MUMBAI, NEW DELHI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 4 NO.

179

Thursday, July 29, 2021

livemint.com

mint primer QUICK EDIT

How do startups A digital

dress up for their index
With digital payments being a
public offerings? focus area for the government,
it is only fair to ask how much
progress we’ve made. Though
BY SWARAJ SINGH DHANJAL data on Unified Payments Inter-
The stellar listing of Zomato Ltd last week has paved the way for more face (UPI) transactions is availa-
new-age technology startups to pursue initial public offerings (IPOs). ble, and we’re aware of its suc-
Mint takes a look at the changes a company must make to its structure cess, we have not had a yard-
to meet regulatory compliances for the public company tag. stick that is easy to interpret.
This gap was filled by the
IPO frenzy Reserve Bank of India’s Digital
A lot of technology startups, such as Paytm and Mobikwik, have plans to go Payments Index unveiled this
public by the end of this year. The bumper listing of Zomato has only added January. On Wednesday, our
to the IPO frenzy. central bank released its March
Startups waiting in line 2021 reading, which at 270.59
IPO size (in  crore) marks a jump from 217.74 in
4,000-5,000 September and 207.84 back in
March 2020. By the time covid
hit, the index had doubled on its
16,600 1,900 6,500 1,500 3,700* base of March 2018, when it was
100. Its slower rise since then is
slightly disappointing, consid-
ering that pandemic constraints
*IPO likely in 2022. All others are likely in 2021 (indicative timeline). had pushed us towards online
Source: Company announcements, media reports
ways to make purchases.
But then again, it is always
What’s in a name? Next, the change in hard to match an initial burst of
1 Actually, a lot
In order to achieve the IPO
2 capital structure
Startups are tightly owned by a few
activity, and India’s pace of digi-
tal adoption remains rapid by
milestone, a company must founders and venture capital world standards, thanks to the
change its name—a company has investors, who prefer to invest advantage of linkages created
to go from “private limited” to through convertible instruments. by the UPI platform and other
“limited”. This change has to be IPO aspirants must change all such online transfer tools. Cash is still
approved by the board and instruments to plain equity shares. in use, but this is where the
shareholders, and an application However, the number of actual
action is. Had our economy not
has to be made to the registrar of convertible instruments that are
companies (RoC) to implement it. allocated to investors are small in shrunk in 2020-21, the index
Private companies have various number, and each individual share would’ve been higher. If cyber
restrictions on share capital such may be priced so high that they security is kept tight, it could
as a limit on the number of people will be practically untradeable. attain dizzy heights ahead.
who can be shareholders and Hence, before going public, firms
limits on trading of the shares. tweak the capital structure by
Converting to a public company issuing bonus shares or splitting
removes these restrictions, and the shares to create more shares, so
change is mandatory for any
company that wants to list on stock
that each individual share is now
priced at a level that it can be easily
MINT METRIC
exchanges. traded in the stock market. by Bibek Debroy
MINT

Applications for a job in a mortuary

3 Control issues? Special
rights need to be removed
A firm may need to amend its
In West Bengal, are downright scary.
memorandum of association (MoA) for
You need to clear Standard eight,
suitable changes to its capital clause. It may But engineers and post-grads await
also have to amend its articles of
association (AoA) in accordance with the
Their fortunes in this purgatory.
Companies Act 2013 and the stock
exchange rules, and change or remove any
special management or ownership rights
available to one or more shareholders. QUOTE OF THE DAY
A large part of the non-banking
4 The board and top
management overhaul 5
As startups prepare to go public,
Finally, it’s time for full
disclosures
A company selling shares to public
financial intermediation is
they need to comply with many for the first time needs to make a
through capital markets. Going
corporate governance norms. A whole lot of disclosures in the draft forward, the capital markets are
firm needs to appoint independent red herring prospectus (DRHP).
directors, set up committees such These include details relating to
going to play a bigger role
as the audit committee and the the promoter and promoter group, in funding the economic
risk management committee. For a comprehensive details on the use
public firm, the board needs to of the proceeds to be raised from
growth.
have a combination of executive the IPO, details of ongoing
and non-executive directors with litigations of the company, its
not less than 50% of them subsidiaries and the promoters
comprising non-executive and directors, latest financial AJAY TYAGI
directors. If the chairman is a non- numbers as per relevant CHAIRMAN, SEBI
executive director, at least one- accounting standards. It can take
third of the board is required to be anywhere from one to three
independent. months just to prepare DRHP.

S TO C K TA L K DOWNLOAD THE
MINT APP
DLF TORRENT PHARMA
With the residential We see limited
cycle, particularly in scope for an earn-
the NCR market, ings upgrade for the
BUY REDUCE
becoming stronger, company as domes-
TARGET PRICE TARGET PRICE
DLF may deliver tic growth remains
₹394 ₹2,700
positive surprises price-driven and
CURRENT PRICE CURRENT PRICE
₹331.90 over the medium ₹3,084.10 volume uptick
term. To capture the remains elusive,
same, we set our target price at a 10% while higher tax rate and R&D will
premium to NAV at ₹394. offset opex control.
Jefferies India (on 27 July) Edelweiss Securities (on 27 July)

INTERGLOBE AVIATION INDUSIND BANK

We await clarity on Restructured book SUBSCRIBE TO
the timing of increased to 2.7% of OUR NEWSLETTER
IndiGo’s proposed loans (versus 2% in TOP OF THE MORNING
REDUCE BUY
QIP, which will FY21). Healthy cov-
TARGET PRICE TARGET PRICE
strengthen its bal- erage and contin-
₹1,575 ₹1,200
ance sheet as cash gent provisioning
CURRENT PRICE CURRENT PRICE
₹1,667.10 burn levels have ₹992.30 buffer at 1% of loans
risen. We lower our provides comfort.
Ebitdar estimates by around 8% over We maintain our earnings estimate
FY23-24E. for FY22E-FY23E.
HDFC Securities (on 28 July) Motilal Oswal Financial Services (on 27 July)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
 PLAIN FACTS

Economy recovering,
outlook still uncertain
BY TANAY SUKUMAR

MINT MACRO TRACKER

MACRO TRACKER SNAPSHOT
Parameter value Average band (five-year mean) As of June, four of the 16 indicators in the
Performance better than five-year average tracker are above the five-year trend (highlighted
in green) and nine are below (red). Three
Performance worse than five-year average maintained the trend (amber). This is worse than
Performance in line with five-year average the reading from six months ago. Now 6 months ago 1 year ago 2 years ago 3 years ago

CONSUMER ECONOMY PRODUCER ECONOMY

Passenger vehicle sales Tractor sales PMI composite Core* growth
(growth in %) (growth in %) (in %)
20 -4.1 20 20.6 60 43.1 10 -4.2
0 0
40 0
-20 -20
-40 -40 20 -10
-60 -60 -20
-80 0 *8 core infrastructure industries
Jul 2019 Jun 2021 Jul 2019 Jun 2021 Jul 2019 Jun 2021 Jul 2019 May 2021
-100

Broadband subscriber base Domestic air passengers Banks’ non-food credit Rail freight traffic
(growth in %) (growth in %) (growth in %) (growth in %)
60 17 20 -49 15 6.2 10 5.5
50 0
40 -20 0
10
30 -40 -10
20 -60 5
10 -20
Jul 2019 Apr 2021 Jul 2019 Jun 2021 Jul 2019 May 2021 Jul 2019 Jun 2021
-100

EXTERNAL SECTOR EASE OF LIVING

Import cover Rupee vs dollar CPI Core CPI
(forex reserves in months) (m-o-m in %) (inflation in %) (inflation in %)
20 2 8 6
14.2 -0.5 6.2 5.6
1
15 0 6 5
-1
10 -2 4 4
-3
5 -4 2 3
Jul 2019 Jun 2021 Jul 2019 Jun 2021 Jul 2019 Jun 2021 Jul 2019 Jun 2021

Labour-intensive sector exports Trade balance Real wage growth Labour force participation rate
(growth in %) (as a % of total trade) (in %) (in %)
10 10 2 45 39.6
-4.7 -12.6 -1.2
0 0
40
-20 -10 0
-40 35
-20
-60 -30 -2 30
Jul 2019 -77.4 Jun 2021 Jul 2019 Jun 2021 Jul 2019 May 2021 Jul 2019 Jun 2021

All growth/inflation figures (except for rupee vs dollar) are calculated as the compounded annual growth rate (CAGR) since the
same month two years ago. The rupee vs dollar growth is with reference to the previous month. The grey band denotes an average
range constructed around the five-year mean value. A wider grey band reflects higher volatility.

Source: Centre for Monitoring Indian Economy, Bloomberg, Mint calculations

AHMED RAZA KHAN/MINT

E
conomic activity in June picked up almost as fast as it compared to the two-year-ago period. The tracker now con-
had shrunk in May, when covid restrictions were at siders annualized growth over the past two years to compare
their peak. As states eased restrictions, high-frequency current levels of activity with the pre-pandemic period, and
indicators promptly returned to the April levels. Conse- to avoid the base effect distortions in year-on-year compari-
quently, the impact of the second wave of covid-19 infections sons.
on the economy was far less enduring than last year’s, sug- The contraction in the PMI composite index—for the sec-
gests the latest update on Mint’s monthly macro tracker. ond straight month—was led by the contact-intensive servi-
In June, nine of the 16 indicators considered in the tracker ces sector, which has been hit badly due to poor demand and
were in the red, or below their five-year average trend. Four elevated input costs. But the impact of the second wave
were in green, or above the trend, while the rest remained caught up with the manufacturing sector as well, which went
flat. In May, 12 indicators were in the red—the worst reading into contractionary territory, after recording an expansion
since April 2020, when India was under a strict lockdown. in May.
The June reading was not yet on a par with the recovery
that the tracker had recorded in March, suggesting that the STRESS POINTS
re-ignition has some more distance to cover. A case in point TRENDS IN the external sector—measured in the tracker
is the business activity data, measured by the monthly pur- through trade and currency moves—have offered the best
chasing managers’ index (PMI), which posted an unexpect- ray of hope right since the first wave. The segment showed
edly sharp contraction in June. The consumption environ- resilience again in June, with exports rising at an annualized
ment, too, is under stress: inflation remained high in June, 14% since June 2019. This was the biggest increase in two and
even as jobs remained scarce and wages growth subdued. a half years, on the back of demand from fast-recovering
Launched in October 2018, Mint’s macro tracker provides advanced economies. Yet, India’s export growth pales when
a comprehensive state-of-the-economy report based on compared to other emerging market peers. Worryingly, out-
trends in 16 high-frequency indicators across four segments: bound shipments in labour-intensive sectors posted their
consumer economy, producer economy, external sector, and 19th decline in 20 months, showing continued stress in the
ease of living. After the low of April 2020, labour market.
India had seen gradual improvement, As curbs eased, The ease of living segment was in the red
especially in the consumer and producer for the third straight month. Inflation
segments, until the second wave upended high-frequency showed little sign of a let-up, staying above
the recovery. indicators promptly the Reserve Bank of India’s upper tolerance
The June data holds promise, and early limit. High input prices, global commodity
data for July suggests the momentum may returned to the inflation, and rising crude prices were
have sustained this month as well. Nom- April levels in June either showing up in retail prices, or are
ura’s business resumption index, which likely to do soon. Factory-gate inflation is
uses data on mobility, electricity demand and workforce, has already high, and several sectors are passing on their costs to
returned to a reading close to pre-pandemic levels. Data for consumers. Such pressures could curb any “meaningful sof-
a broader set of indicators for July will be available only in tening” in core inflation, which excludes prices of volatile
August. items, such as food and fuel, this year, says ICICI Securities
in a note to clients on 13 July. Analysts expect an upward revi-
MIXED SIGNALS sion to inflation projections by the RBI when it discusses
THE CONSUMER economy segment, which turned all red monetary policy next week.
in May, had only two indicators below the five-year average Rural wages declined 1.2% in real terms over the two-year-
trend in June. As was the case after the first wave, tractor ago period, indicating that the stress on incomes and con-
sales led the way, posting robust growth after rural India was sumption could linger for some time. The labour force par-
hit hard by the second wave of the pandemic in April and ticipation rate, as measured in a survey by the Centre for
May. Monitoring Indian Economy, dipped below 40% for the first
Passenger vehicle dispatches declined at an annualized 4% time since May 2020.
over the two-year-ago period—the softest decline in eight The data available so far suggests that the impact of the
months. But vehicle registrations, which bear a closer link second wave is behind us, but it may take time for the scars
with retail sales, slowed much more (15%), and were still to heal fully. Unless jobs and incomes recover to pre-covid
behind pre-second wave levels. Consumption demand levels, the rebound in economic activity may peter out.
picked up slower than automakers expected. How fast India can ramp up its vaccination programme
Air travel was slow to resume: domestic airlines ferried 3.1 will be key to a sustained revival. After a pick-up in end-June,
million passengers, the second lowest traffic in 10 months progress on that front does not seem promising.
(after May). This translated into an annualized 49% decline tanay.sukumar@livemint.com

PEANUTS by Charles M. Schulz

 MUMBAI, NEW DELHI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 4 NO. 179 Rs 6.00 16 PAGES

Thursday, July 29, 2021

Can Ajay Singh turn around How to argue with ‘Big B’

livemint.com SpiceJet a second time? uP10 and start a career uP14

SENSEX 52,443.71 135.05 NIFTY 15,709.40 37.05 DOLLAR ₹74.38 ₹0.09 EURO ₹87.78 ₹0.32 OIL $74.70 $0.22 GOLD ₹47,617 ₹55

Sebi to ease rules for Deposit insurance Four funds

linked to
DON’T MISS

in 90 days of bank
startups to go public collapse, says FM
Adani in
spotlight
Regulator plans to hold controlling shareholders of firms accountable Gireesh Chandra Prasad Bloomberg
gireesh.p@livemint.com feedback@livemint.com
Anirudh Laskar NEW DELHI India-US ties key to anchoring
REGIME CHANGE
F
anirudh.l@livemint.com our Mauritius-based funds Indo-Pacific region: Blinken

N
MUMBAI ext time a bank fails or that have attracted atten- Visiting US secretary of state Antony Blinken
withdrawals are barred, tion for parking almost all said there are few relationships in the

I
ndia’s markets regulator plans to
introduce rules that will hold the
controlling shareholders of com-
panies accountable, departing
from the concept of regulating
promoters, as dozens of investor-
backed and entrepreneur-led start-
ups are set to go public.
“We are revisiting the concept of
promoters and controlling share-
holders. There is an increasing num-
ber of companies that do not have
any clear promoters,” Ajay Tyagi,
chairman of the Securities and
Exchange Board of India (Sebi), said
at the annual capital market summit
organized by industry body Ficci on
Wednesday.
The proposed rules aim to make it
easier for startups that are majority-
owned by investors to access capital
markets in India. The changes will
release financial investors such as
SoftBank and Tiger Global from
onerous regulations, including
restrictions on stock sales, that apply
to promoters.
Most of the founders of India’s
unicorn startups that are readying
initial public offerings are left with a
small stake as their shareholdings
get diluted during mega fundraises.
Zomato Ltd’s founder Deepinder
depositors will get as
much as ₹5 lakh as insurance
payment within 90 days.
Finance minister Nirmala
Sitharaman said the Deposit
Insurance and Credit Guaran-
tee Corp. (DICGC) Bill, 2021, to
facilitate this will be presented
in the Parliament’s ongoing
monsoon session.
Briefing reporters about the
decisions of the Union cabinet
on Wednesday, Sitharaman
said the government has
decided to recast the Limited
NEW-AGE TREND Liability Partnership (LLP) Act
to reduce penalty provisions
RULES aim to help firms THE tweaks will release FINANCIAL investors,
and decriminalize some provi-
owned by investors to financial investors from such as PEs, own majority
sions for ease of doing business.
access capital markets onerous regulations stake in IPO-bound firms
LLP is a preferred legal form
among startups. There are over
Goyal, for example, owns just 5.5% of so-called lock-in period after an IPO. 200,000 LLPs in India.
the company. Financial investors The concept of “controlling The insurance cover on bank
such as private equity and venture shareholders” instead of “promoter- deposits was raised from ₹1 lakh
capital funds typically own a major- driven” will address this issue, con- to ₹5 lakh last year, and Sithara-
ity stake in these companies. tends Sebi. man had in her FY22 budget
The investors’ primary objective is “There is a need to move from pro- speech this year assured that
to secure good returns over a defined moters regime to controlling share- the DICGC Act will be stream-
period and not run the company in holder regime. The minimum public lined so that depositors are able
the long run. Under the current rules, shareholding requirement for listing to access their insured amounts
the investors, as majority sharehold- will, however, remain at 25%. Beyond in an easy and time-bound
ers, will be classified as promoters, manner.
blocking their exits during the TURN TO PAGE 6 These payments could take
Finance minister Nirmala
Sitharaman. HT
8-10 years after the bank’s liqui-
dation, the minister said.
“Now we are saying that even
if there is a moratorium on a
bank, which means everything
is frozen and depositors are not
able to take money out of their
account, even at that time, this
measure (90-day access to
insured amount) will set in,” the
minister said. Insurance pay-
ment will not have to wait till
the eventual resolution or liq-
uidation of the bank, Sithara-
man said.
The minister explained that
DICGC insures all bank depos-
its, including savings, fixed,
current and recurring deposits
TURN TO PAGE 9
their money in companies con-
trolled by Indian billionaire
Gautam Adani have a history of
investing in firms which ended
up defaulting or were investi-
gated for wrongdoing.
Before they put about 90% of
their $6.9 billion under man-
agement in the Adani empire,
the funds—Elara India Oppor-
tunities Fund, Cresta Fund,
Albula Investment Fund and
APMS Investment Fund—held
significant stakes in two com-
panies whose founders fled
India and have since been
probed for money laundering,
another that went bankrupt,
and a fourth that was liquidated
after sparring with the Ethio-
pian government.
Because the funds are regis-
tered in the tax haven of Mauritius,
their ownership structure is
opaque. Cresta, Albula and Elara
have been subject to at least one
probe for alleged round-tripping,
Firstpost website reported in 2018.
This is a process illegal under
Indian rules where money is trans-
ferred typically to a shell company
TURN TO PAGE 8
world that are ‘more vital’ than the one
between the US and India. He also announced
an additional $25 million support to India’s
covid-19 vaccination programme. >P2
After Maruti’s Q1 profit miss, all
eyes are on its margin trajectory
Maruti Suzuki (India) Ltd’s June-quarter
results were affected by the covid-led
lockdown as anticipated. Q1 sales volumes
declined 28% sequentially after three
successive quarters of strong improvement
registered by the automaker. >P4
Messaging firm Gupshup raises
$240 million in follow-on funding
Gupshup, a conversational messaging
platform for companies to manage customer
interactions, on Wednesday said it has raised
an additional $240 million in follow-on
funding that will go toward a share buyback
from employees and existing investors. >P7
IBC amendment bill aimed at
aiding MSMEs gets Lok Sabha nod
The Lok Sabha on Wednesday cleared the
Insolvency and Bankruptcy Code
amendment bill that lays down the
framework of a simpler alternative
bankruptcy resolution framework for
small businesses. >P9

BharatPe in talks to Droom races to

raise $350 million unicorn status
Swaraj Singh Dhanjal & Swaraj Singh Dhanjal
Tarush Bhalla swaraj.d@livemint.com
MUMBAI
MUMBAI/BENGALURU

D
room, an online auto-

B
haratPe is likely to
become India’s next uni-
corn with New York-
based Tiger Global Manage-
ment LLC set to spearhead a
likely investment of about $350
million in the fintech startup at
a valuation of more than $2 bil-
lion, two people aware of the
matter said.
Tiger Global is investing
$100 million in the new round
of funding in the New Delhi-
based startup, one of the two
people cited above said. Exist-
ing investors Coatue Manage-
ment and Ribbit Capital will
also participate in the round.
Insight Partners, Steadview
Capital, Beenext, Amplo and
Sequoia Capital are the other
existing investors in the com-
BharatPe co-founder
Ashneer Grover.
pany, the person said. The
transaction is expected to close
soon.
BharatPe had in February
raised close to $108 million in
Series D primary and second-
ary equity funding led by New
York-based hedge fund Coatue
Management at a valuation of
TURN TO PAGE 6
mobile marketplace,
on Wednesday said it
has closed the first leg of its
pre-IPO growth funding
round of up to $200 million at
a valuation of $1.2 billion.
In addition to several exist-
ing investors, new investors, Sandeep Aggarwal, founder
including 57 Stars and Seven and CEO, Droom.
Train Ventures, participated
in the first closing of the ship of automobiles. The com-
round. The company said it is pany expects online penetra-
pursuing a dual-track for a tion for automobile buying
possible initial public offering and selling to increase to 7% in
(IPO) and aims to be listed 2025, up from 0.7% currently.
either on the Nasdaq or in “Globally, we are seeing
India in 2022. automobile buying and selling
The company said it has shifting online for both ICE
seen strong growth in digital (internal combustion engine)
adoption during the pandemic and electric vehicles. We think
besides an increasing con-
sumer preference for owner- TURN TO PAGE 6

Apple reports robust growth in India

Prasid Banerjee America and Vietnam,” Tim Navkendar Singh, research
prasid.b@livemint.com Cook, Apple’s chief executive, director at IDC, noted that the
NEW DELHI said during the company’s June quarter of 2020 was weak
earnings call for the June quar- for all companies, with only 18

A
pple reported strong
growth in India for the
fourth straight quarter
in the three months ended
June, underscoring continued
robust demand for its premium
smartphones.
Besides India, the US tech-
nology giant set June quarter
sales records in Mexico, Brazil,
Chile and Turkey among
emerging markets.
“Today, Apple is reporting a
very strong quarter with dou-
ble-digit revenue growth
across our product and services
categories and in every geo-
graphic segment. We set a new
June quarter revenue record of
$81.4 billion, up 36% from last
year, and the vast majority of
markets we tracked grew in
double digits, with especially
strong growth in emerging
markets, including India, Latin
ter late on Tuesday.
According to analysts, Apple
has only a 2-3% market share in
India’s smartphone market, but
it accounts for almost half of all
premium smartphones sold in
the country, which comprises
phones costing more than $700.
The company had also reported
“double-digit” growth in India in
the March quarter this year.
Data from market researcher
International Data Corp. (IDC)
showed Apple improved its
market share in the premium
segment to 48.8% in the June
quarter last year from 41.2% a
year earlier. The company’s
shipments grew 5% last year. Its
market share and shipments
data for the June quarter this
year weren’t available at the
time of writing. Experts said the
company’s shipments were hit
in the June quarter because of a
Apple has a 2-3% market share in
India, but accounts for almost
half of all premium smartphones
sold in the country. REUTERS
global chip shortage that has
affected almost every vendor.
“Apple was hit hard in Q2,
compared to other vendors,
due to the second wave and
supply chain disruptions
caused around it. The month of
May was impacted the most
with shipments halving from
April,” said Sanyam Chaurasia,
a research analyst at market
researcher Canalys.
million shipments. As a result,
every vendor should see bumper
year-on-year growth this year.
According to analysts, the sup-
ply bottlenecks are expected to
continue through this year, some-
thing Apple also acknowledged
during its earnings call. Singh said
Apple’s India sales are driven by
older devices such as the iPhone 11
and iPhone SE (2020), which
remain the key drivers for the
company. The iPhone 12 did pick
up in terms of sales this year and is
expected to do better going for-
ward as the iPhone 13 is launched
in a couple of months.
“The growth was primarily
driven by persistent demand for
old gen iPhone 11 and diverse
iPhone 12 portfolio making
affordability of iOS devices easier,
which was also well supported by
attracting financial offers,” said
Chaurasia at Canalys.
02 THURSDAY, 29 JULY 2021
MUMBAI ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
Pfizer sees net profit rise 61%
India-US ties key to anchoring LS approves
additional
to ₹200 crore in June quarter
New Delhi: Pharmaceuticals firm Pfizer Ltd on Wednesday
reported a 60.63% rise in its net profit to ₹199.91 crore for the quar-
ter ended in June mainly on account of robust sales. The company
Indo-Pacific region: Blinken spending of
₹23,675 cr
had posted a net profit of ₹124.45 crore for the corresponding
period of the previous fiscal, Pfizer Ltd said in a regulatory filing. Asit Ranjan Mishra
Revenue from operations of the company stood at ₹749.17 crore asit.m@livemint.com
for the quarter under consideration. PTI US secretary of state said there were few relationships ‘more vital’ than India-US partnership NEW DELHI

T
he Lok Sabha on
FinMin invites entries for name, Elizabeth Roche ples, and regional security, including Wednesday passed amid
elizabeth.r@livemint.com through US-Australia-India-Japan ruckus the first batch of
logo design contest for new DFI NEW DELHI Quad consultations,” a statement supplementary demands for
PTI
issued by the US Embassy said. grants and relevant appropria-

V
isiting US secretary of state Speaking to reporters after meeting tion bills, authorizing the gov-
Antony Blinken on external affairs minister S. Jaishankar, ernment to spend an addi-
Wednesday said the Blinken said: “Together the actions tional ₹23,675 crore in FY22 in
India-US partnership is that India and the US take, are shaping view of the increased spending
key to anchoring the Indo- the 21st century and beyond. That is on healthcare amid the cov-
Pacific region and beyond, as the two why strengthening the partnership id-19 pandemic.
sides explore ways to deepen ties. with India is one of the US top foreign On 20 July, Union finance
On his first visit to New Delhi after policy priorities. We believe this part- minister Nirmala Sitharaman
the Joe Biden administration took nership will be critical to delivering sta- sought Parliament’s nod for
office in January, Blinken said there bility and prosperity in the Indo-Pacific gross additional spending of
were few relationships in the world that region and beyond.” When asked about ₹1.87 trillion though the net
were “more vital” than the one between China’s criticism of the Quad’s role in cash outgo was only ₹23,675
New Delhi: The finance ministry on Wednesday invited the US and India. the Indo-Pacific, Blinken said the crore, with the rest met
entries from citizens for name, tagline, and logo for the new Blinken’s visit is aimed at laying the grouping was not a military alliance. through savings or higher
development financial institution (DFI) touted as a game groundwork for an in-person meeting Jaishankar said: “In a globalized receipts and recoveries. A big
changer for infrastructure financing in the country. “@Fin- between the leaders of the Quad coun- world, India has interests far beyond its chunk of the gross additional
MinIndia in association with @mygovindia is announcing a tries—the US, India, Australia and immediate borders.” spending is transferring loans
contest to crowdsource the name, tagline and logo of the new —which back a free and open Indo-Pa- US secretary of state Antony Blinken with external affairs minister S. Jaishankar. PTI He had earlier said Blinken and he of around ₹1.59 trillion raised
Development Financial Institution. Cash prizes of up to ₹5 cific. China sees the Quad with suspi- spoke at “length about regional con- from the market as part of the
lakh in each category! Last date for entries is 15.08.2021,” cion, wary that its aim is to reduce Bei- minority rights and freedom of the Geshe Dorji Damdul, a representative cerns, multilateral institutions and Centre’s commitment to com-
finance minister Nirmala Sitharaman said in a tweet. PTI jing’s rising influence in the region. press, to overshadow relations. of Tibetan spiritual leader the Dalai global issues, the expanding Indian pensate states for the revenue
Ties between the US and China have Blinken met a cross-section of peo- Lama. The event could elicit an angry footprint, be it in Africa, South-East shortfall under the goods and
deteriorated in recent years and they ple from the civil society, and in his response from China. The US supports Asia, the Caribbean or the South-pa- services tax.
Consensus on neutral central force remain at odds over technol- the Tibetan leader, cific” and how it “naturally broadened Around 72% of the addi-
ogy, cybersecurity and BOOSTING TIES who is revered by the (India-US) shared agenda”. tional spending, involving net
troops on Assam-Mizoram border human rights. The ties thousands of Tibetan In a tweet, Blinken announced sup- cash outgo of ₹23,675 crore
New Delhi: A neutral central force will be deployed along the dis- between India and China, BLINKEN’S visit is HE met civil society HE ALSO announced refugees seeking asy- port to India’s covid-19 vaccination projected in the first supple-
turbed Assam-Mizoram border where five policemen and a civilian too, have been tense, particu- aimed at laying the representatives, and supporting India’s lum in the US. programme with an additional $25 mil- mentary demand goes to the
ground work for an spoke of the ‘great covid-19 vaccination
were killed following a bloody clash recently, officials said on larly since Chinese troops in-person meeting challenges’ for all programme with an At his meeting lion. “Today, I’m proud to announce an healthcare sector.
Wednesday. The decision was taken after a two-hour long meeting intruded into India in May among Quad leaders democracies additional $25 million. with Prime Minister additional $25 million from the US gov- The rest will be used for
chaired by Union home secretary Ajay Bhalla and attended by last year. Narendra Modi, ernment, through @USAID, to support loans to Air India, sugar mills,
Assam chief secretary Jishnu Baruah and director general of police During the talks between Blinken discussed India’s covid-19 vaccination pro- and to lenders for the com-
Bhaskar Jyoti Mahanta and their respective Mizoram counterparts Blinken and the Indian leadership, the opening remarks, spoke of the “great “regional challenges and a growing gramme.” In his remarks at the media pound interest support
Lalnunmawia Chuaungo and S.B.K Singh. PTI emphasis was on building on conver- challenges” faced by all democracies. range of cooperation on covid-19 briefing, Jaishankar said the covid-19 scheme for loan moratorium,
gences rather than allowing irritants, A key takeaway from the civil society response efforts, climate change, issue was “naturally a priority”. according to the document
such as India’s alleged record on event was Blinken’s meeting with shared values and democratic princi- PTI contributed to this story. tabled by Sitharaman.
Prime Minister to mark one year
of NEP with at least 10 initiatives
Govt sanctions ₹349 cr for aviation cos RS clears changes to
PTI

Rhik Kundu
rhik.k@livemint.com
child protection law The expansion of ECLGS to
civil aviation, hotels and tour
NEW DELHI operators, which were also
severely impacted by the sec- Neetu Chandra Sharma imprisonment of more than

S
ince the launch of the ond wave of the pandemic, will neetu.s@livemint.com seven years, and minimum
Emergency Credit Line act as a lifeline to highly lever- NEW DELHI punishment is not prescribed
Guarantee Scheme aged companies, Crisil Ratings or is less than seven years.

(ECLGS) to support businesses
affected by covid-19, the gov-
New delhi: Prime Minister Narendra Modi will unveil at ernment has sanctioned ₹349
least 10 education schemes on the first anniversary of the crore to companies belonging
National Education Policy (NEP), 2020, on Thursday. These to the aviation sector, which
will include an Academic Bank of Credit (ABC) in tertiary include SpiceJet and GoAir,
education, a competency-based assessment system for the minister of state for civil avia-
school sector and a framework for internationalization of tion V.K. Singh said in the
Indian education, the prime minister’s office (PMO) said on Rajya Sabha on Wednesday.
Wednesday. PRASHANT K. NANDA Responding to a query from
MP K.R. Suresh Reddy, Singh
said that though the govern-
Badminton great Nandu Natekar ment had not allocated a sepa-
rate fund for the civil aviation
dies of age-related ailments sector, borrowers from the
Pune: One of Indian badminton’s earliest superstar Nandu Nat- sector were provided with
ekar, whose on-court grace was often compared to a ballet dancer, guaranteed support of ₹349
died on Wednesday after suffering from age-related ailments here. crore as on 16 July, as per data
The 88-year-old, who won over 100 national and international from the National Credit
titles in his career, is survived by his son former Davis Cupper Gau- Guarantee Trustee Co. Ltd.
rav and two daughters. PTI While SpiceJet borrowed
₹127.52 crore, ₹8.5 crore was
disbursed to Bird Worldwide
JM Financial posts its highest ever Flight Services Mumbai Pvt.
Ltd, which handles ground
quarterly profit during Apr-Jun operations at Mumbai airport,
Mumbai: JM Financial, a diversified financial services company, under ECLGS 3.0.
reported its highest ever quarterly net profit, a 117% rise in its June So far, ₹136 crore has been
quarter, aided by a growth in investment banking, wealth manage- guaranteed under ECLGS 3.0,
ment, and securities business. During the April-June period, JM’s and ₹213 crore to eight compa-
net profits were at ₹203.14 crore against ₹93.61 crore in the corre- nies under ECLGS 2.0.
sponding period a year ago. ASHWIN RAMARATHINAM The other beneficiaries are
T
said in a report in June. he Rajya Sabha on Amid disruptions in the Par-
“More sectors have been Wednesday passed an liament’s monsoon session,
brought under the scheme’s amendment Bill that pro- Smriti Irani, women and child
ambit, some eligibility criteria poses to increase the role of dis- development minister, while
have been relaxed and MSMEs trict magistrates and additional moving the Bill for considera-
have been allowed to avail of district magistrates in child tion in the Rajya Sabha, said
loans for longer tenures. The care and adoption. children of this country
scheme has sanctioned about The existing law says that deserve parliamentarians’
The companies that are set to benefit from the Emergency Credit ₹2.54 trillion of loans under adoption of a child is final on attention for protection and
Line Guarantee Scheme include airlines such as SpiceJet. MINT the previous three versions as the issuance of an adoption support.
of mid-May,” it added. order by the civil court. The As of July 2018, there were
CAE Simulation Training Pvt. gies Pvt. Ltd (₹2.5 crore). The Centre has decided to Juvenile Justice 629 adoption
Ltd (₹18.4 crore), Aerostruc- In May 2020, the finance extend its validity from 13 May (Care and Protec- The amended law cases pending in
tures Manufacturing India Pvt. ministry had launched the to 30 September, or till guar- tion of Children) various courts. In
Ltd (₹45.19 crore), Bengal Aer- ECLGS to help covid-hit busi- antees for an amount of ₹3 tril- Amendment Bill,
provides for
order to expedite
district
otropolis Projects Ltd (₹16.36 nesses. The scheme initially lion were issued. Disburse- 2021 provides that magistrates to adoption pro-
crore), Squad Forging India aimed to provide unsecured ment under the scheme will be instead of the ceedings, the Bill
issue adoption
Pvt. Ltd (₹3.5 loans of ₹3 trillion permitted up to 31 December. court, the district transfers the
crore), WAISL In May 2020, the to micro, small “All these (sectors) have m a g i s t r a t e orders instead of power to issue
Ltd (₹26 crore), civil courts
finance ministry and medium been hit hard by the second (including addi- adoption orders
Go Airlines Ltd had launched the e n t e r p r i s e s wave. In the current quarter, tional district to the district
(₹25.65 crore), ECLGS to help (MSMEs) and these sectors are expected to magistrate) will magistrate.
Flight Simulation business enter- see a demand contraction of issue such adoption orders. The Standing Committee on
Technique Cen-
businesses
prises to mitigate over 30% sequentially,” Crisil Under the 2015 Act, offences Human Resource Develop-
tre Pvt. Ltd impacted by the distress said. “Moreover, except for committed by juveniles are cat- ment (2015) had noted that var-
(₹44.14 crore), Air the pandemic caused by the airport operators, many com- egorized as heinous, serious, or ious statutory bodies under the
Works India pandemic-in- panies in the other stipulated petty. Serious offences include Act were not present in many
Engineering Pvt. duced nation- sectors of the scheme have those with three to seven years states. As of 2019, only 17 of 35
Ltd (₹11.07 crore), VEM Tech- wide lockdown. high leverage, which con- of imprisonment. The new Bill states/Union territories had all
nologies Pvt. Ltd (₹1.93 crore), The aviation and tourism strain their ability to with- adds that serious offences will basic structures and bodies
Rossell India Ltd (₹18.31 crore) sectors were later included stand unexpected demand also include offences for which required under the Act in all
and Alpha Design Technolo- under the scheme. contraction.” maximum punishment is districts.

Centre asks states to conduct district-wise serosurveys to tackle covid CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Neetu Chandra Sharma said that such studies may fol- “ICMR has conducted the conducted from June to July The second such survey was suggestions or complaints
neetu.s@livemint.com low a standardised protocol. recent National Serological 2021 on more than 28,975 conducted in August-Septem- about errors.
NEW DELHI “The findings of such stud- survey in 70 districts of India. individuals, including adults ber 2020 and found 7.1% sero-
Readers can alert the
ies can then be utilized quickly The national serosurvey by and children aged between 6 positivity, while the third sur-
newsroom to any errors in the

T
he Union government by the respective states and ICMR was and 17 years, apart vey carried out in December paper by emailing us, with your
on Wednesday advised Union territories to guide designed to cap- More than 400 from 7,252 2020-January 2021 found full name and address to
all states and Union ter- objective, transparent, and ture the extent of million Indians healthcare work- 24.1% people to have SARS feedback@livemint.com.
ritories to conduct SARS CoV2 evidence-based public health the spread of continue to ers in 70 districts CoV2 antibodies.
serological prevalence surveys response to covid-19, said covid infection at remain vulnerable where earlier Among the population cov- It is our policy to promptly
respond to all complaints.
in consultation with the Indian Bhushan, referring to the find- the national
to covid-19, shows three rounds of ered under the fourth survey, Readers dissatisfied with the
Council of Medical Research ings of the fourth round of level. Therefore, the survey were 10% people were aged response or concerned about
(ICMR) to generate district- National Serological Preva- the national sero- the fourth ICMR also conducted. between 6-9 years, 20% were Mint’s journalistic integrity may
level data for formulating lence Survey conducted by survey results do serosurvey The seroposi- aged 10-17 years, with the rest write directly to the editor by
localized public health ICMR. not reflect the tivity has only being 18 years or older. More sending an email to
response measures. The national ICMR survey, More than 67.6% of the general population have developed heterogeneity of been increasing than half of the children sur- asktheeditor@livemint.com
Union health secretary the findings of which was SARS-CoV-2 antibodies, showed the ICMR serosurvey. REUTERS seroprevalence between dis- in the consecutive serological veyed 6-17 years were seropos- Mint’s journalistic Code of
Rajesh Bhushan, in a letter to shared by the Union health tricts and even between surveys done by the govern- itive with the seroprevalence Conduct that governs our
additional chief secretaries, ministry on Wednesday, remain vulnerable to covid-19 have been exposed to the virus states,” said Bhushan in the ment. The first serosurvey similar in rural and urban newsroom is available at
principal secretaries, and sec- showed that more than 400 despite more than 67.6% of the and having developed SARS- letter. conducted in May-June 2020 areas for all age groups, the www.livemint.com
retaries, health, of all states, million Indians continue to general population found to CoV-2 antibodies. The serological survey was found 0.7% seroprevalence. survey showed.

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LIVEMINT.COM CORPORATE THURSDAY, 29 JULY 2021
MUMBAI 03

IDBI Bank to pare ‘India’s crypto industry needs Billionaire

Jhunjhunwala
NPAs via toxic asset plans to start
transfer, new loans regulations, not prohibition’ new airline
Bloomberg
feedback@livemint.com
Shayan Ghosh Abhinav Kaul

B
shayan.g@livemint.com abhinav.kaul@livemint.com illionaire investor
MUMBAI NEW DELHI Rakesh Jhunjhunwala is
planning on having 70

I
N
DBI Bank aims to reduce its ischal Shetty, chief execu- aircraft within four years for a
bad loan ratio to 15% of tive officer of WazirX, new airline he wants to set up in
advances by the end of this started the #IndiaWant- India on optimism more people
year through a mix of loan sCrypto campaign in will travel by air.
growth and by transferring November 2018, just a few Jhunjhunwala, who is con-
toxic assets to the bad bank, its months after the Reserve Bank of India sidering investing $35 million
chief executive Rakesh Sharma barred banks from providing services to and would own 40% of the car-
said on Wednesday. the crypto industry in April 2018. The rier, expects to get a no-objec-
IDBI Bank is no longer sub- Internet and Mobile Association of India tion certificate from India’s avi-
ject to strict lending curbs, (IAMAI) subsequently approached the ation ministry in the next 15
which were imposed by the IDBI Bank chief executive Supreme Court of India for a stay order days, he said in a Bloomberg
Reserve Bank of India (RBI) in officer Rakesh Sharma. in May, but Shetty realized that the case Television interview Wednes-
May 2017, with the central bank wasn’t going to be enough, as he day. The ultra-low cost airline
stating in March that the pri- with the rest having already believed that the root problem was the will be called Akasa Air and the
vate sector lender has been been written off. lack of crypto regulation and the under- team, which includes a former
taken out of the prompt cor- On the loan growth front, the standing what the crypto is. So, to solve senior executive of Delta Air
rective action (PCA) frame- lender had a 62:38 ratio these two issues, he decided to tweet Lines Inc., is looking at planes
work. between retail and corporate every day and tag Indian leaders, high- that can carry 180 passengers,
As on 30 June, the bank’s loans as on 30 June, indicating lighting why the country needs to regu- he said.
gross bad loans were at 22.71% a shift since it came under the late and understand crypto. It’s a bold bet by Jhunjhun-
of its total advances. However, PCA restrictions in 2017. The In an interview, Shetty spoke about wala, who’s known as India’s
because of aggressive provi- bank now wants to restart cor- the #IndiaWantsCrypto campaign, paigns like #IndiaWantsCrypto kept handful of startups, a lot of companies ity. It is the same in many parts of the Warren Buffett, in a market
sioning, its net bad loan ratio porate lending and has which completed 1,000 days on 28 July, people motivated. are now working in the crypto sector. world. that has seen some airlines col-
stood at 1.67% in Q1FY22. The onboarded 80 clients. It has key challenges that the industry faced The campaign has run for nearly Moreover, today startups can easily To catch up with the rest of the world, lapse in the face of intense fare
lender’s loan book was ₹1.56 sanctioned loans to these cor- during the past three years, and what the three years. What were the big attract investments. we first must have banking access. Even wars and high costs. Still, what
trillion in the same period. The porate entities after restrictions campaign would aim to achieve in its struggles during this phase? From the regulators’ side, we have the though the Supreme Court case was was once the world’s fastest-
bank expects a loan growth of were lifted, but the loans have next 1,000 days. Edited excerpts: Crypto has always been a challenging finance minister (Nirmala Sitharaman) won, banking access is still hard to come growing aviation market holds
8-10% in FY22. as yet not been What was the general mood in the sector because of the lack of regulatory who has spoken about crypto, and now by for all businesses. There is still fear an allure and Jhunjhunwala is
“We will be The bank plans to disbursed. crypto industry when you started clarity. Right from the banking ban in the Reserve Bank of India (RBI) and uncertainty among the banks, looking at opportunities to woo

‘
able to reduce our transfer up to “We have spe- this campaign? 2018 to the draft bill in 2019 that talked talked about the cen- and they are not really flyers with a brand new carrier
gross non-per- ₹12,000 crore of cial expertise in The situation was pretty bad. WazirX of regulations, which were more about tral bank digital cur- sure about servicing offering low fares.
forming asset advances to corporate advan- was new (founded in prohibiting than regulat- rency (CBDC). In order to catch up the industry. Second, “For the culture of a com-
(GNPA) ratio by
NARCL to reduce ces and we will March 2018), but there ing. Then we had a bear There is also a we need some guide- pany to be frugal you’ve to start
4-5% through continue to do were other exchanges, m INTERVIEW market of around 2-2.5 greater understanding with the rest of the lines from the govern- off fresh,” Jhunjhunwala said.
growth in advan- its gross NPA by that. There will be which were older and years during 2018 and of crypto and the world, govt needs to ment or more direc- “I’m very, very bullish on
ces or the denom- 5-6% a lot of focus on larger. Multiple exchanges shut down, 2019, the investors were demotivated, industry among the come faster with tion. We know that the India’s aviation sector in terms
inator. Now, the mid-corporate and some left the country as they could and we were not getting enough money media in the country. government has been of demand.”
government has advances. There not operate in the country. Many people from global venture capitalists or funds Net-net, if you see
guidelines for crypto talking about bringing Even before the pandemic,
also come out with the National are certain good sectors and in crypto back then were really worried to build startups. On top of this, there from 2018 to today, businesses in regulations, how- airlines in India were strug-
Asset Reconstruction Com- good-rated advances available and afraid about the state of the crypto was confusion about whether crypto is India has progressed NISCHAL SHETTY ever, they may take gling. Kingfisher Airlines Ltd,
pany Ltd (NARCL). Once and we have done some sanc- ecosystem and the future of investments legal or what the government was going greatly in terms of CEO, WazirX longer, but guidelines once India’ second-largest
NARCL becomes functional, tions also,” Sharma said. that they had made. The mood, in gen- to do — support it or shut down the every metric that you can come faster. domestic carrier, ended opera-
some assets will be transferred As much as 90% of the len- eral, was low, and there was fear among industry. can track in crypto. Have you replied to tions in 2012, and Jet Airways
and that would further reduce der’s structured retail book is people. In fact, the general consensus Has the perception of regulators Has it become easier to run a crypto the Enforcement Directorate India Ltd, which was recently
gross NPA by 5-6%,” Sharma asset-backed and the auto and was that crypto was illegal in India, and and the government changed dur- business in India? notice to WazirX for Foreign approved to fly again, collapsed
said. personal loan portion is quite even owning crypto was not allowed. ing this period? Yes, it has because easier, but if you Exchange Management Act (FEMA) in 2019. While demand for air
The bank plans to transfer a small, Sharma said. The bank Also, the fact that crypto was in a bear Things have changed tremendously. compare it with the rest of the world, it is violations? travel has been hit globally,
total of ₹11,000 crore-₹12,000 would like to have a 60:40 mix market in 2018 didn’t help either. First of all, growth-wise, the Indian still harder. In the US, you have compa- We have cooperated with the agency India’s aviation industry is at
crore of advances to NARCL, of of retail and corporate loans, 2018 was really bad for the Indian crypto industry has grown from four- nies that are able to use the initial public in the investigation so far and are pre- greater risk of delayed recovery
which live accounts will be but does not want its retail book crypto industry, and people thought of five million people in 2018 to 15-20 mil- offer (IPO) route. They have some sort of paring a response to the detailed notice as the threat of a third wave of
₹7,000 crore-₹8,000 crore, to go below 55% of total base. exiting at that point in time. But cam- lion investors now. Second, from a licensing process in place and have clar- we have received on FEMA violations. infections looms.
04 THURSDAY, 29 JULY 2021
MUMBAI 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

52,443.71 -0.26 15,709.40 -0.24 13,579.15 -0.23 39,174.85 0.18 15,983.90 -0.17 22,880.08 0.00 26,365.97 -0.45
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

52,578.76 52,673.69 15,746.45 15,761.55 13,610.30 13,631.55 39,105.40 39,213.20 16,011.05 16,030.60 22,879.39 22,944.44 26,485.13 26,615.11
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

52,673.69 51,802.73 15,767.50 15,513.45 13,631.55 13,409.10 39,213.20 38,659.85 16,030.60 15,781.90 22,946.85 22,540.14 26,615.11 26,032.24

m MINT SHORTS
Australia’s inflation spikes to
IndiGo’s net worth turns negative,
the highest level since 2008
Australia’s inflation surged last quarter, joining developed-
world counterparts in spiking from 2020’s lockdown-in-
duced weakness, though a renewed covid-19 outbreak is
but its stock refuses to descend
set to damp pressures ahead. Inflation accelerated to 3.8% Pallavi Pengonda covid highs seen in early 2020. Indeed, team,” pointed out a report by Prab-
in the three months through June from a year earlier, the pallavi.p@livemint.com investors have so far ignored all the badhudas Lilladher Pvt. Ltd. Pandemic turbulence
fastest pace since 2008, the statistics bureau said on news. The argument that supports the Note that IndiGo’s free cash at the InterGlobe Aviation’s cash burn jumped in Q1FY22 owing to subdued demand

A
Wednesday. But highlighting the impact of one-off factors fter the covid-19 crisis is stock’s performance is that IndiGo’s end of Q4FY21 had stood at ₹7,100 and lower capacity deployment.
like free childcare that fuelled the gain, the key core meas- over, InterGlobe Aviation balance sheet is in relatively much bet- crore. For Q1FY22, average net cash
ure that strips out volatility only climbed an annual 1.6%. Ltd could well be the last ter shape and the firm is best placed to burn increased to ₹33.4 crore per day, Daily cash burn (in ₹ crore)
33.4
The yield on 10-year Australian government notes fell 4 man standing. That seems cope with the ongoing pandemic crisis. up from ₹19 crore per day in Q4. 30
basis points to 1.16%, with the move mostly in response to to be the bet investors are Its net worth may have eroded, but it According to Ambit Capital, weaker-
souring global risk sentiment. The Reserve Bank expects taking. After all, what explains the resil- still has a fair amount of cash on its than-expected yields, higher employee 25
inflation to dissipate as price indexes lose the boost from ience of the stock even as losses have books. Some also believe that IndiGo costs and lease rentals were key nega-
the comparison with the pandemic last year.BLOOMBERG piled up to an extent where the firm’s would benefit from potential consoli- tive surprises in the Q1 results. IndiGo’s 19
net worth has completely eroded? dation in the sector as weaker aviation employee costs have increased by 15
InterGlobe runs around 9% sequentially.
Money magnet India’s largest airline, TAKING THE LEAD Further, the aviation
IndiGo. The June-quar- industry has had to grap-
Foreign investors boost their holdings of Chinese ter results (Q1FY22) WITH its balance ITS net worth may INVESTORS would ple with higher crude oil
bonds to a record. announced on Tuesday sheet in good shape, have eroded, but the follow recovery in
IndiGo is set to cope company still has a traffic closely, but
prices, a factor that hurt June 2020 Q2FY21 Q3FY21 Q4FY21 Q1FY22
Chinese government bonds held by foreign investors (in billion yuan) after market hours show with the covid-19 fair amount of cash upsides in the stock IndiGo’s profitability as Note: The firm has provided data for June 2020 and not for Q1FY21. Source: Company earnings call
2,500 losses are higher than crisis better on its books could well be limited well. Moreover, the sec-
2,134.94 forecasted. Its standalone ond covid wave severely SATISH KUMAR/MINT

2,000 net loss stood at nearly hit traffic demand, Needless to say, investors would fol- Meanwhile, JM Financial Institu-
₹3,180 crore, which is over ₹1,000 firms find it tougher to survive this impacting revenues for the quarter. low recovery in traffic closely hereon, tional Securities Ltd has a ‘sell’ rating
1,500
crore higher than Ambit Capital Pvt. extended war against covid-19. IndiGo said the best way to illustrate but upsides in the stock could well be on the stock with a target price of
Ltd’s estimates. With this, the airline’s “We believe IndiGo continues to the covid demand impact is through limited. Prabhudas Lilladher values the ₹1,260. The broker said in a report on
1,000
net worth has now turned negative. At remain better placed than its peers and monthly revenues over April to July. stock at 9 times FY23 adjusted EV/ 27 July: “IndiGo’s share price at current
500 234.89 the end of FY21, IndiGo’s net worth was is likely to emerge stronger post covid Revenues for the months of April, May Ebitdar and arrives at a target price of market price not only factors in the
merely ₹71 crore, declining from given its superior balance sheet and June stood at ₹1,540 crore, ₹670 ₹1,630. EV is enterprise value. Ebitdar improving (expected) momentum in
0 ₹5,860 crore a year ago. (₹5,600 crore free cash), which is likely crore and ₹960 crore, respectively. is earnings before interest, tax, depre- passenger demand but also factors in a
30 Jun 2015 30 Jun 2021 But IndiGo’s shares fell just 2% on to be further strengthened with a “July is projected to recover back to ciation, amortization and lease rentals. favourable change in competitive land-
Source: Bloomberg
Wednesday on the NSE. What’s more, ₹3,000 crore QIP, industry leading April levels,” said the company’s man- The IndiGo stock now is marginally scape, ignoring the sharp rise in Brent
SATISH KUMAR/MINT the IndiGo stock is 11% above its pre- cost structure and strong management agement in a post-earnings call. higher at ₹1,667.45 apiece. and the adverse impact on cash flows.”

Billionaire staring at a debt

crisis set to be a test for Beijing
The call went out from the megalopolis of Shenzhen, just
Mahindra Finance’s investors After Maruti’s Q1 profit miss, all
north of Hong Kong: Hui Ka Yan, one of the richest people
in China, wanted to talk. The news was bad—and about to
get even worse—for the billionaire and his troubled prop-
seek revival post 2nd wave hit eyes are on its margin trajectory
erty giant, China Evergrande Group. And yet, Hui was all
smiles as bankers dialled into a video-conference with him Aparna Iyer Ujjval Jauhari The upshot: Ebitda at about side constraints remain. Analysts,
earlier this month. Ignore the headlines, the rumours, the aparna.i@livemint.com
Braving the blows ujjval.j@livemint.com ₹820 crore declined by a steep nevertheless, said they will be
short-sellers and the noise, Hui told the bankers, according Mahindra Finance saw its asset quality deteriorate sharply in 59% sequentially and was lower watchful on the ramp-up in SUV
the June quarter due to the second wave of covid-19.

M M
to a person familiar with the call. Evergrande—its stock ahindra and Mahin- aruti Suzuki (India) Ltd’s than analysts’ estimates. Analysts sales, given rising competition.
cratering, its bonds pointing towards potential default— dra Financial Services (in ₹ crore) Gross bad loans (as a % of total) June-quarter results at Reliance Securities Ltd, for The concern, however, will
(right-hand scale)
would get through this. Investors aren’t sure how. China Ltd’s June quarter Stage 3 assets Provisions were impacted by the instance, had expected an Ebitda remain elevated on margins amid
Evergrande is quickly becoming the biggest financial was a disaster in terms of asset 12,000 20 covid-led lockdown as antici- of ₹870 crore, while those at Moti- rising commodity prices. Though
worry in a nation with no shortage of financial worries. quality and investors showed pated. Q1 sales volumes declined lal Oswal Financial Services Ltd the firm has been taking price
Even as a sell-off in Chinese technology stocks grabs global their displeasure by dragging 9,000 15 28% sequentially after three suc- had pegged it at hikes (about 1.3% in
attention, China hands are anxiously watching Ever- the stock down nearly 7.5% so cessive quarters of strong ₹900 crore. Analysts The recovery in January followed by
grande. The question that keeps coming up: just how bad far this week. The results were 6,000 10 improvement registered by the attributed the miss volumes is 1.6% in April), covid
could this get? The short answer: very bad. BLOOMBERG released on Monday. company. Revenues declined at to commodity cost expected to pick- disruptions are likely
The non-banking financial 3,000 5 the same rate to ₹17,776 crore. inflation and pricing up again, as to put a cap on price
company’s bad loans surged to According to analysts, realiza- pressure. hikes. The firm will
demand for
UK house prices ease in July as 15.5% of the loan book in the 0 0 tions improved marginally, Moving forward, be cautiously taking
although it wasn’t sufficient to the recovery in vol- personal mobility hikes so that demand
Q1FY21 Q2FY21 Q3FY21 Q4FY21 Q1FY22
June quarter from 8.9% in the
tax break starts to phase out previous quarter. What is
Source: Company presentation
take care of cost pressures. Rising umes is expected to remains strong is not impacted, said
UK house prices fell unexpectedly in July, signalling a loss more is that stage two assets, SATISH KUMAR/MINT commodity prices continued to pick-up again, as analysts. Even so, a
of momentum in the property market after a tax break on which are loans with repay- covid-19 hit semi-urban and remain cautious, considering hurt margins. Raw material costs demand for personal small price hike was
purchases began to be phased out. The average value of a ment overdue for more than rural centres hard and much of that the third wave of covid-19 stood at 79% of net sales in mobility remains strong. The firm taken by the company in July.
home fell 0.5% to £244,229 ($338,800), the first decline two months, were 16% of the the quarter was under severe could further hamper overall Q1FY22, up from 77.2% in the pre- said it is already seeing a strong Mitul Shah, head of research at
in four months, Nationwide Building Society said on loan book. In essence, Mahin- restrictions because of subse- credit demand and affect the vious quarter. Employee cost, rise in enquiries and bookings in Reliance Securities, expects the
Wednesday. It followed an average gain of 1.6% between dra Finance’s vulnerable loan quent lockdowns across most collection mechanism of the other overheads and depreciation July, indicating continued recov- domestic passenger vehicle (PV)
April and June. The annual pace of increase slowed to pool is at a massive 33%, ana- states. Thus, Mahindra company even in the current costs saw a sharp rise, which is ery since June. Its low channel industry to record double-digit
10.5% from a 17-year high of 13.4%. Economists surveyed lysts at Edelweiss Securities Finance’s operations were hit, financial year,” an Emkay attributed to higher expenses dur- inventory is also supportive from volume growth in FY22, which
by Bloomberg had expected a 0.3% gain in July. The figures Ltd said, adding that this was with just 40% of its centres Global Financial Services Ltd ing the covid-19 pandemic and the volumes perspective, with would support Maruti’s business.
represent a return to more normal conditions after a fren- the worst quarter open for business report said. expanded capacity in Gujarat. firm demand in June, but supply- He also expects sales of premium
zied year that saw the housing market defy the worst eco- in a decade for The lender’s during the quar- Analysts have cut their products recovering as the situa-
nomic slump in more than 300 years. Demand was driven the company. operations were ter. Defaults were earnings per share estimates tion normalizes gradually.
by the prospect of thousands of pounds of savings for pur- “The manage- bound to surge as for FY22 and expect the lender
A steep rise “Strong expected volume
hit due to curbs Cost pressure accentuated for Maruti during the June quarter,
chases completed by 30 June and a pandemic-induced ment is confident with just 40% of collections had to underperform its peers. The growth bodes well and should
quest for homes away from urban areas. BLOOMBERG of a swift recov- dropped to 67% in 20% drop in share price so far impacting its earnings. help drive growth; however, mar-
its centres open gins in the near term are still
ery (highlighting May. this year has meant that the Key financial ratios (as a % of net sales)
earlier cycles), for business The manage- company’s valuations are Q4FY21 Q1FY22 expected to be suppressed,” said
during Q1 77.2 79.0
but we have our ment sought to modest. To its credit, Mahin- Aditya Makharia, institutional
Outstanding dues own doubts, alleviate con- dra Finance has kept a high research analyst, HDFC Securities
Evergrande needs to repay some $7.4 billion of 14.8 15.6
given the risk of cerns. Collections level of provisioning. Ltd. Healthy passenger vehicle
maturing bonds next year. recurrent covid waves,” the have improved since June, the However, the company sales over the next two years
US dollar bonds Chinese Hong Kong analysts wrote in a note. lender said and pointed out needs to improve its loan 6.3 owing to low penetration and ris-
total maturities yuan bonds dollar bonds (in $ billion) 4.4
The increase in stress was that the defaults are largely the growth in addition to getting a 3.9 3.2 ing affordability, strong product
6,000
expected, as the lender’s port- fallout of liquidity problems grip on defaults. In the portfolio across markets, strong
5,000 folio is dominated by vehicle faced by vehicle operators. absence of either, the June Material costs Employee costs Other expenses Depreciation
return ratio and healthy balance
4,000
loans, especially in non-urban Even so, analysts are scepti- quarter will not be the last to Source: Company sheet are key positives for the
centres. The second wave of cal about a swift revival. “We see pressure on profitability. company, said analysts.
3,000 SATISH KUMAR/MINT

2,000

1,000

0
Q1 2022 Q2 2026
Dalmia Bharat’s pan-India ambition is making investors jittery
Source: Bloomberg
Harsha Jethmalani a series of greenfield and that it would be spending shareholders in the form of divi-
SATISH KUMAR/MINT
harsha.j@livemint.com brownfield expansions across
Aiming high around ₹2,000 crore for ongo- dends and buybacks.
Dalmia Bharat has allocated a large part of its capital expenditure
various regions. The manage- ing expansion and “To meet these promises,
China bond bulls are unfazed towards massive expansions by 2031.

E
xpansion plans are usually
amid increasing crackdowns music to the ears of inves-
While Chinese markets might look bleak at the moment, tors. But Dalmia Bharat
the biggest government bond sell-off of 2021 has some Ltd’s plan to become a pan-In-
investors salivating at a buying opportunity. Risk aversion dia cement maker in the next
swept the country and spread globally this week after decade seems to have given
China cracked down on private education firms, part of the investors more concern than
government’s new curbs on the technology industry. comfort.
Bonds were no exception. And, yet, bulls including Ash- The company said it intends
more Group and Alpine Macro, are undeterred. The driv- to achieve a production capac-
ers that have made Chinese bonds the best performers in ity of 110-130 million tonnes per
the world this year are still in place. Their higher yields, annum (mtpa) by 2031, which
lack of correlation with other markets and China’s con- translates into 15% CAGR.
servative deployment of stimulus should keep investors CAGR is short for compounded
interested, especially since near-zero interest rates remain annual growth rate. The firm
the norm around the world. China’s stock market has been aims to increase its capacity to
hammered this week after a sudden policy change on edu- 48.5mtpa in the next three years
cation firms raised concerns that a swathe of industries and 60mtpa by March 2025.
may be in the crosshairs of regulators. BLOOMBERG This would be done through
ment said that apart from its
ongoing expansion, it will add
more capacities in the East,
North-east and South markets.
It is also looking to boost its
grinding capacity in the South
through a greenfield unit of
3mtpa to cater to the markets in
Tamil Nadu and Kerala.
As far as non-core businesses
are concerned, the manage-
ment said that it is looking to
divest its retail business in the
next three-four months and the
divestment from the refractory
business is awaiting National
Company Law Tribunal’s nod.
But Dalmia Bharat’s stock fell
4.5% on the NSE on Wednes-
Ongoing expansion
of 7.5 million tonnes (MT)
New capacity of 10MT including
clinker debottlenecking
Sustainability
Green initiatives
Other expenses including maintenance
capex/return on interest expenses
day. According to analysts, Dal-
mia’s June-quarter earnings
were largely in line with expec-
tations. Similar to peers, the key
highlight was higher realiza-
tions, which helped operating
Estimated capex (in  crore)
1,950-2,000
4,700-5,000
1,000-1,200
900-1,000
Source: Company presentation
SATISH KUMAR/MINT
performance amid weak vol-
umes. Ergo, the pressure on the
stock is likely to be because of its
aggressive expansion plans.
Expansion plans don’t come
cheap. The management said
₹4,700-5,000 crore for new
capacities. Dalmia Bharat is
looking at both organic and
inorganic routes to increase its
capacity, but its priority would
be organic expansion, the man-
agement added.
“The company’s increased
focus on its core cement-mak-
ing business is positive. How-
ever, its 10-year plan, which still
lacks many granular details, is
too ambitious for the Street to
digest,” said an analyst with a
domestic brokerage house,
requesting anonymity.
Apart from expansions, the
management aims to return up
to 10% of operating cash flow to
cash flows have to be very
strong and for that, cement
demand and prices have to
remain robust. So, in a scenario
of subdued demand and volatile
cement prices, the company
will have to look at debt, which
is a concern,” added the analyst.
To be sure, as of Q1FY22, Dal-
mia Bharat is net debt-free. In
case of inorganic expansion, its
net debt/Ebitda could exceed its
comfort level of two times; how-
ever, the company has assured
that it would try to bring it back
to two times in a definite time-
frame. Ebitda is short for earn-
ings before interest, tax, depre-
ciation and amortization.

Mark to Market writers do not have positions in the companies they have discussed here
LIVEMINT.COM DEALS, TECH & STARTUPS THURSDAY, 29 JULY 2021
MUMBAI 05

m MINT SHORTS
Augmented reality startup Flam
‘We will remain open and Kalaari seed
fund aims to
help startups
raises $3.5 million in seed funding
Mumbai: Augmented reality (AR) startup Flam on Wednesday
said it has raised $3.5 million (about ₹26.079 crore) in seed fund-
ing from Silicon Valley Quad, Inventus Capital Partners SV, 9Uni-
flexible in our supply chain’ led by women
corns and Kwaish Ventures. The capital will be used to promote Prasid Banerjee ing in your journey? Staff Writer
growth and user engagement on Flam’s new social media fea- prasid.b@livemint.com Indian consumers are extremely feedback@livemint.com
tures, build a scalable next-generation AR engine, drive massive NEW DELHI bright, and they are value-conscious MUMBAI
AR adoption, and expand to international markets, an official consumers. What we want to address

O K
statement said. It will also be deployed to build a high-quality nePlus co-founder Carl within India is consumers who are alaari Capital has
team with expertise in computer vision, graphics engineering, Pei’s new venture Noth- tech-savvy, want to get hold of the lat- launched its CXXO pro-
GPS mapping, social media product development, including ing has been the talk of est devices and latest technologies. gramme to level the
growth managers and 3-D designers, the statement added. PTI the town in 2021. Its first There are consumers who are trend- playing field for female
product, wireless ear- setters and love design, we want to founder-CEOs in India by
buds Ear (1), was launched in India on address that space. And that space is making it easier for them to
Cost of data breach at record 27 July. Nothing will be expanding its across Gen Z or millennials, or even access capital, community and
portfolio to address the entire con- Gen X. coaching to run their busi-
high during pandemic: IBM sumer technology space. In an inter- How will you keep prices competi- nesses more effectively. The
ISTOCK
view with Mint, Manu Sharma, vice- tive, given the restrictions that the venture capital firm has set
president and general manager, Noth- government has put in place to aside $10 million a year to
ing India, said it may even consider promote local manufacturing? invest in startups that have
local manufacturing. Edited excerpts: The fact that the India launch of Ear female founders as key deci-
development capability rapidly. It’s While we are a very young company, (1) happened alongside the global sion-makers, ideally as CEOs.

‘
Is Ear (1) the entry point? Will you equally important for us to work on we have a wealth of experience in launch is a testament to the impor- “India’s startup ecosystem is
focus on the entire consumer elec- both areas. Our long-term vision is to the consumer tech- tance of the market for booming, with 16 new uni-
tronics segment? have technology that feels like nothing, nology space. Nothing. Our products corns minted in 2021 alone,
Yes, you are right that we are launch- which means we would want to work We understand The fact that the India are being expertly taking the total number to 53.
ing the Ear (1), which is just the starting towards both hardware and software. the market and the launch of Ear (1) assembled around the However, only one of the uni-
point of our journey. We Are you looking to dynamics, and of happened alongside world. The important corns has a woman as its
want to introduce a com- m INTERVIEW partner with compa- course the ecosystem thing is that our future founder-CEO. Inclusive
plete ecosystem of prod- nies such as Qualcomm of players in the con- the global launch is customers and stake- growth cannot happen with-
Bengaluru: Data breaches cost companies $4.24 million ucts and services that are beyond audio. and others for closer integration sumer tech space is testament to the mar- holders can rely on us to out adequate opportunities for
(about ₹31.598 crore) per incident on average, according to The biggest consumer tech compa- with the ecosystem? very important. ket’s importance for us deliver quality products women at the top,” CXXO said.
the findings of the latest IBM Security report, the highest nies are strong in both hardware Let me put it this way: for our future So, definitely all with our unique design The programme seeks to
cost in the 17-year history of the report. Based on analysis and software. What’s the focus for products, and as we roll out more cate- kinds of partnerships Manu Sharma approach. So, we will meet the specific needs of each
VP & GM, Nothing India
of real-world data breaches experienced by over 500 orga- Nothing? gories, we will be working with various are on the table. always remain open and female CEO and her startup.
nizations, the study suggests that security incidents became Both are equally important. You ecosystem players. I would not want to India is a high-vol- flexible in our supply The aim will be to create a
more costly and harder to contain due to drastic operational can’t do one without the other. Now, name any one of them right now, but ume market, but at lower price chain. I’d not rule anything out at this cohort of 8-10 female founder-
shifts during the pandemic, with costs rising 10% compared we are scaling up our research and it’s very important to be connected. points. How do you see that figur- stage. CEOs every year, it added.
to the prior year. In India, the average total cost of data
breach was ₹16.5 crore in the 2021 study, an increase of
17.85% from 2020. STAFF WRITER

IT services firm Cyient to acquire

Ola expands ESOP pool to offer
Australian company in $2.7 mn deal
Bengaluru: IT services company Cyient Ltd said on Wednesday
staff extra stocks worth ₹400 cr
that it has agreed to acquire WorkForce Delta, a mobile work-
force management consultant based in Australia, for $2.7 million PTI impact they create,” Aggarwal
(about ₹20 crore). Cyient will acquire the firm through its unit feedback@livemint.com said.
Cyient Australia Pty Ltd. There has been a growing demand for NEW DELHI It will also reinforce their
comprehensive field force management solutions in the utilities (employees’) sense of owner-

R
and telecom industries. Cyient said it continues to invest in ide-hailing major Ola on
expanding its market presence while creating “sustainable value” Wednesday said it has
for all stakeholders. AYUSHMAN BARUAH expanded its employee
stock options (ESOP) pool to
₹3,000 crore and has allocated
Jobtech startup Bandhoo raises an additional ₹400 crore
worth of stocks to employees
fresh funding from Unitus, others in the run-up to its IPO.
New Delhi: One-and-a-half-year-old startup Bandhoo that The allocation rewards Ola’s
works in the field of construction sector jobs and supply chain has high-impact employees and
raised $1.1 million (about ₹8 crore ) funding from early stage ven- will lead to long-term wealth
ture capital firm Unitus Ventures and others. Besides Unitus, creation for them, Ola said.
Bharat Innovation Fund and other angel investors, too, partici- The development comes
pated in the funding round. The investors said by working closely close on the heels of Ola’s
with “building-material suppliers, and construction workers, $500 million fundraise from
Bandhoo is set to make the labour market (in that segment) more Temasek, Warburg Pincus
transparent”. STAFF WRITER affiliate Plum Wood Invest-
ment and its co-founder Bha-
vish Aggarwal.
“At Ola, we are focused on
Ola co-founder Bhavish
Aggarwal.
to build globally competitive,
high-impact businesses at
global scale. Our expanded
ESOP programme, along with
the fresh stock allocation of
₹400 crore, enables our key
talent to participate in the
long-term wealth creation
ship and align their growth
with that of the company as
Ola continues to accelerate the
world’s transition to sustaina-
ble mobility, he added.
While the company has
been talking of possible listing,
Ola has not specified a timeline
for its proposed initial public
offer (IPO). An IPO will help
Ola investors like SoftBank,
Tiger Global and Steadview
Capital to exit or partially sell
their stake in the company to
return funds to their share-
holders.
Founded in 2011 by Aggar-
wal and Ankit Bhati, Ola offers
services in India, Australia,
New Zealand and the UK. It

Osmium launches creating the industries of

tomorrow with the ambition
opportunities generated by
their innovations and the
competes with Uber in these
markets as well.

₹371 crore fund for

early-stage startups MARUTI SUZUKI INDIA LIMITED
Registered Office: Plot No.1, Nelson Mandela Road, Vasant Kunj, New Delhi - 110070
Joseph Rai fund will avoid firms that may CIN: L34103DL1981PLC011375; Website: www.marutisuzuki.com; E-mail: investor@maruti.co.in; Phone: + 91-11-46781000; Fax: +91-11-46150275/76
joseph.rai@hindustantimes.com face legal hurdles and would
NEW DELHI also not invest in social net- Extract of Standalone Unaudited Financial Results for the quarter ended June 30, 2021 INR in million, except per share data
working firms as they do not Quarter ended Year ended

I
ndian investment manage- have clear revenue models.
31st March,
ment firm Osmium Global, Osmium Global’s team Sr. No Particulars 30th June, 2021 30th June, 2020 31st March, 2021
2021
which had been investing includes senior fund manager Unaudited Unaudited Unaudited Audited
in public equity globally so Chander Malik, an IIT Delhi,
1 Total Income from Operations 177,707 240,237 41,065 703,325
far, has launched a fund for IIM Calcutta and the Kellogg
early-stage startups in India. School of Management alum- 2 Net Profit / (Loss) for the period (before Tax, Exceptional and / or Extraordinary Items) 5,635 13,075 (3,457) 51,594
Luke Talwar, founder and nus, and Geetika Dhawan, a 3 Net Profit / (Loss) for the period (before Tax, after Exceptional and / or Extraordinary Items) 5,635 13,075 (3,457) 51,594
chief executive of startup con- Delhi University and Harvard 4 Net Profit / (Loss) for the period after Tax (after Exceptional and / or Extraordinary Items) 4,408 11,661 (2,494) 42,297
sultancy Turiya Investments, University alumnus, who is a
5 Total Comprehensive Income /(Loss) for the period [comprising Profit / (Loss) for the period (after tax) and 5,758 12,603 (1,507) 47,423
said Osmium had reached out fund manager. Other Comprehensive Income /(Loss) (after tax)]
to him to run a trial for private Talwar said Osmium had
6 Equity Share Capital 1,510 1,510 1,510 1,510
investments in view of the been making public equity
vibrant startup eco- investments so far. It 7 Reserve as shown in the Audited Balance Sheet 512,158
system. raised funds from 8 Earnings Per Share (of INR 5 each) (for continuing and discontinued operations)
The $50 million high net-worth indi- (a) Basic 14.59 38.60 (8.26) 140.02
(₹371 crore) fund, viduals and drew
(b) Diluted 14.59 38.60 (8.26) 140.02
based in the Cayman Islands, lines of credit. According to
has already made two bets in Osmium’s website, some
Extract of Consolidated Unaudited Financial Results for the quarter ended June 30, 2021 INR in million, except per share data
India with Turiya acting as a major investments include
consultant for both the deals, Taiwan Semiconductor, Ten- Quarter ended Year ended
said Talwar. cent and Alibaba in Asia; Nes- Sr. No Particulars 30 June, 2021
th 31st March,
30 June, 2020
th
31st March, 2021
2021
Turiya is a tle, Allianz and
partner for the The fund has LVMH Moet Unaudited Unaudited Unaudited Audited
fund and will made two bets in Hennessy Louis 1 Total Income from Operations 177,764 240,345 41,106 703,720
scout for more India with Turiya V u i t t o n in 2 Net Profit / (Loss) for the period (before Tax, Exceptional and / or Extraordinary Items) 5,965 13,836 (3,697) 53,210
deals, but the Investments Europe; and
3 Net Profit / (Loss) for the period (before Tax, after Exceptional and / or Extraordinary Items) 5,965 13,836 (3,697) 53,210
final decision to Lockheed, Intel
acting as a 4 Net Profit / (Loss) for the period after Tax (after Exceptional and / or Extraordinary Items) 4,750 12,411 (2,683) 43,891
invest in a startup Corp. and Coca-
will depend on consultant for Cola in the US. Its 5 Total Comprehensive Income /(Loss) for the period [comprising Profit / (Loss) for the period (after tax) and 6,111 13,360 (1,692) 49,027
the fund’s man- both the deals indirect invest- Other Comprehensive Income / (Loss) (after tax)]
agers. ments in Indian 6 Equity Share Capital 1,510 1,510 1,510 1,510
The fund startups include 7 Reserve as shown in the Audited Balance Sheet 523,496
invested ₹17 crore in a Mad- Swiggy, Fabindia, Byju’s and
8 Earnings Per Share (of INR 5 each) (for continuing and discontinued operations)
hya Pradesh-based startup Dream11.
and a Gurugram-based artifi- The indirect investments (a) Basic 15.72 41.09 (8.88) 145.30
cial intelligence (AI) firm. It were through public equity (b) Diluted 15.72 41.09 (8.88) 145.30
aims to back 80 startups in investments in companies Note: The above is an extract of the detailed format of the Standalone and Consolidated Financial Results for the quarter ended June 30, 2021 filed with the Stock Exchanges under
this financial year with a deal that in some way have an Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The full format of the Standalone and Consolidated Financial Results for the quarter ended
size of ₹50 lakh to a few cro- exposure to the startups, Tal- June 30, 2021 are available on the websites of BSE and NSE at www.bseindia.com and www.nseindia.com and on Company’s website at www.marutisuzuki.com.
res, Talwar said. war said. For and on behalf of Board of Directors
The fund is sector agnostic. Turiya helps both startups
It will focus on “rapid- and funds scout for deals with
growth” startups or “stable an aim to make startup invest- Place: New Delhi (Kenichi Ayukawa)
revenue-generating” start- ing very easy and accessible. Date: July 28, 2021 Managing Director & CEO
ups. Talwar said it works with both
Talwar, however, said the small and large funds.
06 THURSDAY, 29 JULY 2021
MUMBAI CORPORATE LIVEMINT.COM

Indian mkt
delivers a Nestlé India’s Jun qtr profit ORDINARY
POST
good Q2 for
Mondelez rises, but misses estimates SHUCHI BANSAL

Respond to this column at

shuchi.b@livemint.com

Suneera Tandon
suneera.t@livemint.com
NEW DELHI The packaged foods and beverages firm saw its profit jump 10.6% year-on-year to ₹538.5 cr
LIGHT REGULATION
OF CONTENT MAY
C
hocolate and snack
maker Mondelez Inter- Suneera Tandon
national Inc. on Tues-
day reported double-digit
growth in India in the second
suneera.t@livemint.com
NEW DELHI REMAIN A MIRAGE

P
quarter of the calendar year, ackaged foods and beverages

despite the market reporting
covid-linked disruptions at the
beginning of the quarter.
India’s short-term risk of
further disruption remains
“significant” because of the
slow vaccine roll-out and new
variants, the company’s top
management told analysts.
However, they believe that the
India’s long-term prospects
are “still very strong”.
At its second-quarter earn-
ings conference call for the
three months ended 30 June,
the maker of Oreo cookies and
Cadbury Dairy Milk choco-
lates said that the situation in
India improved in June and
growth trends have been
restored in line with its per-
formance in the first quarter.
“India delivered another
quarter of exceptional
growth, despite a challenging
start related to lockdowns,
growing in strong double dig-
its. India grew on a two-year
average mid single digit,” said
Luca Zaramella, chief finan-
cial officer & executive vice-
president.
Packaged consumer goods
companies in India also bene-
fited from a lower base in the
year-ago quarter when lock-
downs and supply-side disrup-
tions affected demand, despite
India being affected at the
beginning of the quarter by
covid lockdowns, he added.
Within emerging markets,
the company reported a strong
performance, growing more
than 16% for the June quarter.
W
company Nestlé India on hen the government introduced the Information
Wednesday reported a 10.6% Technology (Intermediary Guidelines and Digital
year-on-year (y-o-y) jump in Media Ethics Code) Rules, 2021, in February to regu-
June-quarter profit at ₹538.5 late social media, digital platforms and streaming services, it
crore, missing Street estimates. termed the rules as a “soft-touch regulatory architecture”. Of
Estimates by nine brokerages had course, it was anything but, as critics and stakeholders com-
pegged Nestlé India’s sales at ₹3,528.90 plained that the rules impinge on their rights and creative free-
crore for the quarter; while eight ana- dom. The amendments to the Cable TV Rules introduced last
lysts had projected the company to month have triggered a similar response with television news
report net income of ₹576.50 crore. channels challenging them before the court.
The maker of Maggi noodles and Kit Earlier this month, the Kerala High Court directed the infor-
Kat chocolates reported a 13.8% y-o-y mation and broadcasting (I&B) ministry not to take any coercive
jump in sales for the three months action against news channels that are members of the News
ended 30 June, benefiting from a low Broadcasters Association (NBA) for non-compliance with the
base. Sales for the quarter stood at amended Cable TV Rules. The NBA went to court against new
₹3,462.35 crore, up from ₹3,041.45 provisions in the Cable Television Networks (Amendment)
crore in the year-ago period. Sequen- Rules, which stipulate the broadcast industry self-regulatory
tially, the firm reported a 10.5% drop in bodies to register with the ministry, and TV channels to employ
profit, while sales were down 3.8%. grievance officers for content complaints.
The company flagged inflationary The maker of Maggi noodles reported a 13.8% y-o-y jump in sales for the June quarter, benefiting from a low base. BLOOMBERG The new rules also create a third layer—an oversight mecha-
pressures in commodities, especially in nism—for grievance redressal, over and above the TV channel
oils and packaging materials. Other market over the next three to four that sales were broadly in line with esti- ties have increased sharply in the past and its self-regulatory body. This will publish a charter and codes
expenses jumped 30% y-o-y largely years. Nestlé India had announced the mates, but earnings before interest, four months, but the company was able of practices for self-regulatory bodies and also establish an inter-
because of rising fuel prices and com- investment in October to expand exist- taxes, depreciation and amortization, to improve gross margins by 67bps departmental committee chaired by an additional secretary of
pared to a base quarter impacted by ing manufacturing capacities, apart or Ebitda, was lower than estimates. mainly because of a favourable product the I&B ministry to look into complaints against TV content.
restrictions in operations because of from setting up a new plant in Gujarat. “On the sales front, good to see mix and higher realization, said ana- In its plea, the NBA has said this gives the executive unfettered
the lockdown imposed to contain the “Last year, our commitment to India domestic and exports grow in double lysts at ICICI Securities. However, and excessive power to regulate content. “NBA is challenging the
covid pandemic, it said. Other income made us articulate an ambition to digits, while the strong performance in overhead spends increased sharply by 2021 amendments as being violative of fundamental rights of the
decreased because of lower yields. 265bps mainly because of increas- Constitution (Article 14, Article 19(1)(a)
E-commerce channels grew by QUARTERLY REPORT ing fuel prices. The NBA says and Article 19(1)(g)), alleging violation
105% and contributed 6.4% of In the first half of the year, the the rules give of right to equality before the law, right
domestic sales during the quarter. SALES for the June THE company E-COMMERCE THE company has contribution of innovations to to free speech and expression and right
Demand during the quarter was quarter stood at flagged inflationary channels grew by invested ₹1,000 cr as domestic sales stood at 4.9%. Nestlé the executive to trade,” said Chandrima Mitra, part-
₹3,462.35 cr, up from pressures in 105% and contributed part of the capacity excessive power ner, DSK Legal.
led by Maggi noodles, Kit Kat, ₹3,041.45 cr in the commodities, 6.4% of domestic expansion plan hired over 1,000 people through
Munch, Maggi sauces and Maggi year-ago period especially in oils sales in the quarter promised for India regular hiring, apprenticeship and to regulate “We understand that the main chal-
masala-ae-magic brands, which internship in the period. content on TV lenge is to rules 18-20 of the 2021
posted strong double-digit growth. On Wednesday, Nestlé India’s amendments, as these create the over-
Domestic sales for this period invest ₹2,600 crore over three-four e-commerce has continued,” said board of directors approved the disin- sight mechanism which enable the
increased 13.7%, though the lockdown years. I’m pleased to announce that out Abneesh Roy, executive director, insti- vestment of the company’s entire government to regulate the content of news broadcasters. The
disrupted production across factories. of this, we have already invested about tutional equities, Edelweiss Securities. minority stake of 19.98% in Sahyadri petitioners have contended that the said rules give the inter-de-
Domestic sales growth was driven by ₹1,000 crore. This is a vindication of However, the Ebitda margin com- Agro and Dairy Pvt. Ltd (formerly lndo- partmental committee the power to adjudicate upon decisions
volume and mix, the company said. our confidence and trust in the Nestlé pression of 88 basis points (bps) y-o-y con Agro and Allied Activities Pvt. Ltd), given by retired Supreme Court/High Cort judges (since they
The company has invested ₹1,000 journey in India,” said Suresh Naraya- and 177bps quarter-on-quarter was a a company engaged in milk collection head the self-regulating bodies) and thus is allowing the execu-
crore as part of the ₹2,600 crore capac- nan, chairman and managing director. key negative, he said. in western India, because of changes in tive to interfere with the judicial process,” she added.
ity expansion promised for the Indian Analysts tracking the company said Prices of milk and other commodi- the business scenario. Bombay High Court advocate and media specialist Ashok Man-
sukhani agreed. “All forms of media, barring newspapers, will
now have a three-layered self-regulatory mechanism with
‘strong’ government supervision,” he said. “Importantly, this

Droom races to unicorn status BharatPe in talks to raise $350 mn
FROM PAGE 1
Sandeep and his team have
built an impressive digital eco-
system that can revolutionize
the automobile buying and
selling experience,” said Gene
Pohren, managing director of
57 Stars.
While business was initially
impacted due to the nation-
wide lockdown, Droom saw
strong recovery and, by
December, its transactions
had passed the all-time peak
seen in February, said Sandeep
Aggarwal, founder and CEO,
Droom, adding that the busi-
ness has been growing every
month since then.
“Our current annual run-
rate is $1.7 billion for GMV and
$54 million for net revenue.
The company remains on
track to touch a GMV of $2 bil-
lion and a net revenue of more
than $65 million in CY (calen-
dar year) 2021,” he said.
Cars represent almost 90%
of gross merchandise value
(GMV), with two-wheelers
making up the rest, while in
terms of number of units sold
Droom says it has seen growing
consumer preference for
ownership of automobiles. MINT
cars are two-third and two-
wheelers one-third of the units
sold. Though Droom has pri-
marily been a used vehicles
platform, the company has
started selling new vehicles
too in the past three months.
“We sold new cars once in
2018, but then we stopped.
Last three months, we have
again started a new vehicles
business, and it currently com-
prises 5% of the business. We
are primarily a used car plat-
form but after covid, OEMs
(original equipment makers)
started looking for online plat-
forms for selling new vehicles
and that’s how we restarted it,”
said Aggarwal.
“In coming quarters and
years, new electric vehicles will
be a very big opportunity for
Droom because these compa-
nies want to sell EVs like how
mobiles phones and consumer
electronics is sold and we are
the most suited platform for
that opportunity,” he added.
Services is another big focus
area for Droom, as the company
feels that this can help it signifi-
cantly improve its margins.
“Services is not very big. Our
monetization was primarily on
the money made on the trans-
actions executed on the plat-
form. But this year, one big
focus area for us is to attach
loans and insurance on every
transaction on the platform,
that is a very substantial
opportunity,” said Aggarwal.
“Another service we are build-
ing is last-mile delivery. Besides
that, we own a few tools in the
ecosystem, such as one for used-
vehicle pricing. We will mone-
tize this also. So far, this product
has been free,” said Aggarwal.
FROM PAGE 1
$900 million.
BharatPe is in advanced
talks with the investors for the
latest fundraise, which track its
plans around the takeover of
distressed Punjab and Maha-
rashtra Cooperative (PMC)
Bank with Centrum Group.
In a recent interview, Bhar-
atPe co-founder Ashneer
Grover said the company,
along with Centrum Group,
will collectively infuse $250-
300 million (or up to ₹2,224
crore) in PMC Bank over the
next two years.
The consortium had
received the Reserve Bank of
India’s (RBI’s) in-principle
approval for the takeover of
PMC Bank in June.
RBI said it has decided to
grant in-principle approval to
Centrum to set up a small
finance bank under on-tap
licensing norms.
The new entity has to be
operational within 120 days of
approval, and only when that is
done will the RBI draft a
scheme on amalgamation with
inter-departmental committee can recommend deleting or mod-
ifying content and not just overrule an HC or SC judge but even
completely bypass the second tier of self-regulation.”
Mitra observes a trend in the 2021 IT Rules, the proposed
PMC Bank. sumer-focused BNPL offering to amendments to the Cinematograph Act, 1952, and now the Cable
The plan will then be sent to customers by the end of July. TV amendments—the Centre is attempting to amend the legisla-
the government for approval The company, which has tions to provide safeguards so that the content is aligned with
and official notification. How- been focusing on its lending public interest. “While changes in technology and evolution in
ever, under Section 45 of the operations, has plans to raise the digital world require amendments that are in line with the
Banking Regulation Act, only a close to $500 million in debt by current times, these amendments in content-related legislations
bank can be merged with FY23, Grover said in an earlier could lead broadcasters, producers, OTT (over-the-top) plat-
another, and, therefore, the interview. forms and content creators to become more and more cautious
process will start only once the Through its recent acquisi- in the kind of stories they want to tell to avoid the threat of any
small finance bank is created. tion of Payback, BharatPe plans complaints or litigations,” she added.
The multi-state cooperative to help 500,000 merchants on Content choices are subjective and views on content are bound
lender was on the its platform to roll to differ in a diverse country like India. “But the government must
brink of collapse BharatPe had out loyalty pro- be able to draw a clear line as to which views are to be taken seri-
when the regula- in February grammes and ously and which cannot be allowed, as under Article 19(1)(a), it is
tor seized it on 24 raised close to work as redemp- a fundamental right of every citizen of India to have freedom of
September 2019, $108 million in tion points for cus- speech and expression and any restriction to such right must only
capped cash with- be as per Article 19(2),” Mitra said.
Series D primary tomers over the
drawals and next six months. Mansukhani maintained that regulating broadcasters through
launched an and secondary BharatPe has the Cable TV Act is a legislative failure to effectively monitor a
investigation into equity funding disbursed close to vibrant broadcast media industry. He has been batting for an
its accounting $225 million in autonomous broadcast regulator for the sector for years and
lapses. credit to date and often cites the Supreme Court ruling on the Cricket Association
BharatPe declined to com- has an outstanding loan book of of Bengal case that said “airwaves or frequencies are public prop-
ment, while Tiger Global did $100 million. erty. Their use has to be controlled and regulated by a public
not respond to an email seeking Through its QR codes, the authority in the interests of the public and to prevent the invasion
comment until press time. firm processes payments worth of their rights…”
BharatPe will offer ‘Buy Now $10 billion annually and But times have changed. With the Centre tightening the noose
Pay Later’ (BNPL) credit servi- expects it to reach $30 billion around all content across platforms—social, digital, streaming
ces, as its first product to PMC by FY23. The company wants and broadcasting—Mansukhani rued that light-touch regulation
depositors, through its recent to have 10 million merchants by will remain a mirage in the near future.
acquisition of loyalty platform the end of March 2022, com- Shuchi Bansal is Mint’s media, marketing and advertising edi-
Payback India. It had earlier said pared with 6 million merchants tor. Ordinary Post will look at pressing issues related to all three. Or
that it plans to launch its con- at the end of FY21. just fun stuff.

World economy at key juncture Rules to hold controlling shareholders accountable

amid vaccine gap: IMF chief
Bloomberg
feedback@livemint.com
FROM PAGE 1
that, the company can decide if it
high public and corporate debt qual access to vaccines is fur- wants to be a more widely held
levels could change rapidly? ther widening the recovery gap entity or not,” Tyagi said.
What should be their guiding between advanced and devel- “With almost all corporate-
comments on whether there is
a need to shift from the ‘pro-
rights, nor do they have to lock
in their shares for three years
that even without any agree-
ments, a 20% or 30% shareholder
moter’ regime to a ‘controlling (although pre-issue sharehold- has overwhelming rights over
shareholder’ regime as in many ers—with a few exceptions— the control of the company,” said
countries and, if yes, the man- have to lock in their shares for a an investment banker.
ner and timeframe for such a year after listing). On Wednesday, the Sebi

T
he world economy is at a
dangerous juncture as
the gap widens between
nations that have access to cov-
id-19 vaccines and those that
don’t, according to the Interna-
tional Monetary Fund’s (IMF’s)
managing director.
Navigating the recovery
from here will require careful
choices by policymakers, espe-
cially central banks, Kristalina
Georgieva warned.
“How will they calibrate the
withdrawal of stimulus when
models and data are not appli-
cable and uncertainty remains
extreme, when the extent of
scarring is still unknown, and
markets’ willingness to finance
principles to navigate our exit?” oping economies. The fund related laws in India based on shift, Tyagi said. Thus, when PE- or chairman said the market regu-
Georgieva said in Washington, maintained its outlook for the the promoter concept, I need In June 2017, Mint first VC-owned firms list, there is an lator is also discussing ways to
D.C., according to prepared biggest rebound in global eco- not emphasize how important reported that Sebi was planning exit of stakeholders who over- create and develop a SPAC
remarks. nomic growth in and far-reaching this proposal to ease norms for listing of com- saw the growth phase of these (special purpose acquisition
Georgieva Navigating the four decades, but is,” Tyagi said. panies that do not have any clear companies, a key factor that company) market in India.
asked how central recovery from changed its “The concept of promoters promoter and are majority- Sebi chairman Ajay Tyagi. MINT deters such companies from Several Indian companies,
banks will adapt here will require u n d e r l y i n g has existed in India for years. owned by financial investors. accessing the market. mostly startups, are looking for
their tool kits to careful choices by regional forecasts. Concentrated ownership is still The issue is that once a promoters must contribute at The new rules being consid- US listing through the fast-
the post-pan- World output is predominant in our country. shareholder is classified as a least 20% of the post-issue ered by Sebi may provide relax- emerging SPAC route.
policymakers,
demic policy still expected to However, over time, with high promoter, the listing rules shareholding and promise not to ation in these lock-in norms Data from Refinitiv, a data
landscape and especially central grow 6% in 2021 levels of PE/VC funding, increas- impose certain obligations, sell this stake for at least three while allowing key stakehold- analytics firm, shows 126 SPAC
how they’ll pre- banks: IMF MD following last ing startup culture and new-age including a lock-in period on years. At the same time, they get ers to retain some of the special IPOs raised $44 billion in the
pare for an accel- year’s 3.2% drop, companies are coming up, there shareholding. Under the new some rights, such as appointing rights given only to promoters. first nine months of 2020,
eration in digital the fund said in an is an increasing trend of compa- norms expected to be rolled out a majority of the directors or To be sure, Sebi had earlier which is more than three times
money. “These are just some of updated World Economic Out- nies with diversified sharehold- this fiscal, Sebi may grant some controlling the management or relaxed some rules for startups the sum raised during the same
the difficult questions being look released Tuesday. It ing and, in many cases, with pro- rights akin to what promoters making policy decisions. wanting to raise money and trade period in 2019, as corporate
faced by central bankers every- reduced the emerging-market fessional management and no hold in listed firms. Companies that have no on stock exchanges on a so-called value creators and investors
where,” she said. forecast to 6.3% expansion, promoters,” he said. Current rules classify firms as identifiable promoters are institutional trading platform. seek to dodge the volatility and
The remarks come a day compared to the 6.7% increase Sebi issued a consultation promoter-driven or profession- called professionally managed. But, it has been a non-starter. uncertainty of the traditional
after the IMF warned that une- projected in April. paper some time back seeking ally managed. In the first case, Big shareholders get no special “It is important to remember listing process.
LIVEMINT.COM CORPORATE THURSDAY, 29 JULY 2021
MUMBAI 07

Gupshup gets $240 mn

in follow-on funding
Additional sum will go toward a share buyback from employees, investors
Swaraj Singh Dhanjal
swaraj.d@livemint.com
MUMBAI

G
upshup, a conversational
messaging platform for com-
panies to manage customer
interactions, on Wednesday
said it has raised an addi-
tional $240 million in follow-on funding
that will go toward a share buyback from
employees and existing investors ahead of
a US listing next year.
The funding round was led by investors,
including Fidelity Management and
Research Co. Llc, Tiger Global Manage-
ment Llc, Think Investments Llc, Malabar
Investments, Harbor Spring Capital Llc,
accounts managed by Neuberger Berman
Investment Advisers Llc, White Oak,
Neeraj Arora and others.
This latest round follows the $100 mil- Beerud Sheth, co-founder and chief executive of Gupshup.
lion funding from Tiger Global in April at
a $1.4 billion valuation. Some of the early investors of Gupshup $150 million, is present in India, Latin
San Francisco-based Gupshup helps include Helion Venture Partners and America, South-East Asia, West Asia, East-
businesses interact and manage customer Charles River Ventures, which had ern Europe, Africa and the US.
requirements through AI-powered con- invested in the company in 2008. “The company is growing at 60% year-
versations on messaging apps across mar- “When we were raising the previous on-year, and we are hoping to accelerate
keting, commerce, and support work- $100 million funding from Tiger, there this growth. India comprises 80% of the
flows. Customers can discover products, was a lot of interest from many other business, and the US is the next big market
pay for them, track delivery, provide feed- investors. So we decided to do this second with 10-15% share, but geographies such
back and get support in a business aimed round, which helped us provide liquidity as Latin America and South-East Asia are
at building a conversational seeing fast growth,” said
rapport between customers PREPARING FOR US LISTING Sheth.
and businesses. While the majority of its
“A large part of this round THE round was led by THIS round follows THE firm is eyeing a business coming from enter-
Fidelity Management, the $100 million
of fundraising will go towards Tiger US listing sometime in prise customers, Sheth said
Global, Think funding from Tiger 2022, said its co-
the secondary purchase of Investments, among Global in April at a founder and CEO the focus will also be to tap
shares from current and others $1.4 billion valuation Beerud Sheth small businesses that have
ex-employees of the company been forced by the pandemic
as well as the existing inves- to quickly go digital. “Conver-
tors. We ran a tender offer process con- to our shareholders. And since we are sations represent the new digital store-
currently with this round, and over 200 looking to go public, it was a good oppor- front for businesses - virtually every busi-
employees have tendered part of the tunity to bring in these marquee crossover ness will need to build them. And small
shares they held. Some of our investors investors in this round,” said Sheth. businesses are an untapped market where
who have been invested in the company Gupshup is eyeing a US listing some- we see a lot of growth coming from,” said
for a long time also tendered some of their time in 2022, he added. Sheth,
shares,” said Beerud Sheth, co-founder Gupshup, which ended 2020 with an Gupshup is also exploring M&A oppor-
and chief executive of Gupshup. annual revenue run-rate of approximately tunities.

LIC IPO may be the

largest issue so far:
Dipam secretary
Asit Ranjan Mishra
asit.m@livemint.com
NEW DELHI

L
isting of the Life Insurance
Corporation of India (LIC)
in the equity markets tar-
geted for the March quarter of
the fiscal year 2021-22 (FY22)
will be a big global event as it is
expected to be the largest issue Dipam has invited bids from i-
that India has seen, department bankers and legal advisers to
of investment and public asset manage the LIC IPO. MINT
management (Dipam) secre-
tary Tuhin Kanta Pandey said shrink for the second consecu-
on Wednesday. tive year in FY22, achieving the
“LIC’s initial public offering disinvestment target will be
(IPO) will give larger numbers crucial for the finance ministry.
and that itself will be a very big The government’s focus will
event for stock markets not be privatization and strategic
only in India but also around disinvestment this fiscal,
the globe. It will be the largest Pandey said. “Bharat Petro-
issue that India has seen. That is leum Corp. Ltd is a very large
our estimate,” Pandey said at an transaction. After probably 17
event organized by industry years, India needs to see some
lobby Federation of Indian privatization. It will be a mes-
Chambers of Commerce and sage to all stakeholders,” he
Industry (Ficci). said. Growth is
Dipam has The disinvestment Pandey said he
invited proposals schedule for FY22 is hopeful that the not just about net gains.
from investment
bankers and legal
got delayed due g o v e r n m e n t ’ s
to the 2nd wave. efforts to sell Air
It’s also gaining knowledge
advisers to man-
age the LIC IPO.
But Dipam feels India this fiscal
year will succeed. and perspective.
The central gov- the ₹1.75 tn target However, he
ernment so far has is still achievable accepted that the
got ₹7,646 crore
through disin-
pandemic has
affected the hos-
Growth is...On.
vestment in FY22. It sold a pitality and travel sectors, espe-
1.95% stake in Axis Bank held cially international travel.
through the Specified Under- “We are also sanguine that
taking of the Unit Trust of India things will change as vaccina-
in May. Earlier this month, it tion increases. India has a dias-
sold a 7.49% stake in NMDC pora all around the globe. We
Ltd. An offer for sale for an 8% really deserve an airline that is
stake in Housing and Urban connected to the world and
Development Corp. (HUDCO) whose hub is India. How do you
Ltd opened on Tuesday and make it happen? We had a
this could help the government turnaround plan, but we didn’t
get ₹720 crore for its disinvest- succeed in the public sector.
ment kitty. Hopefully, somebody through
The government’s ambitious a transparent bidding process
disinvestment schedule for should be able to take it over Follow us:
FY22 has been delayed because and carry on and let employ-
of the second wave of the cov- ment be saved. However, it is mint.live livemint live_mint
id-19 pandemic. However, not an easy thing to do. We
Dipam is confident that the have to go through the process livemint livemint.com
₹1.75 trillion target is still and relentlessly pursue it with
achievable. optimism and certainly we will
With revenues expected to succeed,” Pandey added.
08 THURSDAY, 29 JULY 2021
MUMBAI GLOBAL LIVEMINT.COM

Apple and Tesla to take a hit

from global chip shortage
Supply-chain woes for microprocessors are hitting those that were once seen less affected by such disruptions
Tim Higgins it comes from greater demand for its its expected demand. Despite the recovery, bitcoin remains far below its mid-April high
feedback@livemint.com products than expected. This year, Apple is expected to of almost $65,000. GETTY
Apple introduced its first iPhone release four new iPhone models with

On a bullrun: bitcoin
T
he chip shortage is about to with 5G cellular capabilities late last screens similar to last year’s lineup,
hit the iPhone. year, which has helped drive record people familiar with the matter said.
Apple Inc. and Tesla Inc. growth for the company. Getting In 2020, Apple released the iPhone 12
are set to begin feeling the
impact of a significant dis-
ruption to the global supply of micro-
chips with the latest technology
hasn’t been an issue, Mr. Cook said.
“The legacy nodes are where the sup-
Mini, iPhone 12, the 12 Pro and the 12
Pro Max.
The chip shortage first hit large
heading towards its
processors, a sign that even some of
the largest, best-supplied companies
can no longer sidestep the semicon-
ply constraints have been on silicon.”
Before Tuesday’s results, analysts
surveyed by FactSet expected iPhone
auto makers who cancelled chip
orders last year and underestimated
how quickly demand would bounce
best streak this year
ductor crisis. sales in the current quarter to rise back in the post-coronavirus recov-
The iPhone maker cautioned on 49% compared with last year and rev- ery. Demand for electronics and Bloomberg Inc.’s potential involvement in
Tuesday that supply constraints enue from the device to jump 36% internet services that rely on chips to feedback@livemint.com the cryptocurrency sector. The
would extend to its smartphones dur- next year compared with 2021. process information also jumped token soared Monday as some

ing the three-month period ending in
September, contributing to a slowing
of the company’s growth compared
with the 36% revenue gain in the
most recent quarter. The caution
comes as Apple prepares to bring out
its latest iPhone this fall.
“We’re going to take it sort of one
quarter at a time and, as you would
guess, we’ll do everything we can to
mitigate whatever set of circumstan-
ces we’re dealt,” Chief Executive Tim
Cook told analysts Tuesday during a
public conference call.
IPhone revenue rose 50% in the
past quarter while most smartphone
competitors have struggled to get
parts. Similarly, Tesla posted a record
profit for the most recent quarter in
which it saw car deliveries more than
double from a year earlier as other
auto makers struggled with produc-
tion.
Yet Tesla chief executive Elon
Musk on Monday raised new con-
cerns, suggesting his highly antici-
pated Cybertruck pickup, which was
supposed to begin production later
this year, could be affected. In order,
he said, “to scale to volume that’s
meaningful for customer deliveries,
we’ve got to solve the chip shortage.”
In April, Apple had cautioned its
iPad tablets and Mac computers
could be affected by the chip shortage
by $3 billion to $4 billion in missed
revenue. With mitigation, however,
the effect wasn’t as bad as expected.
Chief financial officer Luca Maestri
Apple cautioned on Tuesday that supply constraints would extend to its
smartphones during the three-month period ending in September.
said the effects were mostly limited to
iPads and that the impact was less
than $3 billion. “In the June quarter,
we didn’t have real issues with the
iPhone,” he said.
“We have a phenomenal opera-
tions team, and they work very, very
closely with our supply partners, and
we try to do the
best we can given
the world-wide
situation on a
number of components,” he said.
The Cupertino, Calif., tech giant’s
April-through-June period results
are a case study in how its massive size
and Mr. Cook’s career in supply-
chain management helped the
iPhone maker avoid the more severe
disruptions other smartphone manu-
facturers have faced.
Over the years, Apple has used its
might to invest billions of dollars into
suppliers to guarantee space on their
assembly lines so that the iPhone has
the parts it needs, said Patrick Moor-
BLOOMBERG
head, president of the technology
firm Moor Insights & Strategy. And
where it doesn’t have such arrange-
ments, it has shown a willingness to
pay suppliers more to ensure needed
parts are received, he said.
But even with those steps, there is
only so much that can be done. “With
the iPhone’s
explosive growth
last quarter, I
believe that the
company tapped into its reserves, and
it sold phones in [calendar] Q2 that
were targeted for Q3,” he said.
“There’s likely no amount of invest-
ment that can change anything for Q3
and possibly Q4.”
Mr. Maestri cautioned analysts on
Tuesday that the effect of supply con-
straints will create a greater revenue
hit and now include both iPhones and
iPads. Speaking broadly, Mr. Cook
added that Apple’s supply constraints
“are of the variety that I think others
are seeing” while noting that some of
Analyst estimates have been
buoyed by a whisper network of sup-
plier sources who said Apple
appeared bullish going into fiscal
2022. As Apple ramps up production
of its next iPhone ahead of launch
expected in the fall, some suppliers
have received component orders or
production forecasts for the second
half of 2021 that are in line with, or
relatively stronger, than those that
Apple has shared with them in recent
years, people familiar with the matter
said. Apple’s orders are an indication
to the suppliers that the company
isn’t expecting its iPhone production
to be significantly impacted by chip
shortages, they said.
On Tuesday, Mr. Maestri said
Apple still expects double-digit reve-
nue growth this quarter from a year
earlier when it recorded $64.7 billion
in sales.
An iPhone contains various kinds
of chips. For the new models, those
are likely to include the 5G modem
and memory chips, and among the
most crucial is the A-series Bionic
processor, which receives and exe-
cutes commands from the users.
Apple designs its own processors
and contracts out the manufacturing
to Taiwan Semiconductor Manufac-
turing Co.’s plants in Taiwan. The
arrangement makes Apple TSMC’s
biggest customer, accounting for
some 25% of the foundry’s revenue;
Apple books TSMC’s production
capacity years ahead of time as it plots
from the work-from-home economy,
putting further strain on the industry.
Earlier this year, TSMC faced pres-
sure to make more automotive chips
as global auto makers from the U.S.
and Europe asked TSMC give priority
to their orders, forcing the chip
maker to negotiate with other clients
to free up manufacturing capacity for
auto chips.
While TSMC has reallocated some
production capacity for automotive
chips, that move didn’t seriously
impact Apple, people familiar with
the matter said. TSMC said it doesn’t
comment on specific customers.
Tesla managed the shortage by
finding alternative chips then rewrit-
ing the software over the course of
weeks to make them work in its cars,
Mr. Musk said.
“It was an incredibly intense effort
of finding new chips, writing new
firmware, integrating with the vehi-
cle and testing in order to maintain
production,” he said.
Chip executives don’t believe the
supply-demand imbalance will right
itself soon. Pat Gelsinger, chip maker
Intel Corp.’s chief executive, said last
week that the strains could stretch
into 2023 while rival Advanced Micro
Devices Inc. Chief Executive Lisa Su
said Tuesday that she sees supply-
chain tightness through the second
half of this year, although it should
improve next year.
Asa Fitch contributed to this article.
©2021 DOW JONES & COMPANY, INC
A
continuing recovery in traders exited leveraged bets
bitcoin has put the larg- on declines.
est cryptocurrency on Bitcoin has been rising even
course for its longest winning though a stock rout in China
streak this year. this week dented some investor
The virtual coin rose as appetite for risk, contributing
much as 7.5% to top $40,900 to a drop in global stocks.
on Wednesday during New The crypto rally has taken
York trading hours. It’s the focus away—for now at
advanced for eight straight least—from criticism of bit-
days, its longest winning streak coin’s environmental impact
since December. due to energy consumed by the
Other coins including sec- computers underpinning it.
ond-ranked Ether climbed, Regulators in China, the US
boosting the Bloomberg Gal- and Europe are also increas-
axy Crypto Index. ingly cracking down on crypto-
“The current currencies or con-
momentum is Bitcoin has been sidering harsher
strong” and rising even rules.
$45,000 is in though a stock Now there are
sight but a con- rout in China this signs retail inves-
clusive break tors are starting to
week dented
above $50,000 pile back into
“will take some some investor cryptocurren-
doing,” Pankaj appetite for risk cies, according to
Balani, chief exec- Ben Onatibia and
utive officer of Giacomo Pieran-
crypto derivatives exchange toni of VandaTrack Research,
Delta Exchange, wrote in a note citing a rise in bitcoin trading
Tuesday. volumes across major
Bitcoin remains far below its exchanges.
mid-April high of almost “In a period when most other
$65,000. hyper growth stocks are strug-
But bulls have taken heart gling, the marginal retail dollar
from recent positive comments may flow into crypto instead,”
from billionaire Elon Musk and they wrote in a note.
Ark Investment Management “In this environment, we
LLC’s Cathie Wood, as well as think cryptocurrencies could
speculation over Amazon.com enjoy a decent run.”

4 funds with $7 bn in Adani have history of wrong bets

FROM PAGE 1
before being returned, giving the
impression the funds originate
from a clean source. Indian
authorities struggled to identify
who ultimately controls the
money, according to the report.
Some lawmakers are now
seeking an investigation into
whether the Mauritius funds
Boeing said it has shelved plans to shed another 10,000 workers by year-end as it starts to boost 737 are being used as a shell for
MAX jetliner production. REUTERS Adani’s own money. Mahua
Moitra, an opposition law-
public filings of the companies
they invested in.
Two of the funds, APMS and
Albula, are registered at the
same address in Port Louis,
Mauritius, while Cresta is regis-
tered to an address on the same
street. Elara India is also regis-
tered in Mauritius.
Mauritius has long been a
favoured investment route into
India due to the ease of register-
ing firms and a low tax rate. The
Sebi is looking into some Adani group firms over non-compliance with two nations have a treaty to
didn’t respond to calls.
Karuturi’s land lease was
cancelled in 2015 by Ethiopia’s
agriculture ministry, which
alleged that the company failed
to adequately develop its plot.
Karuturi was the world’s largest
rose grower at that time. While
Karuturi had challenged the
action and sought compensa-
tion, it was pushed into liquida-
tion earlier this year with cred-
itors claiming a total of 18.2 bil-
lion rupees.

Boeing swings to profit on sales maker and former investment

banker, questioned the ulti-
mate ownership of the funds in
securities rules.

ger Burger, and Alastair Gug-

REUTERS avoid double taxation. It isn’t
appropriate for the regulator to
The funds rank among the big- disclose information pertaining
The funds’ focus on Adani
assets is renewing speculation
about who’s backing them.

of aircraft and defence business Parliament last week, saying

that the information should be
public given the Adani group
holds stakes in strategic Indian
Doug Cameron during the quarter, far less pled with production-quality infrastructure like ports, air-
feedback@livemint.com than analysts expected as problems on its popular 787 ports and power plants.
deposits from a slew of new Dreamliner “We want to know whose
genbuchi Even and Yonca gest shareholders in Adani group to any investigation, a repre-
Even Guggenbuehl, identified companies, ahead of prominent sentative for the Mauritius
in the response to Parliament as financial institutions like Black- Financial Services Commission
Their investments have coin-
cided with a rally in the compa-
nies’ shares in recent years, at
controlling or otherwise Rock Inc. and The Vanguard said by email, adding that the one point giving Gautam Adani
responsible for Cresta, Albula Group Inc. BlackRock declined to FSC has a robust supervisory the world’s fastest-rising
and APMS, respectively. Raj comment on whether it was framework to safeguard public wealth and putting him a mere
Bhatt, chairman and CEO at aware of the Mauritius funds’ interest and foster investor con- $6 billion behind Mukesh

B
oeing Co. reported its
first quarterly profit in
nearly two years, bol-
stered by military and services
sales and as air travel makes a
stronger-than-expected
recovery.
The company also said it
had shelved plans to shed
another
10,000
workers by
the end of
the year as it starts to boost
production of the 737 MAX jet-
liner and airlines seek more
parts and services.
Boeing on Wednesday
reported a profit of $567 mil-
lion for the June quarter com-
pared with a $2.4 billion loss in
the same period a year ago.
Sales rose 44% to $17 billion.
Adjusted per-share earnings of
40 cents beat the consensus
among analysts polled by Fact-
Set for an 83-cent loss.
The company’s commercial
airplanes unit reported an
operating loss of $472 million
in the quarter, but its defence
business earned $958 million
and services generated $531
million.
The company burned
through $705 million in cash
jetliner sales combined with Global airline capacity money is it,” Moitra said in a text Elara Capital, who was also track record and whether it had fidence. Ambani, Asia’s richest person.
steady defence revenues. remains 30% below pre-pan- message to Bloomberg News. “If identified in the response to concerns about its holdings in India’s banks and government Cresta has the biggest expo-
“While we still have a ways demic levels and industry it is Adani’s money, then minor- Parliament, didn’t respond to a companies whose other investors declared Winsome’s majority sure to Adani firms with 99% of
to go before a full rebound, it is executives expect it to take ity shareholders are being message on LinkedIn. are being questioned in Parlia- owner, Jatin Mehta, a willful its investments in flagship Adani
encouraging to see the com- until 2024 to catch up, but screwed. If it is not, then which A representative for IQ EQ ment. “The securities in question defaulter and economic fugitive Enterprises Ltd and Adani
mercial market improving,” pockets of domestic market foreign actors have so much say Fund Services, the management are constituents that make up a in 2018 over an unpaid loan of Transmission Ltd. Albula has
chief executive officer strength in the US, China and in our strategic assets?” company for Albula, Cresta and very small portion of indices about $900 million in today’s 89.9% of its holdings invested in
(CEO)David Calhoun said in a Russia have helped speed a In a written reply 19 July to APMS, didn’t respond to multi- tracked by highly-diversified value. Mehta’s whereabouts are Adani firms, while the other two
note to employees on limited recovery. Moitra’s questions posed to ple emails seeking comment. A Vanguard index funds,” a Van- unknown and India is investigat- funds have over 95%.
Wednes- US aerospace companies Parliament, India’s junior representative for Elara didn’t guard representative said by ing him for alleged money laun- The four have increased
day. last year announced plans to finance minister Pankaj respond to an emailed request email. “The mandate of an index dering and round-tripping. Win- their combined holdings in
B o e i n g shed more than 100,000 jobs, Chaudhary said neither the for comment. fund is to track its some had denied Adani Enterprises by about
shares rose including many of Boeing’s funds nor Adani firms are being A representative for the benchmark, not Cresta has the the round-tripping 48% through June 2021 from
almost 4% in premarket trad- 12,000 suppliers. Boeing itself investigated by the Enforce- Adani group said by phone the make active invest- biggest exposure allegations in 2014. 2016, when the stock hit a five-
ing as the company avoided had planned to cut its own ment Directorate, the Indian group cannot comment on for- ment decisions with 99% of its A similar story year-low, giving them a current
the type of charges on its com- workforce by a fifth to around agency that probes serious eign portfolio investors. “We about the underly- investments in played out with stake of 11.23%. Their holdings
mercial and defense programs 130,000 by the end of this financial crimes like money have always been fully compli- ing constituents.”
Adani Enterprises Sterling Biotech, in Adani Transmission have
that have dogged recent earn- year, but now plans to hold laundering and round-trip- ant with applicable Sebi regula- The funds were whose controlling risen more than 55%, giving
ings reports. employment ping. Some Adani group com- tions, we have made full disclo- also among the and Adani shareholders, the them a stake of 12.7%. The
The plane steady at around panies are being examined by sure to Sebi on specific informa- largest foreign Transmission Sandesara broth- stocks each rose about 3,000%
maker’s first The company 140,000. capital markets regulator Secu- tion requests from them in the shareholders in ers Nitin and Che- over the period.
profit since the burned through Boeing has rities and Exchange Board of past,” the representative said by Winsome Dia- tan, fled India The funds held no stake in
third quarter of $705 million in recently slowed India (Sebi) for compliance email. “However, we have not monds and Jewellery Ltd, Ster- after defaulting on loans. They Adani Green Energy Ltd or Adani
2019 follows two cash during the Dreamliner pro- with securities rules as well as received any communication or ling Biotech Ltd, Ruchi Soya are being investigated for Total Gas Ltd when the firms
all-consuming duction while it by the department that looks at information requests recently.” Industries Ltd and Karuturi alleged money laundering and listed in 2018, but now hold a
quarter, far less
crises. Its MAX addresses a newly import and export taxes, The Adani group’s chief finan- Global, companies they previ- round-tripping. The Enforce- combined 6% and 10%, respec-
jets had been than analysts discovered qual- Chaudhary said without elabo- cial officer had told CNBC-TV18 ously invested in that went bank- ment Directorate was examin- tively. Adani Power Ltd and
grounded for expected ity issue with the rating, and cited rules that for- in June that the funds have been rupt or are being investigated. ing Elara India, Cresta and Adani Ports and Special Eco-
nearly two years planes. The com- bid him from disclosing any investors for more than a dec- Unusually intertwined, the Albula as part of the Sandesara nomic Zone Ltd are aberrations:
following a pair of pany has delayed income tax investigations. ade and their holdings in group funds themselves have a his- investigation to identify the Elara has cut its stake by 8% from
fatal crashes that took 346 deliveries to fix defects that Chaudhary also disclosed companies are the result of tory of acting in lockstep: ultimate beneficiary of the 2016 in Adani Power, which has
lives, and the pandemic had emerged about a year ago. It is names of people registered as demergers. investing and exiting at the money, the Firstpost website doubled in value, while none of
sapped demand for new air- awaiting regulatory approval responsible for each of the Sebi chairman Ajay Tyagi same time and sometimes reported in 2018, without say- the funds have a significant posi-
planes as passengers stayed for a plan to inspect newly pro- funds. Bloomberg couldn’t find declined to comment when acquiring holdings of the exact ing where it got the informa- tion in the group’s oldest listed
home and airlines retrenched. duced aircraft. contact details for Markus Beat asked about the probe at a vir- same stake size, down to the tion. A spokesperson for the firm Adani Ports, whose stock
The company has also grap- ©2021 DOW JONES & COMPANY, INC. Dangel, Anna Luzia Von Sen- tual conference Wednesday. decimal place, according to Enforcement Directorate value has doubled.
LIVEMINT.COM NEWS WRAP THURSDAY, 29 JULY 2021
MUMBAI 09

TWEETS OF THE DAY Kiran Mazumdar-Shaw Rishad Premji Secretary Antony Blinken
Vani Kola @kiranshaw @RishadPremji @SecBlinken
@VaniKola Simone Biles withdraws We absolutely must Thanks to @DrSJaishankar for
Unless you feel pre- from women’s team gymnas- open schools. The a collaborative discussion
pared & strongly com- tics at Tokyo Olympics due damage of them today on many areas of coop-
pelled to dedicate to mental health concerns - staying closed is now eration. India is one of our
yourself to an idea brave n responsible deci- worse than schools most valued partners, and US
you’re truly excited sion. I wish her well n a opening. welcomes India’s emergence
about, why start? healthy future. as a leading global power.

Sanofi India sells THE PURSUIT OF GLORY JSW Cement raising

nutraceuticals biz ₹1,500 cr via CCPS

S J
anofi India Ltd said on Wednesday that its SW Cement Ltd on Tuesday said it is raising
board has approved the sale and transfer of up to ₹1,500 crore from Apollo Global
its nutraceuticals business to Universal Management Inc. and Synergy Metals
Nutriscience Pvt. Ltd for ₹587 crore. The Investments Holding Ltd as it works to
decision will help the company focus on its expand its annual capacity from 14 million
growth pillars while giving more opportunities tonnes (mt) to 25 mt. The unlisted company,
to the nutraceuticals business for expansion in part of the $13-billion JSW Group, said it will
an organization where it will have a better issue compulsorily convertible preference
strategic fit, Sanofi said in a statement. shares (CCPS) to the global PE investors.
Universal Nutriscience is a strategic Their conversion to common shares will be
partnership between Kedaara Capital, a linked to JSW Cement’s performance and
homegrown private equity firm, and Universal valuation determined at the time of an initial
Medicare, a nutraceuticals company. public offering planned in the next 12-18
“Across the world, Sanofi regularly assesses months. “Synergy and Apollo are among the
the best ways in which to serve our customers... strongest investors globally, and JSW Cement is
We have carefully selected Universal pleased to partner with them in the next phase
Nutriscience whose mission is to grow the of our growth,” said company MD Parth Jindal.
business to provide more patients with The company plans to use the funds to grow
increased access to the range of nutraceuticals organically and inorganically in key new
across India,” said Rajaram Narayanan, MD, geographies. KALPANA PATHAK
Sanofi India. SWARAJ SINGH DHANJAL

P.V. Sindhu defeated Hong Kong China’s Ngan Yi Cheung in the women’s singles badminton category at the 2020 Olympics in Tokyo on Wednesday.PTI

IBC amendment bill aimed at

Narayan Ramachandran is the new chairman
(non-executive) of TeamLease Services. MINT aiding MSMEs gets LS approval Virat Kohli took to social media to praise LPU and
its contribution to India’s Olympics squad.

ASCI to send notice

MINT

TeamLease makes
leadership changes to Kohli over posts
The bill lays down framework of a simpler alternative bankruptcy resolution scheme
A
d regulator Advertising Standards

L
isted staffing company TeamLease
Services Ltd on Wednesday named
Narayan Ramachandran as its new
chairman (non-executive), while executive
chairman Manish Sabharwal has transitioned
to the role of executive vice-chairman.
Council of India (ASCI) on Wednesday
said that it will write to Indian cricket
Gireesh Chandra Prasad sions, proprietors or major shareholders of a small is least disruptive to the continuity of the businesses team captain Virat Kohli over his social media
gireesh.p@livemint.com business do not lose operational control of the busi- and also preserves jobs. posts praising Lovely Professional University
NEW DELHI ness to lenders once a pre-pack insolvency scheme Almost 60% of the over 1.3 million active compa- (LPU). The posts, which appeared like a
commences. This is very important for small busi- nies in the country are eligible for the pre-pack promotional campaign with the cricketer

The company has also inducted managing
director of Stryker India Meenakshi Nevatia,
former Flipkart chief people officer Mekin
Maheshwari and former Titan Company Ltd
chief financial officer S. Subramaniam as new
independent directors. Ramani Dathi, deputy
chief financial officer, has also been
redesignated as the chief financial officer of
TeamLease. Ramachandran has been an
independent director since 9 July 2015.
“Corporate India has been reconfiguring its
people supply chains for years, but this
revolution has been accelerated by covid.
TeamLease has a central role to play in this
transformation and has demonstrated a
willingness to take the long view. I look
forward to working with my colleagues to
accelerate this strategy,” said Ramachandran.
PRASHANT K. NANDA
T
he Lok Sabha on Wednesday cleared the
Insolvency and Bankruptcy Code
amendment bill that lays down the
framework of a simpler alternative
bankruptcy resolution framework for
small businesses.
The bill seeks to replace an ordinance issued in
April to roll out the ‘pre-pack’ scheme as an urgent
measure. The simpler and alternative bankruptcy
resolution scheme was offered on 4 April as the one-
year suspension of bankruptcy action for defaults
during the pandemic had expired in March and the
authorities wanted to offer a simpler bankruptcy
resolution scheme to small businesses in parallel.
The pre-pack scheme is a less time-consuming and
informal one up to a stage. Besides, the filing fee is
also less than in the general bankruptcy provisions.
The most important feature of the pre-pack
scheme is that unlike general bankruptcy provi-
nesses because the best person to run the firm bankruptcy resolution scheme. That is because a tagging LPU’s official social media handles and
would be its promoters who get orders on the basis large part of the functional companies fit in the defi- using hashtag #LPUStudentsInOlympics, was
of personal relationships and are experts in that nition MSMEs which are incorporated. Proprietor- devoid of any disclosure required by ASCI’s
business. Also, getting outsiders to run small busi- ships are not covered by the scheme. An MSME newly launched influencer guidelines.
nesses may be a diffi- which has not met its In response to Mint’s query, Manisha Kapoor,
cult task to achieve. payment obligation secretary-general, ASCI said, “ASCI will take up
The ‘debtor-in-con- Almost 60% of the over 1.3 million of ₹10 lakh could, the issue and write to the celebrity and the
trol’ feature ensures active companies in the country is either on its own ini- advertiser for their clarifications.”
that the business
does not suffer any eligible for the pre-pack bankruptcy tiate a pre-pack bank-
ruptcy resolution
Kohli took to social media to praise LPU.
“What a record, 10% of Indian Olympians are
disruption. The resolution scheme scheme with from Lovely Professional University. I hope LPU
ordinance said that approval from len- will send students to the Indian cricket team
the government felt ders, or lenders rep- also! Jai Hind,” Kohli said. STAFF WRITER
it was expedient to provide an “efficient alternative resenting 66% of the debt of the business could initi-
insolvency resolution process for corporate per- ate the process. Under the scheme, lenders have
sons classified as MSMEs (micro, small and medium extensive oversight but the business in distress
enterprises)” under the IBC. The idea is to ensure enjoys moratorium from all recovery proceedings
quicker, cost-effective and value-maximizing out- and remains in control of the operations so that
‘70% of consumers
comes for all the stakeholders, in a manner which there is no disruption to business and employment.
are aware of Rera’

F
ive years after the Real Estate (Regulation
Mental heath, fitness top Twitter trends post covid: report Tata Motors to raise and Development) Act, 2016, was enacted,
the sector is seeing improved transparency,
PV prices next week developer compliance and customer

C
onversations related to well-being emerged as one of the top six trends confidence. A new report by Boston Consulting
post the pandemic on Twitter, said a report by the microblogging Group and Omidyar Network India assesses the

T
platform on India-specific trends. Within the well-being umbrella, the ata Motors is looking to increase prices of prevailing status of Rera implementation and
top three sub-trends to emerge are self-care, witnessing over 88% growth in its entire range of passenger vehicles (PV) recommends solutions that can meet the goals
conversations, health and fitness (103%), and mental health matters (150%). from next week as it aims to offset the that the Act wanted to achieve.
Twitter said that it studied millions of tweets and analysed over 300,000 steep rise in procurement cost of essential According to the report, 76% of consumers
entities (or topics of conversation) from January 2020 to June 2021 and materials, as per a top company executive. who are aware of the law affirmed that they
compared them to tweets from the previous 18 months (July 2018 to The Mumbai-based auto major sells a range of would buy only Rera properties in future and
December 2019) to learn more about what conversations people were having passenger vehicles like Tiago, Nexon, Harrier 64% of consumers are more likely to invest in
on the platform in India. and Safari in the domestic market. real estate post Rera implementation.
As more people think about their overall health and fitness, with over 103% “We have seen a steep rise in the prices of steel About 70% of consumers are aware of Rera,
growth in such conversations, more than 80% conversations were around and precious metals over the last one year. The however, awareness is limited to a few benefits,
sleep and 102% around workout. Mental healthcare has also become a crucial impact of the increase in commodity prices is in while 77% of projects are Rera registered. There
conversation with 108% mentions of the term “wellness”. #SelfLove, the range of 8-8.5% of our revenues in the past is higher compliance in metros and tier-1 cities,
#LoveYourSelf, #GoodHealth and #MentalHealthMatters are some of the Twitter said that it analysed over 300,000 entities from January 2020 to one year,” Tata Motors president, passenger and 45% of developers are dissatisfied with the
popular hashtags used in these conversations. STAFF WRITER June 2021, and compared them to tweets from the previous 18 months. vehicles business unit, Shailesh Chandra said.PTI Rera website. STAFF WRITER

Embassy Reit expects a revival Customers to get insurance within 90 days of a bank’s collapse
in leasing, demand in H2FY22
Madhurima Nandy
madhurima.n@livemint.com
BENGALURU
continued its strong perform-
ance through Q1 despite the
challenges of the recent lock-
down. Notwithstanding that,
will remain constrained.
“Demand for new space will
be led by global captives across
sectors that have actively leased
FROM PAGE 1
and covers all commercial
banks, whether public or pri-
vate. Local area banks, regional
rural banks, cooperative and
small finance banks and local
and pass them on to the insurer
within 45 days, and the pay-
businesses opting for these
legal forms.
ment process will be completed The government will also
within 90 days, without wait- come out with a definition of
ing for the eventual liquidation ‘small LLPs’, which would be
or resolution of the bank. subject to fewer compliances,
Sitharaman explained that fees and penalties to reduce the

E
mbassy Office Parks Reit
on Wednesday reported a
36% rise in net operating
income to ₹621.3 crore during
the quarter ended June com-
pared with ₹456.9 crore in the
year-ago period. It declared
distribution, including divi-
dend, of ₹534.61 crore to unit-
holders for the April-June
period. The firm said it col-
lected more than 99% of office
rent across its 32.3 million sq. ft
operating portfolio.
“Having delivered to gui-
dance in FY21, Embassy Reit
the global megatrends towards
technology growth will benefit
us as we see record hiring and
investments in technology and
captives housed in India,” said
Embassy Reit chief executive
officer Michael Holland.
Embassy Reit said it achieved
stable portfolio occupancy of
89% with 13% rent increase on
2.2 million sq. ft leases.
Holland in an interview said
he expects strong pickup in
demand and leasing momen-
tum in the latter half of FY22, as
supply of quality office space
space in recent years and
e-commerce firms who came of
age during the pandemic,” he
said.
The Reit board on Wednes-
day also approved fundraising
by issuing rupee-denominated,
listed, rated, secured/unse-
cured, redeemable, transferra-
ble non-convertible deben-
tures aggregating up to ₹4,600
crore in one or more tranches.
The funds will be used to refi-
nance Series I non-convertible
debentures and for general
purposes.
branches of foreign banks are
also insured.
The move is significant given
that several banks, including
Punjab and Maharashtra
Co-operative (PMC) Bank, Yes
Bank and Lakshmi Vilas Bank,
have faced stress in the recent
past. Once the law comes into
force, banks under morato-
rium, if any, will also benefit.
However, the amendment
won’t be applied retrospec-
tively.
Sitharaman said that the dis-
tressed bank will list the claims
with the increase in the insur-
ance cover to ₹5 lakh, 98.3% of
all deposit accounts are insured
and, in terms of deposit value,
50.9% of deposits are covered.
Globally, deposit insurance
covers only 80% of all deposits
and covers only 20-30% of the
deposit value, the minister
added.
The government will move
another bill to amend the LLP
Act to decriminalize certain
defaults in order to improve the
ease of doing business.
Penal provisions in LLP Act
costs of compliance. The cabi-
net approval is to define LLPs
with ₹5 crore partner contribu-
tion and ₹50 crore sales to be
treated as small LLPs. In Janu-
ary, an expert panel made this
The move is significant given that several banks, including Punjab and recommendation with a lower
Maharashtra Co-operative Bank have faced stress in the past. REUTERS threshold.
The cabinet also cleared a
will be reduced from 24 to 22, company law tribunals for deal between the International
and 12 provisions will be adjudication. The minister Financial Services Centre
decriminalized. The lapses get- explained that provisions in the (IFSC) and global bodies of
ting decriminalized are techni- Companies Act were decrimi- securities and insurance regu-
cal or procedural in nature, and nalized already, and a similar lators, which is expected to
since no criminal intent is exercise in the LLP Act will improve ease of doing business
involved, these need not go to ensure a level-playing field for for entities in the IFSC.
10 THURSDAY, 29 JULY 2021
MUMBAI LONG STORY LIVEMINT.COM

REPORTAGE | TALKING POINTS | IDEAS | INSIGHT | THE BOTTOMLINE

CAN AJAY SINGH SAVE

SPICEJET A SECOND TIME?
The airline is faced with mounting losses, a clutch of legal challenges and uncertain recovery in travel.

While the strategy of focusing more on

the cargo business has paid off for
SpiceJet, its chairman and managing
director Ajay Singh needs to ensure there
is adequate capital for the airline, going
ahead. SONU MEHTA/HT

Rhik Kundu SpiceJet’s trouble, however, needs to be
rhik.k@livemint.com read in the context of the broader downturn
NEW DELHI in the sector. Most Indian airlines were loss-
making ventures even before the pandemic
defending its position in accordance with the investment if the airline goes under,” the
mint AIR POCKET
legal advice. Further, SpiceJet has challenged SHORT executive added.
the order before the Court of Appeal in the STORY SpiceJet hopes to keep its rivals at bay and The MAX aircraft are yet to be re-certified
UK, which is pending adjudication pres- shore up the bottom line while betting on a by the DGCA, although globally, the aircraft

B
y December of 2014, SpiceJet Ltd, hit. No-frill carriers such as IndiGo and Spi- ently,” a SpiceJet spokesperson said. “We are swift recovery in the air passenger traffic. has returned to service in many countries.
then controlled by media baron ceJet were exceptions. However, restrictions working with all the lessors (including Gos- WHAT Net sales (in  crore)
Kalanithi Maran’s Sun Group, was on air travel over the last one year have meant hawk) to amicably settle the matter. On the 4,000 THE STRENGTHS
SpiceJet is currently faced with
debt-ridden and on the verge of
closure. The glide path to bank-
ruptcy had become apparent. One morning,
trouble even for India’s top domestic air-
line—IndiGo. InterGlobe Aviation Ltd, the
parent company of IndiGo, posted its biggest
basis of our arrangement with BOCA, the par-
ties have suspended any court proceedings,”
the spokesperson further clarified.
headwinds that are beyond
slumping air travel. Rising oil 3,000 2,922.5
W hen it comes to the promoters of air-
line firms, Ajay Singh is one of the most
recognizable personalities—after all, he is still
state-owned oil companies refused to refuel quarterly loss in the June quarter (Q1FY22) Meanwhile, SpiceJet is also fighting a dis- prices, a series of legal disputes standing in a sector ripe with spectacular fail-
their planes. The airline had started gradually and this was the airline’s sixth consecutive pute with the Marans—the Supreme Court and stiff competition are 2,000 1,829.8 ures. More storied promoters such as Vijay
grounding planes. Hundreds of flights were quarterly loss. The future, meanwhile, had in November 2020 stayed a Delhi high troubling the airline. Mallya (Kingfisher Airlines Ltd) and Naresh
cancelled and salaries of employees delayed. remains uncertain given the possibility of a court order asking SpiceJet to deposit 1,000
Goyal (Jet Airways Ltd) didn’t survive.
This is when Ajay Singh resurfaced, just in third wave and the risk from new variants. around ₹243 crore as interest related to a Many people, inside and outside the com-
the nick of time for the airline. He had Rating agency Icra Ltd expects domestic air share transfer dispute with the former pro- BUT pany, do think he can work his magic again.
co-founded Spicejet in 2005. Those were the traffic to reach pre-covid levels by 2022-23; moter. The matter is pending legislation. 0 “I would not write off SpiceJet as Ajay Singh
heady days of Indian aviation that saw a sud- international air traffic, on the other hand, SpiceJet is also facing stiff competition in SpiceJet’s trouble, however, Q1FY20 Q4FY21
has shown an uncanny ability to somehow
den spurt in low-cost carriers. IndiGo, Go Air, may rebound only by 2023-24. the sector, and it could get worse post pan- needs to be read in the context survive, whether it is by being extremely
of the broader downturn in the Net profit (in  crore)
Kingfisher Airlines and SpiceJet all started While airlines such as the Wadia Group- demic, said experts. Deep-pocketed rivals 400 nimble or getting into new areas of business
services in 2005. In 2010, Singh exited the operated GoAir, and Tata Group-operated and domestic market leaders such as Inter- sector. Most Indian airlines were 262.9
through new routes,” an aviation expert said,
company and the Marans of Sun Group Vistara and AirAsia India, can count on their Globe Aviation can drive out competition in loss-making ventures even requesting anonymity.
acquired control in 2010. In January 2015, promoters’ deep pockets to pull them out of certain routes by discounting ticket prices. before the pandemic hit. 0 Singh’s trusted aides at the airline include
with the airline teetering on the brink, he the quagmire, SpiceJet has limited options. Both domestic airlines as well as interna- the chief strategy officer G.P. Gupta, chief
bought back the company, ignoring advice The firm needs capital urgently to stay afloat. tional carriers are expected to roll out heavy -257.0 customer officer Kamal Hingorani, and chief
from friends. The airline could be turned Singh, therefore, faces one of the biggest discounts to make up for the smaller passen- AND -400
commercial officer Shilpa Bhatia. The firm,
around, he believed. “There was still great challenges of his career. ger numbers today. “SpiceJet, which com- nevertheless, pivots around Singh, who
potential in aviation, and oil prices were com- mands a 9%-12% market share, continues to The future remains uncertain unlike other airline promoters, involves him-
-800
ing down,” Singh, now the chairman and TURBULENT SKIES face challenges that can be traced to cash- given the talk of a third wave of self in day-to-day working—negotiating
covid-19 and emerging variants.
managing director of SpiceJet, told this writer
in 2018. “I thought nobody would blame us if S piceJet faces headwinds that are beyond
slumping air travel. Unlike 2015, SpiceJet
the airline died but if it succeeded, we would now has to deal with high oil prices. Global
flow, costs and the lack of a clear path to prof-
itability,” Satyendra Pandey, managing part-
ner at aviation advisory firm AT-TV, said.
Rating agency Icra Ltd expects
domestic air traffic to reach pre-
-1,200
Q1FY20 Q4FY21
commercial deals and contracts. Some of his
strategies have worked. Singh’s foray into the
cargo business has been profitable. In fact,
have stories to tell our grandchildren.” crude prices have shot up from $52.05 a bar- In June 2021, IndiGo led the market with covid levels by 2022-23 Source: Capitaline
during the pandemic, SpiceJet reconfigured
SARVESH KUMAR SHARMA/MINT
Singh executed an astute strategy aided by rel on 31 December, 2020 to $72.17 a barrel by a lion’s share of 54.7%, followed by Air India the planes to cater more to the cargo busi-
declining oil prices that led to several quar- 26 July. Aviation turbine fuel (ATF) or jet fuel at 16.5%, according to the aviation regulator ness. During Q4FY21, cargo revenues
ters of profits. For a while it seemed like he constituted about a fifth of total costs in Directorate General of Civil Aviation qualified institutional buyers. If this happens Another senior industry executive, who jumped to ₹416.5 crore from ₹67.8 crore in
had managed to steady the ship. But now, 2020-21 and it may shoot up further this year. (DGCA). SpiceJet with 9% share is the No.3 in through fresh equity, the shareholding of the has worked for top commercial airlines, said the year-ago period. The airline has also
after two waves of the covid-19 pandemic that “We remain cautious on SJET (SpiceJet) the pecking order. current promoter will fall from 60% to 40%,” that SpiceJet may not get the full compensa- aggressively expanded its network, often to
has battered the aviation sector around the due to its weak balance sheet (negative net the report added. tion it claims as most aircraft manufacturers smaller towns and cities. As a result, SpiceJet
world, and oil prices soaring, it’s testing times worth) as well as lower yields amid rising fuel FLIGHT PATH The airline, however, denied that the pro- don’t prefer a direct/full cash payment. is now the largest regional operator with 63
yet again for SpiceJet. Can Singh save the air- costs,” a report by BOB Capital Markets
line a second time is the big question now. stated. “The key to its survival will depend on
SpiceJet posted its fifth consecutive quar- the availability of liquidity (either through
S o, what can Ajay Singh do to stabilize the
airline and hold on to market share?
One, the company needs capital right
moters will dilute stake to raise funds.
Meanwhile, SpiceJet is pressing ahead with
its cost-cutting measures to keep the burn in
Instead, they prefer other structures that daily flights under the government’s regional
include discounts. When asked about the connectivity scheme UDAN.
compensation issue, a Boeing spokesperson “SpiceJet is strong when it comes to
terly loss of ₹257 crore in the three months debt or equity) coupled with staying afloat away. After the March-quarter (Q4FY21) check. It is renegotiating its contracts with said that the company doesn’t comment on regional networks. If you want to go to places
ending March 2021, among strong competi- results, the airline’s board of directors vendors and has deferred payments to some conversations with its cus- such as Darbhanga, Rajkot,
although that doesn’t tion from peers who are announced its approval for raising up to while initiating salary cuts for employees. The tomers. Nevertheless, the or smaller cities in Gujarat,
reveal the full picture, as While airlines such as GoAir, also raising funds,” the ₹2,500 crore to bolster its financial health. airline has also claimed about ₹1,100 crore as stakes are high for Boeing SpiceJet is pressing ahead SpiceJet is an option. Effec-
we shall see momentarily. Vistara and AirAsia India can report further added. The board also decided to hive off its growing compensation from Boeing Co. for the as well. SpiceJet had 13 with its cost-cutting measures tively, it can command
In 2020-21, the company Besides jet fuel, the firm and profitable cargo operations into a sepa- grounding of 737 Max aircraft—it is yet to MAX aircraft in its fleet in higher fares here unless
lost ₹1,029.89 crore, up count on their promoters’ is also dealing with a clutch rate entity, a move that analysts said would receive the amount. The aircraft was 2019. At the time of the to keep the burn in check. It IndiGo gets into these
from a loss of ₹936.57 deep pockets to pull them of legal cases. Aircraft man- give the airline avenues to raise cash. As per grounded globally by different regulators in ban, it had placed an order has deferred payments to regional routes,” said an
crore in the previous year. ufacturer De Havilland Air- a SpiceJet spokesperson, multiple options 2019 after two crashes that killed 346 people. for 205 Boeing aircraft. As industry executive. On the
Revenues dived 54% to out of the quagmire, SpiceJet craft has moved the Delhi are being considered for raising funds. How- While SpiceJet is confident of getting the of today, SpiceJet’s total some vendors while initiating international front, Spice-
₹6,119.39 crore last year. high court to enforce an ever, “the information is price sensitive and compensation, the auditors of the company fleet comprises 109 air- Jet operates in routes such
It is nearly a repeat of has fewer options award from a UK court. will be shared in public domain at the appro- noted that the airline would report steeper craft, including Boeing 737 salary cuts for employees as Kabul—not many air-
2014. The auditors of Spi- The award comprising priate time,” added the same person. losses had it not recognized the ‘other income’ and the Q-400 turbo- lines are interested in fly-
ceJet Ltd, Walker Chandiok &.Co. LLP, have $42.9 million in damages came after the air- A report by ICICI Securities dated 1 July (Boeing compensation) during Q4FY21. props. “If SpiceJet walks away from Boeing ing there.
raised doubts about its ability to continue as craft maker dragged SpiceJet to court over emphasizes that “recapitalization remains SpiceJet may be counting on the compen- orders, the US company loses the narrow- Singh will be hoping he can keep rivals at
a going concern—mounting losses have led alleged payment defaults following the deliv- the key” as SpiceJet’s “balance sheet position sation but receiving it requires sophisticated body aircraft market in India (most Indian air- bay. He will also be hoping that air passenger
to a complete erosion of its net worth. By ery of Q-400 turboprops. Then, there is Irish is weak with negative equity of ₹26 billion structuring and negotiation, said Satyendra lines use Airbus A320/321 family narrow- traffic returns to pre-pandemic levels sooner
March-end, SpiceJet’s current liabilities aircraft lessor Goshawk and Asian leasing firm and gross borrowing without lease liability of Pandey of AT-TV. “Currently, the compensa- body planes for domestic and short/medium- than later. That may help shore up the bot-
exceeded its current assets by ₹5,185.84 BOC Aviation that have dragged SpiceJet to ₹44 billion as of FY21-end.” “SJet (SpiceJet) tion is being fully recognized as cash. This haul global routes). However, Boeing may still tom line. If the company indeed turns around
crore; the airline only had cash and cash UK courts for defaulting on lease payments. has approved a fund raise of up to ₹25 billion accounting treatment is debatable,” added be reluctant to give the entire compensation again, he will have a more exciting story to
equivalent of ₹35.94 crore. “In the Delhi high court matter, SpiceJet is through the issue of eligible securities to Pandey. in cash considering it may lose the entire tell his grandchildren.
LIVEMINT.COM MINT MONEY THURSDAY, 29 JULY 2021
MUMBAI 11

New-age Bharat makes the shift from POWER

POINT
savings to investments with aplomb V. R A M E S H

Respond to this column at

mintmoney@livemint.com

NEW MF PLATFORM
Traditional investment avenues such as bank fixed deposits, post office schemes and gold are losing their sheen
WOULD RESULT IN A
Namrata Patel
mintmoney@livemint.com Investment mantras
high-risk investments such as stocks,
mutual funds and cryptocurrencies.
With online trading platforms such
DUPLICATION PUSH
Registered investment adviser and founder of

A
nkita Joshi, a 25-year-old Shree Financial Nishith Baldevdas offers these as Upstox attributing over 80% of their

teacher from Haldwani,
the third largest city in
Uttarakhand, started
investing in mutual funds
through systematic investment plans
(SIPs) shortly after getting her first job.
She is a pioneer of sorts, for she for-
ayed into investing in equities—some-
thing unheard of in her family.
“Investing as a concept has still not
seeped into the fabric of life here. The
very term investment isn’t common
parlance. We still use the word bachat
(savings). For years, there were only
two things we would do with the extra
money we had: Deposit it in a post
office account or a State Bank of India
account,” says Joshi.
Easy access made post office
schemes and bank fixed deposits (FDs)
the go-to option for most people. For
long, the objective they had was to
safeguard their hard-earned money
and earn guaranteed interest.
“In our city, bachat revolves around
trust and word of mouth. The post
office and bank symbolize trust, and in
fact earlier most of my family and
neighbours would simply go to the
post office agent or bank manager and
ask him/her where to put their money.
In fact, my grandfather, a post office
agent himself, invested his life’s sav-
ings in post office schemes and follow-
ing in his footsteps, my father dili-
gently invested in Kisan Vikas Patra
(KVP), as did most of my maternal and
paternal uncles. For them, the per-
centage of return or CAGR (com-
pound annual growth rate) didn’t
really matter,” says Joshi.
Small savings schemes have been
very popular in tier-II and tier-III cities
for multiple reasons.
The low minimum investment lim-
its, guaranteed monthly or annual
interest payouts and sense of safety
have ensured a steady flow of money
T
guidelines for investing. total customer base to tier-II and tier- he mutual fund (MF) industry was struggling with more
III cities, new users from cities such as than 80% physical transactions in the beginning of the past
IDENTIFY the exact purpose before
1 making any investment.
Jaipur, Aurangabad, Warangal,
Ahmednagar, Nashik, Guntur, Patna,
decade. In a visionary move, the Association of Mutual
Funds in India (Amfi) initiated MF Utility (MFU), a system to
ASSESS your risk appetite and your Kannur, Tiruvallur are exploding. aggregate transactions and increase digital transactions, besides
2 current financial status. Most online investing platforms are enabling a scalable tech solution to bring convenience to all
reporting similar trends. stakeholders, including investors. A proposal was submitted to
FINALIZE an amount you can invest every
3 month after prioritizing your goals. “30-35% of our new users in the last the Securities and Exchange Board of India (Sebi) in May 2012
year have come from tier-II cities and detailing all the facilities that shall be offered to transactors (dis-
FOR meeting emergencies, build an the majority of them fall in the age tributors and investors), which included consolidated account
4 emergency corpus for at least six months group of 24 to 30 years,” says Tejas statement on demand, facility for digital transactions/service
INSURE yourself adequately. Never mix Khoday, co-founder and chief execu- requests, centralized grievances mechanism and aspects to
5 investments with insurance tive officer of FYERS, a Bengaluru- enhance customer and distributor experience in transacting with
BALANCE risk and returns by based investment and trading plat- mutual funds. The MFU was defined in the proposal as “an ena-
6 diversifying across asset classes. form. bling market infrastructure for MFs that is future-ready, scalable,
This demographic of millennials cost-efficient, provides national and global reach and provides
CONSIDER stock trading to create wealth
7 only after providing for financial goals.
has changed the way small cities are
investing.
benefits to various stakeholders”.
This was followed by various discussions and in June 2012,
AVOID unregulated chit funds “We have seen a burst of interest in Sebi approved the proposal to implement the MFU as an industry
8 and Ponzi schemes. mid-cap and small-cap stocks and initiative with AMCs being “equal shareholders” and owning the
funds and IPOs. It is clear that the system. The MFU was also a non-profit oriented initiative.
PHOTOGRAPH FROM ISTOCKPHOTO; GRAPHICS BY PARAS JAIN/MINT
focus has shifted from safety and guar- There were many naysayers, but in January 2015, the MFU sys-
into these schemes. Joshi, like many Modi scam in Punjab National Bank , integral part of investing in small cit- anteed returns to making quick tem was successfully launched. Over a period, it grew to be the
others living in tier-II and tier-III cities cancelled licences of co-operative ies. The numerous jewellers that have money and creating an alternative largest player with an average of ₹10,000 crore-₹15,000 crore
across India, represents how the coun- banks and stricter scrutiny by the RBI, made base here bear testimony to that. stream of income. Millennial investors being transacted every day. Many investors and distributors
try’s investing patterns are changing. younger investors are opting for safety Many jewellers used to run schemes who have entered the equity markets found value in using the MFU for their daily transactions.
In Coimbatore, Tamil Nadu, N. over higher interest rates from FD wherein an investor paid fixed during the pandemic have not seen The MFU was structured and infrastructurally set up in a way
Krishnamurthy, a 36-year-old soft- investments. monthly instalments for a pre-decided the downside of the market. The risk- that it could accommodate all transactions in the industry since
ware professional, comes With increasing finan- tenure, at the end of which he/she taking capacity has increased mani- the objective, as per the proposal submitted to Sebi, was along
from a family that tradi- cial literacy and access to could purchase gold at some discount. fold and with the confidence of first- those lines. The proposal explained a plan to connect with stock
tionally parked any extra Having smelt the information, investors Such schemes were very risky and time investors who have made profits, exchanges and depositories, too. A
earning in bank FDs. money, the young such as Krishnamurthy many investors got duped; the govern- they are high on confidence,” says The MFU common account number (CAN) for
The past two genera- are shunning are realizing the impor- ment in 2019 introduced a ban on such Khoday. should be investors was proposed . Standardiza-
tions had all their money safe investments tance of term plans for schemes. Having smelt the money, these mil-
saved only in FDs and strengthened by tion of processes/practices and inter-
and also ignoring life insurance and are While Krishnamurthy invests in lennials are not only staying away from
recognizing it
operability across RTAs (registrar and
money-back and endow- moving away from gold, he has stayed away from chit traditional safer investments but also transfer agents) for account-related
ment schemes of the Life the basics of endowment plans and funds and real estate, both of which are ignoring the very basics of financial as market information was a very big benefit
Insurance Corporation financial planning money-back plans. very popular in his social circle. planning. infrastructure drawn by distributors/advisers and
of India (LIC). “Compared with my Access to information, exposure to Financial advisers caution that this investors alike. Effective use of the
“While most of my grandparents and par- technology and financial platforms, trend is not sustainable. For those MFU would have reduced at least
family, friends and acquaintances ents, my wife and I have a limited and increasing disposable income entering the equity markets, a few 30-50% of cost for the industry, which would have benefited the
from my parents’ generation put all exposure to LIC schemes. Although I have transformed the way those in investment lessons are to be learned investors. But the focus of the industry was somewhere else.
their money in FDs in co-operative did imbibe the conservative mindset tier-II and tier-III cities are investing from the previous generations and the Sebi’s 26 July circular came as a bolt from the blue. It includes
banks, my generation has shifted to when it comes to investing, I’m more compared with the previous genera- habits of discipline and patience need almost all recommendations in the Amfi proposal to Sebi for the
deposits in private or public sector mindful of inflation, our improved tions. to be imbibed. MFU. Asking RTAs to come up with a common platform will see
banks. The affinity for LIC schemes lifestyle and increasing financial goals Traditional investment avenues And in times of doubt, there’s efforts duplicated, costing time, effort and money. In common
has also fallen a bit,” says Krishnamur- as a family,” says Krishnamurthy. such as FDs, LIC schemes, real estate always the option of consulting a qual- parlance, this would be reinventing the wheel. Twitter was abuzz
thy. With issues such as the 2018 Nirav Physical gold in any form is still an and gold have been replaced with ified financial adviser. with questions like why Sebi did not know about the MFU’s exis-
tence and whether Amfi had not informed the regulator about
having already created this convenient platform. Industry stake-
holders are in complete confusion. Sebi will do well to once again

Claiming TDS credit HOW NRIs ARE TAXED IN INDIA

go through the proposal submitted by Amfi in May 2012, which
is already in compliance with the Sebi circular dated 26 July.
Interestingly, Sebi has not addressed a very important risk that

will be difficult if bank Whether a person’s income will be taxed in India or not will depend on the residential status of that person. Even if the
residential status is non-resident Indian (NRI), any income earned by such a person in India will be taxed. The rate of tax will
depend on the source of Income. Income of NRIs in India are subject to TDS (tax deducted at source). Anyone making
is existing in the MF industry—concentration risk. With a duop-
oly, the entire industry assets of about ₹35 trillion are put into two
baskets. Ironically, the industry and Sebi always advise investors
payment to an NRI is required to deduct TDS. In case TDS is deducted at a higher rate, NRI can claim refund by filing income

doesn’t have PAN data tax return. The following table shows the rates of tax and TDS that NRIs are charged in India. not to put all eggs in one or two baskets and diversification is very
important. Why isn’t Sebi looking at this serious risk?
With this circular, Sebi has unwittingly enhanced the risk
SHORT-TERM CAPITAL LONG-TERM CAPITAL TENURE*
ISTOCKPHOTO
ASSET GAINS (STCG) GAINS (LTCG) (MONTHS) TDS RATES (%) manifold for investors. If the regulator is seriously looking to
Renu Yadav scale the industry and achieve the target of ₹100 trillion in assets
renu.yadav@livemint.com
Listed equity shares/Equity
10% under management set by Amfi for themselves a couple of years
without indexation on amount
oriented mutual funds–STT based 15% exceeding ₹1 lakh 12 STCG: 15; LTCG: 10 ago, it assumes extreme importance that the regulator takes nec-

H
ave you submitted
your permanent
account number (PAN)
to your bank? If not, the bank
can deduct TDS (tax deducted
at source) at a higher rate of
20% on interest you have
earned on deposits. As you
have already paid TDS on
interest income, you would
want to get it adjusted to your
overall tax liability. Also, if the
tax deducted was higher than
your tax liability (if you fall in a
lower tax bracket), you can
claim a refund. The taxpayer
will have to show pre-tax, or
gross, income in the ITR and
the credit for tax paid will have
to be taken separately.
However, you may face a
problem in claiming TDS
credit, as it will not get
reflected in your Form 26AS
because you didn’t submit
PAN with the bank. The TDS
return filed by the bank will
show, “PAN not available”.
Every person liable to
deduct TDS has to file TDS
return. If the deductee has
given the PAN, the deductor
will show the TDS deducted
against the PAN in the TDS
return. The tax department
will use this data, which will be
reflected in Form 26AS of the
PAN holder.
But if PAN was not submit-
ted, it will not reflect in Form
26AS of the deductee. So, how
can you claim TDS credit?
“It will not be possible to
claim TDS credit if PAN is not
furnished by the deductee. If
PAN is furnished after the
deduction of tax and filing of
TDS return by the deductor,
then the deductor may be
requested to file a correction
statement to his TDS return
mentioning the PAN of the
concerned person whose TDS
is deducted,” said Shailesh
Kumar, partner, Nangia & Co.
“If the deductor accepts the
request and files a TDS correc-
tion statement mentioning the
PAN, then such TDS will
reflect in Form 26AS of the
concerned person, after the
TDS correction statement
filed by the deductor is proc-
essed, then the person will be
able to claim credit,” added
Kumar. However, there is a
possibility that the deductor
doesn’t agree to file a revised
TDS return.
“In such cases, the tax
deductee (the taxpayer) may
also avail credit on the basis of
the Transaction-Based Report
(TBR) issued to him by the tax
deductor. However, this may
lead to notice being issued to
the taxpayer due to the dis-
crepancy between the TDS
claimed in the income-tax
return filed and TDS reflected
in Form 26AS. However, a rec-
tification application may be
filed in this regard by the tax-
payer to claim the TDS credit
based on the TBR,” said
Suresh Surana, founder, RSM
India.
Therefore, if you want to
avoid any hassles, it is always
better to submit your PAN
wherever required.
Unlisted shares
Debt-oriented mutual funds
(listed)
Debt-oriented mutual funds
(unlisted)
Bonds/debentures
Gold
Real estate
*For long term  mitted a report by PricewaterhouseCoopers, which recom-
Slab benefit is not available to non-residents on capital gains income chargeable to tax as per the provisions of section 112, section 112A and section 111A of The Income Tax
Act, 1961; The rates given are exclusive of surcharges, and health and education cess.
Do a cost-benefit analysis when you decide on repayment of loans
Surya Bhatia
I have served three employ-
ers (including the current
one) between 2015 and
2020, with no gap in
employment. Recently, I
transferred the employees’
provident fund (EPF) from
the account with employer
1 to that of employer 2 and
then this accumulated EPF
to the account with
employer 3. Can I now
claim advance with-
drawal? Will the EPFO
office consider the total
length of employment as
five years, as the first con-
tribution was made in 2015
by employer 1? Do they con-
sider the age of universal
account number (UAN) cre-
ation?
—Vicky Rawal
You have completed five
years of continuous service.
And yes, the service under the
previous employers is also
As per applicable slab rate
without indexation
As per applicable slab rate
As per applicable slab rate
(unlisted) without indexation
As per applicable slab rate
without indexation
As per applicable slab rate
As per applicable slab rate
ASK MINT
m FINANCIAL PLANNING
considered to calculate the
continuous period of service.
And in case of any withdrawal,
the EPFO will consider the ser-
vice rendered as five years and
not the service of the current
employer.
My father recently passed
away, and I have received
his pension of ₹38 lakh. I
have a car loan outstanding
balance of ₹10 lakh, a home
loan outstanding balance
of ₹28 lakh (6.7%), a top-up
loan outstanding balance
of ₹22 lakh (7.8%). I do not
plan to close all my loans
but want an optimum solu-
tion. Currently, I am get-
ting a tax rebate on a home
loan, but this can change
next year; prepaying the
car loan will fetch a pen-
alty. I am unsure if I should
invest some money in a
10%
20%
with indexation
10%
10%
20%
with indexation
20%
with indexation
gold loan scheme, put some
money in public provident
fund (PPF), some in debt
mutual funds. I am not sure
if investing in the share
market is a wise decision
considering there could be
a market correction soon. I
am a risk-averse investor.
—Name withheld on request
It is recommended that the
loans be pruned down, and a
cost-benefit analysis be done
24 STCG: 30; LTCG: 10
36 STCG: 30; LTCG: 20
36 STCG: 30; LTCG: 10
36 STCG: 30; LTCG (unlisted): 10
LTCG (listed): 20
36 STCG: 30; LTCG: 20
24 STCG: 30; LTCG: 20
Source: EY, Mint Research
ISTOCKPHOTO
to decide on the repayment of
loans. The benchmark, in this
case, will be the reinvestment
return. As you are risk-averse,
the return on a debt mutual
fund will be, let’s say, an aver-
age of 6%. And the key is to
check if the cost of borrowing
is higher than the said rate. In
your case, a car loan can be
repaid, as the cost of borrow-
ing will be higher, but as there
is a prepayment penalty, it
needs to be evaluated accord-
essary steps to reduce the concentration risk that exists for every-
one to see.
Waking up when it happens will not help. Already, we have
seen a severe crisis in the industry just about a year ago. Another
one on the infrastructure side can gravely imperil the industry.
Therefore, investors and other stakeholders would expect that
Sebi shall not push to create parallel systems and duplicate efforts
that may lead to a waste of investors’ money, but create aspects
to ensure their investments in the mutual fund industry are com-
pletely safe from any operational crisis. To conclude, it is logical
for Sebi and Amfi to strengthen the MFU to extend the conve-
nience enjoyed by some investors to all investors by recognizing
it as market infrastructure. A couple of years ago, Amfi had sub-
mended that the MFU should be made a market infrastructure.
V. Ramesh is an independent director and former MD & CEO of
MF Utilities, and former deputy CEO of Amfi.
ingly. Likewise, the top-up ment of employees’ provi-
loan can also be considered for dent fund (EPF) on 11 July
repayment as you are not get- 2019. Will the final pay-
ting any tax benefit, thereby ment of EPF received be
the cost of borrowing remains taxable, since I will file my
the same and is higher than the income tax return for
potential earning capacity. FY20?
Only the housing loan can be —Name withheld on request
continued, as the net cost of
borrowing post tax savings will In your case, the most
be lower than the potential important thing is the period
earnings. The surplus of the of continuous service, i.e., if
corpus received from your you have retired from your job
father’s pension account can after the completion of at least
then be reinvested in PPF and five years of continuous ser-
debt mutual funds. You can vice, which also includes any
even consider balanced change in employment during
advantage funds that dynami- the period of five years. In that
cally manage the equity expo- case, the full and final payment
sure. However, this is to be of provident fund will be tax
done only if you have a long- free in your hands.
term investment plan and can Surya Bhatia is managing
consider taking some risk to partner of Asset Managers.
the portfolio. This will enable
you to generate inflation-ad- Do you have a personal
justed returns if held for the finance query? Send in your
long term. queries at
mintmoney@livemint.com
and get them answered by
I retired in February 2019.
industry experts.
and received the final pay-
12 THURSDAY, 29 JULY 2021
MUMBAI
OUR VIEW
Let rip-roaring rivalry
catalyse our EV market
Ola’s founder has opposed Tesla’s call for India to lower EV import barriers. Local production
is what he wants. We do, too. But that needs the catalyst of exposure to top-level competition
T
hat a market open to competition
from all sources tends to reward
both consumers and producers
better than a barred one should
have been almost axiomatic by
now, thanks to three decades of lib-
eralization and our experience thereof. Even
the so-called Bombay Club of industrialists,
which had briefly grumbled about exposure
to foreign rivalry back in 1991, largely came
around to view it as a win-win. Today, our
startup boom and herd of unicorns testify not
just to the roused spirit of enterprise in India,
but also confidence in outdoing others in
domains that span the globe. So it strikes curi-
osity when entrepreneurs of the internet age
express qualms over dropping import barriers.
On Tuesday, Ola Cabs’ founder and chief exec-
utive Bhavish Aggarwal opposed a suggestion
made by Tesla that we let electric vehicles (EVs)
be shipped in with an import-duty charge of
just 40% on its landed value, a proposal that
was seconded by Hyundai Motor India, the
country’s second-largest carmaker, which said
it would help our EV market grow. “Strongly
disagree with both,” said Ola’s founder on
Twitter. “Let’s have confidence in our ability
to build indigenously and also attract global
OEMs to build in India, not just import.”
As of now, we levy an import tariff of 100% on
ready-to-drive cars valued over $40,000, 60%
on the rest, and 100% on ready-to-use scooters.
While Tesla made a pro-climate pitch, with its
chief Elon Musk pointing out that we had the
world’s highest duties on cars among large
countries, its interest in a special drop for EVs
is clear. Since demand here for its expensive
electric cars is hard to forecast, it would suit it
well to test-launch a model or two via ship-
Private partners could help RBI run a digital currency
SHEHNAZ AHMED
R
ecently, a deputy governor of the
Reserve Bank of India (RBI)
announced that RBI is working on a
“phased implementation strategy” for the
issuance of a central bank digital currency
(CBDC), including a possible pilot project in
the retail segment. A retail CBDC is a digital
version of a fiat currency that’s available to
is fintech lead at the Vidhi
the general public. It will be part of the pay-
ments ecosystem, which already consists of
Centre for Legal Policy banks and payment service providers (PSPs).
One significant issue in the design of a retail
CBDC is the role of the private sector.
A retail CBDC issuance will include the
introduction of public services needed for
customer on-boarding, apart from systems
for due diligence, compliance with anti-
money laundering laws, transaction authori-
zation and maintenance of cyber security.
Such activities would mark a departure from
existing central bank functions that focus on
monetary stability and do not envisage direct
interaction with retail users. A recent report
by the Vidhi Centre for Legal Policy, titled A
VIEWS
BLOOMBERGT
A pandemic-optimized plan for
kids to resume their education
India’s hard-won educational gains could be lost if we don’t mount a sorely-needed rescue mission
ANURAG BEHAR
is CEO of Azim Premji Foundation
S
chools must reopen and our chil-
dren must return to education.
They have been effectively shut
since March 2020. Just as they had
started opening up, a second wave of the
pandemic overwhelmed India. This
period has made the inefficacy of online
education clear. Some systematic state
efforts and voluntary initiatives by
teachers for in-person engagement,
including mohalla classes, have been
laudable but grossly inadequate to com-
pensate for closed schools. Not only have
our children lost over a year of educa-
tion, they have also lost a lot of what they
ments before setting up a local assembly line. had learnt before—the phenomenon of
As it reportedly argued, a barrier of 40% will learning loss. Economic devastation,
combined with a break in habit, may
still serve as an incentive for it to crank out its result in large numbers of students
vehicles locally (should its trial entry go well, dropping out. This would undermine
presumably). Aggarwal’s ‘Make in India’ decades of effort and hard-won gains.
emphasis chimes loudly with Ola’s electric This pandemic has driven education into
scooter venture, for which it has a 10-million- an unprecedented crisis. Our response
has been insufficient on most fronts and
unit facility coming up in Tamil Nadu. As he cavalier on others.
said, he aims to export these two-wheeled EVs We should have done a lot more, and
to the UK, EU, Latin America and other desti- must do so even now, for systematic
nations. If this is his plan, then Ola’s products in-person engagement with children
need to be globally competitive from the very while schools are shut. Our thinking and
planning for what we will do once they
get go, achieved best not behind tariff walls of reopen have been particularly cavalier.
self-reliance, but by testing its edge on value- We want to restart as though they have
for-money over all other contestants in a well operated as usual for the past year-and-
contested arena. Given that Ola is out to play a a-half. Children are being ‘promoted’ to
volume game, its economies of scale should the next class with almost no thought in
most states given to addressing the lost
keep costs sufficiently low to compete with EV
imports from China (or elsewhere) with 40%
extra slapped on at ports. If not, its learnings
should push it to strive in that direction.
Regardless of specific cases, an import duty
drop could boost the competitive intensity of
our EV market in general, lending it the frisson www.livemint.com
needed to emerge swiftly, as companies jostle to
beat fossil fuel-guzzlers as much as one another,
EXCLUSIVE PARTNER
a process likely to drive efficiency among our
SENSEX 18,209.52 æ 222.73
M&A RULES
Takeover
local manufacturers. Right now, private modes
code gets
of conveyance that burn hydrocarbon fuels
makeover
Sebi makes sweeping
like petrol and diesel are cheaper. This must
changes based on panel
recommendations,
including threshold
being raised to 25%
B Y A NIRUDH L ASKAR & try (Ficci) corporate law com-
V YAS M OHAN
change. To hasten switch-overs, the Centre has
·························
MUMBAI
T he mergers and acquisi-
tions landscape in India
is set to change with the
capital market regulator for-
malising the recommenda-
tions of the takeover regula-
tions advisory committee on
set up policy props for EVs. Yet, how well EVs
Thursday. Following a board
meeting, the Securities and Ex-
change Board of India or Sebi
said that a company can ac-
quire up to 25% in a firm with-
out requiring to make an open
offer. The new takeover code
also raised the open offer size
from a minimum of 20% at
mitigate climate change will depend on how
present to 26%, providing an
exit for more investors.
At present an entity requires
to make an open offer for at
least 20% once its stake reach-
es 15%. This was preventing a
number of companies, espe-
cially private equity and ven-
ture capital firms, from in-
carbon-free our electricity supply is. It may take
creasing their stake in target
firms without requiring to take
control over management
through the additional open
offer. This move will come as a
relief for these firms.
“Increasing the open offer
trigger to 25% will allow some
companies to address growth
a decade’s shift towards clean power generation
capital requirements by get-
ting in a private equity inves-
tor,” said Sourav Mallik, senior
executive director, M&A, Kotak
Mahindra Capital Co. Ltd and
takeover panel member.
Sebi has also scrapped the
non-compete fee that the ac-
quirer firm currently pays to
before EVs on our streets make a difference
the promoters of target firms
to prevent the latter from tak-
ing up the same business and
compete. Sebi said that remov-
al of the non-compete fee will
ensure that all shareholders of
the target firm are treated fair-
ly. Recently, minority share-
holders of Cairn India Ltd had
beyond reducing fumes. By then, EVs need to
protested against acquisition
of a stake in the firm by Vedan-
ta on grounds of non-compete
fee amounting to differential
open offer pricing for the pro-
moter shareholders and other
stakeholders in Cairn.
There will be no separate
account for a sizeable share of all wheels on tar-
non-compete fee provision
and all shareholders will be
Mint is also available for R6 with
Hindustan Times under a combo offer
mac. Let rip-roaring rivalry play the catalyst.
GUEST VIEW
Central Bank Digital Currency for India: Pro- provide wallet services for holding and using
ceeding with Cautious Optimism, notes that the Sand Dollar issued by the central bank. A
globally many central banks are exploring a CBDC pilot project launched by the People’s
retail CBDC that involves private-sector par- Bank of China in 2020 relied on a similar
ticipation through a two-tiered model. model, whereby it issued its e-CNY (China’s
Under this model, a central bank develops CBDC) through ‘authorized operators’ such
the core CBDC system and the private sector as commercial banks and licensed non-bank
takes up operational tasks. This is in contrast payment institutions.
with a direct model, where the central bank These authorized opera-
is responsible for all aspects of CBDC issu- tors manage wallets,
ance and its access to end-users. authenticate e-CNY, and
Under both models, a CBDC remains a develop ‘platforms’ to ena-
direct central bank liability. While a direct ble operator-specific fea-
model will allow the central bank to exercise tures. Such operators
more control over the CBDC design, it will
also require the bank to assume a more active
undertake customer due
diligence and on-boarding
role in payment services for CBDC transac-
tions, raising questions over the institutional
services. In the UK, the
Bank of England envisages
capacity of a central bank to undertake such private sector intermedia-
activities. In economies like India’s that have ries as developers of ‘over-
well developed digital-payment markets, lay services’ that can meet
this may lead to the central bank competing future payment needs by
with PSPs, which would raise concerns of enabling programmable
disintermediation. money, smart contracts and micro-pay-
The two-tiered model seeks to address ments. Proponents of this model argue that
these concerns. It has been adopted by the private-sector PSPs are “best placed to use
central bank of the Bahamas that launched their expertise” to promote innovation and
its CBDC (Sand Dollar) in 2020. Financial integrate payment services with other finan-
intermediaries in the private sector (banks, cial products and platforms.
money-transmission businesses, PSPs, etc) In India, to leverage the potential of the
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune*
NIFTY 5,487.75 æ 59.05
able to exit at the same price.
“Non-compete fee could
have been phased out in a cali-
brated manner, instead of re-
ducing it to zero,” said Sid-
harth Birla, chairman of the
Federation of Indian Cham-
bers of Commerce and Indus-
mittee and chairman of Xpro
India Ltd. “India is not at that
stage of economic develop-
ment where the fee could be
scrapped altogether.”
Bankers said the acquirer
may have to pay more for take-
overs with the non-compete
fee going. “A promoter has cer-
tain expectations in mind.
With the regulator ensuring
the minority shareholder does
not lose out, the valuations per
share will go up,” said Ranu
Vohra, managing director, Av-
endus Capital Pvt. Ltd, a do-
mestic investment bank.
Sebi cleared the committee’s
proposal on pricing takeover is-
sues. At present, open offers
are priced at the higher of
weekly averages of market
price for 26 weeks or two
weeks. To ensure that all share-
holders of the target firm get a
fair value for shares tendered in
an open offer, the panel pro-
posed that the minimum price
payable shall be the highest of
four options—the negotiated
price that triggered the open
offer, the volume-weighted
average price paid by the ac-
quirer in the preceding 52
weeks, the highest price paid
by the acquirer during the pre-
ceding 26 weeks, or the market
price based on the volume-
weighted average market prices
in the preceding 60 trading
days. Sebi has accepted this.
The new takeover code took
a year to secure Sebi’s clear-
ance. Last July, a panel headed
by the former chief of the Secu-
rities Appellate Tribunal C.
Achuthan had submitted its
recommendations to change
the existing regulations for
takeovers that were framed in
1994. The committee had pro-
posed that an acquirer firm
should make an offer for 100%
shares in the target firm once
an open offer was triggered. Ac-
cording to the committee’s re-
port, an offer for a 100% stake
in the target firm would provide
an exit opportunity for all
shareholders and would attract
only serious companies to go
for buyouts in Indian firms,
though the cost of acquisitions
would have gone up.
While most of the recom-
mendations, including the re-
TURN TO PAGE 32®
RBI can set up
the core CBDC
system and
let the private
sector manage
customer-facing
operations
DOLLAR `44.08 ®
U-turn: Karnataka chief minister B.S. Yeddyurappa in New Delhi on Thursday.
CORRUPTION CHARGES
BJP takes moral high ground as
Yeddyurappa agrees to resign
B Y R UHI T EWARI
ruhi.t@livemint.com
·························
NEW DELHI
B .S. Yeddyurappa agreed to
resign as Karnataka chief
minister after the Bharatiya Jan-
ata Party (BJP) asked him to quit
following his indictment by the
Lokayukta, the anti-graft watch-
dog, in the illegal mining case.
This allows the BJP, the main
opposition party, to take the
moral high ground in its battle
against the Congress-led Unit-
ed Progressive Alliance (UPA)
government on issues of cor-
ruption and poor governance.
The move by Yeddyurappa,
Cabinet clears
Lokpal Bill,
keeps PM
out of purview
B Y L IZ M ATHEW
liz.m@livemint.com
·························
NEW DELHI
T he Congress-led United Pro-
gressive Alliance (UPA) gov-
ernment on Thursday rejected
key demands by civil society rep-
resentatives for inclusion in the
anti-graft Lokpal Bill and decid-
ed to press ahead with its own
prescription to fight corruption
in public life.
The Bill approved by the Un-
ion cabinet on Thursday will be
the ninth attempt by Parliament
to pass legislation to constitute
an anti-corruption watchdog.
The Bill will be introduced in
Parliament in the first two days
of the monsoon session begin-
ning 1 August, said V. Naray-
ansamy, minister of state at the
Prime Minister’s Office.
Contrary to recommendations
by civil society representatives
headed by activist Anna Hazare,
the government has kept the
Prime Minister, the judiciary and
the conduct of lawmakers inside
Parliament out of the purview of
the Lokpal. The immunity for the
Prime Minister only extends to
the period during which he re-
mains in office.
TURN TO PAGE 4®
Friday, July 29, 2011
POLICY: Food ministry
against wheat export >6
CORPORATE: Hindustan Unilever
net up 18%, beats estimates >8
WSJ: US house heads
for debt-crisis vote >27
COMMERCE: India, EU reach interim
settlement on generic drugs row >6
EURO `62.94 æ `0.76
who called off a state cabinet
meeting scheduled for Thurs-
day afternoon and is expected
to send his resignation to party
president Nitin Gadkari shortly,
is contrary to expectations that
he would defy his party’s diktat.
The BJP now has the advan-
tage ahead of the monsoon ses-
sion of Parliament beginning 1
August, during which it plans to
intensify its attack on the UPA.
Yeddyurappa’s impending
exit has clearly given the BJP the
opportunity to take on the UPA,
said Pratap Bhanu Mehta, presi-
dent, Centre for Policy Research,
a Delhi-based think tank.
“With the Yeddyurappa is-
Vol.5 No.179 `3.00
GOLD `23,180 æ `25
sue hanging over them, they
(BJP) had no chance of taking
the moral high ground,” Mehta
said. “However, now with this
liability gone, it frees them to
take a much more aggressive
and consistent stand.”
The decision to remove Yed-
dyurappa was taken after a
meeting of the BJP parliamen-
tary board, its highest decision-
making body, at Gadkari’s resi-
dence on Thursday morning.
TURN TO PAGE 5®
ALSO SEE
>Steel makers may step up iron ore
imports to to tide over shortages
LIVEMINT.COM
MY VIEW | OTHER SPHERE
year of education, let alone the learning- munities, and certainly not for an entire
loss from previous years. state or district simultaneously. As a
What to do while schools are closed default option, these units can be pan-
and after they open are critical ques- chayats in rural areas and wards in urban
tions. But a precursor to these is: How areas. Many kinds of realignments will
and when to reopen schools. be required within state education sys-
Let’s acknowledge the basic facts. It is tems to enable such different start dates,
risky to restart schools before the entire since the current practice is to go by a
population of India, including children, single calendar for an entire state.
is vaccinated. But, like all decisions in Fourth, two parameters should deter-
this pandemic, this one too must be mine whether or not to open schools in
taken in balance and not in imagined any unit. One, how large and dispersed a
ideal circumstances. If done so thought- population does the school serve? Two,
fully, there is less risk in reopening what is the extent of vaccination among
schools than in opening shopping malls the communities that the school serves?
and theatres, which has happened in The principle should be that schools
most of the country. But even if we serving tight and small communities can
reopen schools, they will be shut again in open with relatively low levels of vacci-
the event of a third wave, regardless of nation of the relevant population. This is
whether it is localized or nationwide.
So, like everything else in our country,
education will continue to be on the
precipice till we have fully vaccinated
because children and adults from such
communities intermingle anyhow, and
thus open schools do not materially
increase the risk of transmission. Those
our population. that serve dispersed communities would
With these facts, let’s consider how to require higher levels of vaccination
open our schools. before they open. In general, these
First, no school should be opened till parameters would lead to early opening
all its teachers and other team members of primary and middle schools, particu-
have been fully vaccinated. This is to larly in rural areas, with higher classes
protect them and minimize the risk of having to wait longer, especially in large
their being carriers of the covid virus to cities. Unfortunately, too many states
children and then to their families and seem to be doing the reverse.
communities. This must include pre- Careless and misinformed decisions,
schools and Anganwadis. Vaccination the kind of which we have seen too often
priority should be accorded to school for comfort during the pandemic, would
staff in all states right away. They must be disastrous for education. Given the
also get top priority if a booster dose is country’s large student population,
eventually required. unfortunately a few may fall seriously
Second, schools will have to be ill with covid. In the wake of the near-
opened even though children have not apocalyptic second wave, along with
been vaccinated. But we should plan our unfounded but widespread fears that a
vaccination programme for children in third wave would hit children much
the minutest detail and execute it rigor- harder than earlier waves did, reports of
ously. This should include trials and such illnesses would fuel a severe politi-
approvals, the procurement and delivery cal and community backlash. So, a word
of vaccines, and also demand mobiliza- of caution for all, especially for politi-
tion, including efforts to address any cians in power at the state level: We
hesitancy. We must learn from the must open schools at the earliest, but we
blunders of our adult vaccination drive. must do so with rigorous procedures
Third, decisions to open schools along with genuine expert advice, and
should be taken for geographic units that recognize that the biggest priority today
encompass relatively proximate com- for education is vaccination.
32
32 PAGES
PAGES
+ 24 PAGES MINT FEATURE
OIL $117.61 æ $0.49
PTI
QUICK EDIT
A Lokpal
Bill, finally
T he draft of the Lokpal
Bill cleared by the
Union cabinet on
Thursday has,
predictably enough,
upset members of “civil
society”. They are angry
at the exclusion of the
Prime Minister, the
You miss 100% of the
higher judiciary, and the
conduct of MPs inside
Parliament from the
ambit of the Lokpal.
In all three instances,
giving the Lokpal a free
hand would have been
problematic.
The office of the
Prime Minister had to be
excluded for political
reasons. Including the
shots you don’t take.
other two categories
requires constitutional
amendments—a
procedure that needs
time. And “civil society”
was not willing to give
the government any time
beyond 16 August.
While citizens are free
to stage protests, the
Union government needs
to ensure that these do
not get out of hand. The
chaotic scenes witnessed
in New Delhi during yoga
teacher Ramdev’s protest
should be avoided at all
costs.
>P6
WAYN E G R E TZ KY
country’s payments sector, RBI ought to tenance of a digital ledger for recording
consider a two-tiered model for its retail transactions. The central bank can opt to
CBDC; that is, it should provide the core sys- either run the core infrastructure that sup-
tem and leave operational and consumer- ports record-keeping and related tasks or
facing activities to regulated entities in the delegate these to CBDC intermediaries.
private sector (CBDC intermediaries). This Both these approaches will have to take into
will enable RBI to focus on core activities account prudential risk management, data
such as guaranteeing the governance, security-risk mitigation and the
stability of the digital cur- impact on competition in India’s payments
rency’s value, regulating its market. The adoption of a two-tiered model
intermediaries, and over- would also call for appropriate regulatory
seeing the overall security architecture designed to empower RBI to
of the system. regulate CBDC intermediaries and oversee
Some issues, however, the soundness and operational resilience of
require special considera-
tion. RBI will have to
such private entities, while ensuring overall
financial stability and the safety of customer
develop oversight and risk
management functions vis-
funds. Issues related to the interoperability
of CBDC services with other payment solu-
à-vis CBDC intermediaries, tions will have to be examined closely, as also
and establish systems to the implications of data protection laws.
respond to potential CBDC A two-tiered model based on public-private
disruptions that could partnerships would present us an opportunity
result from operational to leverage our private-sector potential to
failures or cybersecurity breaches. Further, engage customers while promoting CBDC-
since a CBDC will represent a direct claim on oriented innovation in the payments sector.
RBI, some form of an operational role for it At the same time, it would rely on RBI to regu-
will have to be planned. The Bank for Inter- late and supervise this digital currency in a
national Settlements notes that an impor- way that will generate the trust that underpins
tant aspect of CBDC design is the role of the the transactional function of money.
central bank and private sector in the main- These are the author’s personal views
LIVEMINT.COM VIEWS THURSDAY, 29 JULY 2021
MUMBAI 13

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

Global covid trends suggest the Xi’s four pillars of regulation

will reshape China’s Big Tech
pandemic may be petering out His agenda: bank safety, antitrust, data security and social equality

Mortality numbers offer us some cause for guarded relief but three issues of significant urgency await policy-level attention

REUTERS

SHULI REN
is a Bloomberg Opinion columnist covering
Asian markets

ALOK SHEEL
is RBI chair professor of macroeconomics,
Indian Council for Research on International
Economic Relations
Declining mortality
The number of officially recorded covid deaths has fallen around the world lately, pointing

F
potentially to a waning of the pandemic rom the US to the European Union,
17.9 governments are clearly uneasy with
Global population 10.2 12
share 2020 (in %) 47.4 the pervasive power of Big Tech: The

A
n analysis of six-weekly (official)
covid deaths since the pandemic
began around March 2020 indicates
that mortality is declining, albeit at a
varying pace, almost across the board
after having peaked in April-June
2021. The inference is that the pandemic is either
petering out, or the expected third wave is still to
materialize. The third wave hypothesis has its
origins in the pattern of the Spanish Flu a century
ago that covid has broadly tracked. It is possible that
a third wave might be averted, or at least moderated,
on account of the global vaccination drive, the
spread of the virus’s Delta variant notwithstanding.
This is the big picture, based on aggregated data
from 32 major countries in Europe, the Americas
and Asia that together account for about 70%
of the global population and 87% of covid deaths
(see table). Regional patterns differ, and some
countries have bucked the regional trend.
The six-weekly data ending 21 July 2021 shows
that the decline is more marked in Europe (Russia
and Ukraine excepted) and North America than in
South America and Asia. The second wave also
peaked earlier in Europe (between October 2020
and February 2021) and North America (Decem-
ber-February 2021).
South America by and large continues to show
high and rising mortality. In Asia, Indonesia and
Bangladesh have bucked the regional trend of
falling mortality.
These differences possibly lie in the highly
skewed coverage of covid vaccinations. While
about half the population in most high-income
countries has been fully vaccinated, low coverage
in the more populous poorer countries of the
world, including India (below 7%), has kept the
global average under 15%.
The official global death count now exceeds 4
million. The Americas and Europe, which account
for just 22% of the global population, have had 73%
of all covid deaths so far. The Asian trend (Central
and West Asia is aggregated with Europe on
account of both proximity and similarity in trends)
is dominated by India, which accounts for about
three-quarters of all covid deaths in the region. At
over 400,000, the third highest after the US and
Brazil, it is the only country in Asia and Africa with
more than 100,000 deaths. The other 10 countries
are in Europe (four) and the Americas (six).
Deaths per million in India (304) are significantly
lower than the global average (536), and much
lower than both Europe (1,388) and the Americas
(2,178). However, if India’s covid deaths in the six-
week period between 21 April and 6 June 2021 are
taken at around 10 times higher than the recorded
figure, as a number of studies suggest, the death toll
rises to around 2 million. Covid mortality, in terms
of deaths per million, would then be comparable to
influence of their social media platforms on Some of Xi’s moves have a populist if not
Europe Americas South & East Asia elections, the security of the vast amount of exactly socialist rationale REUTERS
Timeline Global (15 countries) (10 countries) (7 countries) India consumer data they store, and the exploita-
559,808 419,021 tion of gig economy workers who don’t have invested more money into education.
Total deaths enjoy health insurance or receive overtime Gig economy workers’ rights are also at the
(21 July 2021) 4,142,679 1,096,336 1,933,855
pay. In the US, Congressional hearings have heart of the government’s push for social
been conducted and anti-trust lawsuits equality. Earlier this week, the government
% of Global 26 47 14 10 filed, but nothing substantial has come posted notices that online food platforms
Deaths per million about. Judging by the Nasdaq 100 Stock must respect the rights of delivery staff and
Index, Big Tech in the West is still thriving. ensure that those workers earn at least the
6 Mar-20 Apr 21 131 53 1 0
China’s political leadership perceives the local minimum income. Food delivery giant
20 Apr-6 Jun 30 94 179 3 4 same set of problems as well. But China is Meituan dived 14%, its worst on record,
6 Jun-21 Jul 28 32 173 8 16 willing to go a lot further to rein in the clout which wiped out about $30 billion of its
21 Jul-5 Sep 32 19 185 12 28 of its tech giants. market cap. DiDi, which depends on gig
5 Sep-21 Oct 35 54 151 16 36 What has just happened to after-school drivers, is also likely to take a hit.
21 Oct-6 Dec 51 227 153 9 17 tutoring providers should be a warning. In President Xi Jinping doesn’t care if stock
6 Dec-21 Jan 73 249 270 8 10 a sweeping overhaul, China is banning com- investors, many of them foreigners, lose bil-
21 Jan-6 Mar 66 208 297 6 3 panies that teach the K-12 school curricu- lions of dollars. He knows that China’s mid-
6 Mar-21 Apr 60 176 269 11 18 lum from making profits. On Friday, New dle class will have his back. They like these
Oriental Education & Technology Group, a regulatory crackdowns. The ministry of
21 Apr-6 Jun 88 134 254 50 119
blue-chip, tumbled 54% to close at $2.93 per education’s for-profit tutoring ban is a
6 Jun-21 Jul 53 64 193 29 52
share, spelling a market cap of $5 billion. crowd-pleaser. In Chinese society, a family’s
Total 536 1,388 2,178 152 304 The company’s net cash, adjusted for wealth alone already gives its offspring a
Source: www.worldometers.info
deferred revenue and refund liabilities, natural edge, but the middle class does not
PARAS JAIN/MINT
pegs this stock’s worth at $2.30, according enjoy seeing that edge amplified through an
Europe, although lower than the Americas. There pandemics. Until very recently, we humans were to a Goldman Sachs estimate. Essentially, army of tutors. Meanwhile, big cities’ con-
may be similar undercounting in other countries relatively immobile, with most people spending investors appear to be betting that New Ori- sumers are sympathetic to gig economy
with poor governance systems. their entire life without venturing beyond a few ental will be liquidated. Similarly, TAL Edu- workers, often migrants from rural areas,
Going forward, the covid pandemic has under- kilometres of their homes. Human disease and cation Group closed down to $6 per share, calling them endearingly “fast delivery little
scored three critical issues requiring the attention immune systems also tended to be local phenom- lower than the bank’s estimated net cash brothers”. And, by regulating Ant like a
of policymakers, as similar epidemics will occur in ena. Epidemics were contained locally. This value of $6.70. bank, consumers are less likely to be sold
the future as well. The first issue arises out of the changed with the maritime and later even more While what happened to Chinese educa- risky financial products too.
North-South divide. Richer countries cannot dramatically with the industrial revolution that tion stocks shocked the outside world, it was Going forward, investors need to realize
escape the negative externalities arising from increasingly gave humans geographic mobility. not exactly surprising inside China. Since the four pillars are part of Xi Jinping’s vision
poorer countries’ inability to access vaccines. A The first pandemics, the Justinian plague of the last November, Beijing has been reining in to ensure another hundred years for the rul-
fully-funded mechanism needs to be put in place ancient world and Black Death of the medieval Big Tech’s power, and foreign investors are ing Communist Party, which just celebrated
that makes vaccines available globally in an period, were spread through ports by ships and just starting to come to grips with the seri- its centenary. In the past, Big Tech compa-
equitable and timely manner. Also, do we need then reached the interiors rather slowly, if at all. ousness of the bureaucracy. nies were evaluated in terms of sales, their
differentiated strategies for poorer countries with New diseases carried by Europeans to the New Broadly, Beijing is concerned about four total addressable market, or even monthly
weaker public health infrastructure and finances? World, against which local populations had no pillars of stability: Banking, anti-trust regu- active users. Now investors need to factor in
If so, what might these be? The efficacy of strin- immunity, resulted in high mortality there. And in lation, data security and social equality. All Big Government.
gent lockdowns in such countries, which cannot early industrial Britain, mortality actually rose of Beijing’s major interventions reflect For instance, DiDi doesn’t do much more
afford adequate fiscal support to protect liveli- because of heightened mobility, till public health these concerns: the last-minute scuttling of than host a taxi-hailing app. That’s a service
hoods and where shutdowns often result in more interventions led to a decline. fintech giant Ant Group’s $34 billion initial a smart city’s government can also provide.
overcrowding than less, needs to be revisited. The colonial era saw increased human mobility public offer (IPO) last November because of Or why should Ant Group be allowed to
The second issue has to do with the aetiology of that carried diseases far into interior regions its potential disruption of banking; Alibaba cross-sell its investments, insurance and
viral pandemics. Viruses are optimized for trans- through motorized road and rail transport. The Group Holding’s record $2.8 billion fine for consumer loan products, while banks are
mission and mutate rapidly. Therefore, they are very high mortality of the Spanish Flu was not monopolistic business in April; and the being asked to spin off their wealth manage-
not easy to target through vaccines. Viruses that entirely on account of limitations of extant public cybersecurity watchdog’s investigation of ment arms?
are highly infectious are usually not very deadly, health and infrastructure at the time, but also on DiDi Global immediately after its $4.4 bil- In the future, China’s big tech will be less
and those that are deadly, not highly infectious. account of large-scale troop movements arising lion IPO this month. exciting and able to exploit consumer data
But every now and then, there will be the perfect from the First World War. With the increasing den- Social equality is at the heart of the ban of to make more money. They might— gasp—
storm of a deadly highly infectious virus, like a cen- sity of air transport across the globe, pathogens can for-profit after-school tutors. Confronted just be turned into state-owned big banks,
tury ago and presently. Handling such a viral pan- spread globally within days. Governments across with blanket advertising and fear monger- or big utilities. When that happens, China’s
demic has proven to be a major challenge even in the world scrambled to close borders in a disruptive ing, anxious middle-class parents feel com- technology companies might have to be val-
rich countries with advanced public health sys- manner that had a devastating impact on econo- pelled to send their kids to mind-numbing ued in terms of book or net cash. Liquida-
tems. Modern science still has some way to go in mies and livelihoods. What kind of mobility proto- cram schools, in some cases even before tion risk is real in Xi’s China. He wants a
learning how to deal with such viral epidemics. cols need to be adopted in handling pandemics that kindergarten. No one wants her kids to be more equal society, and any obstacles will
The third issue has to do with mobility and will prove least disruptive for the global economy? left behind just because her neighbours be swept away. ©BLOOMBERG

MY VIEW | BEHAVIOUR BY BRAIN

Sports could hold crucial lessons on decision making

image of the ball leaving the bowler’s hand
BIJU DOMINIC has fallen on the batsman’s retina, the brain
takes a minimum of 200 milliseconds to
predict the trajectory and other factors of
the delivery. After that, even the best of
batsmen will take a minimum of 150 to 200
McCrone describes this as the “dynamically
tapering cone of anticipations” mechanism
of the brain. The human mind takes most
decisions by anticipating the future.
As compared to games involving fast-
moving balls, sprinters have some of the
snap decisions like those involved in play-
ing a cricket shot taken within thousandths
of a second happen at thresholds below the
conscious levels of the brain.
When the coach of a basketball team
that’s trailing by two points calls for a time-
contributed immensely to these new devel-
opments.
Even the world of business and policy-
making could gain a lot by developing an
in-depth understanding of the final few
moments of some decisions.

O
ne of the very best places to study
human decision-making processes
is in the sports field. Decisions in
such arenas are very complex. Every player
has to take into consideration multiple
dynamic factors before taking a quick deci-
sion. On-field calls in competitive sport are
taken under conditions of extremely high
milliseconds to swing their bat and achieve
contact with the ball at the centre of it. This
means that the time available for a batsman
to take the crucial decision of what shot is
ideal to play is in the range of thousandths
of a second.
This in-depth analysis of playing a cricket
shot reminds us about another significant
easier decisions to make in competitive out with just two seconds of play left, he What happens in the consumer’s mind,
sports. Their goal is singu- knows very well that a lot for example, as she walks down the aisle of
lar and there are no varia- can be done in those two a supermarket? Are these the same proc-
bles they need to take into Knowledge of seconds. He scripts out esses that occur in her brain while she is
consideration. As soon as every millisecond of the buying something on an e-commerce plat-
they hear the starting shot, how the mind remaining play time. What form seated in the comfort of her home?
they only need to get off move must each of the five Answers to these and other questions about
the blocks and run at the
works in the players make in those two the final seconds before a purchase will

is the chief evangelist, Fractal

physical and emotional stress. The conse-
quences of those decisions are large. Years
Analytics and chairman,
FinalMile Consulting
of preparation could get undone within a
matter of a few seconds.
John McCrone’s book, Going Inside: A
Tour Round a Single Moment of Conscious-
ness, has captured the decision-making
process in the brain of a sports person. The
book details a study done by Dr. Peter
McLeod, a researcher at the Applied Psy-
chology Unit in Cambridge University. Dr.
McLeod studied what happens in the brain
of a cricket batsman as he plays a shot.
When a fast bowler sends down a delivery
at 145 kilometres per hour, the ball reaches
the batsman in 440 milliseconds. After the
feature of the human decision-making
process. As the brain takes 200 millisec-
onds to process the image of a ball in the
bowler’s hand, the ball would have travelled
half way across the pitch by then. So what
the batsman’s brain is actually processing
on the basis of that image of a ball in the
bowler’s hand, together with various other
playing factors, is a predictive distribution
of the various possible ways in which the
ball will pitch and behave.
The brain assigns probabilities to each of
those possibilities. So the batsman begins
with a broad hierarchy of likelihoods, but
finally predicts a particular delivery and
then decides the best shot to deal with it.
fastest possible speed. The
sprint race provides us an
sports arena seconds? Who will get the
ball to attempt a match-
surely strengthen a marketer’s hands.
The understanding that in the final sec-
understanding of the min-
imum time our brain takes
could guide winning three-point shot?
If he is not able to receive
onds of trespassing across a railway track,
the human brain tends to underestimate
to take a straight-forward, business and the ball, which alternative the incoming speed of a large object by 40%
conscious decision. player should take that all- gave us a special grasp of the trespassing
For a human brain to policy decisions important shot at the bas- problem. The knowledge that the anticipa-
sense or register an audio ket? What should be done tory faculties of the brain can be used to
stimulus and respond to it to counter the defence design more effective road signage helped
at a conscious level, it needs a minimum of strategies of the opponent team? us reduce accidents on Indian roads.
120 milliseconds. The field of sports has broken down Human behaviour is perhaps the most
So, in international competitions, pres- every micro-moment of the action and cap- complex phenomenon in the universe. To
sure sensors embedded in foot blocks tured every decision taken within split sec- unravel this complexity, it makes lot of
record any movement under 120 millisec- onds. This information is used to develop sense to take learnings from multiple fields
onds of the crack of a starter’s pistol to game-winning strategies. The disciplines of of knowledge. Let’s include the sports field
notify a false start. This is a reminder that big-data analytics and neuroscience have to that list.
14 THURSDAY, 29 JULY 2021
MUMBAI BUSINESS OF LIFE CULTURE LIVEMINT.COM

How to argue with Amitabh

Bachchan and start a career
In an excerpt from his
autobiography, film-
maker Rakeysh
Omprakash Mehra
recalls the start of his
relationship with Big B
Rakeysh Omprakash Mehra A scene from ‘Ready Player One’, which imagines a metaverse
busienssoflife@livemint.com

stood in front of the mirror and stared

Metaverse: the
I at myself for a long time. I had a meet-
ing scheduled at 10 a.m. with Amitabh
Bachchan at the AB Corp office in
Juhu. My hero, the hero of an entire
nation, walked in wearing a blue shirt, denims
and a baseball cap.
next internet
‘Hi, I’m Amitabh Bachchan,’ he said, shaking
hands. ‘Can you come again?’ went my silly
head! But then, let’s not push it.
revolution?
‘Rakeysh,’ I said meekly.
We started discussing the BPL Sanyo ad, Agencies
shared the creatives and said our goodbyes. This feedback@livemint.com
was a Friday morning. Over the weekend, I felt

uneasy, and on Monday met Amit ji again and
shared my deep feelings!
Even though getting the opportunity to shoot
the BPL Sanyo ad with Amit ji was a cathartic
experience, I was not only creatively nervous,
but also gripped with an uneasy conscience.
‘I’m really excited, but I don’t think you
should do this ad,’ I said.
Mr Bachchan looked at me and smiled indul-
gently. I continued, ‘You have died and come
back from death in real life.’
I was referring to 1982, when this great man
met with a near-fatal accident on the sets of the
film Coolie (1983) that landed him in the hospital
battling for his life. It is believed that along with
the doctors, it was the entire country that
brought him back to life with their heartfelt
tears and prayers. I was among the millions
praying.
I have no idea what overcame me or where
my presumption that I needed to protect this
colossus came from. I insisted, ‘All our lives in
cinema halls, we’ve seen you 60 feet tall, you
have controlled us, entertained us, mesmerized
us. But on television, you will be 6 inches tall. I
could insult you by merely changing the chan-
nel. How can I shoot these TV commercials?’
I tried very hard to dissuade him from doing
the ad. But his mind was clear.
‘Rakeysh, this will be the future. You will see
more and more celebrities endorsing products.
Don’t worry on that account,’ his baritone rang.
However, sure enough, Abhinav understood
the sentiments behind what I was saying and his
brilliant copy writer Syed Usman laboured on
the script until we got what felt right. In 1996,
we worked on a set of five commercials; the first
one was meant to ease his entry into the world
of product endorsements. It began with him
saying something like, ‘Shaayad aap mujhey TV
par dek kar hairaan hongey’ (You may be sur-
prised to find me on TV).
He goes on to say that he has been offered to
endorse BPL products and while he has done
theatre, sang songs, acted in movies, there was
no harm in trying this new thing out. What fol-
lowed in the next four commercials was ground
breaking. One had Amitabh Bachchan emerg-
ing from the escalator of Piccadilly Circus Tube
Station, earnestly vocalizing that he was seeking
an Indian name that had a reputation outside
India.
As he moves away, a signage with BPL
appears right behind him, making a bold state-
ment. That was the Indian brand he was looking
for. I had a vision to employ some breakthrough
technology. In the next commercial, there was
the real Amitabh Bachchan walking through his
own retro films and interacting with his own
iconic characters from Shahenshah, Deewar,
Anand and many more.
Kehte hain ki international naam ho to sab
kuchch chalta hai.
Humme wo baat kahan! Hai koi Hindustani
naam jisme
koi dum ho… Kuch wazan ho… Kuch baat ho?
Sunaa hai woh naam B se shuru hota hai…
(It is believed that only foreign brands work.
We’re not up to the mark. Is there an Indian
name that can stand up to the world? They say
there is one and the name starts with B [a pun on
B for Bachchan and B for BPL].)
I decided to spend the last penny available to
ensure the highest quality and took the final
post production—colour grading and VFX— to
London, the hub of the world advertising back
then, to achieve something new. Our VFX
supervisor, Paul Sims, was from a leading post-
production house in London. Bharathi and I
rented an apartment near Soho square for four
months to finish the job. I was very clear from
the beginning that our advertisement had to be
at par with, if not better than, the best in the
world.
Coincidently, Amit ji happened to be in Lon-
don while I was there. One day, right in the mid-
dle of our work, Amit ji dropped by to say hello
(from left) Amitabh Bachchan,
Rakesysh Omprakash Mehra and
DoP Kiran Deohans on the set of
‘Aks’; Mehra on location RUPA
The Stranger in the
Mirror By Rakeysh
Omprakash Mehra with
Reeta Ramamurthy Gupta,
Rupa, 324 pages, Rs 595
and asked:
AB: What are you doing later in the evening?
Me: I’m available.
Of course I was!
Amit ji took me to a recording studio where,
along with Bally Sagoo, he was creating an
album. I heard some of the music; it was path-
breaking fusion to say the least.
Amit ji and I were eager to cross the threshold
of what we had done before. Perhaps that’s why
I was able to bond with a legend two decades
and several paeans senior to me. Later, I realized
that innovation was a constant for Amit ji. He’s
a visionary with tremendous foresight. In those
times, in his mind, he was imagining the future
and wanted to be part of shaping it. In 1996, he
founded Amitabh Bachchan Corporation Ltd.
(ABCL), the first ever attempt to corporatize the
Indian film industry. I remember thinking how
full of energy he was, always forthcoming,
always thinking at least a 100 steps ahead of any-
one else.
After wrapping up the BPL commercial, I
returned to India, when I got a call from Rosy
Singh (Amit ji’s dependable executive secretary)
for a meeting. Here’s how that went.
AB: Remember the music studio in London?
Me: Yes!
AB: Here’s what we created.
He proceeded to play me some songs.
AB: I’ve composed Babuji’s (Harivansh Rai
Bachchan’s) poetry in my own voice with Bally
Sagoo. Maybe we should do a music video. What
do you think?
Me: Amazing!
Mentally, I started compiling a list of the best
pop video directors from the US and London
who were best suited to make such a video. Each
song deserved out-of-the-box thinking!
He prodded me, exploring my thoughts.
AB: What are the songs you like?
I shortlisted three: The first was the rustic ‘Eir
Bir Phatte’, which brought alive folk storytelling
in Awadhi. The sound was new and unheard,
thanks to Bally Sagoo’s modern reggae flavour.
Then the lilting romantic ballad ‘Sone Machari’
and finally, the intoxicating lyrics of Sahir Lud-
hianvi and ‘Kabhi Kabhi’ in AB’s own voice.
AB: Good choices. Will you direct the songs?
Me: I have never done music videos, but why
not?
AB: Then let’s begin with ‘Eir Bir Phatte’.
Suffice to say, we proceeded to make a dent in
the universe with the album Aby Baby. India had
never seen anything like ‘Eir Bir Phatte’ before.
I
magine a world where you could sit on the same couch as a
friend who lives thousands of miles away, or conjure up a vir-
tual version of your workplace while at the beach. Welcome to
the metaverse: a vision of the future that sounds fantastical, but
which tech titans like Facebook founder Mark Zuckerberg are
betting on as the next great leap in the evolution of the internet.
The metaverse is, in fact, the stuff of science-fiction: the term
was coined by Neal Stephenson in his 1992 novel “Snow Crash”,
in which people don virtual reality headsets to interact inside a
game-like digital world. The book has long enjoyed cult status
among Silicon Valley entrepreneurs—but in recent months the
metaverse has become one of the tech sector’s hottest buzzwords,
with companies pouring millions of dollars into its development.
Facebook fuelled the excitement further Monday by announc-
ing the creation of a new team to work on Zuckerberg’s vision of
the metaverse. “This is going to be a really big part of the next
chapter for the technology industry,” Zuckerberg told tech web-
site The Verge last week. Over the next five years, he predicted,
Facebook would transition from “primarily being a social media
company to being a metaverse company”.
As with many tech buzzwords, the definition of the metaverse
depends on whom you ask. But broadly, it involves blending the
physical world with the digital one.
Metaverse With the help of augmented reality
enthusiasts glasses, it might allow you to see infor-
dream of being mation whizz before your eyes as you
walk around a city, from traffic and
transported to pollution updates to local history.
digital settings But metaverse enthusiasts are
that feel real dreaming of a future in which the idea
could be extended much further,
allowing us to be transported to digital
settings that feel real, such as a nightclub or a mountaintop.
Games in which players enter immersive digital worlds offer
a glimpse into what the metaverse could eventually look like,
blurring virtual entertainment with the real-world economy.
In the early 2000s, the game Second Life allowed people to cre-
ate digital avatars that could interact and shop with real money.
Recently, plots of land in Decentraland, a virtual world where visi-
tors can visit art galleries and gamble in casinos, have sold for
hundreds of thousands of dollars in MANA, a cryptocurrency.
The hugely popular video game Fortnite has expanded into other
forms of entertainment, with 12.3 million people logging in to
watch rapper Travis Scott perform last year. Fortnite’s owners
Epic Games said in April that $1 billion of funding raised recently
would be used to support its “vision for the metaverse”.
Facebook has invested heavily in technology that allows peo-
ple to feel like they are physically elsewhere, such as its Portal vid-
eo-calling devices, Oculus headsets and its Horizon virtual reality
platform. But even Zuckerberg has admitted that existing virtual
reality headsets are “a bit clunky”, requiring far greater develop-
ment. Wedbush tech analyst Michael Pachter said it was hard to
predict whether Facebook could truly transform into a “metav-
erse company” in five years. “But they have a huge advantage of
having one billion people log on every day,” he said. “If they offer
entertainment options, it’s likely they will succeed.”

An art exhibition for all

Preeti Zachariah nificance; these covid-inspired Phad
preeti.z@livemint.com paintings are an extension of that idea.
Joshi is one of the 40-odd artists who

T
he scene in the painting is quotid-
ian: a family of six going about their
everyday routine. The patriarch of
the family sips a cup of tea while his son
peers intently into a laptop. Two chil-
dren—a girl and a boy—read and watch
television respectively, and the women in
the household seem to be preparing a
meal. Outside this apparent tranquillity,
however, disaster awaits. Two rakshasas,
horned and with protruding tongues, jug-
gle spherical objects, which look suspi-
ciously like the covid virus (spike protein
and all) while at their feet lie the severed
heads of those who seem to have stepped
outside the safety of home.
Kalyan Joshi, the artist behind this dis-
tinctly mimetic reflection of our current
times, says that it is painted in the Phad
style of Bhilwara in Rajasthan. The 700-
year-old art tradition is usually used to
create religious scrolls for the bhopas or
priest singers of the region, who would
carry scrolls of these paintings as illustra-
tive depiction tools while telling stories
about folk deities.
However, Joshi, an award-winning art-
ist, often uses art to tell stories of social sig-
will be part of an affordable art show,
which opens on 30 July at Mumbai’s
Method gallery in Kala Ghoda.
The exhibition, curated by Srila Chat-
terjee, the co-founder of Mumbai’s Baro
Market, is open to all, offering an eclectic
mix of folk and contemporary artwork.
“I don’t think art should be limited to
any one kind,” says Chatterjee, pointing
out that many people believe that tribal or
folk art is usually showcased at Indian fes-
tivals, cottage emporiums or havelis.How-
ever, she doesn’t subscribe to this.
A traditional piece of art can fit into a
contemporary setting and vice versa. “Art
belongs where you think it works for you,”
she says. “I don’t think it is nice to put it
into categories where one is different from Works that will be showcased at An Affordable Art Show SPECIAL ARRANGEMENT
the other; we just think of it as art, and that
is what we are doing.” whatever their origins, aesthetic, style and is how art has become the purview of a ces are in a range that she says is afforda-
Some of the other artists showcasing creation process—is this: they are not small bunch of rich and privileged people, ble. “It is important to make art afforda-
their work include Jaipur-based creative exorbitantly priced. This was a deliberate which is not the way it should be,” she ble,” she says. “I don’t think good art needs
team Wolf, photographer Dhiman Chat- choice, says Chatterjee. says, pointing out that this affects art’s to be expensive; good art is good art.”
terjee, Pattachitra artist Laltu Chitrakar, According to her, many people are potential to be democratic and make a dif-
Gadwakam sculptor Suresh Waghmare, often intimidated by art because all they ference in people’s lives. An Affordable Art Show is open between
Gond painter Ramesh Tekam and pinch hear about are auctions where pieces of None of the work on display at the exhi- 30 July and 8 August at Method Kala
potter Dolon Kundu. art sell for millions. bition is priced higher than ₹2 lakh, she Ghoda, from 11am. All covid checks will be
What binds the displayed artworks— “One of the things I feel strongly about says. Prices start at ₹2,000, and most pie- conducted, and protocols will be followed.