss-making airline seeks to cooperative banks, enforcing may allow professional manag-
bolster its financial health. powers granted by legislative ers to run these banks, wresting
The SC told the govt to frame rules within six weeks on payment The Gurugram-based car- changes last year to clean up a control away from political
of ex gratia to the families of those who have died of covid. MINT rier, which recorded a net loss system bogged down by cor- overlords. “There were instan-
for the fifth straight quarter, ruption. ces of mismanagement and

SC tells Centre to has also decided to hive off its

growing cargo operations into
a separate entity.
Lax corporate governance
standards have been at the cen-
tre of India’s cooperative banks,
Lax corporate governance
standards have been at the centre
lack of proper corporate gov-
ernance in some of these banks.
Before the amendment to the

pay ex gratia to
SpiceJet reported a consoli-
dated loss of ₹257 crore in the
three months ended 31 March
as the pandemic sapped
The airline’s loss narrowed from ₹816.25 crore a year earlier, with political influence and of cooperative banks. MINT Banking Regulation Act last
mainly due to a 37% drop in expenses to ₹2,442.73 crore. MINT interference rampant. year, there was lack of clarity on
A striking recent example is and chief risk officers while the regulation and supervision
quently, revenue fell 28% business has performed the financial scandal surround- imposing fines for shortcom- of cooperative banks despite

kin of covid dead demand for domestic air travel

Utkarsh Anand & nataka and Delhi have been
Abraham Thomas paying compensation for covid
utkarsh.anand@hindustantimes.com deaths from individual chief
ministers’ relief funds.
The bench held that it was
while international passenger
flights remained restricted.
Net loss, however, narrowed
from ₹816.25 crore a year ear-
lier, mainly due to a 37% drop
in expenses to ₹2,442.73 crore.
SpiceJet carried nearly 2.96
from a year earlier to ₹2,185.75
crore.
“To ensure our long term
growth and sustainable opera-
tion we have decided to raise
funds of up to ₹2,500 crore.
These funds will be used to sig-
nificantly strengthen our bal-
“extremely well” and “in order
to provide greater focus to
cargo business and raise addi-
tional capital, we will hive off
the cargo business to operate
as a separate entity.”
“The same will provide
greater opportunity and flexi-
ing Punjab and Maharashtra
Cooperative (PMC) Bank, where
just one borrower, Housing
Development and Infrastruc-
ture (HDIL), reportedly took
away over 70% of the bank’s
aggregate loans. The bank mis-
represented the violation of pru-
ings and mandating stricter
reporting norms. In the six
months to 30 June, RBI
imposed penalties on 51 coop-
erative banks compared with
23 in 2020 and just seven in
2019, according to data com-
piled by Mint.
failures and frauds at their
end,” said Girish Rawat, part-
ner, L&L Partners.
At the end of March 2020,
there were 1,539 urban cooper-
ative banks (UCB) and 97,006
rural cooperative banks,
showed data from RBI. Con-

T
he Supreme Court on
Wednesday directed the
government to frame
rules within six weeks on pay-
ment of ex gratia to the families
of those who have died of cov-
id-19, noting that the Prime
Minister-headed National Dis-
aster Management Authority
(NDMA) “failed to perform its
statutory duty” by not envisag-
ing a compensation scheme.
However, the bench of justi-
ces Ashok Bhushan and M.R.
the duty of the NDMA to issue million domestic passengers ance sheet,” said Ajay Singh, bility in pursuing long term dential norms for a long time. These penalties are for a cerns around the financial
uniform guidelines on ex gratia in the March quarter, a 44% SpiceJet’s chairman and man- growth plan and strategies for RBI is now enforcing a series range of violations, from know- health of the two sectors are
payment to “avoid any heart- drop from 5.26 million passen- aging director. of guidelines on the appoint- your-customer (KYC) norms to
burning and discriminatory gers a year earlier. Conse- Singh said SpiceJet’s cargo TURN TO PAGE 6 ment of managing directors frauds in inoperative accounts. TURN TO PAGE 6
treatment” for victims residing
in different states.
“We direct NDMA to recom-
mend guidelines for ex gratia
assistance on account of loss of
life to family members of the
Biden weighs order to check the power of big businesses
persons who died due to cov-
id-19 as mandated under Sec- Jacob M. Schlesinger rights to challenge large pro- lenge the rules in court, as they Forum conservative think tank, nance over certain industries.
tion 12(iii) of Disaster Manage- feedback@livemint.com ducers. already have with administra- added that the potential execu- She added that the president
ment Act (DMA), 2005 for the The goal is to broaden the tion moves to limit oil and gas tive order is rooted in “their has in the past called for giving

Shah clarified that the amount
of ex gratia cannot be fixed by
the court and that the Centre
and NDMA should determine
the quantum after taking into
account their policies, other
relief and mitigation measures
already put in place.
Currently, there is no
scheme for ex gratia payment
for covid deaths due to the
absence of any such provision
under the ‘minimum stan-
dards of relief’ declared by
NDMA for the pandemic. The
Centre has also asked states
not to use disaster relief funds
to pay compensation to the kin
of those who died of covid.
Some states such as Bihar, Kar-
T
minimum standards of relief to
be provided to the persons
affected by disaster, over and
above the guidelines already
recommended,” ordered the
bench.
The court rejected the Cen-
tre’s contention that it was not
bound to make ex gratia pay-
ments since covid was different
from natural disasters such as
floods and earthquakes, and
therefore, the Disaster Man-
agement Act will have to be
interpreted to mean that such a
scheme on ex gratia was only
recommendatory and not man-
datory. The government’s affi-
TURN TO PAGE 6
he Biden administration
is developing an execu-
tive order directing
agencies to strengthen over-
sight of industries that they
perceive to be dominated by a
small number of companies, a
wide-ranging attempt to rein in
big business power across the
economy, according to people
familiar with the plans.
The executive order, which
President Biden could sign as
soon as next week, would direct
regulators of industries from
airlines to agriculture to
rethink their rule-making
process to inject more competi-
tion and to give consumers,
workers and suppliers more
way policy makers approach
business concentration in the
U.S., going beyond conven-
tional antitrust enforcement
focused on blocking big merg-
ers. For example, companies in
industries controlled by a small
number of
big firms
might face
new rules
for disclosing fees to consum-
ers or for their relationships
with suppliers, the people
familiar with the effort said.
Big business groups and
some Republicans will likely
protest any new Biden meas-
ures. Businesses and conserva-
tive legal groups could chal-
drilling on federal lands and to
extend a pandemic-related
moratorium on evicting rent-
ers. Regulatory opponents are
hopeful that conservative
judges appointed by former
President Donald Trump will
make it eas-
ier to chal-
lenge Biden
administra-
tion rules.
“I find the way this is being
framed questionable,” said
Douglas Holtz-Eakin, an econ-
omist who worked in the
George W. Bush administra-
tion and who has advised GOP
lawmakers and candidates.
“They’ve decided the economy
Biden made clear he wanted govt
to do more to limit biz dominance
over certain industries. REUTERS
isn’t competitive, but when you
look closer at the data, you just
don’t see a radical increase in
concentration.”
Mr. Holtz-Eakin, who now
runs the American Action
philosophical presumption
that the private sector is wrong
and that government is better.”
The approach to big business
would be similar to what Mr.
Biden has called a “whole of
government” method for tack-
ling other priorities, such as
addressing climate change and
racial inequality. The draft
executive order was first
reported by Reuters.
No final decision has been
made on the order, White
House spokeswoman Emilie
Simons said. She said that Mr.
Biden made clear during his
presidential campaign that he
wanted the government to do
more to limit business domi-
small farmers more protection
against concentration among
farm distributors and makers of
agricultural equipment, and he
has called for restricting the
ability of employers to force
workers to sign noncompete
agreements limiting their abil-
ity to go work for other compa-
nies.
The executive order under
consideration would follow
one with similar goals issued by
former President Barack
Obama in April 2016. Some
supporters of aggressive anti-
trust action say that order was
vague and came too close to the
TURN TO PAGE 8
02 THURSDAY, 1 JULY 2021
NEW DELHI ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
India urges EU nations to exempt
Output of core sectors rises India’s current
account deficit
at 1% of GDP in
vaccinated travellers from curbs
New Delhi: India has requested countries in the European Union
(EU) to allow Indian travellers who produce a vaccination certifi-
cate issued by the India government’s CoWIN portal to be
16.8% due to low-base effect March quarter
Asit Ranjan Mishra
exempted from travel restrictions such as mandatory quarantine asit.m@livemint.com
or self isolation after arriving at their destination. “We have also NEW DELHI
conveyed to EU member states that India will institute a reciprocal
Data suggest the economy may have bottomed out in May with states unlocking in early June
I
policy for recognition of the EU digital covid certificate,” said a per- ndia’s current account defi-
son aware of the development. ELIZABETH ROCHE cit widened to 1% of gross
domestic product (GDP) in
Asit Ranjan Mishra place induced by the first wave of the the March quarter from 0.3% of
Swiggy chief operating officer asit.m@livemint.com Covid impact pandemic. Capital (11.4%) and revenue GDP in the December quarter
As states increased curbs due to (13.4%) expenditure both were lower as the trade deficit widened and
Vivek Sunder to leave in Oct NEW DELHI
the second wave, the core sector than their levels a year ago. net invisible receipts fell,

I
ndia’s eight infrastructure sectors expansion expectedly flattened Care Ratings chief economist Madan showed data released by the
in May.
grew 16.8% in May because of the Sabnavis said the fiscal performance Reserve Bank of India on
low base of last year, while state- Core sector output (in %) has been quite impressive because tax Wednesday. For FY21, the cur-
wide lockdowns because of the sec- 80 revenues have been better as was borne rent account balance recorded
Month-on-month
ond wave of the coronavirus pan- Year-on-year out by GST collections in April, while a surplus of 0.9% of GDP as
60
demic meant the output actually con- non-tax revenue got a big boost from against a deficit of 0.9% in
tracted 3.7% from April. 40
the Reserve Bank of India’s dividend. FY20 on the back of a sharp
The core sector had registered “Expenditure was under control for contraction in the trade deficit
60.9% growth in April, as a nationwide 20 the usual subsidy payments for previ- to $102.2 billion from $157.5 bil-
lockdown was imposed by the govern- 8 ous year happening in April-May did lion in FY20.
16.8
ment last year to curb the spread of the 0 not take place this time as the amounts Private transfer receipts,
coronavirus pandemic. -3.7 were subsumed in the Budget. There- mainly representing remittan-
-20 -12.4
Data released by the industry depart- Jun 2020 May 2021
fore, outflow from the department of ces by Indians employed over-
Bengaluru: After completing three years at foodtech uni- ment on Wednesday showed that as food was lower. Also, compared with seas, increased to $20.9 billion
Month-on-month: Seasonally not adjusted and
corn Swiggy, Vivek Sunder, the company’s chief operating state-level restrictions increased, calculated by Mint; Year-on-year: as provided by DPIIT Core sectors such as steel reported a last year, NREGA expenditure was in the March quarter, a 1.7% rise
officer, will be leaving the company by October-end, accord- cement, electricity, refinery products sequential decline in growth in May. lower as seen in the outlay of the minis- from a year earlier. In the finan-
ing to an internal memo sent to employees by co-founder Sri- and steel reported a sequential decline try for rural development. Fertilizer cial account, net foreign direct
harsha Majety. With Sunder’s exit, Majety will take over and in growth, whereas fertilizer and crude omy may have bottomed out in May 8.3% from 10.1% earlier. subsidy was also lower. Therefore, on investment at $2.7 billion in the
directly oversee the marketplace business with immediate oil output contracted. with states beginning the unlocking Separately, data released by the Con- the whole, the Budget has been well- March quarter was lower than
effect. TARUSH BHALLA Aditi Nayar, chief economist at ICRA process in early June, as the second troller General of Accounts showed managed. The concerns going forward $12 billion a year earlier while
Ratings, said with the base becoming wave of the pandemic started ebbing. that the central government has will be higher outlay on free food and net foreign portfolio investment
less distorted and the widening of state- However, depressed consumer sen- exhausted just 8.2% of its full-year fiscal fertilizer subsidy as well as other out- (FPI) increased by $7.3 billion—
Bombay HC upholds Sebi’s power wise restrictions, the core deficit target in the first lays under the finance minister’s relief mainly on account of net pur-
to fix fees of investment advisers sector expansion expect- ECONOMIC GAUGE two months (April-May) programme,” he said. chases in the equity market—
edly flattened in May. of FY22, compared to The government released 23% of its against a decline of $13.7 billion
Mumbai: The Bombay high court has held that the Securities and “Based on the core sec- THE core sector had CGA data showed DEPRESSED market 59% during the same full-year food subsidy by May, while no in fourth quarter of FY20.
Exchange Board of India (Sebi) can regulate investment adviser tor data as well as the per- registered a 60.9%
growth in April, as
that the Centre has sentiment and weak
exhausted 8.2% of its rural demand are
period a year ago, as gov- petroleum subsidy was released during Aditi Nayar, chief economist
fees. “The power of Sebi to do so is said to be sourced from three formance of other high- economy was hit by full-year fiscal deficit expected to hamper ernment expenditure the first two months of the fiscal year. at Icra Ratings said normaliza-
different provisions of the Sebi Act,” said the high court. Purnartha frequency indicators lockdown in 2020 target in first 2 months any sharp recovery remained constrained by While the government has set a tar- tion in import demand as well
Investment Advisers Private Ltd had challenged Sebi’s authority such as auto production, regional lockdowns while get of reducing fiscal deficit to 6.8% of as a surge in gold imports con-
to decide on fees which investment advisers can charge clients. exports and generation of revenue receipts gross domestic product (GDP) in FY22 tributed to the widening of the
TINESH BHASIN GST e-way bills, we expect the index of timent and weak rural demand are improved significantly. from 9.2% of GDP a year ago, subse- current account deficit to $8.1
industrial production growth to mod- expected to hamper any sharp recovery In May, 13.7% of total expenditure quent announcements, including free billion in the March quarter
erate substantially to 20-25% in May in economic activity. Most economists was exhausted compared to 16.8% dur- foodgrains till November and greater from $1.7 billion in the previous
CDC Group sells 3.7% stake in from a high 134.4% in April,” she added. have slashed their growth forecasts, ing the corresponding period last year outlay for fertilizer subsidy, may quarter despite a massive
High-frequency data show the econ- with the World Bank paring it down to when a nationwide lockdown was in increase the full-year fiscal deficit. increase in exports in March.
IIFL Finance worth ₹337 crore

Sitharaman and Yellen share Government defends GST as the

thoughts on min tax proposal tax reform completes four years
Gireesh Chandra Prasad as a global consensus on taxing Gireesh Chandra Prasad it a milestone in India’s eco- burden, and has improved the
gireesh.p@livemint.com digital corporations has been gireesh.p@livemint.com nomic landscape. competitiveness of domestic
NEW DELHI elusive. A consensus on a global NEW DELHI “GST has been a milestone in industries in the international
minimum tax could help the US the economic landscape of market by removing hidden

F T
Mumbai: CDC Group Plc, the development finance institu- inance minister Nirmala
tion owned by the UK government, on Wednesday sold 14 Sitharaman and US trea-
million shares or 3.7% stake in IIFL Finance Ltd for around sury secretary Janet
₹337 crore through an open market transaction. According Yellen have discussed Wash-
to the data from stock exchanges, CDC Group PLC sold 14 ington’s proposal for a global
million shares of IIFL Finance at an average price of ₹240.64 minimum tax, which is
per share, aggregating to ₹336.90 crore on the BSE. expected to be taken up at the
ASHWIN RAMARATHINAM G20 meeting in July for a
broader consensus.
The US treasury department
Court upholds constitutional said on 29 June that Yellen
spoke with Sitharaman on the
validity of Trai’s 2020 tariff order subject. “Secretary Yellen dis-
Mumbai: The Bombay high court on Wednesday upheld the con- cussed that the US and India
stitutional validity of a tariff order passed by the Telecom Regula- have a shared interest in imple-
tory Authority of India (Trai) last year. It has, however, struck down menting a robust global mini-
two pricing conditions as unconstitutional—one, which said that mum tax,” it said.
the sum of the a-la-carte rates of pay channels forming part of a Yellen stressed the impor-
bouquet shall not exceed one-and-a-half times the rate of the bou- tance of a partnership with
quet. And two, the a-la-carte rates of the pay channels shall not India in the G20 and the Orga-
exceed three times the average rate of a pay channel of the same nisation for Economic Co-op-
bouquet. LATA JHA eration and Development
(OECD) “to seize a once-in-a-
generation opportunity to
Tata Steel has advanced process of remake the international tax
system to help the global econ-
merger with BSL: Chandrasekaran omy thrive”, it said.
Mumbai: The process to merge Tata Steel BSL with Tata Steel has India is yet to make a state-
been advanced, the steel major’s chairman N. Chandrasekaran said ment about the discussion.
on Wednesday. Tata Steel had won the bid to acquire debt-laden An email sent to the Union
Bhushan Steel Ltd (BSL) in insolvency proceedings. It was later finance ministry remained
renamed as Tata Steel BSL Ltd. PTI unanswered till the time of
Union finance minister
Nirmala Sitharaman.
going to press.
The Joe Biden administra-
tion had proposed a 21% global
minimum tax aimed at low-tax
countries such as Ireland, but
G7 nations agreed earlier this
month on a 15% global mini-
mum tax.
The proposal will also allow
taxation rights to countries
such as India where some of the
largest technology giants have
customers but conventional tax
methods are inadequate to tax
them. Countries such as India
and France have resorted to
other tax methods unilaterally
raise taxes without risking
flight of capital to low-tax coun-
tries and give countries such as
India the right to tax tech giants
who serve Indian consumers
without a place of business
here, a key concept in conven-
tional taxation.
India will not have to raise
corporate tax as part of the deal
as the applicable rate here is
either at par for new manufac-
turing companies or higher.
PTI However, India may insist on
the tax provisions covering off-
shore digital corporations to be
as broad as possible.
India has been applying an
equalization levy on offshore
digital economy firms, which
will have to be withdrawn once
a new global tax treaty comes
into force. Such levies by India
and other countries have raised
concerns in the US.
Washington recently gave
six countries, including India,
180 days to complete multilat-
eral talks on the proposed
global taxation framework.
These countries are on a US tar-
get list for retaliatory tariffs.
he central government
on Wednesday defended
the goods and services
tax (GST) regime on the eve of
the fourth anniversary of
India’s biggest tax reform since
Independence, flagging the
ease it brought to businesses
and the relief on tax burden to
consumers.
The roll-out of GST to
replace 17 central and state
taxes and remove border barri-
ers across states completes four
years on Thursday, even as
some of the interim measures
such as a cess on automobiles
and compensation to states
look set to continue longer than
originally envisaged.
The Centre’s endorsement
of GST comes at a time states
not ruled by the Bharatiya Jan-
ata Party (BJP) have become
vocal about their fiscal woes
and alleged loss of voice in deci-
sion-making at the federal
body, the GST Council.
Prime Minister Narendra
Modi, who had described GST
as a ‘good and simple tax’ at the
time of its launch in 2017, called
India. It has decreased the and embedded taxes, the
number of taxes, compliance finance ministry said in a tweet.
burden and overall tax burden Over the years, GST rates
on common man, while signifi- were reduced on 400 goods
cantly increasing transparency, and 80 services, minister of
compliance and overall collec- state for finance Anurag Tha-
tion,” Modi said in a tweet. kur said in a tweet.
GST brought in more trans- In the pre-GST regime, the
parency in the tax system, combined tax by the central
showed where it was burden- and state governments was
some on consumers and above 31% on most items.
prompted central Under GST,
and state govern- PM Modi, who essential goods
ments to correct described GST as are either not
those anomalies, a ‘good and simple taxed or are sub-
leading to several tax’ in 2017, called ject to 5% tax,
rounds of tax cuts while mass use
it a milestone in
on goods and ser- items are subject
vices. GST also India’s economic to either 12% or
demonstrated landscape 18% tax. Only a
that tax adminis- few other items
tration could lev- are kept on the
erage technology to a high highest slab of 28%. Though,
degree, use data analytics and indirect taxes are considered
zero in on instances of tax eva- regressive as they affect the rich
sion with accuracy. and the poor alike, the GST
In these four years, GST has Council sought to address it by
achieved better tax compliance bringing progressivity in rates
through mitigation of tax cas- depending on mass use and
cading (instances of tax amount goods of essential and luxury
getting taxed), double (multi- nature, with luxury items being
ple) taxation, and reduced tax kept in the highest tax bracket.

Employees wary of variable pay as firms cut costs amid covid, says survey CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Prashant K. Nanda 230 million Indians into pov- anywhere, life/medical insur- past year. The impact on component of the salary took a suggestions or complaints
prashant.n@livemint.com erty, according to a survey by ance, home office set-up and remuneration was more pro- major hit,” said Amit Jaiswal, about errors.
NEW DELHI the Azim Premji University. flexible hours are being sought nounced in mid-size compa- partner, human capital con-
Readers can alert the
Data from the Centre for Mon- as high-priority benefits. Over nies with less than 1,000 sulting at Grant Thornton
newsroom to any errors in the

A
round two-thirds of
employees either did
not get any variable pay
or were given a reduced varia-
ble pay as part of their cost to
company (CTC) in the past one
year as India Inc. cut down
their cost in a pandemic year.
This comes against the
backdrop of the coronavirus
outbreak battering the job
market with millions losing
jobs and many more observing
a pay cut or income loss.
The first wave of the pan-
demic in 2020 pushed about
itoring Indian Economy
showed that the second wave
led to almost 23 million job
losses in April and May alone.
As much as 31% employees
said there was no variable pay,
while 33% said there was a
“decrease in the percentage of
variable pay” that they got,
said a fresh survey by consult-
ing firm Grant Thornton.
The loss of variable pay is
pushing a sizeable portion of
employees to demand a
restructuring of the salary with
a higher fixed pay even if that
73% of the survey respondents
said that organizations must
introduce long-term incen-
tives such as employee stock
options and retention bonus,”
the survey respondents said.
Companies experienced
higher attrition among young
Employers should consider a WFH allowance to reduce the performers and lower or stable
office-related expenses of employees, the survey showed. HT attrition among mid- to sen-
ior-level performers, the sur-
means the overall CTC is a lit- expenses of employees as vey showed.
tle less, showed the survey. working from home is the new Overall, 40% employees
Employers should consider normal, respondents said. witnessed a reduction in total
a work-from-home allowance “As the need to re-look at pay and 45% did not see any
to reduce the office-related strategy increases, work from change in overall pay over the
employees in sectors such as
real estate, infrastructure and
hospitality. Larger companies
in sectors such as consumer,
retail, e-commerce, pharma,
healthcare and life sciences
showed higher resilience to
the adversities.
“While one-third of the
respondents experienced a
reduction of more than 20% in
their fixed pay, 40% did not see
any change in fixed pay
despite an overall decrease in
their earnings. This high-
lighted that the variable pay
Bharat. paper by emailing us, with your
“There is an increased full name and address to
expectation to change the cur- feedback@livemint.com.
rent pay mix and reduce the
pay-at-risk part of the com- It is our policy to promptly
respond to all complaints.
pensation, specifically in the Readers dissatisfied with the
younger workforce of mid-size response or concerned about
organizations,” said Jaiswal. Mint’s journalistic integrity may
The survey said two trends write directly to the editor by
are clearly emerging. First, an sending an email to
increased appetite for long- asktheeditor@livemint.com
term incentives, especially Mint’s journalistic Code of
from the younger workforce. Conduct that governs our
Second, the definition of bene- newsroom is available at
fits is no longer restricted to www.livemint.com
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04 THURSDAY, 1 JULY 2021
NEW DELHI MARK TO MARKET LIVEMINT.COM

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE

52,482.71 -0.13 15,721.50 -0.17 13,473.55 -0.06 38,513.25 -0.43 15,959.40 -0.20 22,535.95 -0.03 25,232.17 0.56
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

52,549.66 52,651.09 15,748.45 15,776.90 13,481.95 13,513.25 38,678.15 38,759.15 15,992.10 16,020.90 22,542.80 22,633.38 25,092.69 25,203.07
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

52,875.92 52,448.64 15,839.10 15,708.75 13,552.95 13,462.20 38,846.85 38,459.00 16,073.85 15,945.55 22,664.95 22,523.81 25,299.64 25,190.31

m MINT SHORTS
Oil set for best half since 2009
No lift-off in credit growth for FY22
as demand recovery picks up
Oil is heading for its best half since 2009 as the rebound
from the pandemic boosts fuel consumption and tightens
the market ahead of a key Opec+ meeting that’s expected
as bad loan firefighting to continue
to lead to an increase in supply. Futures in New York rose Aparna Iyer may weigh on credit growth in FY22
the uncertainties on demand condi-
towards $74 a barrel on Wednesday and are up more than aparna.i@livemint.com despite the economic recovery. tions have only intensified. Ergo,
Credit not due
50% this year. The American Petroleum Institute reported The report sums up the challenges
India’s manufacturers don’t want to The pandemic has dragged credit offtake across all segments but the

T
that US crude stockpiles fell by 8.15 million barrels last he second wave of the pan- by saying, “The credit market contin-
commit fresh investment and the ser- deceleration in the industry segment has been stark.
week, according to people familiar with the matter, adding demic and the threat of a ues to see muted offtake in the face of
vices sector may not see restrictions Non-food Industry Personal loans Services Loan growth (in %)
20
to positive sentiment before Opec+ meets on Thursday. third one are expected to persisting risk aversion and weakfully lifted.
The alliance will be busy after delaying preliminary talks keep credit growth of the demand.” Further, historically low bond
on the oil market to allow members more time to resolve banking industry under Analysts at ICICI Securities Ltd
yields are making companies queue 15
differences. The hold-up comes as a covid-19 resurgence pressure in FY22. believe that credit growth would up, even as they seek to retire costlier
in some regions raises concerns over the demand outlook. Headline credit growth is expected remain muted in the first half of the
debt. Small businesses may see a sharp 10
The recovery in key energy consumers, including the US to be 8-10%, according to economists. current year. “Incremental credit is
loan growth, but mainly due to the
and China, has driven prices to the highest level since The growth would be boosted by a low seen towards agriculture, retail and
government’s credit guarantee
5
October 2018. BLOOMBERG base and policy support scheme. It should be
through the credit guar- STRESS FACTORS noted that this segment
antee schemes from the is the most vulnerable to 0
government. Growth DUE to persisting HISTORICALLY low BANKS, antsy on a the pandemic’s disrup- 2013-14 2020-21
Losing steam stood at 5.5% in FY21. In demand concerns, bond yields are possible surge in tions. Lenders, antsy
Investment-grade (IG) corporate bond sales in Europe manufacturers don’t making firms queue stress, are unlikely to -5
other words, this growth want to commit up, even as they seek lend beyond what the about a possible surge in Source: CMIE, RBI
are set to extend their downward trend. is more optical than fresh investment stress, may not be will-
to retire costlier debt govt schemes allow
(in € billion)
material. ing to lend beyond what SATISH KUMAR/MINT

Public sector Financials IG corporates Non-IG corporates India’s largest lender the government’s Bankers have been betting on a across banks and non-banking finan-
600 State Bank of India’s (SBI) research MSME segment to be followed by schemes allow. resurgence in consumer credit in cial companies (NBFCs) has damp-
wing in an 8 June report flagged off demand for working capital credit and That brings us to retail loans, the FY22, which now looks challenging. ened, with some deterioration in the
450 deleveraging by companies as another then capex. Expect overall industry main driver of loan growth in recent Similar to FY21, bankers would be risk rating of retail borrowers becom-
factor in keeping loan growth low. growth at 8-10% for FY22-23,” the years. Retail loan growth dropped to faced with the twin jobs of keeping ing evident,” the central bank’s draft
300 What’s more is that the Reserve brokerage said in a note. just 10% in FY21 from an average of stress from rising and pushing credit report said. While the financial stabil-
Bank of India (RBI) too believes that What are the signs that suggest a 16% in the previous four years because to strong borrowers. The focus will ity report predicts bad loans to rise to
150 growth won’t be easy to come by. modest credit growth revival in FY22? of the pandemic. The RBI’s report continue to remain on asset quality 9.5% by March, global rating agency
In a draft version of the financial The economic impact of the second shows that loan enquiries have fallen and that would leave bankers with lit- S&P has forecast as much as 11-12% of
0 stability report viewed by Mint, the wave and perhaps the third one may sharply in April in the wake of the sec- tle inclination to push lending. loans to turn delinquent. This is
H12018 H12019 H12020 H12021
central bank points to key factors that not be as severe as the first. However, ond wave. “The demand for consumer credit bound to keep banks risk-averse.
Source: Bloomberg
SATISH KUMAR/MINT

Europe’s high-grade bond sales

slow down as economy revives
JSW Energy stock powers For IRCTC investors, it has been a
Europe’s corporate-debt issuance market may go from
mildly hot to just lukewarm, with the recovery from the
pandemic curbing new sales. High-grade firms have raised
ahead on growth outlook good journey despite the pandemic
about €157 billion ($187 billion) of new bonds in the region
so far this year, about half the volume priced in the first six Ujjval Jauhari Pallavi Pengonda ticketing business increased by 70% each y-o-y. Catering, tour-
Favourable decline
months of 2020. That has slashed their share of first-half ujjval.j@livemint.com pallavi.p@livemint.com nearly 10% y-o-y and 48% versus ism and Rail Neer segments
Deleveraging has not only improved JSW Energy’s earnings
European debt sales to less than a sixth from more than a the December quarter. posted Ebit losses in the March
prospects, but also its ability to explore growth opportunities.

T I
quarter last year. The slowing pace suggests the days of he recent uptick in n the land of the blind, the one- The segment’s quarter.
Net debt/equity Net debt/Ebitda (right-hand scale) (times)
hectic issuance seen during the height of the coronavirus power demand is eyed man is king. Among performance was During the March Overall, IRCTC’s
1.5 4.5 5
crisis may be over. As the economic rebound takes hold, it expected to drive the Indian public sector compa- also helped by the quarter, revenue earnings before
could get even harder to sustain bond sales in the second performance of JSW Energy 1.2 4
nies, that king is Indian Railway conversion of unre- from internet interest, tax, depre-
half. Already, cash-rich firms have switched out of survival Ltd. This is well-reflected in the 1.4 Catering and Tourism Corp. Ltd served seats to 2S ciation and amorti-
2.6 ticketing
mode, while resurgent inflation is threatening to push bor- company’s shares, which have 0.9 3 (IRCTC). The stock has appreci- class, said analysts. zation declined by
business
rowing costs higher. “It is unlikely this is going to be more than doubled compared ated as much as 535% from its ini- The internet ticket- around 23% y-o-y to
another blockbuster year,” said Helene Jolly, head of to their pre-covid highs. 0.6 2
tial public offering (IPO) issue ing business made a increased by ₹146 crore.
EMEA investment-grade corporate syndicate, Deutsche JSW Energy has continued 0.3
0.5
1 price of ₹320 in October 2019. profit of around nearly 10% y-o-y Meanwhile,
Bank AG, London. BLOOMBERG to see rising contributions from Indeed, some analysts reckon the ₹174 crore at the shares of IRCTC
long-term power purchase 0
FY17 FY21
0 stock was underpriced during Ebit level. trade at 32 times
agreements (PPAs), ensuring the IPO. But also note that IRCTC While revenue from IRCTC’s estimated earnings for financial
Bitcoin maintains gains with longer-term growth visibility.
Note: Ebitda is earnings before interest, taxes, depreciation, and amortization
Source: MOFSL
shares are now above its pre- catering and tourism segments year 2023, based on Bloomberg
Besides, continued deleverag- covid highs, although profits improved sequentially, it is down data.
chartists eyeing technicals ing has helped improve earn- SATISH KUMAR/MINT
have taken a sharp hit. “Its low fixed-cost model and
Bitcoin is hanging tough amid a slew of negative headlines, ings prospects further. Efforts plant load factor declined equity now stands at 0.43 Justifying the sharp rally in net-cash position ensure that the
extending its rally for the third day and lifting the spirit of to grow the renewables portfo- across the Ratnagiri plant and times, while net debt to Ebitda IRCTC’s shares, analysts said
On fast track company can navigate the next
battered bulls. The largest cryptocurrency has rallied lio have driven investor senti- hydro plants (given poor stands at 1.97x. Though the investors were looking beyond IRCTC shares have few quarters, when the activity
above its average price over the past 20 days, a positive ment. hydrology), the same improved Ratnagiri plant saw the impact the near-term concerns. “In fact, meaningfully outperformed would remain subdued relative
indication for advocates who were looking for the digital The firm reported decent across its Vijaynagar and on generation, the LT PPA at further upsides in the IRCTC broader markets since its to pre-covid levels,” said analysts
token to reclaim its upward momentum. Bitcoin gained as results for the March quarter. Barmer stations, said analysts at the plant increased by 179MW stock cannot be ruled out when listing in October 2019. from IIFL Securities Ltd in their
much as 5% to $36,422 on Tuesday in New York trading. Long-term (LT) net generation HDFC Securities Ltd. in May, further de-risking the the unlocking begins,” said Jin- IRCTC Nifty 200 initiating coverage report on 31
For many chartists, the next key level to watch is the increased 3% in both Q4 and While revenues saw some portfolio. The Ratnagiri LT esh Joshi, an analyst at Prab- 300 March. IRCTC’s net cash stands
50-day moving average, which currently sits around FY21. LT net ther- impact, profits PPA tie-up is now at 96%, said hudas Lilladher Pvt. Ltd. 279.47 at ₹1,460 crore.
$38,221. Should bitcoin meaningfully break out above it, mal generation Notably, net debt were helped by the company. This comes even as IRCTC has To be sure, while IRCTC may
it could rally towards $40,000 again. “Although we might was also higher by of the company lower operating “We highlight JSW Energy seen its revenue for fiscal 2021 250 be a good play on the covid recov-
be in for a few choppy months ahead, we remain long-term 5% in Q4 and 8% reduced by and fuel costs. has increased its capacity decline substantially by 66% on a ery theme, the outperformance
very bullish in the sector and have no doubt that the mar- in FY21. But lower ₹513 crore in the Ebitda margins under LT PPA to 86% (81% in year-on-year (y-o-y) basis as the in its shares captures the opti-
ket will recover quicker than most expect,” said Paul Bar- short-term sales improved to March 2020), contributing to pandemic weighed on business. 200 mism to a good extent, thereby
March quarter
roso, chief executive officer and co-founder of Atani, a and merchant 40.3% in Q4FY21 95% to Ebitda,” said analysts at Tourism and hospitality sectors limiting near-term upsides.
crypto trading platform. BLOOMBERG power realiza- and by ₹2,739 from 32.1% in the Kotak Institutional Equities. have suffered over the past year Moreover, it might be challeng-
142.90
tions meant reve- crore in FY21 year-ago quarter. JSW is pursuing a growth owing to the pandemic-led 150
ing for the company to reach pre-
nues fell 12.5% Lower interest strategy to expand its current restrictions and this has hurt pandemic levels in the financial
year-on-year. expenses due to capacity of 4.6GW to 10GW by IRCTC. year 2022.
Tourism slump The Ratnagiri facility saw deleveraging further supported FY25, and 20GW by FY30, The internet ticketing seg-
100
Going ahead, the pace of vacci-
The losses this year alone could amount to $1.7 trillion lower short-term power net profit at ₹107 crore compa- with the entire capacity addi- ment has done relatively well nations would be a key monitora-
to $2.4 trillion, the UNCTAD said in a report. demand and impacted plant rable to the year-ago quarter tion being in the renewable lately. Internet ticketing is the ble. “In the near term, uncer-
50
Worst-case scenario Best-case scenario (Estimated losses in % of GDP) load factor. Being a lean season despite a decline in revenues. segment. The Street will evi- largest Ebit (earnings before 14 Oct 2019 30 Jun 2021 tainty on reopening timelines is a
Central America
for hydropower generation, Notably, net debt reduced by dently be watchful on the interest and tax) contributor of Values rebased to 100
concern. This could adversely
Southeast Asia
overall power generation ₹513 crore in Q4 and by ₹2,739 aspect of timely execution as the company. During the March Source: Bloomberg impact ticketing and catering
declined 7.6%. Though the crore in FY21. Net debt to well as PPA tie-ups. quarter, revenue from internet segment revenues,” said Joshi.
North Africa SATISH KUMAR/MINT
Turkey
Ecuador
Australia/New Zealand
UK
France
Sebi’s relaxation for Reits is good, but WFH may impact demand
US
Mexico Harsha Jethmalani giving better returns than some taking exposure in listed Reits pre-covid highs. Mindspace and
Under pressure
-20 -15 -10 -5 0 Source: Bloomberg harsha.j@livemint.com fixed-income products. despite Sebi’s relaxation, ana- Brookfield Reits are trading
Delayed lease renewals and early tenant exits have weighed on
SATISH KUMAR/MINT Now, a lower entry barrier lysts said. below their respective issue pri-
occupancy rates.

M
arkets regulator, the
Securities and
Tourism crisis to cost the global Exchange Board of
economy over $4 tn: UNCTAD India (Sebi), has made real estate
The slump in tourism caused by covid-19 will cost the investment trusts (Reits) more
global economy more than $4 trillion for 2020 and 2021, accessible to a larger pool of
much worse than expected, as an uneven vaccination roll- investors. It has reduced the
out crushes developing nations that are highly dependent minimum application value for
on international visitors. The losses this year alone could Reits from ₹50,000 to ₹10,000-
amount to $1.7 trillion to $2.4 trillion, even as international 15,000, besides lowering the
tourism rebounds in the second half in the US, UK and trading lot size to one unit for
France, which have higher vaccination rates, the UN Con- publicly-listed Reits.
ference on Trade and Development (UNCTAD) said in a Since the Reit market in India
report. The study highlights the impact from an unequal is at a nascent stage, the move is
access to vaccines around the world. Developing nations a step in the right direction, ana-
may account for as much as 60% of the estimated losses to lysts said. Reits are still perceived
global gross domestic product, said the UNCTAD. The as a complicated product and
world may not see a return to pre-pandemic arrivals of some investors have stayed
international tourists until 2023, it added. BLOOMBERG away, despite the instrument
would give investors a chance to
explore this product and boost
further awareness about it.
Experts said it will also pave
the way for more Reit listings by
commercial real estate develop-
ers. Sebi is yet to announce the
implementation date for the new
rules.
Reits invest in commercial
real estate and earn rental
income from their holdings,
which is passed on to investors.
They are also required to give
90% of their cash flows to inves-
tors at least once in six months.
That apart, investors also benefit
from capital appreciation of the
underlying assets. So far,
Embassy Mindspace Brookfield
91.7 94.7 92.0 90.6 89.9 91.0
Q2FY21
Embassy Office Parks, Mind-
space Business Parks and Brook-
field India are the three listed
Reits in India. While the move is
positive for commercial real
estate companies, uncertainties
Occupancy rate (in %)
88.9 86.8 91.0
Q3FY21 Q4FY21
Source: Company reports and JP Morgan
SATISH KUMAR/MINT
for office leasing remains. Ana-
lysts warned of near-term pres-
sure on office rentals and its
adverse impact on the earnings
of listed Reits. This could keep
potential investors away from
“Office sector vacancies have
moved up by 400-500 basis
points over the last six months
on lower renewals at the point of
expiry and higher supply,” ana-
lysts at JP Morgan India Pvt. Ltd
said in a report on 29 June. One
basis point is one-hundredth of a
percentage point.
“This, in turn, is driven by
lower visibility on return to
office, which is reflected in rising
vacancy levels across listed Reits
and developer portfolios, and
correspondingly stocks trading
at a discount to net asset value,”
the analysts added.
Reits issued by Embassy Parks
are down around 23% from their
ces as well. Concerns are that
even when the situation normal-
izes, firms could opt for a hybrid
work structure including work
from home (WFH), which could
weigh on the office leasing out-
look, especially for Grade A
properties.
An analysis of listed Reits by
ICICI Securities Ltd showed that
the rental collections were
strong at around 99% in FY21.
However, their overall portfolios
saw occupancy levels decline by
4-6% on a like-to-like basis for
Embassy and Mindspace. This
was due to the exits by tenants
for scheduled expiries and early
exits.

Mark to Market writers do not have positions in the companies they have discussed here
LIVEMINT.COM CORPORATE THURSDAY, 1 JULY 2021
NEW DELHI 05

Fourth Partner Tribunal decision

Energy raises PMC’s bad loans pose major on airport slots
$125 mn from
Norfund and
The Rise Fund
challenge for new promoters deals a blow to Jet
Rhik Kundu
Staff Writer rhik.k@livemint.com
feedback@livemint.com NEW DELHI
NEW DELHI The bank is fighting several cases at various legal fora to recover the money it lent to HDIL
A
bankruptcy court has

N
orway government-
owned Norfund and
TPG Capital’s The Rise
Fund have invested $100 mil-
lion and $25 million, respec-
ruled that the new
Gopika Gopakumar owners of Jet Airways
gopika.g@livemint.com (India) Ltd cannot claim his-
MUMBAI toricity to obtain airport slots
that earlier belonged to the

tively, in Hyderabad-based
Fourth Partner Energy, which
focuses on the commercial and
industrial (C&I) segment, and
has a portfolio of 550 mega-
watts (MW) under operation.
On 29 September 2020,
Mint reported that the com-
pany had appointed Investec to
raise about $150 million
through a stake sale. Fourth
Partner Energy is building solar
parks in Uttar Pradesh, Maha-
rashtra and Tamil Nadu. The
capital will be used for business
expansion in domestic and
international markets.
“Fourth Partner Energy today
announced that it had raised
$125 million in equity funding
from Norfund and existing
shareholder The Rise Fund. This
$100 million marks Norfund’s
maiden investment in India’s
leading solar energy company,
while The Rise Fund is investing
an additional $25 million into
Fourth Partner, following its $70
million investment in July 2018,”
the companies said in a joint
statement on Wednesday.
This comes amid strong
investor interest in distributed
renewable energy generation as
the market has only a few devel-
opers with large portfolios. C&I
projects are generally insulated
from risks such as power pro-
curement curtailment and tariff
shopping by state-owned distri-
bution companies. They supply
electricity to third-party and
captive consumers who buy
power from them, instead of
depending on an expensive grid.
T
he Centrum Group pro- grounded airline, in a blow to
moted by Jaspal Bindra, their plans to use these slots
which has got the go-ahead that have already been distrib-
to take over the Punjab and uted among other domestic
Maharashtra Cooperative carriers. The copy of the order Jet Airways’ revival will hinge
(PMC) Bank, is going to face an uphill that was passed last week was on the path adopted by the
task to make recoveries to repay the released on Wednesday. civil aviation authorities. MINT
depositors of the bank. The National Company Law
The bank is fighting several legal Tribunal (NCLT) in its order main airports of New Delhi
cases against 25 companies associated said that Jet did not possess and Mumbai, were tempora-
with Housing Development and Infra- any airport slot on the day of rily allocated to other airlines.
structure Ltd (HDIL) in various legal commencement of its insol- Lawyers representing the
fora including the National Company vency process, which rules out civil aviation ministry and the
Law Tribunal (NCLT) and the Coopera- the claim of historicity. Directorate General of Civil
tive Arbitration Court to recover The NCLT had approved Aviation (DGCA) had earlier
money that PMC Bank’s former man- the resolution plan of a con- argued at NCLT that though
agement lent HDIL in a fraudulent sortium comprising UK’s Kal- the allocation of Jet’s slots to
manner. The outstanding dues from rock Capital and UAE-based others was temporary, they
these companies were ₹6,212 crore as entrepreneur Murarilal Jalan. couldn’t be withdrawn with-
on March 2020, which forms 73.3% of “The facts and circumstan- out any legitimate basis.
the credit portfolio of ₹8,477 crore of Nearly two years after RBI put curbs on the bank, it allowed Centrum Group and BharatPe to take over PMC Bank. REUTERS ces would indicate that pres- “Keeping in view the pur-
PMC. ently the slots cannot be pose of insolvency resolution,
However, the security available is Sarang Wadhawan, the prime accused Services is a step-down subsidiary of troubled real estate firm which owes restored to the corporate we trust that the authorities
only valued at ₹1,400 crore, which is in the scam at the cooperative bank. listed entity Centrum Capital, and pro- ₹6,840 crore to lenders is undergoing debtor on a historic basis. The concerned, including the gov-
mostly in the form of land, said a person In September 2019, RBI put severe vides credit to small and mid-sized insolvency proceedings. According to thumb rule being ‘use it or lose ernment, shall take a holistic
aware of the matter. curbs on PMC Bank, including on cash companies ranging from ₹2 lakh to ₹2 a Financial Express report last year, it’,” according to the order by a approach and provide neces-
“The legal process is complicated. It withdrawals, amid a probe into crore. Resilient Innovations Pvt. Ltd, HDIL had received six expressions of two-judge bench of Justice sary assistance to the success-
has been nine months and some of the accounting lapses. Cash withdrawals which operates BharatPe, will be an interest from suitors, including Adani Janab Mohammed Ajmal and ful resolution applicant/cor-
cases have not been admitted. The were initially capped at ₹1,000 per equal partner in the small finance bank. Properties Private Ltd (APPL), Surak- Justice V. Nallasenapathy porate debtor in terms of the
administrator appointed by the sha Asset Reconstruction and Sun- released on Wednesday. guidelines in allocation of slots
Reserve Bank of India (RBI) and the RECOVERING DUES teck Realty. None of the three pro- A slot is a permission given as and when they are sought,”
advisors cannot strike any private spective bidders have submitted for a planned operation to use the NCLT said.
deals to recover these loans. These PMC Bank’s THE bank’s ANY recovery from IT had also invited any resolution plan with the dead- the full range of airport infra- Ajay Shaw, partner, DSK
loans can also not be sold to an asset outstanding dues
from 25 companies
administrator and
advisers can’t strike
HDIL, which owes
₹6,840 cr to lenders,
bids for two French-
manufactured jet
line for doing so expiring on 7 Janu- structure necessary to arrive Legal, a Mumbai-based law
reconstruction company as they associated with HDIL any private deals to will depend on the planes and a yacht ary. Instead, APPL has filed an or depart an airport at a spe- firm, said it will be crucial to
are classified as fraud accounts. are at ₹6,212 crore recover these loans proceedings at NCLT to recover the loans interlocutory application, seeking cific date and time. see the path adopted by the
The bank has fully provided for it so partial resolution of the company. The Mumbai bench of the DGCA and the aviation minis-
the new promoters do not have to “Since banks have written off NCLT had in June 2019 admit- try in slot allocation as a revival
set aside fresh capital against it,” said account for six months, but gradually The promoters of the new bank have this account, whatever they recover ted an insolvency petition of Jet Airways will hinge on
the person mentioned above. relaxed to ₹100,000 in June last year. committed to bring in ₹1,800 crore in will add to the income for the year in against the carrier filed by a these decisions.
The bank’s administrator had also Nearly two years after the curbs on phases. The small finance bank will which it is realised. Recovery of the lenders’ consortium led by SBI The consortium has pro-
invited bids for two French-manufac- the bank were first put, RBI allowed have an initial capital base of ₹500 assets will depend on HDIL’s resolution following the airline’s ground- posed to invest ₹600 crore in
tured jet planes and a yacht to recover Centrum Financial Services and the crore. plan under the Insolvency and Bank- ing in April 2019 amid an acute the first two years in the airline
loans. These assets belong to HDIL payments platform BharatPe to take Any recovery from HDIL will depend ruptcy Code,” said Girish Rawat, part- fund crunch. At the time, Jet’s to repay creditors and acquire
owners Rakesh Wadhawan and his son over PMC Bank. Centrum Financial on the proceedings at NCLT. The ner at Luthra & Luthra. vacant slots, including at the an 89.79% stake in the carrier.

JSW Steel readies Voda Idea narrows March quarter consolidated loss to ₹7,023 cr
₹25,115 cr capex for Deborshi Chaki
deborshi.c@livemint.com
Taking a call
Vodafone Idea shares
crore a year ago. Gross debt
(excluding lease liabilities)
nificant doubt on the com-
pany’s ability to make the pay-
tion of cash flow from its opera-
tions that it needs to settle its
company’s total revenue from
operations fell nearly 12% to
MUMBAI stood at ₹1.8 trillion as of 31 ments and continue as a going liabilities. ₹9,607.6 crore as against
next growth phase declined 1.4% on Wednesday,
ahead of Q4 results.
March. This includes deferred concern. “FY21 has been a transforma- ₹10,894 crore quarter-on-

V
odafone Idea on
Wednesday said fiscal
fourth-quarter loss nar-
Ashwin Ramarathinam rowed to ₹7,022.8 crore from
ashwin.r@livemint.com ₹11,643.5 crore in the year ear-
MUMBAI lier.
Total income during the
10.4
(in ₹) spectrum payment obligations
of ₹96,270 crore, AGR
Vodafone Idea
(adjusted gross revenue) liabil-
ity of ₹60,960 crore and debt
10.2
from banks and financial insti-
10.09 tutions of ₹23,080 crore.
10 In a filing to the exchanges,
The company said that while
it continues to remain engaged
with potential investors, its sta-
tus as a going concern is contin-
gent on its ability to raise addi-
tional funds and successful
negotiations with lenders on
tional year for Vodafone Idea
with several important mile-
stones achieved,” said Ravinder
Takkar, managing director and
chief executive of Vodafone
Idea. “We enter FY22 with a
renewed focus on executing
quarter. The company posted a
one-time loss of ₹974.3 crore
during the fourth quarter. Its
average revenue per user
(Arpu) for Q4FY21 declined to
₹107 from ₹121 in Q3FY21 on
account of the removal of inter-

S
teelmaker JSW Steel Ltd
will deploy ₹25,115 crore
towards capital expendi-
ture for the next phase of its
growth plans, the company
said in its annual report
released on Wednesday.
“We are now embarking on
the next phase of growth with
the newly approved capex plan
of ₹25,115 crore. This capital
will allow us to augment our
crude steel capacity at Vijaya-
nagar by 7.5 million tonnes per
annum (mtpa), enhance and
digitize our mining capabili-
ties and infrastructure in Odi-
sha, and help us set up a state-
of-the-art colour-coated facil-
ity in Jammu and Kashmir to
support local demand and
development in the state,” Saj-
jan Jindal, chairman and man-
aging director of JSW Steel,
said in the annual report.
“In addition, we are focus-
ing on upgrading our acquired
facilities through efficiency
enhancing projects. Together,
these initiatives will see the
combined capacity of JSW
Steel, including JVs and asso-
ciates, expand to ~37.5 mtpa by
FY24-25,” he said.
Over the past three years,
JSW has deployed more than
₹48,000 crore of capex to
increase its production capac-
ity by 50% through organic
and inorganic routes without
increasing its debt, he said.
“Our balance sheet is get-
ting stronger as we improve
cash flows and efficiently allo-
cate capital. With the new
capacities and strong price
environment, we expect our
net-debt-to-Ebitda ratio to be
about 2.75. We are consist-
ently reducing our cost of capi-
tal with access to diverse pools
of liquidity and strong rela-
tionships with institutions
across the world,” he added.
In FY21, despite higher iron
ore and energy prices with
quarter ended 31 March the company’s auditor said that continued support, refinancing our strategy to keep our cus- connection usage charge (IUC),
declined by around 19% to 9.95 its financial performance of debts, monetization of cer- tomers ahead, and our cost adjusting for which ARPU was
₹9,647.8 crore from ₹11,920.4 9.8
9.15am 3.30pm
impacted its ability to generate tain assets, the outcome of the optimization plan remains on broadly flat this quarter, it said.
crore in the year earlier, the Source: Bloomberg the cash flow that it needs to modification application filed track to deliver the targeted Vodafone Idea had more than
company said. For the year settle/refinance its liabilities with the Supreme Court and savings. We are in active dis- 267.8 million subscribers as of
SARVESH KUMAR SHARMA/MINT
ended 31 March, the loss nar- and guarantees as they fall due, clarity on the next instalment cussion with potential inves- 31 March. Ahead of its earnings
rowed to ₹44,233.1 crore from Total annual income which along with its financial amount, acceptance of its tors for fundraising to achieve announcements, shares of
₹73,878.1 crore in the previous declined by about 8 % to condition is resulting in mate- deferment request by the tele- our strategic intent.” Vodafone Idea fell 1.4% to ₹9.95
year. ₹42,126.4 crore from ₹45,996.8 rial uncertainty that casts sig- com department and genera- In the fourth quarter, the on BSE.
Sajjan Jindal, chairman and
managing director, JSW Steel.
better average realizations,
cost optimization and efficien-
cies, JSW’s topline grew by 9%,
and operating Ebitda
increased to ₹20,141 crore, a
rise of 70% from the ₹11,873
crore in the previous year.
“Our efficient capital alloca-
tion and industry-leading
project execution skills means
that we are able to scale capac-
ity at industry leading capex
per tonne, in record time. We
have delivered an industry-
leading total shareholder
return compound annual
growth rate (CAGR) of 24%
over the past 10 years, which
validates our efficient capital
allocation and execution. The
board has recommended a
dividend of ₹6.5 per share,
which is our highest ever, and
will lead to a total payout of
₹1,571 crore,” said Jindal.
“We are also recalibrating
our R&D from a process-ori-
ented approach to a product-
oriented one. As a result, our
innovation and research func-
tion will increasingly focus on
understanding customer
requirements and develop a
larger variety of specialty
grades and specialized solu-
tions to meet our customer’s
evolving needs,” he said.
For May, JSW’s capacity
utilization was 91% as liquid
oxygen supplies were more
than 30,000 tonnes for medi-
cal purposes against more than
20,000 tonnes in April.
06 THURSDAY, 1 JULY 2021
NEW DELHI CORPORATE LIVEMINT.COM

Govt charts
course for
usage of
new-age fuel
FROM PAGE 1
hydrogen produced from fos-
sil fuels such as natural gas or
naphtha. “The proposal for
mandating green hydrogen
consumption by fertilizer pro-
ducers and petroleum refiner-
ies is under consultation.
Details of quantum of man-
Govt set to invite global bids More stress is here
but lenders seem to
for rural broadband project be safer than before
FROM PAGE 1 Monday, the government
increased the outlay of the
To be sure, the increase in scheme by ₹1.5 trillion.
BharatNet will execute the project through a public-private partnership in 361,000 villages bad loans predicted by the In the retail loan portfolio,
stress test is far below the fore- data from credit bureaus show
casts of the previous report more than a quarter of loans
Gireesh Chandra Prasad & coms subject to them meeting reform- released in January. At that slipped to the riskiest subprime
Neetu Chandra Sharma related milestones, with state-run time, RBI projected the bad category by January from the
Power Finance Corporation (PFC) and loan ratio to surge to 13.5% by year-ago period. In essence,
NEW DELHI Rural Electrification Corporation September. It should also be credit risk perception has wor-
(REC) nominated as nodal agencies for noted that RBI’s stress tests sened for retail borrowers. “All

dated share, required RE
(renewable energy) capacity,
etc., are yet to be firmed up,”
said an MNRE official.
Power and new and renew-
able energy minister Raj
Kumar Singh told reporters
recently that the government
plans to start green hydrogen
purchase obligations on the
lines of RPOs.
Given India’s dependence
on energy imports, the play-
book involves leveraging the
country’s large landmass and
low solar and wind tariffs to
produce low-cost green
hydrogen.
With the current cost of
green hydrogen produced by
electrolysis estimated at
around ₹350 per kg, the plan is
to more than halve it to ₹160
per kg by 2029-30. The gov-
ernment also aims to extend
the production-linked incen-
tive (PLI) scheme for manufac-
turing electrolyzers to produce
green hydrogen.
Green hydrogen is pro-
duced by splitting water into
hydrogen and oxygen using
an electrolyzer that may be
powered by electricity from
renewable energy sources
such as wind and solar. Hydro-
gen can be used for both fuel
cell and internal combustion
engines. It is also being lever-
aged for applications in sec-
tors such as chemicals, iron,
steel, transport, heating and
power.
I
ndia will soon invite global bids to the scheme’s implementation. have been overestimating toxic lenders except PSBs have
bring broadband to 361,000 villa- Mint reported about the contours of loans in recent years (see chart). begun to record increase in
ges across 16 states in public-pri- the scheme on 16 December last year. The draft report said troubled stress, which is particularly
vate partnership mode with gov- While announcing the relief package loans would mainly emerge from acute for unsecured lending
ernment aid, Union minister Ravi in the wake of second wave of corona- micro, small and medium enter- products,” the report notes.
Shankar Prasad said. virus pandemic, the finance minister prises (MSMEs) and retail bor- The upside for banks is that
The new plan, which will be exe- on Monday said that the Centre’s rowers. These categories were large borrowers may not be the
cuted by state-run BharatNet through share towards the discom reform the biggest beneficiaries of for- main source of stress, although
a public-private partnership, was scheme will be ₹97,631 crore. bearance, such as moratorium, their share may remain high.
cleared by the Union cabinet on An official statement from the gov- restructuring and standstill on Potential recoveries from past
Wednesday. The selected private ernment said that Wednesday’s cabi- asset recognition. Further, pub- defaulters, a low restructured
player will set up, operate and main- net decision for broadband connectiv- lic sector lenders loan pile, and a
tain the network. ity in 16 states covered Kerala, Karna- have been at the The draft report likely pick-up in
As per the plan, the project will be taka, Rajasthan, Himachal Pradesh, forefront of lend- said troubled loans credit growth may
bundled into nine packages, each cor- Punjab, Haryana, Uttar Pradesh, Mad- ing to small busi- help banks bring
would mainly
responding to one or more telecom hya Pradesh, West Bengal, Assam, nesses, besides down their toxic
circles, and no investor will be The government said that the project will enable online education, telemedicine, Meghalaya, Manipur, Mizoram, Tri- aggressively chas- emerge from loan pile. As such,
awarded more than four packages, skill development, e-commerce and other applications of broadband. PIXELFUSION pura, Nagaland and Arunachal Pra- ing retail credit in micro, small and banks have shored
said Prasad at a briefing on cabinet desh. The cabinet also accorded the past few years. medium units and up provisions
decisions. Prasad holds the portfolios (ECLGS). Also, the due date for busi- nomic Affairs (CCEA) on Wednesday in-principle approval for extending Therefore, the retail borrowers against risks from
of law and justice, telecom, electronics nesses to register newly hired workers approved the marquee ₹3.03 trillion BharatNet to all inhabited villages in bulk of the stress covid in FY21.
and information technology. for provident fund contribution sup- power distribution company (discom) the remaining states and Union terri- could appear on “Banks have
The cabinet also cleared parts of the port from the government under the reform scheme, wherein the Centre’s tories. The department of telecommu- balance sheets of public sector already made contingency pro-
₹6.28 trillion economic package Atmanirbhar Bharat Rojgar Yojana share will be ₹97,631 crore. nication will separately work out the banks, with gross bad loan ratios visioning against much of the
announced on Monday by finance has been extended. They get another The reforms-based results-linked modalities for these remaining states likely to touch 12.5% by March. stress from the pandemic.
minister Nirmala Sitharaman, which nine months till 31 March 2022. power distribution sector scheme to and Union territories. Signs of stress among These contingency provisions
needed approval. This included “It will enable online education, MSMEs have emerged in the could be drawn down this year.
the ₹19,041 crore viability gap CABINET DECISIONS telemedicine, skill development, special mention account (SMA) Need for incremental provi-
funding for the village broadband e-commerce and other applica- loans of banks. These capture sioning is lower now,” said
connectivity programme. Another THE ₹50,000 crore THE ₹1.5 trillion BUSINESSES now THE marquee tions of broadband,” the statement early signs of stress by record- Anand Dama, an analyst at
element of the economic relief financial guarantee
cover for new
addition to the
Emergency Credit
have time till 31 March ₹3.03 trillion reform
to register newly scheme for discoms
said. ing how long repayments are Emkay Global Financial Servi-
package cleared by the cabinet is healthcare facilities Line Guarantee hired workers for PF also received a nod Prasad explained that the cap of overdue. The proportion of ces Ltd. Coupled with the
the ₹50,000 crore financial guar- was approved Scheme was cleared support from govt from the cabinet awarding a maximum of four SMA 1 and 2 loans in the MSME increase in capital during FY21,
antee cover for opening new packages to an investor will ensure category for public sector banks are likely to emerge
healthcare facilities or for expand- there will be no monopoly in the banks shot up to 11.8% in FY21 stronger despite the pandemic.
ing existing ones under the new ‘loan This move is expected to create 7.18 be applicable till 2025-26 was project. He said Prime Minister Nar- from 8.6% in FY20. For private Analysts have upgraded the
guarantee scheme for covid-affected million jobs in the formal sector as announced in the Union budget pre- endra Modi had on 15 August last year sector banks, this ratio has earnings estimates of large
sectors’. In the case of other sectors against the earlier projection of 5.85 sented earlier this year and will sub- announced that in 1,000 days, optical increased to 3.2% from 2.6%. banks, anticipating an improve-
covered under the scheme, modalities million. As on 18 June, ₹902 crore has sume programmes such as the Inte- fibre broadband will be taken to every Further, it should be noted that ment in their overall profitabil-
will be cleared in due course. been given to 2.14 million beneficia- grated Power Development Scheme village. Already, the facility has been credit flow to stressed MSMEs ity in FY22. Dama believes that
The cabinet also cleared the ₹1.5 ries through 79,577 establishments and the Deen Dayal Upadhyaya Gram introduced in 156,000 villages out of from the government’s credit recoveries from large bad loans
trillion addition to the Emergency under the scheme. Jyoti Yojana. the 250,000 villages targeted initially. guarantee scheme was sub- may also help banks in improv-
Credit Line Guarantee Scheme The Cabinet Committee on Eco- The funds will be released to dis- gireesh.p@livemint.com stantial during the year. On ing profitability.

Frame rules to pay ex SpiceJet posts₹256.98 crore Q4 Cooperative banks on RBI radar
gratia to kin of covid loss, plans to raise ₹2,500 crore FROM PAGE 1

MINT many: urban cooperative banks

dead, SC tells Centre FROM PAGE 1

the cargo business,” he said.

reported an aggregate return
on assets and return of equity of
-0.79% and -9.72%, respec-
FROM PAGE 1 Authority to recommend For the year ended 31 tively, in FY20.
appropriate guidelines for ex March, SpiceJet widened its “In the recent period, we
davit also stated that an ex gra- gratia assistance,” maintained consolidated net loss to have been taking measures to
tia amount of ₹4 lakh cannot be the bench. ₹1,029.89 crore from ₹936.57 improve their governance
paid for covid deaths as it is The bench also noted that crore in the previous year. structure, implement system-
beyond fiscal affordability, and there was no document on Revenue during FY2021 fell based asset classification
the finances of Central and record to show that after a rec- 54% to ₹6,119.39 crore. norms, bring them into the
state governments are under ommendation of the Finance Meanwhile, Walker Chan- central repository of informa-
severe strain. Commission against a scheme diok & Co LLP— the auditors tion on large credits reporting In the six months so far this year, RBI has imposed penalties on 51
Dissatisfied with these sub- for ex gratia, there was any to SpiceJet— have raised infrastructure and under the cooperative banks, as compared to 23 in 2020. MINT
missions, the bench under- decision made by the PM-led doubts about the airline's abil- supervisory action framework.
lined that section 12 of the NDMA, which was statutorily ity to continue as a going con- Last month, we set up an expert In September last year, the “fit and proper” managing
DMA used the word ‘shall’ mandated to issue these guide- cern as the mounting losses SpiceJet’s chairman and managing director Ajay Singh. SpiceJet’s cargo committee to examine these government notified the directors and whole-time
twice in propounding that lines. have led to complete erosion arm, SpiceXpress, saw a significant jump in Q4 revenue to ₹416.5 crore. issues and provide a road map amended Banking Regulation directors.
guidelines have to be made “ex “Ex gratia assistance on of net worth with current lia- for strengthening the UCB sec- Act, reducing the regulatory “The way I understand, most
gratia assistance on account of account of loss of life is part of bilities exceeding current SpiceXpress, saw a significant suspended in India since 23 tor,” RBI governor Shaktikanta arbitrage between commercial of the current heads of India’s
loss of life”, damage to houses minimum standards of relief, assets by ₹5,185.84 crore. increase in its revenue to March 2020, due to the coro- Das said on 25 March. banks and cooperative banks. cooperative banks might find
and restoration of means of which must be considered by “These conditions, together ₹416.5 crore in March 2021 navirus-triggered lockdown. Historically, the problem The effect of this change was them ineligible to continue as
livelihood. the National Authority while with uncertainties relating to quarter, from ₹67.8 crore a However, special interna- arose from the dual control of visible in the central bank’s many may not satisfy the condi-
“Therefore, it is the statu- providing for the minimum the impact of the ongoing cov- year ago. tional passenger flights have these lenders by the central recent rescue of PMC Bank by tions stipulated by the Reserve
tory duty cast upon the standards of relief to be pro- id-19 pandemic on the opera- Scheduled domestic flight been operating under the bank and state cooperative allowing Centrum Financial Bank. Commercial failures do
National Authority to recom- vided to the persons affected by tions of the company....indi- services were suspended in Vande Bharat Mission since societies. Under the Constitu- Services and BharatPe to set up happen, but these banks must
mend guidelines for the mini- disaster—in the present case, cate the existence of a material India from 25 March to 24 May May 2020 and under bilateral tion, these banks are a state a small finance bank and later ensure that decisions are taken
mum standards covid-19 pan- uncertainty that may cast sig- last year due to the lockdown. air bubble arrangements subject, but during the mid- take over the cooperative based on prudential guidelines,
of relief to be pro- demic,” said the nificant doubt about the com- The domestic flights resumed formed between India and 1960s, banking laws were made bank. and that would lead to an
vided to persons The NDMA court. pany’s ability to continue as a from 25 May 2020, but in a other countries since July applicable to these lenders for On 25 June, RBI notified improvement of the coopera-
affected by disas- headed by the PM At the same going concern,” it said. curtailed manner. Scheduled 2020. RBI to exercise some control guidelines for appointments at tive banking system,” said
ter, which shall ‘failed to perform time, the bench The company’s cargo arm, international flights have been PTI contributed to the story. over them. these banks, insisting on only Rawat.
include the its statutory duty’ highlighted that
reliefs, as stated
by not envisaging the courts must
hereinabove. The draw a line when
a compensation it comes to mat-
language used in
the provision is
very plain and
scheme, SC said ters of financial
implications and
IPOs raise ₹27,417 crore so far this year, highest in 10 years
unambiguous,” is cognizant that
said the bench, as it shot down covid-19 is different from the FROM PAGE 1 via IPOs in the first six months Nifty—rose 8.26% and 10.8%, Energy (85 times) and Indigo
the Centre’s plea that the word other disasters/natural disas- of 2019 and 2018, respectively. IPO deluge respectively, compared to Paints (82 times).
‘shall’ in the provision should ters for which ex gratia assist- few years, with PE or VC funds, According to Gaurav Dua, How new listings have dominated markets in 2021 6.94% gains by the MSCI The biggest IPOs in this
be read as ‘may’. ance is provided. which have invested large sums head of capital market strategy, (Jan-Jun) Amount raised (₹ crore) Number of IPOs
Emerging Markets Index dur- period were Sona BLW Preci-
Emphasizing that the bene- No state or country has of capital in Indian companies Sharekhan by BNP Paribas, ing the period, while the MSCI sion Forgings or Sona Comstar
ficial provision of the legisla- unlimited resources, said the in the past decade, increasingly promoters and other institu- 2016 8,183 12 World index rose 12.5%. In (₹5,550 crore), Indian Railway
tion must be literally con- bench, pointing out that the using the primary market route tional investors have used 2017 11,774 13 rupee terms, the Sensex and Finance Corp. (₹4,633 crore),
strued so as to fulfil the statu- central government was also to exit their mature invest- favourable market conditions the Nifty have gained 10% and Macrotech Developers (₹2,500
2018 23,452 18
tory purpose and not to required to take various meas- ments. to exit or book partial profits 13% since Janu- crore) and Krishna
frustrate it, the bench noted ures in different sectors, such as As a result, most IPOs hitting rather than raise fresh capital 2019 5,509 8 ary, the best six- Most of the funds Institute of Medi-
that once covid had been noti- public health, employment and the primary markets have had a for business growth. month perform- raised via IPOs cal Sciences
2020 10,341 1
fied as a disaster, it was manda- providing food and shelter to PE/VC backer in recent times, “The trend is not ideal but ance in the past were used to (₹2,120 crore).
tory to contemplate a scheme people and migrants. thus leading to a higher pro- not necessarily negative for 2021 27,417 22 five years. On the “We are wit-
offer an exit to
for ex gratia for loss of life due “There shall not be any justi- portion of secondary share retail investors. The listing has other hand, the nessing high
to the infection.
Source: primedatabase.com PE/VC firms or
fication to provide for the same sales in IPOs. enabled retail investors to par- benchmark indi- momentum in the
ces shed 15% in existing investors capital markets. A
PARAS JAIN/MINT
“Not recommending any amount by way of ex gratia It was the same story in the ticipate in some fast-growing
guidelines for ex gratia assist- assistance as provided in the past two years. In 2019 and companies. At the same time, ing Zomato, LIC and Paytm,” economic recovery, investors the year-ago and promoters significant amount
ance on account of loss of life case of other disasters/natural 2018, too, the proportion of there are cases of IPOs priced at Dua said. continued to pump money into period. of activity is driven
due to covid pandemic, while disasters, i.e., ₹4 lakh. The gov- OFS in the total IPO fundrais- high valuations with little left Favourable market condi- equities, making it the best- So far this year, by huge dry pow-
recommending other guide- ernment has to decide its own ing was 73.8% and 72.5%, on the table for retail investors. tions have made it attractive for performing asset class in the six India has seen 22 IPOs. MTAR der awaiting investment and
lines for the minimum stan- priorities and reliefs to differ- respectively. Consequently, it is essential to companies to raise equity capi- months to 30 June. Technologies was subscribed companies exploring a listing in
dards of relief, it can be said ent sectors for different In the first six months of be very selective in investing in tal at relatively higher valua- Gains from the Indian stock 139 times, the highest in these India or overseas. The markets
that the National Authority has reliefs...What reasonable 2020, there was only one IPO— the medium-to-long term. We tions, and many companies markets outpaced emerging six months. Others that drew continue to reward companies
failed to perform its statutory amount to be offered towards by SBI Cards and Payment Ser- believe that the hyperactivity in have taken advantage of the sit- markets (EMs) in the first six high subscriptions included with robust, scalable and tech-
duty cast under Section 12 and, ex gratia aid is left to the wis- vices Ltd—due to the covid out- the IPO market will continue in uation, he added. months of 2021. Nazara Technologies Ltd (96 nology-led business models,”
therefore, a writ of mandamus dom of National Authority,” break. A total of ₹5,509 crore the near future—many mega- Despite the pandemic’s sec- In dollar terms, benchmark times), Easy Trip Planners (88 Sandip Khetan, EY India IPO
is to be issued to the National said the court. and ₹23,452 crore were raised IPOs are in the pipeline, includ- ond wave in India and delayed indices—the Sensex and the times), Shyam Metalics and leader, said in a note.
LIVEMINT.COM CORPORATE THURSDAY, 1 JULY 2021
NEW DELHI 07

Duroflex in
talks with Online retail set to see LEGACY FIRMS ARE EAGER TO
GRAB A SLICE OF THE D2C PIE
PE firms to
raise funds
its biggest jump in 2021 ORDINARY
offline store operations from time to time, and
kept consumers away for fear of infection.
“The pandemic has accelerated the pace of
digital adoption and legacy FMCG companies
Debjyoti Roy POST are attempting to fast-track their online adop-
debjyoti.roy@hindustantimes.com tion journey through organic (stepping up focus
NEW DELHI The segment is expected to clock $55 billion in sales, up 45% from last year SHUCHI BANSAL on D2C strategy) or inorganic means (partner-
ships/investments/acquisitions),” said Ankur

M
attress maker Duro- Respond to this column at Pahwa, partner at EY in the strategy and trans-
flex Pvt. Ltd is in talks Tarush Bhalla shuchi.b@livemint.com actions practice, and also the national leader for
to raise funds from tarush.b@livemint.com Online retail boom the e-commerce and consumer internet sector.
350

O
domestic private equity firms BENGALURU India is set to become the third-largest online retail market globally, n Monday, FMCG company Emami Ltd Also, the pandemic has taught brands that if
Kedaara Capital, ChrysCapital after the US and China, clocking $350 billion in GMV by 2030. said it has increased its stake in Helios the customer can’t come to you, you will need to

and Multiples Alternate Asset
Management, apart from a few
foreign PE firms, two people
aware of the matter said.
The Kerala-based company
is seeking to raise $50-75 mil-
lion (₹371-557 crore) for
expansion, and has hired the
investment banking arm of
KKR-controlled Avendus Cap-
ital to scout for potential inves-
tors, the people cited above
said on condition of anonym-
ity. The transaction could
include
a small
second-
a r y
component, the people added.
It couldn’t be immediately
ascertained if Lighthouse
Funds, which had backed the
firm in 2018, would be exiting
through the funding round.
Email queries sent to Duro-
flex and the investors
remained unanswered till
press time. Avendus Capital
declined to comment.
Duroflex started in 1963 by
manufacturing a wide range of
mattresses and polyurethane
foam products. It diversified
into accessories and work-
from-home furniture. It oper-
ates three manufacturing units
in Hosur, and one each in Ben-
galuru and Hyderabad.
Duroflex has an omnichan-
nel presence, with digital
brand Sleepyhead accounting
for nearly 40% of sales. It is
said to be India’s second-larg-
est mattress seller after Sequ-
oia Capital-backed Wakefit.
T
he online retail market is 140 Lifestyle, which sells male-grooming go the customer, he said. Besides, millennials
Gross merchandise value (GMV)
expected to witness the high- for e-retail sector (in $ bn) products under The Man Company brand, by are a fast-growing and influential consumer
est ever year-on-year growth 15% to 45.96%. This was in line with its ambition group who are increasingly gravitating towards
in 2021 with $55 billion in to tap emerging online opportunities, Emami online shopping. And, if legacy players don’t
sales, up 45% from 2020, said. The Man Company’s premium products adapt soon, they could soon miss the bus on this
when the gross merchandise value 55 sell on its website and on e-marketplaces. aspirational segment, he said.
(GMV) of goods sold on e-commerce plat- 38 Likewise, Hindustan Unilever Ltd, India’s To be sure, younger shoppers hardly visit kir-
21.7 27.1
forms stood at $38 billion, according to 12.4 16 largest maker of packaged goods, said it was anas to buy groceries or personal care products,
management consultancy RedSeer. focusing on making some of its premium brands said Panditrao. A lot of product research hap-
The growth is primarily being driven 2016 2017 2018 2019 2020 2021* 2025* 2030* available direct to consumer (D2C) via mono pens online. They even get introduced to new
by first-time shoppers. New direct-to- brand sites. At the recent annual general meet- brands through Instagram. The entire cycle of
consumer (D2C) brands are expected to ing of Tata Consumer Products Ltd (TCPL), discovering brands
further bolster the sector’s growth. 500,000 $800 bn $1.5 trillion $150 bn chairman N. Chandrasekaran announced the The second and becoming loyal
In spite of the pandemic, e-commerce Total gig workers Size of India's Total sales expected GMV contribution of launch of its foreign premium coffee brand consumers has
platforms added 20 million new shop- expected to be digital economy to be clocked by small-town shoppers on Eight O’Clock in India as a D2C brand. Prior to covid wave has changed, and digital
pers in 2020. This year, 40 million first- employed (2021) (2030) kiranas (2030) e-commerce (2020-2030) that, TCPL had marked its foray into the D2C only reiterated is a large part of it.
time shoppers may log on to e-commerce market via premium roasted and ground coffee the value of “So, traditional
*forecasts Source: RedSeer
platforms, taking the user base to 190 brand Sonnets aimed at urban aficionados. direct reach to brands need to see
million by 2021-end, according to Red- Clearly, action in the D2C segment is heating the consumer how they will acquire
Seer estimates. counting. In the first six months of 2021, e-commerce will contribute 40% to non- up with some of the largest traditional FMCG and retain new cus-
India is set to become the third-largest e-commerce continues to grow in double grocery retail such as electronics and companies actively participating in the frenzy tomers,” he said.
online retail market globally, after the US digits, and with the second half of the fashion, and 6% of medicine and grocery for digital-first brands. Of course, the flurry of “Right under their nose, many new brands
and China, clocking $350 billion in GMV year loaded with sale events, this growth purchases by 2030. activity continues among the startups, too, have come and built a whole, large business
by 2030, it added. The growth in online will be bolstered further,” said Mrigank With the likes of JioMart, Flipkart and which began the D2C craze in the first place. from a market they (legacy firms) never knew
retail is expected to be further fuelled by Gutgutia, director, e-commerce, Red- Amazon India now tying up with kiranas A lot has been written about the size of the existed,” said Panditrao, adding, that’s what
88% of new online shoppers added over Seer Consulting. to facilitate express hyperlocal deliveries, D2C opportunity in India. And the second and they worry about. It’s the fear of missing out on
the next decade (2020-30) from tier-2, 3 Gutgutia said the impact of lockdowns kirana stores are expected to clock more severe covid wave that kept the country growth opportunities, he added.
and 4 cities. approximately $1.5 trillion in shut in April and May has only reiterated the But can they compete with more nimble
Shoppers from small GROWTH DRIVERS overall sales by 2030. value of direct reach to the consumer as store internet-first brands? Pahwa admitted that
towns and cities will cumula- To keep pace with the operations remained patchy. online is fast-paced, and consumer preferences
tively contribute to $150 bil- THE growth is being THIS year, 40 mn NEW direct-to- growth in online retail, the Little surprise then, Shoptimize, the com- can change relatively quickly compared to the
lion of e-commerce GMV in driven by first-time
shoppers. Platforms
first-time shoppers
may come online,
consumer (D2C)
brands are expected
logistics sector is expected to pany that helps set up D2C e-commerce web- sales cycles of traditional retail. “However, tra-
the coming decade, until added 20 mn new taking user base to to further bolster the employ 500,000 gig work- sites for brands and drives growth for them, has ditional firms bring years of experience along
2030, RedSeer data showed. shoppers in 2020 190 mn by 2021-end sector’s growth ers in 2021. Logistics firms in seen its business jump 300% since January. with understanding supply chains, unit eco-
New e-commerce models India clocked over 3 billion Co-founder and CEO Mangesh Panditrao said nomics and deep pockets,” he said.
such as social, video and shipments in 2020, of which the growth came from brands he on-boarded on Besides, they are keen to learn the game and
influencer-led commerce will result in following the second wave of the covid 850 million were driven by third-party a revenue-sharing model, which was piloted are, therefore, either backing some of the inter-
higher penetration of e-tailing in India. infections was far less on e-commerce, logistics firms. three months ago. These are in the consumer net-first brands or launching their own.
“The pandemic has caused an inflec- with online sales trading 70% higher in Furthermore, new-age logistics play- durables, food and lifestyle categories. “Fashion Pahwa said growth through acquisitions is
tion point for e-commerce in the coun- the April-June quarter, compared to the ers have reduced the average time of brands have also come on board and some are likely to play out as this becomes an increasingly
try. At present, more than 50% of online corresponding period last year. delivery by two-thirds over the last seven offshoots of large offline brands,” he said. competitive space. Clearly, D2C brands are no
shoppers are using e-commerce for con- Besides, India’s consumer digital years, as they leveraged automation. But why are more and more legacy compa- longer a fad, but a trend here to stay.
venience. This is a far departure from economy, including cab-hailing and By the end of 2020, tier-2, 3 and 4 cit- nies veering towards D2C brands? For two rea- Shuchi Bansal is Mint’s media, marketing and
earlier estimates when 70% of online mobility services, is expected to touch ies accounted for more than 50% of shop- sons probably, and the first is more of an aberra- advertising editor. Ordinary Post will look at pre-
shopping used to be driven by heavy dis- $800 billion by 2030. With its rise, pers in the Indian e-commerce space. tion caused by the pandemic, which restricted ssing issues related to all three. Or just fun stuff.

PRESENTS

BUSINESS TRANSFORMATION
SYMPOSIUM 2021
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10 Business transformation
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2 3

4 5

PENSION FUND REGULATORY AND

DEVELOPMENT AUTHORITY
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ADVERTISEMENT INVITING PROPOSALS FOR
SELECTION OF SPONSORS OF PENSION FUNDS (PFs)
FOR NPS GOVERNMENT SECTOR SCHEMES, PRIVATE 6 7
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REGULATED/ADMINISTERED BY THE AUTHORITY 2. Puneet Chandok, President, AWS India and
UNDER PFRDA (REGISTRATION OF PENSION FUNDS) South Asia (AISPL)
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The Pension Fund Regulatory and Development Authority (INSEA), OYO
(PFRDA) proposes for selection of Sponsors of Pension Funds 4. Shalil Gupta, CBO, Mosaic Digital, an HT Media
(PFs) for NPS Government Sector Schemes, Private Sector Group Company in conversation with Ankur
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davp 15102/11/0004/2122 Sumit Kumar, General Manager
08 THURSDAY, 1 JULY 2021
NEW DELHI GLOBAL LIVEMINT.COM

Renault vows
to cut battery China’s economy flashes On milestone day,
CPC eyes second
costs by 60%
in EV push
Bloomberg
hints of weakness in June century in power
PTI
feedback@livemint.com
feedback@livemint.com BEIJING

Expansion in factory sector slowed, while services sector softened amid low consumer spending
R C
enault SA aims to cut the hina’s ruling Commu-
cost of its batteries by nist Party, which had a
60% this decade as the vice-like grip on the
struggling French carmaker Jonathan Cheng destiny of the world’s most
seeks to accelerate a push into feedback@livemint.com populous nation besides
electric vehicles. BEIJING diverse influence on interna-
Renault also plans to lower tional leftist movements and

the cost of its electric motors by
30%, make them more com-
pact and extend their range, it
said Wednesday. It plans to roll
out several EVs in the coming
years, including a revival of the
iconic and affordable ‘4L’
model.
“We’ll lead the energy transi-
tion and make electric cars very
popular,” chief executive offi-
cer Luca de Meo said when pre-
senting the company’s updated
EV strategy. EVs will account
for up to 90% of Renault-
branded cars by the end of this
decade, indicating a gradual
phasing out of hybrids.
The automaker is making a
big bet on electric cars and ear-
lier this week unveiled plans to
secure batteries for its future
vehicles produced in France.
China’s Envision Group agreed
to spend as much as $2.4 billion
on a battery factory near Ren-
ault’s auto plant in Douai.
Renault, which had a record
loss last year, also plans to
acquire a stake of slightly more
than 20% in a year-old French
startup called Verkor for high-
er-performance power packs
and could join a venture called
ACC, spearheaded by rival Stel-
lantis NV and TotalEnergies
SE.
In deciding to revive the 4L
model that dates back to the
1960s after also announcing
plans to remake the Renault 5
into an EV, de Meo is taking his
penchant for vintage a step fur-
ther. The latter will cost a third
less than its compact Zoe EV,
the company said.
E
xpansion in China’s factory sec-
tor slowed in June, as export
demand weakened while sup-
ply bottlenecks held back pro-
duction, official data showed
Wednesday.
Equally worrying, China’s services
sector, a persistent laggard in the coun-
try’s post-pandemic rebound that Bei-
jing policy makers are eager to see drive
more of the economy, softened as recent
coronavirus outbreaks again hindered
consumer spending.
The hints of weakness on both fronts
come as economists lowered expecta-
tions for growth in the world’s second-
largest economy. In recent weeks, Mor-
gan Stanley and Barclays, among others,
have downgraded their forecasts for
China’s full-year gross domestic product
to below 9%, citing the impact of higher
raw material prices on production and
weaker-than-expected consumption.
On Wednesday, China’s National
Bureau of Statistics said its official man-
ufacturing purchasing managers index
fell slightly to 50.9 in June, from 51.0 in
May. The gauge was higher than the
50.7 median forecast expected by econ-
omists polled by The Wall Street Journal
and remained above the 50 mark that
separates expansion from contraction
for a 16th straight month. But it marked
the lowest reading in four months.
Beneath the headline number, the
subindex measuring production
declined to 51.9 in June, from 52.7 the
previous month, as recent shortages of
semiconductors, coal and power held
back output at many factories, the statis-
tics bureau said.
As they have all across the global auto
supply chain, chip shortages have hit
China’s car makers, keeping the auto
manufacturing subindex in contraction-
ary territory for two straight months.
China’s official manufacturing purchasing managers index fell slightly to 50.9 in June from 51.0 in May, data showed.
The subindexes measuring the oil, coal
and metal industries also weakened,
weighing on total demand, officials said.
Recent covid-19 cases in the southern
province of Guangdong, an economic
and export stronghold, have added
strains to supply bottlenecks for manu-
facturers. Operations at Shenzhen’s Yan-
tian Port, one of the world’s busiest, were
cut to 30% of capacity beginning in late
May and have only started to recover in
recent days, accord-
ing to port officials.
Meantime, the
subindex of new
export orders fell deeper into contrac-
tionary territory to 48.1 in June from
48.3 in May, signalling weakening exter-
nal demand for Chinese goods.
As the first major economy to emerge
from the pandemic last year, China ben-
efited from robust global demand for its
export goods, which helped China’s
export sector continually defy market
expectations. Now, economists see the
trend turning as the lifting of pandemic
restrictions in Western countries drives
a shift in wealthy consumers’ spending,
away from purchases of big-ticket items
and more toward in-person services,
says Sebastian Eckardt, lead China
economist at the World Bank.
As that shift takes root, the contribu-
tion of net exports to China’s overall
growth will likely wane, Mr. Eckardt
says. The World Bank projects China’s
current account surplus, which includes
foreign trade of merchandised goods
and services, to fall
to roughly 1.4% of
gross domestic
product this year,
from 1.9% last year.
As exports slow, Mr. Eckardt says he
expects to see “import growth recover-
ing in China on the back of firming
domestic demand.” Chinese leaders,
too, have called for the economy to shift
more toward domestic consumption.
But on that count, Wednesday’s eco-
nomic data offered more reasons for
caution than for optimism.
China’s official non-manufacturing
PMI, which includes gauges of services
AFP
and construction activity, fell in June to
53.5 from 55.2 in May, the statistics
bureau said Wednesday.
The subindex measuring service
activity fell to 52.3 from the previous
month’s 54.3, while new orders received
by service providers dropped into con-
tractionary territory, to 49.5 in June
from 52.0 in May, reflecting a quick
cooling of market demand. Subindexes
tracking air transportation, catering and
accommodation also fell into contrac-
tionary territory.
The declines come as the recent cov-
id-19 cases in Guangdong have damp-
ened consumer sentiment.
With vaccinations relatively slow to
roll out and many restrictions driven by
covid-19 still in place, consumers have
remained cautious each time a new
wave of infections has broken out. Econ-
omists have had to rein in their expecta-
tions after the hoped-for pickup in con-
sumer spending failed to materialize.
Grace Zhu and Stella Yifan Xie contrib-
uted to this article.
©2021 DOW JONES & COMPANY, INC
global politics, will turn 100 on
Thursday.
The highlight of the occa-
sion, according to officials, is
an address to a special gather-
ing in the morning by Presi-
dent Xi Jinping, who cast him-
self in the mould of Mao Zed-
ong, the founder of the
Communist Party of China
(CPC) as it is officially called.
Xi’s address would be tele-
cast live by official media net-
works, state-run Xinhua news
agency reported.
While much of the “grand
celebrations”, as Xi put it ear-
lier, were shrouded in secrecy,
the Hong Kong-based South
China Morning Post quoted
the officials as saying that
there will be no military
parade.
Earlier, there was specula-
tion about a military parade at
the historic Tiananmen
Square, demonstrating
China’s new military hard-
ware. Some of the latest heli-
copters and fighter jets con-
ducted rehearsals a few days
ago.
The sprawling Tiananmen
Square, where the Great Hall
of People is located, has been
completely blocked for about
a month and also much of the
events in the past few days like
Wednesday’s presentation of
medals by Xi to 29 CPC mem-
bers who have made “out-
standing contributions to the
Party and the people”.
Journalists who are invited
to attend Thursday’s event are
required to get both the doses
All eyes will be on Xi Jinping on
the CPC’s centenary. BLOOMBERG
of Chinese covid-19 vaccines.
According to the Post, diplo-
mats who are invited to the
event can also attend if they
have had a foreign vaccine.
China, which had stopped
international travel to most of
the countries after the corona-
virus emerged in Wuhan in
December 2019 and became a
global pandemic, has con-
tained the spread of the virus
with stringent measures,
though it continued to report
a handful of cases every day in
different parts of the country.
Much of the focus would be
on Xi’s speech, considering
China faces global adversity
over the origins of the cov-
id-19, allegations of genocide
against Uygur Muslims in Xin-
jiang, massive crackdown in
Hong Kong to put down the
mass dissent, besides mur-
murs over his tenure.
The US, EU, Japan and a
host of western countries have
mounted a united campaign to
rein in China’s authoritarian
governance at home and its
attempts to forge a new global
order with multi-billion Belt
and Road Initiative (BRI).
Commenting on the CPC
centenary, Gu Su, a political
scientist at Nanjing University
in China, said that the 100th
anniversary might not yield
any major announcements.

Biden weighs order to check big biz Uber rival Didi prices IPO at $14 a share
FROM PAGE 1 The Biden administration tives to antitrust to ‘catalyze’ Corrie Driebusch been growing quickly heading
focus on big business power competition.” feedback@livemint.com into 2020, the pandemic
end of Mr. Obama’s term to comes amid growing bipartisan A similar argument in a slowed ridership. The value of

prompt significant action.
The Obama order directed
departments and agencies to
identify within 60 days limits to
competition in the industries
they oversee and propose new
rules aiding consumers and
small businesses. The Com-
merce Department moved to
increase competition for cable
and satellite set-top boxes, the
Agriculture Department
moved to give small poultry
farmers more protections
against big meatpackers, and
the Transportation Depart-
ment required airlines to more
clearly disclose baggage fees.
Mr. Trump reversed the
poultry and baggage-fee meas-
ures, and he didn’t make anti-
concentration policy a priority.
“I think the Obama order
worked well, but it came at the
end of the administration, and
these things take time,” said
Jason Furman, who chaired the
Obama Council of Economic
Advisers and helped craft and
implement the order. “With
more time to run, an executive
order now has the potential to
do quite a lot,” said Mr. Fur-
man, now a Harvard economics
professor.
support for tougher antitrust
measures, especially against
big technology companies such
as Amazon.com Inc., Apple
Inc.Facebook Inc. and Alpha-
bet Inc.’s Google. A House
committee last week approved
a far-reaching legislative pack-
age aimed at curbing the mar-
ket dominance of those tech
giants in a variety of ways, such
as prohibiting the big platforms
from favoring their own prod-
ucts or services. The measures
require passage from the full
House and the Senate to
become law.
Mr. Biden named a promi-
nent tech critic, Lina Khan, to
chair the Federal Trade Com-
mission, one of two federal
agencies that handle such
cases.
A federal judge on Monday
handed a setback to advocates
for limiting the power of big
tech companies, dismissing
antitrust lawsuits against Face-
book filed in December by the
federal government and 46
states. U.S. District Judge
James Boasberg in Washington
said the claims were “legally
insufficient” but gave the FTC
30 days to attempt to file an
There is growing support for
tougher antitrust measures
against big tech firms. REUTERS
amended lawsuit.
Progressive academics and
activists have in recent years
been promoting new
approaches to big business pol-
icy, and some have landed in
the Biden administration. Tim
Wu, a longtime advocate for
tougher antitrust enforcement,
is now an official at the White
House National Economic
Council handling technology
and competition policy, and
has been working on the execu-
tive order, according to people
familiar with the deliberations.
As a Columbia Law School
professor in 2017, he wrote an
article urging policy makers to
explore “regulatory alterna-
November 2020 report issued
by the Washington Center for
Equitable Growth—headed at
the time by Heather Boushey,
now a member of Mr. Biden’s
Council of Economic Advis-
ers—called on the new admin-
istration to “commit to a ‘whole
of government’ approach to
competition policy.” Mr. Wu
was one of the authors of that
report.
Advocates of that approach
say that regulators often focus
on promoting the companies
and industries they oversee,
and that it would make a differ-
ence for the White House to
direct them to do more to curb
the power of those companies.
“It’s helpful to have pressure
from the White House pushing
agencies to think more about
promoting competition when
that benefits the public, even
when it’s unwelcome to the
industry being regulated,” said
Carl Shapiro, an economist at
the University of California,
Berkeley who worked on anti-
trust policy in the Clinton and
Obama administrations.
Alex Leary contributed to this
article.
©2021 DOW JONES & COMPANY, INC.
C
hinese ride-hailing
goliath Didi Global Inc.
priced its IPO at $14 on
Tuesday afternoon, according
to people familiar with the
matter, setting the stage for
the company to begin trading
Wednesday, after it made a
lightning-fast pitch to poten-
tial investors.
The company sold more
stock than it had planned, and
the upsized deal raised about
$4.4 billion, a person familiar
with the matter said.
Given the upsizing, the pric-
ing would give Didi a market
capitalization of more than $67
billion, which would trail U.S.
ride-hailing firm Uber Tech-
nologies Inc.’s roughly $95 bil-
lion but land well ahead of Lyft
Inc., which sits at roughly $20
billion.
Didi’s fully diluted valua-
tion, which typically includes
restricted stock units, would
easily eclipse $70 billion at the
initial-public-offering price,
confirming earlier reports by
The Wall Street Journal.
Didi’s pricing comes just
three business days after it
launched its roadshow, mak-
ing it one of the shortest inves-
tor pitches for an initial public
offering in recent memory,
according to bankers, inves-
A file photo of Didi Chuxing CEO Cheng Wei (left) and president
Jean Liu attending the launch event of the D1 electric van. REUTERS
cing investors to focus on
Didi’s potential growth and
brush aside the possible politi-
cal risks around putting
money into U.S.-listed Chi-
nese companies. It will be
entering a U.S. IPO market
that has been white hot on the
whole, but less hospitable for
newly listed Chinese compa-
nies lately.
To help ensure the deal got
done, and one of the reasons
the company was able to speed
through its roadshow, Didi
lined up roughly one-third of
its IPO allo-
right now, according to people
familiar with the matter.
The American depositary
shares of Didi will trade on the
New York Stock Exchange
under the symbol DIDI. The
offering was led by Goldman
Sachs Group Inc., Morgan
Stanley and JPMorgan Chase
& Co.
Didi, which elbowed Uber
Technologies Inc. out of
China, is one of the most antic-
ipated Chinese companies to
list shares in the U.S. since
e-commerce giant Alibaba
G r o u p
all transactions on Didi’s plat-
form fell by nearly one-third in
the first three months of 2020
from a year before and didn’t
start growing again until the
second half of 2020.
Some fund managers and
analysts looking at Didi’s IPO
also noted that the optics of
owning large stakes in
U.S.-listed Chinese companies
are tricky right now with
heated rhetoric between the
two countries.
Late last year, the U.S.
House of Representatives
passed legislation that could
ban trading shares of Chinese
companies in three years over
concerns that their audits
aren’t sufficiently regulated.
Didi mentioned this possibility
as a risk factor in IPO docu-
ments.
It hasn’t stopped a handful
of Chinese companies from
tapping U.S. markets in recent
weeks, though, part of a hot
IPO summer. U.S.-listed com-
panies already have raised
more than $70 billion in tradi-
tional IPOs in 2021, on track
for a record, according to Dea-
logic. When including special-
purpose acquisition compa-
nies, U.S. IPO volumes already
have surpassed any other full
year on record, Dealogic data

Credit Suisse to rejig wealth management biz tors and lawyers.

Didi ran its roadshow
through round-the-clock vir-
cation in
advance.
Morgan
Holding
Ltd. did in
2014.
show.
Full Truck Alliance Co.,
whose app connects truck
tual meetings because of time- Stanley Investment Manage- It boasts an Apple Inc. exec- drivers to businesses that need
Bloomberg the unified business, one of the unit. currently splits private banking zone differences, according to ment and Temasek Holdings utive as a board member, and to transport goods in China,
feedback@livemint.com people said. Credit Suisse Combining the separate across three divisions catering people who participated. Ltd. are so-called anchor pre-IPO investors include made its U.S. stock-market
declined to comment. wealth management busi- to Switzerland, Asia and Company executives investors that planned to buy Tencent Holdings Ltd. and debut last week. In May, Chi-

C
redit Suisse Group AG is
weighing an overhaul of
its wealth management
business, consolidating several
private banking units to save
costs and centralize control as
the sprawling global bank seeks
to move past recent scandals.
The move would replace a
regional structure, where Asia
in particular currently reports
into a local leadership in the
private bank, according to peo-
ple with knowledge of the mat-
ter. The bank could consider
appointing a global wealth
management head to oversee
Even before the bank was nesses under global leadership Europe, Emerging Europe and focused on Didi’s scale and $1.25 billion of shares in the SoftBank Group Corp., which nese insurance technology
shaken by the Archegos Capital would mirror the structure at Latin America. potential for continuing IPO. also is a prominent backer of company Waterdrop Inc.
Management and rival UBS Group Helman Sitohang, Philipp growth, the people said. Didi decided to price the Uber. listed its shares on the New
Greensill Capital The move would AG. There, wealth Wehle and Andre Helfenstein The executives emphasized deal prudently, with a lower Some potential investors York Stock Exchange. Shares
scandals, chief replace a regional management is currently share responsibility that 70% of China’s population valuation than initial expecta- said it was surprising that Didi of both companies have fallen
executive officer structure, where led by co-heads for the bank’s wealth manage- will live in cities by 2030 and tions, said a person familiar planned to price its stock just below their IPO prices.
Thomas Gottstein Asia currently Iqbal Khan and ment operations, which have that few people own cars in with the matter. three days after starting its Last week, Chinese grocery-
was working to Tom Naratil. gained importance at the those cities—and far fewer Some people around the roadshow. In 2021, the average delivery company MissFresh
reports into a
reduce duplica- The move expense of the investment than in the U.S. deal had originally floated the roadshow lasted 8 days, Ltd. priced its American
tion and simplify local leadership in would roll back a bank. Credit Suisse’s new Didi argues it is in position possibility of raising roughly according to Dealogic. depositary shares at the low
its structure. He the private bank structure set up by Chairman Antonio Horta-Os- to capitalize on that, from $5 billion to $10 billion, this By pricing shares Tuesday, end of its targeted range, and
combined the former CEO orio told bankers at a recent shared mobility in general to person said. Didi’s stock will start trading the stock fell more than 25% in
investment bank Tidjane Thiam meeting in London that the its investments in electric Reasons for the scaleback before the July 4 holiday in the its first day of trading. It
and markets division in one of more than five years ago and firm has a great wealth man- vehicles and artificial intelli- included some recent Chinese U.S. and the Chinese Commu- remains below its IPO price.
his first overhauls after taking may reduce costs as well as agement business “with ancil- gence. IPOs in the U.S. trading poorly nist Party founding day on Joanne Chiu contributed to
over, while folding in some present a more unified lary services”, according to How the IPO trades hinges and a glut of U.S.-listed IPOs Thursday. this article.
Asian markets activity into that approach to clients. The lender people who heard the remarks. partly on the company convin- marketing shares to investors While the company had ©2021 DOW JONES & COMPANY, INC
LIVEMINT.COM NEWS WRAP THURSDAY, 1 JULY 2021
NEW DELHI 09

TWEETS OF THE DAY Ritesh Agarwal Gita Gopinath Kalpen Parekh

Christine Lagarde @riteshagar @GitaGopinath @KalpenParekh
@Lagarde Entrepreneurs should pur- Vaccine inequity is When interest rates are low,
As the pandemic sue an idea but not get mar- projected to persist we look for extra yields. 3 year
passes, we need to shift ried to it. It’s great to be into the future. This corporate bonds always earn
focus from preserving obsessive about an idea but needs to change. The more than 10 year sovereign.
the economy to trans- don’t be possessive if it’s not cost at $50bn is trivial Not the case for last 1 year.
forming it...we must working out. Keep relative to the Corporates are not issuing
redirect investment. experimenting. trillions gained bonds as GoI. This can change
.

‘Covaxin neutralizes SEEKING RESPITE India extends ban

Alpha, Delta variants’ on overseas flights

B T
harat Biotech’s covid-19 vaccine Covaxin he Indian government has extended the
generates antibodies that effectively ban on international commercial flights
neutralize the B.1.1.7 (Alpha) and B.1.617 till 31 July, the Directorate General of Civil
(Delta) variants of SARS-CoV-2, US-based Aviation (DGCA) said in a circular on
research body National Institutes of Health Wednesday. The ban on scheduled overseas
(NIH) said on Wednesday. Covaxin comprises a flights was to end on 30 June after a 15-month
disabled form of SARS-CoV-2 that cannot gap. Dedicated cargo flights and flights under
replicate but still stimulates the immune system bilateral air bubble pacts with select countries
to make antibodies against the virus, NIH said. will continue to operate, DGCA said. A bilateral
Published results from a Phase 2 trial of the air bubble is a mechanism to resume flights
vaccine indicate that it is “safe and well between India and other nations with
tolerated”, it said. preconditions during the pandemic. India
“Safety data from a Phase 3 trial of Covaxin in currently has bilateral air bubble agreement
25,800 participants in India will become with about 28 countries, including Afghanistan,
available later this year. Unpublished interim Bahrain, Bangladesh, Bhutan, Canada, Ethiopia,
results from the Phase 3 trial indicate that the France, Germany, Iraq, Japan, Kenya, Kuwait,
vaccine has 78% efficacy against symptomatic the Maldives, Nepal, the Netherlands, Nigeria,
disease, 100% efficacy against severe covid-19, Oman, Qatar, Rwanda, Seychelles, Tanzania,
including hospitalization, and 70% efficacy Ukraine, the UAE, the UK, Uzbekistan and the
against asymptomatic infection with SARS- US. RHIK KUNDU
CoV-2,” NIH said. NEETU CHANDRA SHARMA

Children enjoy a swim in a water canal in Delhi as a severe heat wave swept the national capital, with the mercury soaring to 43.5° C on Wednesday. PTI

Brazil suspends $320 mn deal The newly built facility is expected to generate

The mortgage lender invoked pledged shares. MINT

HDFC picks up 8.4%

with Bharat Biotech for Covaxin direct employment for nearly 1,200 people. MINT

FK opens grocery
Ansal Housing stake unit in Coimbatore

M
ortgage lender Housing Development
Finance Corporation Ltd (HDFC) has
acquired an 8.42% stake in Ansal
Housing Ltd by invoking pledged shares
following loan repayment defaults. “[We]
would like to inform you that the corporation
has invoked the pledge on certain shares of
H
omegrown e-commerce marketplace
The firm denies any wrongdoing in the contract for the vaccine, including the pricing
Flipkart on Wednesday said it has
launched grocery services in Coimbatore
with the opening of its first fulfilment centre in
Leroy Leo of a political storm following a report by the par- Committee (CPI) statement, the report said. the city to meet growing demand. Spread across
leory.d@livemint.com liamentary commission of inquiry on the Bolson- In a statement on Wednesday, Bharat Biotech an area of over 120,000 sq. ft, the newly built
NEW DELHI aro administration’s handling of the pandemic. said it had committed no wrong in the supply con- facility will generate direct employment for
Among major issues, the government’s role in tract for the covid vaccine, including the pricing, nearly 1,200 people, it said. This will be

B
Ansal Housing, for recovery of part
outstanding dues against loans availed by
pledgers from the corporation,” it said in a
regulatory filing late on Tuesday. Real estate
developer Ansal Housing had a turnover
₹116.93 crore for the year ended 31 March 2020
and its net worth as on that date was ₹214.12
crore. Ansal Housing’s website says it has
completed development projects of about 76
million square feet. In its FY20 annual report,
the company said HDFC issued a demand
notice under Section 13(2) of the Sarfaesi Act,
2002, for enforcement of secured assets
against the entire outstanding dues of ₹150.19
crore (including interest till 30 April 2019).
Balance outstanding as per the books as on 31
March 2019 is ₹14,7.7 crore, including interest
of ₹57 lakh, it added. STAFF WRITER
razil has suspended the contract for 20
million doses of Bharat Biotech Inter-
national’s Covaxin worth about $320
million following a controversy over
alleged irregularities in procurement
and pricing.
The suspension, effective Tuesday, follows a
recommendation by the Comptroller General of
the Union (CGU). However, the government led
by President Jair Bolsonaro refuted all allega-
tions. “According to CGU’s preliminary analysis,
there are no irregularities in the contract, but, due
to compliance, the @minsaude (Brazil’s health
ministry) opted to suspend the contract for fur-
ther analysis,” Brazil health minister Marcelo
Queiroga said on Twitter early Wednesday.
The contract between Bharat Biotech and Bra-
zil’s Precisa Medicamentos has been at the centre
procuring the vaccine has been under scrutiny, which was set at $15-20 for export markets. “The Flipkart’s second grocery facility in Tamil Nadu,
considering that the price, at $15 per dose, is the pricing of Covaxin has been clearly established at after Chennai, and ninth in the southern region.
highest for any vaccine, including those devel- $15-20 per dose for supplies to governments out- The Coimbatore centre is in line with Flipkart’s
oped by Pfizer Inc. side India. The pric- plans to strengthen its grocery supply chain
and AstraZeneca ing for Brazil has infrastructure across the country and add over
Plc, Brazil has paid The Brazilian government’s role in also been indicated 800,000 sq. ft of space through the
for so far. procuring Covaxin has been under at $15 per dose. Bha- establishment of five new fulfilment centres this
According to a
report by CNN, scrutiny, given the price, at $15 per rat Biotech has
received advance
year. In the initial stages, only a part of the
facility will be utilized, for which over 500
members of the par- dose, is the highest for any vaccine payments from sev- people will be hired. It will be the only Flipkart
liamentary panel eral other countries facility where 90% of the overall workforce will
said the agreed at the above price be women. MADHURIMA NANDY
upon price was around 1,000% higher than what points, with supplies in process, pending approv-
was initially quoted by the firm. Email exchanges als,” it said in a statement.
between Bharat Biotech and the ministry showed On 4 June, Covaxin was authorized by Brazil’s
an initial quoted price of $1.34 per dose, which drug regulator, Anvisa, and a Phase 3 trial com-
later rose to $15 per dose after the contract was prising 5,000 participants is being conducted by
WB okays $500 mn
negotiated, according to a Parliamentary Inquiry the Albert Einstein Institute at Sao Paulo.
for informal workers

T
he World Bank has approved a $500-
Hospitality sector’s million programme to support India’s
Amul hikes milk price by ₹2 per litre informal workforce, including gig
revival hit by wave 2 workers, to cope with the impact of the covid-19
pandemic and ecological disasters. The funds
of milk sold under the Amul Taaza, Gold, will strengthen the capability of the central and

T
he second wave of the coronavirus
pandemic has derailed the recovery of
the hospitality industry, which is now
expected to return to pre-covid levels only in
2023-24, according to ratings agency Icra Ltd.
Since mid-April, the industry has been affected
by pandemic-related lockdowns/restrictions
on mobility by various states and increased
wariness to travel due to fear of contagion, Icra
said in a statement. Consequently, recovery to
pre-covid levels has now been pushed back by
six-eight months from previous estimates. The
revenue recovery to pre-covid levels is
currently expected by FY24, it added. The
industry was impacted in the first quarter of the
The price hikes in Amul’s fresh milk category
come after a gap of a year-and-a-half. MINT
and Shakti variants across India, GCMMF
said in a statement. In Ahmedabad, the
price of Amul Gold will be ₹29 per 500 ml,
while Amul Taaza will cost ₹23 per 500 ml,
and Amul Shakti will cost ₹26 per 500ml.
The increase of ₹2 per litre translates
into 4% increase in maximum retail price
which is much lower than average food
inflation, GCMMF said in a statement.
Amul said the price hike is a result of
overall increase in cost of operations. “It is
worthwhile to note that in the last 1.5 years
Amul has not made any price revision in its
fresh milk category. Since then, due to rise
in costs of energy, packaging, logistics,
India meets two-thirds of its domestic edible oil
requirements through imports.
India cuts import
state governments in India to respond to the
difficulties faced by informal workers through a
resilient and coordinated social protection
system, the World Bank said.
India’s informal sector is struggling to tide
over the covid-induced economic slowdown
and income and job loss. “With the new
programme…states will get greater flexibility
and more money in their hands. Devolution of
funds under the 15th Finance Commission
recommendations will help states create a more
BLOOMBERG adaptive social protection system, provide
support to excluded groups and cater to context-
specific needs,” it added. PRASHANT K. NANDA

duties on palm oil

G
ongoing fiscal after two quarters of sequential
recovery witnessed in the third and fourth
quarter of the previous fiscal, it added. Icra
sector head and assistant vice-president
Vinutaa S. said the intensity of ‘covid 2.0’ has
been far steeper than the first and it has
temporarily put the brakes on the industry’s
ujarat Cooperative Milk Marketing
Federation (GCMMF)—which
markets and sells milk and milk
products under the Amul brand—is set to
raise price of fresh milk by ₹2 per litre pan-
India effective 1 July, citing higher input
costs. The revision will reflect in the price
overall cost of operation has increased.
Considering the rise in input costs, our
member unions have also increased
Microfinance firms’
T
farmers’ price in the range of ₹45 to ₹50 he Union government has cut duties on
per kg fat which is more than 6% over
previous year,” it said in its statement.
palm oil by 5% and lifted restrictions on
the import of refined palm oil to ease GLP grows by 11.9%
SUNEERA TANDON edible oil prices, which had more than doubled

recovery path”. PTI in April and May in the highest surge in prices in
years. India meets two-thirds of its domestic
edible oil requirements through imports. Palm
oil is one among several edible oils, such as
166 pieces of digital art sold on WazirX NFT marketplace in Jun soyabean oil, that India imports.
Recent increases in edible oil prices had
pinched household budgets hard.
T
he microfinance industry’s gross loan
portfolio (GLP) surged by 11.9% to
₹2,59,377 crore as on 31 March 2021 from
₹2,31,787 crore as on 31 March 2020, says a
report.The growth was driven by an addition of
400,000 borrowers during the pandemic-
struck 12-month period ending March 2021,

I
ndia’s biggest cryptocurrency exchange in terms of trading volume, WazirX On 18 June, the Hindustan Times had according to a report by Micrometer, released
has sold 166 pieces of digital art in the first month of the launch of its platform reported quoting an official that the by Microfinance Institutions Network. As on 31
for NFTs or non-fungible tokens, as more and more Indians try to ride the government was examining a proposal to cut March, the microfinance industry served 59.3
latest craze in the crypto world. The highest amount for an NFT on WazirX was edible oil duties to make it cheaper, even though million unique borrowers through 108.3 million
paid for an art depicting an abstract rendition of the fourth avatar of Vishnu by the government was averse to taking a “hasty loan accounts, the report said. It said 13 banks
Ishita Banerjee. The art was sold for 3,112 WRX (WazirX token) or ₹2,66,616. decision” on the matter. hold the largest share of the portfolio in
Banerjee is an Indian-origin artist based in Montreal, Canada. The next two Cutting import duties can lower prices microcredit with a total loan outstanding of
highest paid NFTs—Kali and Phoenix—also were by Banerjee that went for instantly. Edible oil is India’s third most high- ₹1,13,271 crore, which is 43.67% of total
₹2,49,743.36 and ₹2,42,019.34, respectively. The total sale value of NFTs on the value import, after crude oil and gold.India microcredit universe. Non-banking financial
platform till 29 June was 44,888 WRZ or ₹61.57 lakh. WazirX said that the typically imports from producers such as companies/microfinance institutions (NBFC-
number NFTs sold will see a big jump as it was running a flash sale on Malaysia, Indonesia Brazil, Argentina and MFIs) are the second largest provider of
Wednesday. The amount and the worth of digital art sold so far is significant as Russia. Currently, India’s levies on edible oil microcredit with a loan amount outstanding of
NFTs are entirely a new concept for Indians. WazirX’s NFT platform is still in imports ranges between 32.5% (for palm oil, ₹80,549 crore, accounting for 31.05% to total
the beta phase, meaning the company has limited the bandwidth in terms of An abstract rendition of the fourth avatar of Vishnu by artist Ishita the cheapest edible oil) and 35% for soyabean industry portfolio, the report showed. Small
the inflow of people and those white-listed to drop the NFTs. ABHINAV KAUL Banerjee was sold for the highest amount on the WazirX platform. oil. HT CORRESPONDENT finance banks had a share of 15.87%. PTI
10 THURSDAY, 1 JULY 2021
NEW DELHI LONG STORY LIVEMINT.COM

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

THE D2C WAVE

THAT IS SWEEPING INDIA
Drawn to quality and customization, affluent Indian consumers are falling in love with direct-to-consumer brands.

Co-founders of Sleepy Owl Ajai Thandi

(left) and Arman Sood. The coffee brand
relies on its formula of travel friendly and
easy-to-use DIY brew packs. PRADEEP GAUR

Saumya Tewari & Suneera Tandon are eyeing a $100 billion addressable mar- That’s a view widely held by other investors cafés and restaurants remained shut. The shopping. “D2C businesses which have the
mint
NEW DELHI ket by 2025, Avendus estimates. as well. The consumer shift towards digital SHORT beauty category also saw a high growth tra- patience to wait for another four to five
What is making investors so optimistic consumption, especially in a post-covid STORY jectory. Around 2014, people started years will not require offline distribution to

D
elhi-based art designer Nisha about the D2C market? world, is a positive change that is likely to watching more videos. This change played achieve scale. However, if a brand is fast
Agarwal calls herself an “Insta- One, the ecosystem needed to support help D2C brands, said Arun Iyer, founding natively in the beauty category where growing and wishes to capture the market,
gram shopper”. The 25-year- such brands is fast maturing. The first wave partner of Spring Marketing Capital. WHAT products can be shown in real time through offline is the route to take,” he said. “In
old picks her coffee, protein of D2C ventures came between 2012 and Spring, set up in 2019, is co-founded by video searching, unboxing and tutorials. 2021-22, offline distribution will be our
supplements and skincare 2014. Back in those days, brands would sell former Sequoia India CMO Raja Ganapa- Locked down, India’s young Beauty e-tailers such as Nykaa and Purplle strong focus area. We want to take our cur-
products from brands she comes across on primarily through a third-party platform thy, former DDB Mudra Group chief exec- turned to their smartphones to started legitimizing the model of selling rent distribution from 50 cities to over 100
the popular social media platform. such as Flipkart, FirstCry and Amazon. utive officer Vineet Gupta, and Iyer, the shop. The growing penetration of beauty products online. Nykaa also actively cities through modern trade, general trade
“Between the second and the impending However, over the course of the last five former chairman of Lowe Lintas. smartphones and other macro invested in influencer marketing to build and chemists,” he added.
third wave, I don’t think I’m stepping into years, platforms such as Shopify and Del- Spring provides marketing and brand- tailwinds are now inviting big awareness. Kaushik Mukherjee, Sugar Cosmetics’ Mukherjee admits that
a mall or a store anytime soon,” she said, hivery—which help brands enable digital ing services to more than 20 D2C brands. investment in the D2C market co-founder and COO at Sugar Cosmetics, D2C is tough to scale today through the
explaining her buying behaviour. “More- storefronts and solve for logistics—created Through its investment arm, it has also was running a beauty subscription service online-only approach. He explained that in
over, these brands have the products tai- an infrastructure backbone. Besides, the invested in two D2C startups—Juicy called Fab Bag in 2012, inspired by the suc- China, Perfect Diary has become number
lored to my requirements.” payments ecosystem (UPI and digital wal- Chemistry and Purplle. “Given the low bar- AND cess of the model in the West. Earlier this two beauty brand in just two years because
Agarwal is among millions of online lets) evolved, and so did social media mar- riers to entry, thanks to digital distribution, year, the cosmetics firm raised $21 million they have a payment system through
shoppers that are fuelling a frenzy of new- keting. D2C brands are more experimental and The ecosystem needed to in series C funding led by Elevation Capital, WeChat which India doesn’t. “In five years,
age brands that are trying to sell directly to All this has helped players across catego- more focused on their core purpose and support D2C brands is fast formerly SAIF Partners. “After three years if WhatsApp payments become that big,
the consumer (D2C), bypassing traditional ries to operate large D2C businesses and vision. This gives consumers a whole new maturing. Besides logistics, of running Fab Bag, we realized that the there’s chance of D2C players becoming
marketing and sales channels. You mostly scale up. But investors and entrepreneurs basket of offerings to choose from. Larger the payments ecosystem has frequency of consumption was far less in ₹200-₹300 crore brands. Currently, 90%
won’t find these brands in stores and you are also stoked about a new generation of companies and multinationals these days evolved, and so has social India than the West,” Mukherjee said. of retail shopping is offline. So, if a D2C
will rarely find a celebrity endorsing them, digital-first consumers. Like Nisha Agar- end up following the D2C brands which media marketing He saw a big need gap in the colour cos- player has an aspiration to become to
which means you are not footing the bill for wal. tend to be more innovative and risk-tak- metics market in India as make-up was become a top beauty brand, they will have
sales commissions or marketing spends. ing,” Iyer said. largely occasion based wear till 2015 but to explore offline retail,” he added. Sugar’s
The margins saved on these expenses allow NICHE BUYERS A case in point is Marico Ltd. Earlier this MOREOVER this trend was changing with digital plat- current retail presence is across 10,000
such brands to deliver high-quality prod-
ucts. They then add in a layer of sharp and D 2C brands discovered a vacuum. For
years, fast-moving consumer goods
digitally promoted narrative—around the (FMCG) firms have focused on making
year, Marico completed the acquisition of
male grooming brand Beardo, a move that
will allow the firm to capitalize on the niche
India has a growing young and
upwardly mobile population
forms exposing Indian customers to inter-
national trends and beauty gurus. “As make
up became more mainstream and a daily
stores, including 18 exclusive brand outlets
(EBO’s) and 32 kiosks, in over 130 cities.
Flatheads, a men’s casual footwear com-
quality of ingredients, or the community mass-market products pushed through D2C wave. Former Hindustan Unilever Ltd which seeks niche, high-quality wear ritual, people started looking for more pany, was set up by Utkarsh Biradar and
that the produce comes from or the family massive marketing spends, sales incentives (HUL) executive Shankar Prasad stumbled and customized products that matte products and nude shades which Ganesh Balakrishnan in November 2019.
that owns the business in a way that appeals and distribution muscle that reached every into the D2C category while trying to build are underserved by the existing brands didn’t offer. We launched Both of them are former internet entrepre-
to the sensibilities of an aware, quality-con- nook and cranny of the nation. The bulk of a beauty brand in India. As founder and traditional players matte and long-lasting products under the neurs. The brand primarily sells through its
scious customer. Throw in sustainable the country’s consumption base rests here CEO at Pureplay Skin Sciences that retails Sugar brand,” Mukherjee said. Five years own website, and also via Amazon and
packaging, customized products and with price points that are more affordable. brands such as Plum, Phy and BodyLovin, later, in FY21, the brand managed to clock AJIO. Balakrishnana said he is cognizant
prompt delivery and you have the recipe Nevertheless, India has a growing young Prasad said he liked the “measurability” of customer feedback,” he added. over ₹130 crore in annual revenue. that India’s e-commerce market is still
for the consumer trend sweeping India. In and upwardly mobile population as well. and “modular” nature of D2C. In other small, and brands need to be present off-
categories ranging from electronics, furni- The younger consumers are savvier, are in words, the model allows businesses, often PLUGGING THE GAPS THE OMNICHANNEL WAY line. He does small pop-ups in Bengaluru to
ture to personal care and lingerie and cof- sync with the latest global trends and
fee to cosmetics, D2C brands are shaking demand differentiated brands. They seek
things up. niche, high-quality and customized prod-
bootstrapped, to start small, measure and
scale up over time. It also means that pro-
moters can focus on the core product,
A jai Thandi moved back to India from
the United States in 2015. He noticed
that western markets had several D2C
W hile digital is driving majority of the help gain visibility. “We are already doing
sales for many D2C brands, a multi- road shows and experience centres. We
channel distribution—a mix of one’s own don’t have a fixed store yet. We will poten-
The pandemic has obviously helped. ucts that are underserved by the traditional while outsourcing so much of the opera- niche brands across categories. India had platform, marketplace and offline—will be tially get into the offline mode as well
Locked down, India’s young turned to their players. Using certain brands in their daily tions involving marketing, payments, digi- few. That’s how coffee brand Sleepy Owl essential to achieve scale, going ahead. sooner rather than later,” he said.
smartphones to shop. The growing pene- lives becomes a part of their identity. tal storefronts, logistics and others. For was conceived. Thandi, a former invest- That’s because offline distribution The success of the US-based private label
tration of smartphones Kanwaljit Singh, nearly every function, there is a plug-and- ment banker at JP Morgan, along with increases customer reach aggregator Thrasio has
and other macro tail- founder and managing play third-party offering available in the friends Arman Sood and Ashwajeet Singh, and expands the address- also led to VC money
winds are now inviting The consumer shift towards partner of Fireside Ven- market. started selling cold brew coffee on tap in able market. For Unlike offline retail where chasing similar busi-
big investment dollars. digital consumption, tures, said that India has a The measuring piece, which Kanwaljit June 2016. Most companies in India sell instance, India has over feedback takes longer, the nesses in India. Mensa
Since 2016, about 600 low penetration of Singh also alludes to, is particularly appeal- instant coffee powder—that’s convenient 10 million to 12 million Brands, launched by
such brands had raised especially in a post-covid branded businesses, pri- ing. Unlike in offline retail, where customer to make and is more accessible. “There was mom-pop stores that sell D2C model has a real-time former Myntra and Med-
only about $1.6 billion in world, is likely to help D2C marily because of the feedback comes once a week, D2C model no brand educating consumers on what goods of daily use. These feedback mechanism through life CEO Ananth Naraya-
funding, Avendus Capi- complexity of distribu- has a real time feedback mechanism their coffee is, how to make it and consume shops are the backbone nan, has raised $50 mil-
tal has estimated. How- brands which tend to be more tion and the mass market through reviews, offtake, page views, social it. We said if we can simplify this process of how some of the larg- reviews, offtake, page views, lion from investors
ever, 2021 could be the nature of the market. “In media activity and conversion rates—all and introduce new consumers to coffee, we est consumer goods firms including Norwest Ven-
turning point. Earlier innovative and risk-taking any category, no matter driven by this new generation of consum- will have a solid business at our disposal,” reach shoppers. It also and social media activity ture Partners and Accel.
this year, headphones how mainstream, you will ers. “Recently, we have launched Aloe vera Thandi told Mint. increases brand discov- Global Bees, a venture by
maker boAt raised $100 million from pri- end up with four to seven brands rather gel in a tube format which looked like an Sleepy Owl, backed by Rukam Capital ery and credibility, enables the touch-and- FirstCry, has raised $80 million from Soft-
vate equity firm Warburg Pincus at a valua- than 50 or 100 in any of the other global emulsion. However, consumers gave us a and DSG Consumer Partners, has found a feel factor for customers. bank, TPG and others. This week, 10 Club,
tion of $300 million. In March, skin and markets,” he said. “The white spaces exist,” feedback—they wanted a product which winning product formula in the form of Beauty brand Mamaearth started in a venture by serial entrepreneur Bhavna
hair care brand Juicy Chemistry raised $6.3 he added. looked like gel but packaged in a jar,” travel friendly and easy-to-use DIY (do it December 2015 and is looking to turn prof- Suresh, raised $40 million in the seed
million in Series A funding round led by The digital-first approach adopted by Prasad said. The company therefore yourself) brew packs. They are available for itable by 2021-end. Varun Alagh, round—among the largest seed round
Belgium-based investment firm Verlinvest. new firms, he held, make a lot of sense changed the formulation and packaging to both hot and cold coffee and in various fla- co-founder, said that although e-com- funding anywhere in South Asia. That
Plum, Sugar Cosmetics, MyGlamm, Oziva, because one can disrupt the market, under- relaunch the product. “Some of our best- vours. In retail, the hot brew packs are merce now reaches 30,000 pin codes in should tell us something about the dreams
Sleepy Owl, and Wakefit also raised ven- stand consumer response far more quickly, selling products like night gel for oily skin priced at ₹300 for 10 bags. The format India, it would still take time for the major- and dollars chasing this space.
ture money recently. Together, the brands experiment, and get a lot of consumer data. and acne treatment are created on the basis gained traction during the lockdown as ity of Indian consumers to adopt online saumya.t@livemint.com
LIVEMINT.COM MINT MONEY THURSDAY, 1 JULY 2021
NEW DELHI 11

Understand RIAs’ fees MINT50 SCHEMES TO INVEST IN

We have hand-picked 50 mutual funds for your portfolio that have jumped through hoops of good returns, low risk,
good portfolio hygiene and our own qualitative research. We have restricted the choice universe to 16 categories out

before seeking advice

of the total 32 and given you at least three options to pick from each. In equity, stay with your risk appetite. Match
your investment horizon to the debt fund category you pick. Pick eight to 10 schemes and revisit them every year

3-year return 5-year return 10-year return Corpus Expense

E Q U I T Y (%) (%) (%) (₹ cr) ratio (%)
LARGE-CAP (CORE)
HDFC Top 100 13.50 13.61 11.58 20,041 1.82
ICICI Prudential Bluechip 14.22 14.59 13.44 27,723 1.73
Mirae Asset Large Cap 16.00 16.53 15.74 25,721 1.62
Investment advisers may charge a low fee in the first year, and raise it later Nippon India Large Cap 12.67 13.95 13.14 10,480 1.78
NIFTY 100 TRI 15.27 15.68 12.80

Tinesh Bhasin Category average 14.08 13.75 12.69

tinesh.b@livemint.com
LARGE-AND-MID-CAP (CORE)

A
Invesco India Growth Opportunities 14.24 15.72 13.96 3,835 1.94
registered investment
Mirae Asset Emerging Bluechip 23.16 21.57 22.65 17,892 1.66
adviser (RIA) charging a
Principal Emerging Bluechip 16.36 17.94 19.14 2,730 2.03
higher fee need not necessa-
rily be better than others, and NIFTY LARGEMIDCAP 250 INDEX TRI 16.88 17.31 14.91
an RIA charging a lower fee Category average 15.60 15.33 14.60
need not necessarily be inferior.
As an investor, how do you then judge a FLEXI CAP (CORE)
financial planner based on the fees he/she Aditya Birla Sun Life Flexi Cap Fund 15.13 16.30 15.42 14,144 1.86
charges? “The fee structure may have dif- Kotak Flexi Cap Fund 14.67 15.23 15.50 35,955 1.60
ferent considerations. Someone might Parag Parikh Flexi Cap Fund 21.81 20.27 NA 10,276 2.04
charge over ₹1 lakh in the first year NIFTY 500 TRI 15.70 15.98 13.03
because he wants to deal only with a spe- Category average 15.29 15.39 14.27
cific category of clients. Another planner
may charge below ₹20,000 in the first MID-CAP (CORE)
year as he is in the process of building a cli- DSP Midcap 18.32 16.67 17.32 12,162 1.86
entele. Both could be equally good,” said
Kotak Emerging Equity 20.22 18.08 19.40 12,463 1.82
Suresh Sadagopan, founder of Ladder 7
L&T Midcap Fund 12.68 15.78 17.32 6,587 1.89
Financial Advisories and an RIA.
Most advisers believe that instead of NIFTY MIDCAP 150 INDEX TRI 18.37 18.70 16.81
focusing on the fee of an adviser, investors Category average 16.67 15.59 17.42
should shortlist a few and sign up with an
RIA whom they could trust the most.
“The initial trust is all that matters.
Sebi can decide RIAs cannot ask SMALL-CAP (SATELLITE)
Axis Small Cap Fund 25.22 20.04 NA 5,435 1.98
Investors need to open up entirely about on adviser’s fee for referral fee Nippon India Small Cap 20.46 21.58 22.18 14,318 1.77
their financial conditions. Only if they SBI Small Cap 22.23 22.44 23.13 8,664 1.97
trust an adviser, can they be forthcoming Purnartha Investment Advisers had iFast Financial India Private Ltd, a NIFTY SMALLCAP 250 INDEX TRI 15.25 14.55 13.73
about their issues,” said Chandan Singh challenged Sebi’s powers to cap the financial services platform, asked Category average 17.35 17.43 18.72
Padiyar, a Sebi-RIA. fees investment advisers can charge Sebi to clarify some aspects of its
When to sign up: There is no straight their clients in the Bombay High regulations concerning registered VALUE/CONTRA (SATELLITE)
answer to when in life one should avail the Court. investment advisers (RIAs).
Invesco India Contra 15.70 17.44 15.95 7,033 1.83
services of a financial planner. It depends The company also contested that It asked the regulator if an adviser
Sebi regulating fees is unconstitu- L&T India Value 13.99 14.61 16.86 7,183 1.86
on the knowledge, understanding and the refers clients to another party, can
time a person can spend on planning and tional. It breaches the advisers’ fun- he charge a referral fee? For exam- Tata Equity PE 9.90 14.26 14.26 4,706 1.97
managing his/her finances. damental right to practice a profes- ple, can an adviser refer the client to NIFTY 500 TRI 15.70 15.98 13.03
Understand the fee structure: The sion or business of choice. a chartered accountant or an over- Category average 13.72 14.72 14.53
Securities and Exchange Board of India The court ruled that Sebi Act seas adviser?
(Sebi) has capped the fees advisers can allows the regulator to prescribe According to Sebi, RIA regulations FOCUSED (SATELLITE)
charge their clients. If an RIA has a flat fee fees that investment advisers can don’t allow advisers to avail of such Axis Focused 25 Fund 14.81 18.09 NA 16,540 1.83
structure, he can charge up to ₹1.25 lakh. charge. It also said that such regula- referral fees. “An IA can undertake an SBI Focused Equity 17.41 17.06 17.34 15,879 1.79
If the fee is based on the percentage of the tions do not breach fundamental activity of providing investment Motilal Oswal Focused 25 Fund 14.66 15.26 NA 1,732 2.19
assets under advice (AUA), it can be a max- rights. They are essential measures advice for a consideration, and the NIFTY 500 TRI 15.70 15.98 13.03
imum of 2.5%. for the protection of investors and same cannot be construed to
Category average 14.83 14.97 13.23
Most advisers follow different fee struc- the development and regulations of include referral fees as envisaged (in
tures depending on the client. The fee is the securities market. the query),” the regulator said. ELSS (CORE)
higher based on the client profile, com- Aditya Birla Sun Life Tax Relief 96 8.96 12.60 13.90 13,950 1.81
plexity and the efforts that they would
IDFC Tax Advantage 15.91 17.46 16.11 3,271 1.97
need to put in to create a financial plan and and goes higher depending on the com- cally, charge a lower amount than the first
to fine-tune it. plexity of the portfolio. year. Invesco India Tax Plan 14.84 15.88 15.37 1,669 2.11
The lowest fee that Padiyar charges cli- Some planners charge a fee only for the Padiyar, for example, charges 50% of Tata India Tax Savings 14.54 14.52 NA 2,705 1.99
ent is ₹15,000 in the first year. “The base financial plan initially, which can be the first year’s fee. Sadagopan, in turn, NIFTY 500 TRI 15.70 15.98 13.03
fee is for bachelors. It is higher for married between ₹15,000 and ₹25,000. If an charges a percentage of the AUA. Category average 13.89 14.13 14.09
couples where one spouse is working and investor wants to engage them and help in Investors must be cautious about the
even higher where the husband and wife implementation of the plan, the fee is fees of RIAs, as it is possible that an adviser H Y B R I D
are both working. In such cases, the fee higher. charges a low fee in the first year, but from AGGRESSIVE HYBRID (CORE)
can be up to ₹36,000 in the first year,” he From the second year onwards, advisers the second, raises it much higher as he is Canara Robeco Equity Hybrid 15.84 14.82 13.99 5,327 1.97
said. either charge a flat fee or a percentage of charging a percentage of the AUA. There- DSP Equity & Bond 15.83 14.27 12.83 6,769 1.87
Fees for Sadagopan starts at ₹40,000 AUA. Those who charge a flat fee, typi- fore, check this before signing up.
SBI Equity Hybrid 14.36 13.46 14.13 39,977 1.62
CRISIL HYBRID 35+65 - AGGRESSIVE INDEX 14.73 14.01 12.03
Category average 12.77 12.32 12.35

Invest after AIFs can augment portfolios CONSERVATIVE HYBRID (SATELLITE)

Canara Robeco Conservative Hybrid 11.18 9.30 9.20 569 1.93

working out but are not very tax-efficient BNP Paribas Conservative
IDFC Regular Savings Fund
7.76
7.64
7.69
7.37
8.61
8.76
411
181
2.12
2.15

financial Abhinav Kaul

CRISIL HYBRID 85+15 - CONSERVATIVE INDEX
Category average
11.23
7.69
9.87
7.65
9.60
8.80

situation abhinav.kaul@livemint.com
I N T E R N A T I O N A L
Franklin India Feeder - Franklin U.S. Opp.
#
25.24 24.45 NA 3,163 1.55

I
nvestors’ search for a buffer ICICI Prudential Global Stable Equity 12.22 9.46 NA 101 1.38
against economic uncertain-
ASK MINT ICICI Prudential US Bluechip Equity 21.70 19.70 NA 1,516 2.32
m ties and muted returns from
MUTUAL FUNDS S&P 500 INTL. TOTAL RETURN NET INDEX na na na
stock and bond markets over
the past few years have pushed Category average 15.02 14.10 8.46
Srikanth Meenakshi them to high-yield strategies
1-year return 3-year return 5-year return Corpus Expense
offered by alternative invest- D E B T (%) (%) (%) (₹ cr) ratio (%)
I got a job last year, and my ment funds (AIFs). Conse-
SHORT DURATION (CORE)
annual income is about ₹4 quently, assets under manage-
lakh. Where can I start ment (AUM) of these funds IDFC Bond Fund - Short Term 4.64 8.35 7.51 13,776 0.77
investing so that I get a good have grown to more than ₹4.5 L&T Short Term Bond 4.33 8.06 7.44 5,630 0.75
return with less risk? Please trillion as of March 2021 against SBI Short Term Debt 4.59 8.01 7.45 24,127 0.84
advise. ₹360 crore in December 2012, CRISIL SHORT TERM BOND FUND INDEX 5.80 8.74 7.94
—Ranjay Shankar according to data available with Category average 5.26 7.71 7.28
the Securities and Exchange
ISTOCK
Before you decide where to Board of India (Sebi). CORPORATE BOND (CORE)
invest, or even start investing, Experts say that alternatives startups or social venture the income is taxed as business Aditya Birla Sun Life Corporate Bond 6.39 9.30 8.45 24,669 0.46
you need to work out your per- are meant to augment inves- funds, infrastructure funds and income, meaning that the tax ICICI Prudential Corporate Bond 6.01 8.70 8.00 19,871 0.58
sonal financial situation. Deter- tors’ current portfolio. SME (small and medium enter- paid is, typically, at the highest Kotak Corporate Bond 5.67 8.28 8.05 9,646 0.67
mine how much you can afford “Typically, fund managers of prise) funds, among others. tax slab, including a surcharge
CRISIL CORPORATE BOND COMPOSITE INDEX 7.20 9.59 8.74
to save and invest on a monthly AIFs bring more experience Category II funds are typically of 42.7%.
basis. Also, ensure that you and have an entrepreneurial private equity funds and debt When it comes to costs, AIFs Category average 5.92 8.90 8.05
have sufficient protection in bent compared with regular funds. tend to be costlier as there is no
1-month 3-month 1-year return Corpus Expense
the form of insurance policies mutual fund managers. As a Category III funds employ regulatory limit here unlike LIQUID (FACILITATOR) return (%) return (%) (%) (₹ cr) ratio (%)
(term life and health) and an result, AIF managers bring bet- diverse or complex trading mutual funds.
DSP Liquidity 0.28 0.80 3.17 10,408 0.24
emergency fund (worth 4-6 ter management and innova- strategies and may employ lev- Investors should keep in
IDFC Cash 0.28 0.81 3.14 9,326 0.19
months of your salary) in place. tion for investors,” said Nitin erage, including through mind that by nature, AIFs carry
Once you have secured Rao, CEO, InCred Wealth. investment in listed or unlisted more risk, can have a lock-in Kotak Liquid 0.27 0.82 3.16 30,283 0.32
these, if you are saving for the Multiple factors are driving derivatives. and require more time for the CRISIL LIQUID FUND INDEX 0.30 0.90 3.71
very long term, you can start demand for AIFs. First, AIFs In terms of strategy to play Category average 0.28 0.81 3.19
investing in an equity index offer a non-traditional invest- investment, all When it comes to out. They are suit-
fund and a small and mid-cap ment avenue, as they allow categories of AIFs, costs, AIFs tend able for those ULTRA-SHORT (FACILITATOR)
fund and keep it going (with investors to explore various except angel to be costlier as whose risk pro- Kotak Savings 0.26 0.84 3.72 11,759 0.77
periodic increases). If you are strategies other than long-only, funds, require a there is no files align with the L&T Ultra Short Term 0.26 0.85 3.46 2,720 0.39
investing for a shorter duration such as long-short, hybrid or minimum invest- expectations that SBI Magnum Ultra Short Duration 0.28 0.87 3.82 12,864 0.49
(3-5 years), you would need to other high-yield strategies.
regulatory limit
ment of ₹1 crore. they are willing to
be more cautious and go with a The second factor is differ- In terms of taxa- here unlike wait for the theme
CRISIL ULTRA SHORT TERM DEBT INDEX 0.34 1.10 4.56

small allocation to an equity entiation, as AIFs are more tai- tion, investors mutual funds to play out and
Category average 0.38 1.03 4.04

index fund and the rest to a debt
fund or a recurring deposit.
Srikanth Meenakshi is
co-founder, Primeinvestor.
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
lor-made for more sophisti- should keep in carry the risk
LOW DURATION (FACILITATOR)
cated investors looking for cer- mind that AIFs are until such time.
tain differentiated strategies. not as tax-efficient as mutual “When looking at overall Canara Robeco Savings 0.22 0.86 3.75 1,600 0.60
The third factor is concen- funds. The taxation rules also asset allocation, in the case of IDFC Low Duration 0.22 1.04 4.19 9,575 0.51
trated solutions, as unlike differ for the three categories. AIFs, the overall portfolio allo- SBI Magnum Low Duration 0.27 0.95 4.01 13,286 0.95
mutual funds, AIFs offer con- Category I and II AIFs are cation to the underlying asset is CRISIL LOW DURATION DEBT INDEX 0.32 1.21 5.12
centrated solutions and usually pass-through vehicles, mean- what needs to be considered, Category average 0.27 1.09 4.89
have a basket of 25-30 stocks ing investors have to pay tax on however, it would be prudent
comprising the portfolio. their earnings and the fund not to go beyond 5% exposure Returns as on 28 June 2021; Expense ratio and Corpus data as of May 2021; #For satellite portfolio; NA: Not applicable because the fund has not completed the requisite period;
na: Data was not available; Growth option in regular plans has been used; Data up to 31 March 2019 considered for evaluation; Opp: Opportunities; INTL: International.
There are three categories of does not pay any tax. in a single name non-tradi- Data and analysis from Quantix by CRISIL Research Compiled by Sunita Abraham
AIFs. Category I AIFs invest in In case of Category III funds, tional AIF,” said Rao.
12 THURSDAY, 1 JULY 2021
NEW DELHI VIEWS LIVEMINT.COM

OUR VIEW MY VIEW | OTHER SPHERE

AP

Two big gaps in our vaccination

programme that need attention
Our rural drive to immunize people is hampered by capacity constraints and demand weaknesses

nuance. Capacity assessment and plan-
ning at the aggregate level—national,
state or even the district level—is of little
value. What matters is planning and
building capacity where our people live.
Lots of vaccinators and a good cold chain
in a district or taluka town are of no use
for distant villages. Only the right level of
detail—for each village and mohalla—can
ANURAG BEHAR ensure population coverage.
is CEO of Azim Premji Foundation The public health system’s facility
closest to villages is called a ‘subcentre’.
It is an extension of a PHC, or primary
health centre. Most PHCs have about 5-8
First, the data entry requirements for
covid are onerous. Even in places where
network connectivity is smooth and an
adequate device available, it takes 5-15
minutes to verify and enter the data for
one individual. Subcentres do not have
staff for data entry. This is done by some-
one who would otherwise be conducting
vaccinations. But the reality of poor
internet connectivity across vast swathes
of the country increases the cycle time
for data entry, or forces paper-based
record-keeping for uploading later into
the online system at the PHC. None of

A political party driven

such subcentres. The PHC is the first these are trivial issues. They deprive
point of in-patient care and access to a health personnel of significant time,

M
y column a fortnight ago docu- doctor for most people, but subcentres reducing capacity.
mented my observations from hold the key to any vaccination pro- The second is a problem with the basic
nine weeks of travelling across gramme. They are closest to habitations operating model in many places. Vacci-

by power and little else the country from April to mid-June. I

feared that the pandemic’s reprieve was
temporary. The past two weeks of fur-
ther travel have only fuelled my fears.
and designed to be staffed with people
trained to give intramuscular injections,
among other things. Enlisting private
hospitals and clinics for additional
nations in these parts of the country are
only happening at subcentres. People
are expected to come to where the
vaccine is—a ‘people-to-vaccine model’.
As lockdowns across the country have capacity is good, but is of little use out- An alternate model would have the sub-
eased, people are returning to earlier side cities and large towns. centre staff go to villages or mohallas and
A century of the Chinese Communist Party’s existence calls for global reflection. Its flexibility patterns of behaviour. This is not Each subcentre is supposed to serve a hold vaccination camps—a ‘vaccine-to-
unexpected. They have been restrained population of 5,000. In practice, the people model’. Unsurprisingly, the dif-
on ideology may have spelt economic success, but its geopolitical designs are a clear menace mostly by force instead of being number served varies, as does the count ference in the efficacy of the two models
informed, enlisted and engaged in a of villages or urban wards, with their dis- is stark. Only a meticulously planned
campaign against a pandemic that will tances from the subcentre varying from vaccine-to-people model can cover our
be under control only once the vast 2km to 10km. India has over 150,000 entire population and help deal with

I
t’s not unusual for a political party to sur-
vive for a century after its formation, but
to thrive without a popular mandate is. On
1 July, the Chinese Communist Party (CCP)
celebrates its 100th anniversary. It cap-
tured power under Mao Tse-tung in 1949
after a bloody civil war that saw the ruling
Kuomintang led by Chiang Kai-Shek exiled to
Taiwan, an island province that has governed
itself since but Beijing has vowed to annex.
The CCP remains at the helm of affairs in the
so-called People’s Republic of China, with little
if any threat to its absolute dominance. The
murmurs of dissonance that do surface now and
then are put down firmly. Yet, China’s emer-
gence as the world’s biggest economy looks
inevitable and the power it has come to wield
attracts awe. For how long, though, can a party
riven with deep ideological contradictions sus-
tain itself? It has been over four decades since
Deng Xiaoping switched from Mao’s legacy of
hard communism to “socialism with Chinese
characteristics”. This entailed a brazen embrace
of capitalism. Justified back then as a new tool
decade before the collapse of the Soviet Union majority of Indians are fully vaccinated. subcentres. The capacity can only be demand side issues. This is what we must
exposed the flaws of statism. China’s subse- The fact that India’s vaccination pro- determined by details at the subcentre move to nationwide. It would require
gramme has been hamstrung by a short level—the actual presence of trained additional personnel, and facilities such
quent success in lifting millions out of poverty supply of vaccines has dominated public personnel, the time available for covid as transportation, camp site material,
gave the party an aura of competence. Instead discourse; this requires no elaboration. vaccinations without compromising and more. Many states appear to have
of abolishing private assets, as once envisaged, But insufficient attention is being paid other public health programmes and given little thought to this, let alone take
the CCP has packed its ranks with billionaires. to two other equally important matters. emergency services, refrigeration facili- necessary action.
Tencent founder Ma Huateng, with a net worth First, the capacity of our health system ties at the PHC and sufficiency of ice Our lack of vaccination capacity will
to vaccinate people (simply ‘capacity’, boxes for distribution to subcentres, soon hobble our campaign to tackle the
placed at $75 billion this January, is a member henceforth). Second, public demand transportation adequacy for the move- pandemic. The disadvantaged and vul-
of parliament. So is Lei Jun, founder of Xiaomi. for vaccination, including the issue of ment of ice boxes, and more. That this nerable will be hit hardest. The shortage
President Xi Jinping is known to spout Maoist vaccine hesitancy (‘demand’) . system has been effective in handling of vaccines has obscured the need for
sayings, but he seldom displays any memory of Given the vaccine shortage, state gov- polio and the Bacille Calmette-Guerin capacity planning and addressing other
the private pursuit of wealth being a means to ernments responsible for vaccination (BCG) vaccines is no assurance on covid executional inadequacies. As the supply
have been preoccupied with procuring vaccine capacity because polio is an oral of vaccines improves, these other gaps
an end. Even Beijing’s arm-twisting of entre- doses rather than focusing on their dose given to children, not an injection, will become apparent. And the far more
preneurs, as seen in its recent actions against capacity to vaccinate and on demand. and the BCG injection is only given to intractable demand-related issues, like
Alibaba’s outspoken chief Jack Ma, is little more Some states are doing better, but on the infants; moreover, the numbers handled vaccine hesitancy, will become glaring.
than a cynical exertion of authority. whole the situation should alarm us. in any given period are much smaller. And then I fear the draconian measures
There is scant evidence that the CCP under Xi The matter of capacity is currently There are two other significant issues that may be adopted to force people.
plagued by oversimplification and lack of that determine our effective capacity. More on that in my next column.
has aims beyond the use and abuse of power to
perpetuate its hegemony. A regime that sub-
jects its people to 24/7 surveillance, assigns
ratings for how well they stay in line and herds
minorities into “reform camps” cannot claim
to be welfarist. If Beijing’s repression has wor-
sened with China’s economic advancement, www.livemint.com New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Saturday, July 2, 2011 Vol.5 No.156 `5.00 16
12 PAGES
+ 20 PAGES LOUNGE + 4 MARKETS PAGES

to achieve old ends, it has generated enough so too has its zest to play the regional bully. In Q&A:Aromar Revi’s vision for
a new university >4

It’s my job to save

INTERNATIONAL: US treasury secretary
Geithner toys with quitting >12

riches to induce amnesia on that score. Today’s
the guise of aiding the development of other EXCLUSIVE PARTNER
SIMPLY ECONOMICS: Why China doesn’t want
its currency to appreciate >10
ECONOMY: Manufacturing expands at slowest
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China is a byword for inequality, its people live nations, it has sought to entrap them in debt. In SENSEX 18,762.80 æ 83.07

EXIT DEAL
NIFTY 5,627.2 æ 20.2 DOLLAR `44.57 æ `0.13 EURO `64.64 æ `0.04 GOLD `21,630 æ `335

CBI files case QUICK EDIT

OIL $110.60 æ $2.42

patients, to look after

Essar to sell against former Paying the

repressed lives, and its ruling party’s longevity its quest to dominate Asia, it has muzzled voices stake to
DGH officials
U TPAL B HASKAR
Persians
B Y S AHIL M AKKAR

·························
NEW DELHI

T
&

he Central Bureau of Investi-

gation (CBI) on Friday con-
is a cause for reflection, not celebration. in Hong Kong, flexed muscle in the South China Vodafone
ducted searches at 10 places in
Delhi, Dehradun, Noida and
Mumbai after registering a crimi-
I ran has threatened to
halt oil supplies to
India in August if New
Delhi doesn’t resolve the
payments row between
them, to appear strong,
the two countries.
Is it a threat to be
concerned about? No and

but people forget

Vodafone is set to take
full control as Essar
nal case against former officials
CAR SALES HIT SPEED BUMP of the Directorate General of Hy-
New models have given little relief to the sluggish automobile industry, drocarbons (DGH) on Thursday
already struggling with high fuel prices and rising lending rates. for allegedly favouring Houston-
of the court case over the tax de- based GX Technology (GXT) in
yes. India buys roughly
12-13% of its oil from
Iran. There are other
sources to which it can
switch in case Teheran

There are many admirers of the CCP’s acro- Sea and tried to grab Indian territory in the
exits from the mobile
business; tax withheld
on transaction
mand of more than $2 billion Domestic auto sales carrying out “seismic survey in refuses to play ball—
contested by Vodafone and relat- lieu of personal favours”, the in- Iran’s bete noire Saudi
ed to the acquisition of its stake CAR June Growth (year-on-year) vestigative agency said. Arabia being one. And
in the Indian company in 2007. Honda Siel Cars 3,455 -24% “A contract was awarded to Iran too needs us: there
The case is to be heard in the Su- the private company for con- are not many countries
preme Court next month. Tata Motors 21,993 -21% ducting seismic speculative sur- that want to openly do

we are human too.

“This is not the end of the road Maruti 70,020 -3.8% vey on nomination basis at an business with it. Oil
B Y S NEHA S HAH, for Essar, but the beginning,” exorbitant cost and this caused alone is not a factor in
Hyundai 30,402 11.1%
N IKHIL K ANEKAL & said a senior executive at the Es- huge financial loss to the govern- the equation.
33,772

batic ideology. At their core, what separates Himalayas by force. Its border aggression last
R EMYA N AIR
·························
MUMBAI/NEW DELHI
sar Group. “Now we will be able Mahindra & Mahindra 29% ment,” CBI said in a press re- But India should pay
to focus and develop other busi- lease in Delhi on Friday. attention to what the
Skoda 2,611 69%
ness more effectively and effi- Of the eight persons who have Persians are trying to say.

E nding a four-year relation-
ship, Vodafone Group Plc,
the world’s largest mobile
telephony company by subscrib-
ers, on Friday agreed to purchase
ciently,” the executive said, re- Toyota 12,034 94% been named in the first informa- Iran has been an
questing anonymity. Volkswagen 5,397 162% tion report (FIR), seven belong to all-weather friend to
Another Essar official said the DGH and the eighth is a GXT ex- India, one that does not
money will be used to repay debt ecutive. The private firm is also make one set of promises
at ECML and ETHL, raised to TWO-WHEELERS June Growth named in the FIR, according to in private and denies

This pandemic is
Indian partner Essar Group’s buy steel plants, refineries and Honda Motorcycle 148,937 2% the CBI press release. their existence in public.

classic communism from true capitalism is a year in Ladakh was an example of its disregard
33% stake in Vodafone Essar Ltd
(VEL), India’s third largest mo-
bile telephony company by sub-
scribers, for $5.46 billion
(`24,352 crore) in cash, $460
million more that what was orig-
inally envisaged.
The deal marks the exit of the
steel-to-oil conglomerate Essar
coal mines overseas. DGH is a government body For the sake of preserving
The Newbury, England-based TVS 155,296 11% that manages the petroleum re- these ties, the payments
mobile company will own 74% of Mahindra 2 Wheelers 11,748 16% sources of the country and problem should be
VEL directly through subsidiar- comes under the purview of the resolved quickly. India
Hero Honda 512,244 20%
ies. The remaining 26% will be petroleum ministry. and Iran have shared
controlled by local shareholders. Yamaha 36,595 30% Searches were also carried out geopolitical interests that
“It is expected that 1.35% of at the residence of former direc- require cooperation and
the shares in VEL will be trans- Source: Companies Full story on pg3 not conflict.
ferred to an Indian investor to TURN TO PAGE 2®

divide over collective versus individual owner- for diplomacy as a way to resolve disputes. Yet,
GRAPHIC BY AHMED RAZA KHAN; PHOTOGRAPH BY PRADEEP GAUR/MINT
Group from the mobile telepho- ensure Vodafone’s continued

ny business.
The sale is part of a 2007
agreement between the two and
obliged Vodafone to pay at least
$5 billion for the stake.
Vodafone purchased a 22.03%
stake from Essar Communica-
tions (Mauritius) Ltd (ECML) for
ship of property. Mao wanted state control of there is an even bigger reason for us to be wary
$3.32 billion on Friday. The re-
maining 10.97% from Indian firm
ETHL Communications Hold-
also breaking us
compliance with Indian foreign
direct investment rules,” the re-
lease said. An overseas mobile
firm cannot own more than 74% Madras HC SLOWDOWN FEARS
in an Indian company.
The transaction will give
Vodafone complete control of its
rules in favour Billboards blank as advertisers
of Ram in
Indian operations as Essar will
cut spending on outdoor media
give up board representation.
Other stakeholders of the
company are Analjit Singh, ‘Hindu’ dispute PRADEEP GAUR/MINT

ings Ltd (ECHL) will be bought
for $1.26 billion by 15 February
2012.
“The total cash outflow from
healthcare workers.
founder and chairman of the B Y A NUSHREE C HANDRAN &
Max India group; Infrastructure B Y A MRITHA G OURI S HAH
Development Finance Co. Ltd; V ENKETAKRISHNAN & ·························
and Asim Ghosh, former chief A NUPAMA C HANDRASEKARAN MUMBAI

Vodafone, including cash al-

ready paid for the first tranche of
executive officer of VEL.
“It is to be seen how the regu-
·························
CHENNAI
T he stretch of highway that
leads from Mumbai airport

all means of production. However, a chance of China. Backed by its tech-enabled military
ECML’s shareholding in VEL, is
expected to be approximately
$5.46 billion,” said a Vodafone
release. That figure is inclusive of
withholding tax.
“The stake buyout is in line
with the strategy of streamlining
its shareholding in markets
where it has minority holdings.
latory environment pans out in
India and whether the company
will have to pay taxes and 2G
(second-generation) spectrum
fees with retrospective effect,”
said Crawshaw of S&P. “In a
market where the company is
not profitable, it is a major con-
cern.” Crawshaw expects the
T he Madras high court
ruled in favour of The Hin-
du’s editor-in-chief N. Ram on
Friday, helping prospects for a
reshuffle that seeks to remove
founding family members from
the 132-year-old newspaper’s
editorial team.
“We are happy about the or-
and sweeps across the Mahim
causeway is usually studded
with colourful billboards adver-
tising the latest television serial,
film, insurance product or mu-
tual fund. But of late, the drive
into town has been getting a lit-
tle drab—many of those bill-
boards are blank, as fears of a

encounter with the profit motive—or with the heft, it has revealed a will to supplant liberal
Wherever it has not been possi-
ble,” such as in Poland and
France, Vodafone “has given up
its minority stake, unlike in In-
dia,” said James Crawshaw, a tel-
ecom analyst with Standard and
Poor’s (S&P) in London.
firm to further bolster its position
by weighing opportunities aris-
ing out of any consolidation in
the telecom sector in India.
While Vodafone has decided
to withhold tax of $880 million
on its purchase of shares in VEL
der that vindicates our posi-
tion,” Ram told Mint over the
telephone. He added that there
was no clear timeline yet for
the editorial changes.
His brother N. Ravi, who had
been next in line to take over
slowdown appear to take hold.
The outdoor media industry
has seen a 30-40% slump, with
fewer takers for billboards in Lean period: The outdoor media industry has seen a 30-40% slump, with
the major metros such as Mum- fewer takers for billboards in major metros such as Mumbai and Delhi.
bai and Delhi. An extended
cricket season, lower advertis- channels. Last year though, the ond is usually active only be-

V I K R A MJE E T SI N G H
According to the company re- from the two Essar companies, after Ram’s retirement, indi- ing from telecom and financial out-of-home (OOH) industry tween September and March.
lease, a net payment of $3.32 bil- the firm maintained that the cated that the high court ruling services firms, and new norms was a beneficiary of the There’s been a nearly 80%

superior results of farming done privately democracy globally with its peculiar notions of
lion is being made for the 22%
stake in VEL held by ECML after
withholding tax of $880 million.
“Whilst Vodafone and Essar
continue to believe that no tax is
due on this transfer, it was
viewed as prudent to pay with-
holding tax on a ‘without’ preju-
dice basis,” VEL said in an
transaction was not taxable.
The group withheld the tax as
a precautionary measure, antici-
pating a tax demand from the In-
dian authorities, said advisers fa-
miliar with the deal.
The Essar firms selling stakes
in VEL are incorporated in Mau-
ritius, with which India has a
may be appealed at the Su-
preme Court before the next
board meeting, scheduled for
20 July.
“Another resolution needs to
be passed to implement the
proposed changes in manage-
ment, but any such action is
still subject to the CLB’s (Com-
speeding up the payment of sport—the Indian Premier pullback from telecom opera-
service tax have led to poor League (IPL) advertised heavily tors, said Mandeep Malhotra,
hoarding rentals. The slump on billboards. president, Mudra Max OOH, a
also comes amid the monsoon Contributing to the down- part of the Mudra Group.
season, with the rains acting as turn, two big users of outdoor Although OOH is said to be
a dampener. media—telecom and financial less than 8% of the total adver-
According to Yash Gala, services—have been holding tising market in India, it was ex-
managing director of Zenith back their spends. Telecom pected to grow in double digits.
Outdoors Pvt. Ltd, a part of the constitutes 20% of all outdoor Instead, the billboard industry

rather than collectively—led Deng to adopt a stable world order. The CCP is not a party of
emailed statement.
This is significant in the light
Mint is also available for R9.50 with
Hindustan Times under a combo offer
double-tax avoidance treaty.
Vodafone believes this makes
the deal non-taxable in India.
TURN TO PAGE 2®
pany Law Board) final deci- Gala Group, the last few advertising, and financial serv- may see revenue decline by at
sion, which will be heard end months have been exceptional- ices 10-15%. While the first has least 10-15%.
of August,” said Ravi. ly bad, because of a long cricket been troubled by the investiga- The advertising and media
season and ad budgets having tion into second-generation
TURN TO PAGE 3® been diverted to television spectrum allocation, the sec- TURN TO PAGE 2®

market mechanisms. That was more than a the proletariat. Its designs should be resisted.

MY VIEW | MUSING MACRO

China’s Communist Party will struggle for legitimacy

invasion. The KMT was finally defeated in
AJIT RANADE 1949, partly due to internal dissension and
rampant corruption, and was driven to Tai-
wan. The two decades until 1949 had been
quite bloody and thousands of CCP mem-
bers lost their lives. At one point, the CCP
counter the Soviet Union. One of Mao’s lieu- the establishment of a Western-style Deng maxim asked of it. It is asserting its
tenants from the civil war and fellow soldier democracy. Indeed, in the first 10 years of power openly—visible in its technology and
during the Long March was Deng Xiaoping. the Deng era, there were signs of protests military buildup, on the high seas, in cyber
After Mao’s death, came the Deng era, and from students and intellectuals. Forces warfare and in space. Its aggression against
he is rightfully called the architect of mod- clamouring for political freedoms seemed India in the Himalayas leaves very little
ern China. He took charge in 1978 and led a on the ascendant. But this was again misread doubt about its hegemonic intentions.

T
he Chinese Communist Party (CCP) is
100 years old today. In terms of mem-
bership, with 91 million, it is the
world’s second largest political party,
behind the Bharatiya Janata Party of India.
At its founding in 1921, it had only a handful
of members. Its founders were two intellec-
tuals, Chen Duxiu and Li Dazhao, who were
and its Red Army were on the brink of anni- radical departure from—if not an outright by the West, as it was only a power struggle The West may cry foul over its misuse of
hilation during the Chinese civil war. That reversal of—Maoist eco- within the CCP’s politburo. World Trade Organization membership and
juncture led to the great Long March, which nomic ideology, towards a The brutal suppression of its pursuit of export-led growth with a sup-
was actually a long military tactical retreat to market-based economy The party may the Tiananmen Square pressed currency. But it is China that is now
the countryside during 1934-35. It was with flexible prices. The protest in 1989 left no the global champion of free trade, as the
around this time that Mao Zedong rose in transformation of the Chi- find it harder doubt about the party’s West puts up protectionist barriers.
prominence, first as commander-in-chief of nese economy is simply supremacy. The CCP But China does have vulnerabilities. Its
the Red Army (later christened as People’s unparalleled in modern
to deliver the would brook no dissent on ageing society foreshadows a slowdown in

is chief economist at Aditya

inspired by the ideas of Marx and Lenin, and
the Bolshevik revolution. The party was
Birla Group. actively assisted by the Communist Party of
the Soviet Union, which was then engaged in
the export of the Soviet socialist revolution
to all parts of the world. In its first 28 years,
the struggling CCP was engaged in wars
against two adversaries: Japanese imperial-
ists, who sought to colonize China, and the
Kuomintang (KMT), the ruling political
party founded in 1919 by Sun Yat Sen.
Between 1927 and 1949, the KMT and the
CCP fought an intermittent civil war for con-
trol and power to rule over all of China. In
between, the two parties were also allies in
their joint war against Japan’s imperialist
Liberation Army or PLA), and then as the
CCP’s chairman in 1945. From 1949, when
the People’s Republic of China proclaimed
independence, till his death in 1976, Mao
was the ‘great helmsman’, a leader who, like
his party, wielded absolute power.
This is not a place to recount the full
details of the Mao era, but suffice to say that
despite two major disastrous policies, the
Great Leap Forward that left millions dead
and the Cultural Revolution, Mao’s influ-
ence remains undiminished to this day. The
wily Henry Kissinger of the US and his boss
in the White House, Richard Nixon, both
diehard anti-communists, thought it fit to
pursue rapprochement with Mao as a way to
history. In just four dec-
ades, China’s per-capita
rapid economic the political system. In
that, there was continuity
growth and productivity. The debt overhang
on its economy is a crushing burden. Growing
income rose 70 times, and
hundreds of millions of its
growth and and consistency from Mao
to Deng and China’s cur-
friction between the state and the private sec-
tor does not bode well for future investment.
rural poor joined the ranks jobs needed to rent President Xi Jinping. Its clampdown in Hong Kong is indicative of
of its urban and industrial The Xi era has seen some its sustained suppression of free speech. Such
middle class. The West satisfy people of Deng’s maxims modu- repression sits uneasily with the proliferation
poured in a cumulative lated and even jettisoned. of social media. The state or CCP cannot con-
$2.7 trillion of foreign There is no longer a term tinue to generate more growth and employ-
investment into its special economic zones limit for the supreme leader and the impor- ment as a source of its legitimacy. The rise of
(SEZ) and reaped handsome rewards. The tance of collective leadership has been China is seen by the world not as benign, but
SEZs had an almost inverted regime com- downplayed. Xi has consolidated his power, as a major cause of anxiety. Its role in the
pared to the mainland, with flexible labour and after a long time, the top man in China health havoc caused by coronavirus, which
laws and protection of capitalists. The West holds all three key positions as head of state, originated in Wuhan, is a taint that cannot be
was lulled into thinking that economic the party and also the military. China is no shrugged off. As it enters its second century,
reforms would lead to political reforms and longer “biding its time, by lying low”, as a the CCP has a lot to chew on.
LIVEMINT.COM VIEWS THURSDAY, 1 JULY 2021
NEW DELHI 13

GUEST VIEW M I N T C U R AT O R

El Salvador’s adoption of bitcoin The going may get tougher for

Walmart and Amazon in India
as legal tender is a wake-up call Stringent rules proposed for e-com reveal a push for protectionism

We should offer alternatives that reduce the cost of remittances to dissuade the use of dangerously volatile cryptocurrencies

ISTOCKPHOTO

ANDY MUKHERJEE
is a Bloomberg Opinion columnist covering
industrial companies and financial services.

PAOLA SUBACCHI
is professor of international economics at the
University of London’s Queen Mary Global
Policy Institute, and author of ‘The Cost of Free
Money’

T
he list of what e-commerce platforms
aren’t allowed to do in India has been
growing for some time, but the latest

M
any regard the market for bit-
coin—the world’s leading crypto-
currency—as a game of winners
and losers played out among
hedge funds, amateur investors,
geeks, and criminals. The huge
risk inherent in a highly volatile anonymous digital
currency is best left to those who understand the
game well, or who don’t really care because they
can mitigate the risk or absorb any losses. But bit-
coin recently has become more attractive for
countries and individuals with limited access to
conventional payment systems—that is, those least
equipped to manage the underlying risk.
In June 2021, El Salvador became the world’s
first country to adopt bitcoin as legal tender,
enacting legislation that takes effect in September.
This means that bitcoin can be used to pay for
goods and services throughout the country, and
recipients are legally obliged to accept it.
Salvadorans are not new to this type of monetary
experiment. The US dollar became legal tender in
El Salvador in 2001 and is the currency used in
domestic transactions. At that time, the govern-
ment of President Francisco Flores allowed the
dollar to circulate freely alongside the national
currency, the colón, at a fixed exchange rate.
Dollar advocates argued that the expected
benefits of macroeconomic stability would out-
weigh El Salvador’s loss of economic sovereignty,
monetary independence, and even seigniorage—
the difference between the cost of producing coins
and banknotes and their face value. However, pur-
chasing power suddenly plummeted and left the
economy even more dependent on remittances,
which have averaged about 20% of gross domestic
product per year over the past two decades.
Using bitcoin as legal tender will exacerbate the
monetary constraints that dollarization revealed—
notably, the lack of an independent macroeco-
nomic institutional framework around which to
shape domestic policies. Moreover, bitcoin is
much more volatile than the dollar. Between 8
June and 15 June, its value swung between $32,462
and $40,993, and in the period from 15 May to
15 June, it ranged from $34,259 to $49,304. Such
wide fluctuations—and the fact that they are
entirely market-driven, with no scope for policy-
makers to manage the swings—make bitcoin
an unsuitable instrument for macroeconomic
stabilization.
El Salvador’s president, Nayib Bukele, tweeted
that bitcoin will facilitate remittance transfers and
considerably reduce transaction costs. The fees
that migrants must pay to send their money home
are scandalously high, despite many calls by the
United Nations and the G20 to reduce them.
According to the World Bank, the average global
cost of sending $200 internationally is approxi-
mately $13, or 6.5%, well above the Sustainable
Development Goal target of 3%.
Nonetheless, in 2020, low- and middle-income
countries received remittances of $540 billion—
only slightly less than the 2019 total of $548 billion,
and much larger than these countries’ inflows of
foreign direct investment ($259 billion in 2020)
and overseas development assistance ($179 billion
in 2020). Reducing the fees to 2% could increase
remittances by as much as $16 billion per year.
The large but globally fragmented remittance
business relies on electronic transfers through
commercial banks’ payment systems, and banks
charge hefty fees for the use of this infrastructure
and the benefit of a safe and reliable international
network. But high fees are not the only issue. Many
migrants don’t have a bank account in the country
where they work, and their families back home
may also be among the 1.7 billion unbanked people
worldwide. Furthermore, some international
migrants may need to transfer money to countries
that either are not integrated into the international
payment system or are restricted in their ability
to receive cross-border transfers—for example,
Syria or Cuba.
Bukele is right about the need to challenge this
system, including by providing low-cost and low-
risk alternatives. But bitcoin is the wrong tool.
Yes, it allows people to transfer value directly and
globally without costly third-party intermediation.
But its volatility makes it at best an asset—and an
extremely risky store of value—rather than a
means of exchange. The risk of a sudden drop in its
price means that migrants and their families back
home can never be sure about the amount of
money transferred.
Rather than dismiss El Salvador’s bitcoin
adoption as just another example of the crypto
craze, we should reflect on why many people
around the world are willing to embrace crypto-
currencies for non-speculative purposes. Perhaps
the answer lies in the fact that the current interna-
tional financial system serves them either poorly
or not at all.
Innovations in digital money, such as the M-Pesa
mobile money service in Africa, have made signifi-
cant inroads into many developing countries’
payment systems. But more needs to be done to
provide the infrastructure and regulatory frame-
works to support digital money. For now, though,
the terrain remains patchy.
Coordinated cross-border policies are urgently
needed to ensure that bitcoin and its variants don’t
do more harm than good in developing countries.
Unless both the public and private sectors embrace
critical reforms and make basic banking services
available to all at low costs, people and govern-
ments will increasingly be attracted by bitcoin and
other low-cost, high-risk, and murky alternatives
to traditional banking. ©2021/PROJECT SYNDICATE
prohibition on flash sales has gone too far. If
the rules get implemented, the entire busi-
ness model of Amazon.com and Walmart
could come unstuck before their invest-
ments in the Indian market can grow to a
rewarding size. While a lofty public purpose
can always be tacked on as an afterthought
to draconian regulations, in this case the fig
leaf is thinner than usual. It’s hard to see
how “significantly reduced prices, high dis-
counts or any other such promotions or
attractive offers” for a period of time “limit
customer choice, increase prices and pre-
vent a level playing field.”
The driving spirit behind the consumer
affairs ministry’s new draft guidelines, cur-
rently open for comment, may lie else-
where. In the garb of checking manipulative
behaviour by online marketplaces, India is
effectively muzzling the two leading US
players. It’s also tilting the balance in favour
of offline commerce, and away from digital
startups that are India’s best bet for rebuild-
ing the pandemic-ravaged economy.
Amazon and Walmart are dominant, but
in a tiny corner. Overall e-commerce is only
4% of India’s $800 billion retail market. Yet
they’re supposedly exerting such a baleful
influence on the natural flow of goods that
they must be reined in by, in effect, instruct-
ing Amazon not to sell its Made in India Fire
TV Sticks—a media streaming device—on
its local e-com website. Ditto for Walmart.
Its wholesale operation in the country may
not be able to hawk a shirt on Flipkart, the
online marketplace it acquired for $16 bil-
lion in 2018. And this is when it is trying
hard to blend in. It plans to triple exports
from India to $10 billion by 2027, and will
float Flipkart in the local equity market.
The Flipkart purchase was Walmart’s
most expensive. Soon after the deal, Reli-
ance announced its own ambitious e-com
plan for linking small independent stores
with a telecom network that now has 420
million-plus subscribers. Reliance is also
India’s largest operator of physical stores.
Piyush Goyal, the commerce minister,
says that arrogant US firms have blatantly
flouted Indian laws. Amazon and Walmart-
Flipkart have denied charges of abuse of
market power. Twitter, apparently in breach
of rules framed for information technology
intermediaries, [has been accused of arro-
gance too]. WhatsApp has gone to court
after being asked to make messages on the
platform traceable, arguing that this will
destroy its promise of end-to-end encryp-
tion and have a chilling effect on privacy and
New rules could throw Amazon’s Indian
business model in jeopardy MINT
free speech. The squeeze on US content
firms [seems guided by] political calcula-
tions: Twitter’s offices were visited by the
police after it branded a tweet by one of the
ruling party leaders as “manipulated media”.
The targeting of US e-com players is not
as obvious, though even [this looks like] a
political project. Safeguarding the interest
of consumers or mom-and-pop stores is
how the curbs are marketed to the public,
though they [could eventually] put India
behind something resembling China’s
Great Firewall. Local tycoons would domi-
nate the market, and while foreign players
won’t be completely shunned, they may
only be able to join the party as junior part-
ners, supplying technology and capital.
Achieving this objective with a stringent
foreign direct investment policy is some-
thing the government tried two years ago.
Walmart and Amazon dodged the blow. The
time for more of the same has passed. To
avoid an open confrontation with the Biden
administration, it may be more fruitful to
twist existing Indian laws out of shape. For
instance, it isn’t the remit of India’s con-
sumer protection law to check if the many
sellers taking online orders for phones dur-
ing festive-season discount sales are thinly
capitalized post boxes. A lot of them came
into existence to circumvent a previous pol-
icy that e-com marketplaces, or their relat-
ed-party sellers, can’t control more than
25% of the inventory on offer. If they’re still
violating the spirit of that, it’s not a problem
of consumer protection, but an anti-compe-
tition issue, and should be probed accord-
ingly. It’s not e-com players that have devas-
tated small Indian retailers, but covid. For
small shopkeepers to [recover], they need
partners who’ll help them go digital. Arbi-
trary rule-making gets in the way. A startup
earning a small cut on each online sale will
struggle to run a marketplace that has to
refund 100% of a disgruntled customer’s
purchase price, especially when no such
straitjacket applies to physical retailers.
But then, consumers and small shop-
keepers are just convenient excuses. Behind
the smokescreen of shielding their inter-
ests, India is slowly creating a protectionist
economy that will benefit only a select
group of firms. After sinking billions of dol-
lars into India, Amazon and Walmart are
still not on that shortlist. Maybe they will
never be. ©BLOOMBERG

GUEST VIEW

Act against the silent epidemic that’s stalking doctors

With mounting deaths, long hours, low
KISHORE KUMAR pay, lack of resources and the risk of con-
tracting covid, India’s healthcare workers
also face a mental health crisis of their own.
No sleep and irregular meals for extended
periods without adequate protection add to
ive strategies for the phenomenon. Health-
care workers have also lost loved ones to
covid. There are times when people blame
doctors for their loss. However, few seem to
consider the stress that doctors are under as
they fight new strains of the virus.
attacked by a policeman in Kerala. Doctors
serving in covid wards have been brutally
assaulted in Bihar, West Bengal, Assam,
Uttar Pradesh and Karnataka. A few weeks
ago, a paediatrician was attacked in Tarikere
and an intensive care physician was attacked
policies must focus on increased spending on
healthcare and improving hospital infra-
structure, while violence should be punisha-
ble under appropriately stiffened laws. Aus-
tralia saw a spike in violence against health-
care workers in the late 1990s and early

E
very year, 1 July is observed as National
Doctors’ Day in India to express grati-
tude and acknowledge the dedication
and commitment of doctors towards our
society. The observance honours legendary
physician and West Bengal’s second chief
minister Dr Bidhan Chandra Roy, whose
birth and death anniversaries coincide on
the stress caused by the fear of infecting
loved ones back at home, not to speak of the
risk of dying, even as one bears the trauma of
losing patients no matter what you do.
Rough treatment by hospital administrators
and the fear of being fired are also part of
these day-to-day realities.
Large numbers of junior doctors have
India needs clear-cut guidelines for burn- at a private hospital in Bengaluru. 2000s. In response, its government made
out management. Personal Over 80% of India’s doc- such acts punishable with 12 years of jail.
interventions, such as tors are stressed and 75% Such violence virtually vanished. Stricter
meditation, the use of cog- Cases of stress deal with abuse and assault, laws and their enforcement could safeguard
nitive-behavioural tech- as per an Indian Medical health professionals in India too. All institu-
niques and the develop- induced burnout Association report. tions should also have standard operating
ment of better inter-per- What may seem like procedures to tackle cases of violence.
sonal and work-related
and violence impulsive outbursts of vio- Patients need to be educated that doctors

is founder-chairman and
neonatologist, Cloudnine
Group of Hospitals, Bengaluru,
and a healthcare delivery
graduate from Harvard
Business School.
this date. As a practising neonatologist, I am
deeply concerned about two issues affecting
the medical fraternity: physician burnout
and violence against doctors.
I have always sought an answer to the ques-
tion of why doctors are held especially
answerable to society. Any adversity that
relates to health routinely gets blamed on the
medical community’s alleged negligence.
Why? Specific cases of negligence may exist,
but is this not true of professionals who work
for, say, the judiciary, administration and
banking sector? As a result of the covid pan-
demic, doctors, nurses, care givers and para-
medics are facing an unprecedented work-
load in overstretched health facilities.
been left in a limbo, unable to qualify as doc-
tors but expected to work as such, raising
their chances of suffering a burnout even
before they start their career. Physician
burnout costs the US healthcare industry an
estimated $4.6 billion a year, a pre-pan-
demic number that’s thought to have dou-
bled after covid. No such estimates are avail-
able for India. While burnout is increasingly
being recognized globally as a major con-
cern, the pandemic’s closing of borders and
strict city as well as area-wise lockdowns
have affected healthcare workers and their
families just as much, causing negative psy-
chological effects. It is important to recog-
nize burnout at the earliest and use prevent-
skills could help doctors at
an individual level. But the
against doctors
appreciation of others for
their work also goes a long
have reached
way and must not be over- worrisome
looked. In addition, vari-
ous interventions at the proportions
organizational level, such
as a regular interface with
physicians, should be planned. We also
require a national study on the mental state
of medical workers in the country.
The violence that doctors often face is
unpardonable. Such violence is not new, but
has grown to epidemic proportions in recent
times.Recently, an on-duty doctor was
lence by patients or their
attendants actually reflects
the country’s chronic
neglect of public health.
Meagre state spending on
healthcare and the rising
cost of treatment have cre-
ated much dissonance
among people. Private
health services meet nearly 80% of our
needs, and can be costly for most.
Healthcare in India is complicated. We
need a strong medical model. Hospitals need
to raise capacity, achieve global standards
and ensure that enough doctors and para-
medical staff are employed. Government
practise medicine as best they can and can-
not be held responsible for every death. Our
people also need to realize that costs can rise
with more advanced forms of treatment.
Medical schools should have modules on
patient-doctor relations in their curricula.
All communication needs to be character-
ized by mutual empathy. Doctors in training
need to be taught how to handle potentially
violent situations with tact. Without an over-
haul of our healthcare system and the politi-
cal will to protect health workers, doctors
may be too overwrought to do their jobs well.
This would be a disaster that compounds our
covid crisis. It could even make a third wave
worse than the second.
14 THURSDAY, 1 JULY 2021
NEW DELHI
Agha Shahid Ali: A poet
beyond boundaries
Manan Kapoor’s new
biography of Agha
Shahid Ali celebrates the
complex genius and
enduring legacy of the
Kashmiri-American poet
Somak Ghoshal
somak.g@livemint.com
T
he tombstone that marks the
final resting place of poet Agha
Shahid Ali (1949-2001) in Massa-
chusetts, US, bears an epitaph
from one of his well-known lyr-
ics, “In Arabic”: They ask me to tell them what
Shahid means: Listen, Listen: / It means “the
beloved” in Persian, “witness” in Arabic. The cou-
plet not only beautifully sums up the essence of
Ali’s life, but also his enduring afterlife. His leg-
acy, as a pre-eminent English poet of Indian ori-
gin, continues to prosper among generations of
readers, especially in Kashmir, to whose troub-
les Ali bore unflinching witness.
In A Map of Longings, his critical biography of
the poet, Manan Kapoor heroically rises to the
task of capturing Ali’s complex genius, inflected
by a wide range of influences: a liberal Muslim
upbringing, a voracious appetite for reading, an
abiding love for the ghazal, bold embrace of his
homosexuality, life as an academic in the US
and, above all, his unshaken love for his home-
land, Kashmir, riven by decades of conflict and
unrest during his lifetime.
For a relatively slim volume, A Map of Long-
ings doesn’t lack in ambition, especially since
Kapoor couldn’t travel to the US for a crucial leg
of his research after being denied a visa. Plenty
of details, vividly recounted by Ali’s friends,
family, former students, and colleagues, as well
as remote rummaging through archives, cohere
to form a richly variegated por-
trait of the poet, whose reputa-
tion remains as tall as the Hima-
layas, even two decades after his
death.
Kapoor devotes the opening
pages of the book to emphasise
the inextricably secular and syn-
cretic traditions Ali soaked up
from his Kashmiri father Agha
Ashraf Ali and mother Sufia
Agha, who was born and grew
up in Uttar Pradesh. From being
dressed as Lord Krishna as a tod-
dler during Janmashtami festi-
val to enjoying Persian poetry,
Ali acquired a foundation that
was, as Kapoor says, “completely
South Asian and completely cosmopolitan”.
The point may feel stressed several times over,
but seems necessary in our current political
environment, marked by provincial proclivities.
The cultural cacophony that Ali inherited and
cherished extended to music. An ardent
admirer of Begum Akhtar, Ali was devastated by
her untimely death in 1974, as much as when he
lost his mother to brain cancer, which would
also kill him a few years later.
Although he was not a musician himself, Ali
became a spiritual shagrid (disciple) of Akhtar,
who inspired some of his most memorable
poems. He absorbed her inimitable pathos and
tragic gravitas, infusing his poetry with these
feelings, especially the ghazal in English (on
which Kapoor has an excellent chapter). Ali’s
early affinity with Urdu poetry also led him to
A children’s book about a forgotten army mission
‘India To The Rescue’
recreates the twists and
turns of India’s Operation
Cactus to avert a coup in
the Maldives
Avantika Bhuyan
avantika.bhuyan@htlive.com
D
oes history have to be boring? How
do you explain an army’s role to
children? These are some of the
questions that a new children’s book,
India To The Rescue, seeks to answer. Told
in an adventure-mystery style, it is full
of twists and turns, taking young
readers, aged seven and above,
on secret flights, and a ride on
a tiny boat through the inky
darkness.
It is based on journalist
Sushant Singh’s Operation
Cactus: Mission Impossible
in the Maldives, which
uses reports and testimo-
nies to reconstruct India’s
largely forgotten inter-
vention to avert a coup
in the island country in
BUSINESS OF LIFE
Agha Shahid Ali (left) with Begum Akhtar and his close friend Saleem Kidwai; (below) Manan Kapoor
translate Faiz Ahmad Faiz, a project he threw
himself into with characteristic passion.
For all his daring experiments with the gha-
zal, which often overshadows the discussions of
his protean talent, Ali was deeply influenced by
a wide variety of poetic styles and accents. From
the delicately calibrated rhymes of T.S. Eliot to
the politically charged verses of Palestinian poet
Mahmoud Darwish (another writer Ali trans-
lated), echoes of diverse voices ring through his
lines, connecting the two worlds—Kashmir and
the US—that he inhabited seamlessly. If his ties
with the home he had left informed iconic col-
lections like The Half-Inch Himalayas and The
Country Without A Post Office,
Ali also internalised the arid
landscape of Tucson in Arizona,
where he worked for a while, the
urbane rhythm of Amherst,
where he taught, and the bustle
of New York, where he spent his
final years.
After his arrival in the US for
graduate studies, Ali believed he
“grew as a poet, a lover and a
reader”. The first and last of
these personas were enriched
by the many friendships he cul-
tivated, with American poet
James Merrill for instance, who
was instrumental in Ali’s turn to
formalism, especially his
attempts with inelastic forms like the canzone
and villanelle. But this disciplined move
towards hard-nosed formalist poetry didn’t take
away the mystical quality of Ali’s verse.
Amitav Ghosh, who became close to him in his
later years, recalls Ali giving one of two answers
to explain the provenance of his poems. “One
was: ‘I was playing with this line of Merrill’s’—the
usual poet-speak. Another response was, ‘It
came to me in a dream’, or ‘I had a vision’.”
As an inveterately gregarious presence, Ali
entertained lavishly, cooked for friends and visi-
tors, and was always the soul of a gathering.
Kapoor captures his puckish humour and irre-
pressible derring-do through endearing anec-
dotes and remembrances—one mentions Ali
writing to Jawaharlal Nehru as an adolescent
and being invited to Teen Murti Bhavan. These
November 1988.
The book, co-authored by children’s
writer Shruthi Rao and published by Jug-
gernaut Books, hails the operation as one
of the country’s quickest, boldest and
most successful missions.
“This account was originally written by
Sushant Singh, who researched the story
and interviewed many of the characters in
it. I’ve adapted it, adding a few extra dia-
logues and dramatizing some scenes. But
be warned—every detail in this book is
real!” writes Rao in the introduction.
India To the Rescue breaks the mission
down in an engaging way, starting from
the basics: where is the Maldives on the
world map. It has interesting nuggets
about the island of Male, which, it
describes, is just twice the size of Benga-
luru’s famous Lalbagh garden, or a
little larger than five times the size
of Delhi’s Lodi Gardens, and a
background to the Indian mission.
The chapters are supplemented
with illustrations, maps and boxes
to make the story accessible to
young readers—or to adults
who don’t want to wade
through tomes.
And yet, the book
doesn’t shy away from
complex questions,
such as does a coun- The book narrates the Indian Army’s exploits in the Maldives for children
CULTURE LIVEMINT.COM
A still from Questlove’s ‘Summer of Soul’.
A film that
dives into US’
musical history
The 1969 Harlem Cultural Festival is
revived in a new documentary
Agencies
feedback@livemint.com
I
n the summer of 1969, the same summer as Woodstock, some
of the biggest musical acts of the time, like Stevie Wonder, B.B.
King, Nina Simone, Sly & the Family Stone, Mahalia Jackson
COURTESY SALEEM KIDWAI and the Fifth Dimension all performed in New York’s Mount
Morris Park. Woodstock was immortalized. The Harlem Cultural
Festival forgotten. But the event is given new light in the must-
see documentary Summer of Soul (...Or When the Revolution Could
Not Be Televised).
Over the course six weekends, more than 300,000 people
would pass through what is now Marcus Garvey Park in New York
City to watch the marquee names on the schedule, with the Black
Panthers providing security. It was as much a music festival as it
was a sociopolitical statement. The brainchild of a born pro-
moter, Tony Lawrence, the free summer concert series was spon-
sored by Maxwell Coffee and covered by the local news. General
Foods even had the foresight to commission someone to film the
festival, hiring television veteran Hal Tulchin for the task. The
money was so short, they faced the stage west to save on lighting.
By the end, Tulchin, who died in 2017, had amassed more than
40 hours of footage of the performances, the massive crowds, the
political speeches and the comedy acts. After some failed efforts
to sell or do something with it, even with its new nickname “Black
Woodstock,” it sat in a basement, largely unseen, for five decades
—that is until Ahmir “Questlove” Thompson dusted it off and
made out of it a strong contender for the best documentary of the
year.
In Summer of Soul, Questlove pulls off an extraordinary feat,
turning these endless hours of footage into not just an exciting
concert film, but an elegant and essential historical document of
a particularly fraught and powerful moment in history. It is some-
times celebratory, sometimes critical and never less than utterly
nuances of Ali’s personality are not often appar- hypothesis around—that we are the very things engaging. And although it’s Questlove’s first film, you’d never
ent from his chiselled verse, and they certainly we create—isn’t necessarily an act of erasure; know it.
enriched the “lover” in him too. rather, it can be an empowering gesture, open- It is extraordinary how much information, history and music
Kapoor spends relatively less time delineat- ing up possibilities, refusing to be circum- is packed into these two hours. The film delves into the various
ing Ali’s sexuality and romantic life—partly, as scribed by autobiography. Ali’s sense of the per- musical styles of the moment, explores how some artists like Ste-
he explains, due to the lack of verifiable trails of son he was, the poet he became, and the ideas he vie Wonder and David Ruffin were evolving, points to the diver-
Ali’s lovers. Ali, too, didn’t enjoy being pigeon- believed in are far too interconnected to be sity of Harlem itself, goes into the Puerto Rican influence (with
holed into catego- explained away by commentary from Lin-Manuel Miranda), and doesn’t shy away
ries like “gay one facet of his from addressing the divisions within the community (including
poet”, though he For all his daring experiments personality. an emotional Marilyn McCoo talking about the criticisms that the
was not secretive with the ghazal, Ali was deeply With the aca- Fifth Dimension had a “white sound”). There also a clear setting
about his inclina- demic industry out of the local and national sociopolitical context. And somehow
tions. The one influenced by a wide variety of that has prolifer- nothing feels like it’s getting the short shrift.
marker of identity poetic styles and accents ated around Ali’s Questlove and editor Joshua L Pearson also know when to fea-
he didn’t seem to work in the last ture a full performance as opposed to just clips for ultimate
mind was “Kash- two decades, sea- impact and storytelling. There’s a reason Nina Simone and “Back-
miri-American poet”—a phrase capacious soned scholars may not be unfamiliar with some lash Blues” is saved for last.
enough to contain the multitudes he carried. In of the material Kapoor brings together. But for And though the performances are riveting — standouts include
the 21st century, when identity politics, and the common reader, especially for those who Mahalia Jackson and Mavis Staples belting out Take My Hand,
provocations to wear those on our sleeves, is the continue to find solace in Ali’s poetic universe, Precious Lord and the Edwin Hawkins Singers’ O Happy Day—it’s
buzz, it may seem odd not to link literary pro- A Map of Longings is a valuable introduction to the shots of the all-ages crowd that really makes this film come
duction to autobiographical minutiae— after all, the intricacies of a unique mind, and an invita- alive, with the vibrant fashions, the incredible faces, the excite-
we create and carry over (in image, music, and tion to keep returning to the treasures it has left ment, the boredom and the humanity of it all packed into every
text) traces of who we are. But turning the behind. frame.
try really need a military. There are details of information, which couldn’t be part of
explaining brigades, battalions and pla- the dialogue or sketches, or which needed
toons, and Squadron 44—the ‘do-gooders’ to be explained further, was designed as a
unit of the Indian Air Force. box.
“When you need someone to ferry and There is an interesting one on dhonis.
airdrop troops, supplies
and equipment, you turn
The title, So what exactly
are Dhonis? And no, the
to 44 Squadron,” the answer isn’t related to
authors observe. cricket, would surely
“It helped that I attract the attention of
approached the story as a readers. The box explains
lay person, with no previ- it further: “People have
ous experience of know- been living on these
ing about the operation,” islands for centuries. How
says Rao. “I tried to look at did they get from one
it from the eyes of a child.” island to another? They
As she tried to under- used dhonis. Nope, not
stand the strategies the former captain of the
behind the mission, Rao Indian cricket team. Dho-
kept noting down details nis are small handcrafted
to create a skeletal struc- boats. (If you speak Kan-
ture of the story. She kept nada, Telugu or other
going back to Singh’s text south Indian languages,
to break down the jargon, and added con- you would’ve recognized the word in a
textual notes. trice!)”
“What would a child like? That was my For Rao, the details of Operation Cactus
guiding point,” she says. The writing proc- were a revelation. “I had no idea that such
ess involved several steps, with Rao refer- an exciting event had taken place in the
ring to testimonies from Operation Cactus 1980s. The story captured my imagination
to create dialogues and dramatise scenes and I ended up spending a lot of time look-
in a way that would appeal to children. ing at old videos. It was like going down a
From the outset, Rao and the publishers rabbit hole, but made the process of writ-
were clear on the need to have boxes. A lot ing a lot of fun,” she says.