NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, PUNE* VOL. 16 NO.

164

Monday, July 11, 2022

livemint.com

mint primer QUICK EDIT

Why MFs in insider Lankan

trading ambit has impasse
industry worried
JAYSHREE P. UPADHYAY
The Securities and Exchange Board of India (Sebi) has proposed to
include trading in mutual fund units under insider trading rules. The
proposal, though well-intentioned, has worried many in the industry.
Mint explains.
What is the regulator
1 proposing?
Insider trading is the trading of
securities while in possession of
price-sensitive information that is
unavailable to the broader market.
The Sebi discussion paper
proposes to add a new chapter to
the prevention of insider trading
(PIT) laws that would define
unpublished price sensitive
information (UPSI). The proposals
are widely defined, covering a
large number of scenarios. Sebi
also plans to tweak applicability of
insider trading provisions in
relation to pooled investment
vehicles such as alternative
investment funds, real estate
investment trust, etc. Sebi has
invited comments till 29 July.
What and who all are
2 covered?
The Sebi paper names a long list of
events that will be considered as
price-sensitive, including changes
in investment objectives, and
accounting policy, besides
winding-up schemes and defaults
in underlying securities. An
insider would include connected
persons or someone who has
access to UPSI, including board of
directors, sponsors, associate
companies, holding companies,
immediate relatives, fund
accountants, officials of the
Association of Mutual Funds in
India, auditors, legal advisers,
consultants, employee of rating
agencies, bankers to the fund
house and stock exchange officials.
The anger in Sri Lanka against
the Rajapaksa clan that culmi-
nated in the storming of Presi-
dent Gotabaya Rajapaksa’s pal-
ace, forcing him to declare he’d
quit, offers a political lesson in
the perils of power concentra-
tion. But this popular uprising
also had an underlying story of
misgovernance. Colombo drove
the economy into the national
equivalent of bankruptcy when
it ran short of money for essen-
tial imports. Economies needn’t
be managed all the same way, as
there is much scope for policy
variation for contextual variety
as well as focal priorities defined
by preferences on, say, how
rewards are best shared and
burdens are borne. But modern
life is such that an economy
cannot be an island unto itself.
To the extent that a nation’s
external dependence requires
global integration, all policy
frameworks are bound by
demands of outward orienta-
tion that don’t grant any space
for gross defiance of standard
economic advice. Mahinda
Rajapaksa’s government let
groupthink get in the way of
sound judgement on farm prac-
tices and trade barriers. It only
resulted in mass distress. The
country needs to reform its way
out of trouble. And that calls for
clear-headed leadership.
MINT METRIC
by Bibek Debroy

In Mexico, a mayor
3 What prompted the
regulator’s action?
Apparently the Registrar and Transfer
Couldn’t be a naysayer.
Agent (RTA) of a mutual fund, privy to
When he kissed his alligator bride,
certain sensitive information about a Her jaws were properly tied.
scheme, had redeemed all its units. In the
Franklin Templeton case, a few key
But this traditional marriage needs a prayer.
executives withdrew almost ₹56 crore in
March and April 2020, before the fund
house shut six debt schemes for
redemptions.
QUOTE OF THE DAY
We have been very supportive of
4 Why does this worry
the industry?
Many officials connected with the
5 Do MFs need separate
insider trading rules?
The industry does not believe
Sri Lanka. We are trying to help
financial ecosystem who act in a there is a need for insider trading
and we are always very helpful
fiduciary capacity avoid trading in laws in mutual funds, as the where they are concerned. They
stocks for fear of insider trading possibility of such malpractice is
laws, choosing mutual funds low since funds pool investments
are right now working through
instead. Including MFs in insider in equity and debt of companies. their problems, so we have to
trading will make such Sebi already has provisions under
investments equally unattractive. mutual fund regulations and
wait and see what they do.
The language suggested is quite prevention of fraud and unfair
broad, and many feel the approach trade practices (PFUTP) rules.
is onerous. “The problem of Fund houses already have some
enforcement may not be fully internal checks to prevent such
solvable through change in practices. AMCs say measures S. JAISHANKAR
policy,” said Sumit Agarwal, should be more about disclosures EXTERNAL AFFAIRS
MINISTER
founding partner, Regstreet Law and taking necessary clearances
Advisors. from compliance officers.

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 PLAIN FACTS

Week ahead: Inflation,

deepening Lanka crisis
BY MANJUL PAUL, TAUSEEF SHAHIDI, & NANDITA VENKATESAN

E very Monday, Mint’s Plain Facts section features key data releases and events to look for in the coming week. One
of these is that India is expected to release its retail inflation data for June, which will shape the monetary policy review
next month. The Centre’s Agnipath recruitment scheme could be in for a judicial review starting this week. HDFC
Bank will release its quarterly earnings as the corporate results season continues.

Despite easing commodity and fuel

prices, June inflation was likely high 1 India Inflation
Y-o-y change (%) in consumer price index vs RBI's INDIA’S HEADLINE inflation data for June is to be released
medium-term target of 4% on Tuesday. Retail inflation cooled marginally in May from
8 April’s eight-year high, but was still uncomfortably high at
7.04%. Most economists do not expect it to have shown any sign
7.04
of slowing in June.
6
A Mint poll of 27 economists predicted that inflation will stay
at 7% in June. In their latest report, economists at Barclays said
that despite easing commodity and energy prices, India’s
4
inflation will likely remain high in the near term. Retail
RBI's medium-term target
inflation in India has breached the Reserve Bank of India’s
2
upper tolerance band of 6% across all the months of this year.
Inflation has become a challenge around the world, and
central banks are intensifying interest rate hikes to keep the
0 trend in check. In India, monetary policy makers will be looking
Jan 2019 May 2022 for inflation data to chart out further steps to take in their
Source: CMIE
August meeting.

2 Sri Lanka Crisis Teetering forex reserves key reason

behind Sri Lanka's chaos
THE POLITICAL crisis in Sri Lanka reached a climax over the Forex reserves in $ billion
weekend as thousands of angry protesters made their way into 3.5
Colombo to overthrow the president and prime minister. Both
leaders—Gotabaya Rajapaksa and Ranil Wickremesinghe—have 3
2.8
agreed to resign after their homes were attacked. The chaos is a 2.5
result of the country’s prolonged economic meltdown, which
forced the government last month to suspend fuel sales, except 2 1.9
for essential services like healthcare and food production.
Foreign currency reserves are running low, and inflation has 1.5
squeezed all life out of household budgets, even for 1
essentials.The coming week could see talks start to form an all-
party government to return the country to stability. Once 0.5
Rajapaksa goes on 13 July (he remains missing as of now), the
process to elect a new president will also begin. Ships carrying 0
Jul May
cooking gas are arriving this week, and Rajapaksa has ordered 2021 2022
Source: Trading Economics
officials to ensure smooth distribution among the public.

3 Agnipath In SC Agniveers can replace 15% of armed forces'

total strength in five years
THE ROW over Agnipath is not abating. After violent Number of current personnel in armed forces and Agnipath's
protests in the streets, the government’s new defence intake in next 5 years
recruitment scheme will face another challenge in the
apex court this week. A vacation bench of the Supreme
Court has agreed to list a plea by air force aspirants who
sought a cancellation of Agnipath recruitment
notification. The petitioners were shortlisted by the air
75,881 1,335,777 204,500
force last year for the post of airmen but are awaiting
JCO/OR/Sailors/Airmen
enrolment, which has been delayed. They are Officers
challenging the government’s decision to announce a Agniveers
new recruitment scheme without completing the
enrolment for an already-initiated process. Agnipath
offers four-year contracts at non-officer levels, with The Centre plans to recruit 46,000 “Agniveers”, which will increase to
only up to 25% moving on to long-term employment, 50,000-60,000 annually in the next four to five years and later to 90,000-125,000.
against the current term of 10-15 years. The diminished JCO: Junior commissioned officers; OR: Other ranks.
Source: Lok Sabha question, media reports
job security is the reason behind the anger of aspirants.

Growth was subdued for HDFC Bank

in the last quarter 4 HDFC Bank Earnings
Year-on-year growth in net interest income (in %) INDIA’S BIGGEST private lender, HDFC Bank, will announce
18 17.8 its results for the June-ended quarter on Saturday. The
performance in the March quarter was dull, declared after the
15 big announcement of its merger with Housing Development
Finance Corporation (HDFC). The net interest income (NII)
12 grew at a modest 10.2%. In sequential terms, the growth was just
10.2 2.3%. The income growth for the June quarter would be
9 impacted by high losses in treasury income that banks have
suffered. However, strong loan growth would boost NII. HDFC
6
Bank’s advances grew at 21.5%, whereas deposits grew at 19% on
3 a year-on-year (y-o-y) basis. Kotak Institutional Equities
estimates 15% y-o-y growth for its NII.
0 Interest rates for banks will soon rise on account of recent
Q1FY21 Q3FY21 Q4FY22
Net interest income is interest earned less interest expended.
hikes in the repo rate. Banks in the near term may gain on the
Source: Company results
margin front, but this would taper once deposit rates catch up in
a few quarters.

5 China GDP China's zero-covid policy is likely to

have kept growth slow in June quarter
CHINA’S GROSS domestic product (GDP) growth data for the China's quarterly and annual GDP growth rate (%)
June quarter will be released on Thursday. Economic growth in
Quarter-on quarter Year-on-year
China is likely to have slowed due to a prolonged lockdown in 20
Shanghai and other major cities under the country’s zero-covid Q4 2020
policy, impacting its economic recovery. According to a
Bloomberg survey of economists, the Chinese government will Q1 2021 15
report GDP growth of about 1.5% from a year ago. It grew by 4.8%
in the March quarter. High-frequency indicators suggest that Q2 2021
10
growth will be closer to a contraction, but experts believe Beijing
Q3 2021
will be hesitant to disclose a contraction as President Xi Jinping
has urged officials to ensure that the economy achieves 5.5% Q4 2021
5
annual growth this year. Weaker growth would raise the urgency
of additional stimulus. Policymakers will closely monitor June- Q1 2022 0
quarter GDP data before assessing how much additional stimulus Q4 Q2 Q1
0 0.5 1.5 2.5 2020 2021 2022
they can deliver in the second half of the year.
Source: National Bureau of Statistics of China
manjul.paul@livemint.com
PARAS JAIN/MINT

PEANUTS by Charles M. Schulz

 NeW DeLHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*
Monday, July 11, 2022
SENSEX 54,481.84 0.00
Costs, rupee to hit
June quarter profits
Earnings poised to slow as firms deal with rising inflation, interest rates
Ujjval Jauhari
ujjval.j@livemint.com
NEW DELHI
T
he earnings growth of
India’s largest companies
is poised to slow in the
June quarter as they grap-
ple with inflationary pres-
sures, currency depreciation and ris-
ing interest rates.
While revenue growth will be
aided by last year’s low base and
price hikes to offset input cost
increases, earnings before interest,
taxes, depreciation and amortization
(Ebitda) is likely to decline 32% from
a year earlier, a Mint analysis
showed. However, the aggregated
data for 47 members of the Nifty
index indicate that sales are
expected to grow 35%.
Indian companies are facing multi-
ple challenges, from currency depre-
ciation and rising interest rates to
soaring input costs. High energy and
raw material costs and a weakening
rupee are forcing companies to raise
prices, prompting consumers to cut
spending. With inflation showing lit-
tle sign of easing, the central bank will
likely raise interest rates further,
denting consumer sentiment and
demand for goods.
While the manufacturing sector is
expected to report the sharpest mar-
Economists estimate Hydrogen enters
June inflation at 7% green power play
Manjul Paul
manjul.paul@livemint.com
R
etail inflation likely
remained unchanged in
June as cheaper fuel and
a base effect offset sequential
price hikes from food inflation,
a Mint poll of 27 economists
found.
The poll’s median estimate
put June inflation at 7%, mar-
ginally below May’s 7.04%, but
still uncomfortably above the
Reserve Bank of India’s upper
tolerance limit of 6%. Inflation
has stayed above that limit
every month this year.
About three-fourths of the
economists surveyed expect
inflation to stay the same or
cross 7%, but seven see it mod-
erating below 7%. Predictions
in the survey ranged from
6.45% to 7.32%.
Sakshi Gupta, an economist
at HDFC Bank, whose estimate
Twitter, Musk set for unprecedented battle
Cara Lombardo
feedback@livemint.com
W
ith Elon Musk
attempting to ter-
minate his $44 bil-
lion takeover of Twitter Inc.
and the company vowing to
force him to follow through,
the social-media powerhouse
and the world’s richest person
appear headed for a messy
courtroom battle.
T h e
company
says it plans
legal action
and is any day expected to file
a lawsuit in the Delaware
Court of Chancery, arguing he
is required to close the agreed-
upon deal.
Corporate law experts say
Twitter appears to be on
sounder legal footing than Mr.
Musk, who accused the com-
pany of breaching their con-
tract.
The bigger question, they
This PDF was originally uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) Subscribe now to get this edition before anyone else!! Backup channel:@LBSNEWSPAPER
livemint.com
NIFTY 16,220.60
CruNCH quarTer
While revenue will be aided by last year’s low base and price hikes, earnings before
interest, taxes, depreciation and amortization, or Ebitda, may decline by 32%.
80
Year-on-year growth (in %)
60
40
20
0 every quarter—a first for the
-20
-40
June 2020 Sep Dec
Data for 47 of 50 companies in Nifty50 that Bloomberg has tracked
GROWTH EXPECTATIONS
maNuFaCTurING
likely to see sharp margin
squeeze on spike in costs
gin squeeze because of a spike in
commodity and energy prices, the
information technology (IT) indus-
try may also feel the heat, analysts
said. High employee turnover, rising
salary costs, and increased travel and
administrative expenses remain key
pressure areas for software services
companies. Although the rupee
depreciation is likely to aid IT firms,
Inflation has stayed above
RBI’s tolerance limit every
month this year. MINT
was 7.05%, said inflation
remained high in June on the
back of elevated food prices,
particularly vegetables and
cereals.
“However, excise duty cuts
on petrol and diesel, along
with the reduction in edible oil
TURN TO PAGE 6
say, is if Twitter succeeds in
court, is it really possible to
force the eccentric billion-
aire—known for eschewing
norms even when it gets him
in legal trouble—to buy a com-
pany he doesn’t want to own?
“What are they going to do if
there is a judgment and he
says, ‘Well, I’m still not going
to buy it’?” said Zohar Goshen,
professor of transactional law
at Columbia Law School.
“ T h e y
don’t really
have tools
to force
him to go through with it. You
don’t put people in jail because
they don’t buy something.”
There is little precedent to
draw on.
Though there have been a
handful of examples of buyers
being forced to follow through
with purchases under the
“specific-performance” clause
that Mr. Musk agreed to, most
were small deals.
VOL. 16 NO. 164 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 10.50 (FOR DELHI & NCR) 16 PAGES
How to explain to your Freight rates start to fall as
boyfriend why he got fireduP10 shipping demand wavers uP8
0.00 DOLLAR ₹79.25 ₹0.00 EURO ₹80.20 ₹0.00 OIL $107.02 $2.37 GOLD ₹50,696 ₹0.00
A promotion every
quarter for Wipro’s
₹8k cr roads
may be moved
to InvITs over
DON’T MISS
best performers next 6 months
Subhash Narayan &
Devina Sengupta Rituraj Baruah
devina.sengupta@livemint.com
MUMBAI NEW DELHI Novak Djokovic wins seventh
Wimbledon title, 21st Grand Slam
W T
ipro Ltd is overhaul- he government plans to Novak Djokovic won a seventh Wimbledon title
ing its employee monetize an additional and 21st Grand Slam crown beating Nick Kyrgios.
bonuses and incre- 500km of completed Top seed Djokovic won 4-6, 6-3, 6-4, 7-6 (7/3) to
ments to rein in high attrition highway projects worth equal Pete Sampras’s mark of seven Wimbledon
and attract fresh talent as ₹8,000 crore through the titles and move within one of the men’s record of
Revenue Ebitda eight held by Roger Federer.
India’s technology sector con- infrastructure investment
tinues to see a covid-induced trust, or InvIT, route over the
boom in hiring. Wipro may boost salaries of next six months. Customs authority revokes duty
India’s fourth-largest soft- most of its workforce by up to In October, the government, benefit for solar power developers
ware services firm plans to 10% in September. MINT through the National Highways
The Central Board of Indirect Taxes and Customs
offer employee promotions Authority of India (NHAI), has revoked sops it granted under the bonded
terly promotions to its top per- monetized a road bundle of warehouse scheme, which allowed solar power
Bengaluru-based company— formers, up to mid-manage- 390km by transferring it to developers to defer payment of steep import
and boost salaries of most of its ment level. Wipro is expected NHAI’s InvIT. So far, NHAI has duties on modules that took effect on 1 April, in
workforce by 10% in Septem- to roll out hikes in September,” raised about ₹7,000-8,000 the wake of the alleged abuse of the scheme. >P2
Mar 2021 Jun Sep Dec Mar June 2022* ber, with the top performers the spokesperson said in crore through this route.
*Bloomberg estimate receiving more than 15% hikes. response to emailed queries. In an interview, road trans- For crypto survivors, scenario is
Source: Capitalmarket “Wipro is expected to roll Wipro recorded an attrition port and highways secretary Gir-
out the hikes in September, of 23.8% in the March quarter. idhar Aramane said two bundles
ripe for mergers and acquisitions
and there are large-scale pro- The company, which had a of road assets of 500km (around In the rubble-strewn land of virtual currencies,
motions to be rolled out in staff count of 243,128 as of 250km each) were identified for cash is king. A blowout in the cryptocurrency
IT industry to also feel auTo sector may revive market sparked a wave of layoffs, punished
the heat on high staff on a low base after three July. The company has March-end, is slated to monetization through the NHAI
valuations and drove some companies to
churn and salary costs quarters of decline decided to offer quarterly pro- announce results for the fiscal InvIT this year. While the first bankruptcy. Now firms that still have capital
motions to top performers, first quarter on 19 July. bundle of around 250km has are gearing up for a shopping spree. >P8
SARVESH KUMAR SHARMA/MINT
who are not in the leadership According to an industry already been approved for trans-
the benefits may be negated by the team,” said a company execu- executive, Wipro is expected to fer to the NHAI InvIT, Aramane
dollar’s gain against other curren- tive aware of the development roll out a salary hike of about said the next batch of about Sri Lankan opposition parties
cies, including the euro. The on condition of anonymity. 10%, but the top performers are 250km of completed road assets cobble up an alliance to form govt
stronger dollar may also favour Confirming the plans, a expected to get much more. worth ₹4,000 crore would be Sri Lanka’s opposition parties agreed to form
pharma exports, but the pressure on spokesperson for Wipro said “The 10% is expected for a offered to the InvIT around an interim government after the resignation
input costs, and competition in the the company “will roll out sev- larger chunk of the employees October-November. of President Gotabaya Rajapaksa, following
US, are expected to offset the gains. eral promotions for its employ- while top performers will get All these roads are operational unprecedented turmoil that forced him and
“Most sectors will struggle with ees, starting July.” much more. Depending on pay NHAI highway assets, with a Prime Minister Ranil Wickremesinghe to
“Going forward, the com- offer their resignations. >P8
TURN TO PAGE 6 pany has decided to offer quar- TURN TO PAGE 6 TURN TO PAGE 6
BLOOMBERG
Rituraj Baruah &
Subhash Narayan
NEW DELHI
R
ound-the-clock power
fuelled solely by renewa-
ble energy may be close
at hand, with the Union gov-
ernment planning pilot pro-
jects to operate solar and wind
power bundled with power
from green hydrogen. Govt plans projects to operate
The Union power ministry is solar and wind power bundled
expected to assign state-run with power from green hydrogen.
NTPC Ltd and Coal India Ltd to
run the pilots, two officials the condition of anonymity.
familiar with the matter said. Since electricity from solar
“There was an initial round and wind power plants is inter-
of talks with all stakeholders on mittent, they need backing from
bundling solar and wind a more stable power source,
power, along with power gen- such as battery storage or ther-
erated through the green mal power for uninterrupted
hydrogen-backed gas turbine. supply. Existing round-the-
They are expected to take con- clock (RTC) green power pro-
crete shape soon,” one of the
two officials cited above said on TURN TO PAGE 6
to pay a hefty fee instead.)
Mr. Musk in a Friday filing
moved to terminate the deal,
with his Skadden, Arps, Slate,
Meagher and Flom LLP lawyer
Mike Ringler arguing that
Twitter breached their con-
tract.
Mr. Musk alleged that the
company appears to have mis-
represented the number of
spam accounts on its platform,
Musk claims Twitter appears didn’t provide his team with all
to have misrepresented the the information requested,
number of spam accounts on including data to examine the
its platform. AFP issue, and fired executives and
made other changes to its
Never has the concept been business without permission.
tested on such a big scale. Mr. Musk’s team says Twit-
Apollo Global Management ter’s longtime estimate that
Inc. in 2008 was ordered by a fewer than 5% of its monetiza-
Delaware judge to make its ble daily active users are spam
best efforts to close its $6.5 bil- accounts appears inaccurate,
lion deal to buy chemical and therefore could represent
maker Huntsman Corp. after a “material adverse effect.”
the private-equity firm tried to Under this concept, a buyer
back out. must show that a company’s
(The two sides ultimately
settled, with Apollo agreeing TURN TO PAGE 9
 02 MoNDay, 11 July 2022
New Delhi ECONOMY & POLICY LIVEMINT.COM

STRAIGHT
F O R WA R D
Foreign IPOs, M&As in plan Modi urges
farmers to
SHASHI SHEKHAR

Respond to this column at

feedback@livemint.com
to take power sector global do natural
farming
Staff writer
GRIM POINTER TO A Government is focusing on building self-reliance in promoting domestic production
feedback@livemint.com
NEW DELHI

SURGE IN HATRED
P
rime Minister Narendra
Rituraj Baruah & Utpal Bhaskar mal institutional intervention. There are Modi on Sunday called

ACROSS THE WORLD NEW DELHI also proposals to facilitate consumer-

centric business models and regulatory
upon farmers to adopt
natural farming and to cater to

T
he power sector is going structure to ensure technical integra- global demand.
global as part of Vision 2047, tion of decentralized grids. Speaking at the Natural

I
t is tragic that former Japanese prime minister Shinzo Abe has the government’s plan to To accelerate India’s transition to Farming Conclave, Modi noted
been killed; he was shot while addressing an election rally. Why make India one of the world’s green energy and zero carbon emission, that the world is now increas-
was a friendly and upbeat leader like Abe the target of such a top three economies by the the focus may be on retiring power ingly talking about a sustaina-
vicious attack? Tetsuya Yamagami, the assailant, once served in the 100th year of Independence. plants working below the operating ble lifestyle.
Navy. Why was there hatred, and where did it come from? Japan Strategies being explored by the threshold and scaling up hydropower, “This is one area where India
has shunned the “gun culture”. This incident, which occurred in power ministry include initial public and promoting small-scale technologies has led the world for centuries,
such a nation, points to a deep conspiracy and emphasises the offerings (IPOs) in global markets, such as gravity hydraulic machines and therefore, now is the time when
surge in hatred that has created a perilous chasm between society mergers and acquisitions (M&As) in hydro kinetic turbines. The plan is to we move forward on the path of
and governments, across the world. more overseas strategic resources and increase the operational flexibility of natural farming and take full
Let me start with one instance of how such hatred is affecting expanding the global footprint of Indian coal-fuelled plants and improve the util- advantage of the global oppor-
even our nation. The anchor of a well-known news programme firms, said two government officials ization of gas fuelled plants. tunities that are emerging,” he
was about to be detained by Chhattisgarh Police last week after aware of the plans. One of the proposed goals is to said.
they arrived at the location of a housing society in Ghaziabad. The playbook includes peer-to-peer develop regional electricity markets The Prime Minister said
Before they could finish their task, police from the nearby station (P2P) energy trading to meet enhanced Some initiatives being explored are promoting competition by delicensing backed by regional grids that will products with quality assur-
arrive and begin arguing with Chhattisgarh police personnel. energy demand and drive economic distribution, and increasing private participation. MINT involve building new interconnections, ance certificates are fetching a
Meanwhile, police from Gautam Budh Nagar (Noida) entered the growth while ensuring access to cheap, institutional arrangements and regula- good price when farmers
scene dramatically. The anchor was taken by the Noida police. It reliable and clean electricity. The pro- moting domestic production of critical tion and franchises. tory framework for cross-border coordi- export them.
is incredible that the Noida police had reached out to arrest the posed plan also involves improving cor- equipment such as supervisory control “It is still at the discussion stage, we nation and promoting the ambitious Pointing out that the growth
journalist without even registering an FIR. porate governance practices at state- and data acquisition (Scada), trans- have to get the states on board,” said one One Sun One World One Grid of agriculture would lead to
After that, a “technical” discussion could be heard all day long owned electricity distribution compa- former and batteries amid mounting of the officials cited above requesting (OSOWOG) scheme. growth of the country, he said
at Noida’s Sector 20 police station. The policemen from Chhattis- nies, cutting tariffs, reducing cross- Chinese hacking attacks on Indian criti- anonymity. Queries mailed to a union Mint had earlier reported about three that along with bringing pros-
garh had an arrest warrant, while Gautam Budh Nagar policemen subsidies and shortening power ministry spokes- pilot interconnection corridors having perity, natural farming would
said that they have a complaint from “Zee News” management, so the power purchase GLOBALIzING POWER person on Friday after- been shortlisted for detailed technical protect the quality of the soil
they are treating the “anchor” as suspicious. That anchor was sub- agreement duration from noon remained unan- and financial viability under OSOWOG. and its productivity.
sequently detained and released on bail at the police station itself, 25 years. AIM is to harness CUTTING power PLAN will accelerate swered at press time. They are: South Asia (India)-Southeast On the government’s pro-
but instead of being taken into custody by the Chhattisgarh Police, Electricity costs are a the power sector as
part of Vision 2047
costs is expected to
help the govt’s Make
India’s transition to
green energy & zero
In an attempt to help Asia (Myanmar to Thailand), South Asia grammes that are aimed at pro-
he escaped. Later, Chhattisgarh police officers argued with a Rai- substantial component of for 100 years of in India push, rolled carbon emission by improve cross-sector (India)-West Asia and West Asia-Africa. moting natural farming, the
pur court to issue an attachment warrant, claiming that the anchor manufacturing expenses, independence out through PLIs scaling hydropower energy efficiency, the There are also two options being Prime Minister said schemes
had absconded. Additionally, they formally complained to Ghazia- and any reduction will plan foresees developing explored to connect with the Gulf Coop- such as ‘Paramparagat Krishi
bad’s top police officers. The following three days were spent play- help the government’s market instruments such eration Council (GCC) countries. One is Vikas’ are providing resources
ing cat-and-mouse. The Supreme Court put his arrest on hold on Make in India push, being rolled out cal infrastructure such as power grids. as carbon credits, energy certificates an under-sea link to connect Gujarat and training for traditional
Friday and Chhattisgarh police was left with no choice but to through the production-linked incen- Some of the other initiatives being and fiscal incentives. with Oman, and the other a land route farming and 30,000 clusters
return, cursing UP police. The anchor is accused of presenting a tive scheme. explored are promoting competition by It also involves promoting ease of liv- via Pakistan and Afghanistan to West have been created all over the
statement by ex-president of Congress Rahul Gandhi in the wrong The focus is also on building self-reli- delicensing distribution, and increasing ing by enabling consumer choice and Asia. country under the for the bene-
context. Even when the channel apologized the next day after get- ance in emerging technologies and pro- private participation through privatiza- innovation at the grassroots with mini- rituraj.baruah@livemint.com fit of farmers.
ting itself into trouble, the issue did not go away. This whole epi-
sode has given a new lease of life to the questions that have been
raising their head for many years. Has the police also become
divided along party lines—your police, my police? Will the inter-
ests of the ruling party now determine whether the law is obeyed
or not? I can give numerous instances where police officers from
Govt boosts space Duty deferment scrapped for solar cos
one state clashed with uniformed men from another state or pub-
licly disputed government institutions for political purposes.
Isn’t this a threat to India’s federal system?
assets’ protection Utpal Bhaskar
utpal.b@livemint.com
import duties (both BCD and
IGST) are deferred till they
When we observe that the attacks on the judiciary and journal- NEW DELHI are cleared for domestic con-
ists escalate, the situation gets more dangerous. Regarding the crit- PTI collision of our active satellites sumption. The duty doesn’t

T
ical comments made by a Supreme Court justice on former BJP feedback@livemint.com with other space objects and he Central Board of attract any interest.
spokeswoman Nupur Sharma, a number of things have sparked a BENGALURU avoid collisions with proper Indirect Taxes and Cus- “It is brought to notice of
firestorm on social media. The vehement criticism and targeted manoeuvring to save our space toms (CBIC) has the board that certain solar

I
“campaign” was unprecedented. ndia has given a boost to assets (satellites),” he said. revoked the concessions it power generating units
Not just India, but the entire world is bleeding from such hatred. self-reliance in safeguard- Sources in the Bengaluru- had granted under the applied for permission under
It was predicted that the advent of social media, which includes ing its space assets with headquartered space agency bonded warehouse scheme— section 65 of the Customs Act,
massive platforms like Facebook, Twitter, Instagram and others, ISRO System for Safe and Sus- said concurrent processing of which had allowed solar 1962 for warehousing of
would bring people from all over the world together. Initially, this tainable Space Operation and data from the observational developers to defer payment imported solar panels/solar
did happen, but subsequently, these platforms became uncon- Management (IS4OM) to be facilities for space objects’ of the steep import duties on modules and related accesso-
trolled. However, Meta has refuted these objections, claiming that inaugurated on Monday by orbit determination, correla- solar cells and modules that ries, etc. declared as capital
17.5 million posts were removed in India alone last May, as they minister of state for space Jit- tion and catalogue generation took effect on 1 April—in the goods to generate electricity
were deemed to contain offensive information. endra Singh in the presence of will take place here. wake of blatant abuse of the as resulting/resultant goods
Whatever one may think, social media has strayed from its Indian Space Research Orga- In addition, as part of scheme. CBIC has revoked the permissions granted under the bonded for home consumption. Cer-
intended course. This is the result of a carefully thought-out and nization (ISRO) IS4OM, dedi- Mint had reported on 4 warehouse scheme to solar developers. BLOOMBERG tain jurisdictional Commis-
diabolical strategy to gain power -- because everywhere in the chairman S Som- IS40M is a system cated labs have June that certain developers ahati. founders of the companies survey by Bain & Company said 52%
consumers
firm. CHENNAI, AHMEDABAD,
of
in urban India expect to increase
VOL. 16 NO. 133
sioners have granted such
est in years and backed by the VCkOLkATA, HYDERABAD, CHANDIGARH*, PUNE* the next
spending on sustainable brands in
world, people are divided rather than united. anath. conceived with a also been set up were declaring entire solar when inflation
NEw DElhI, MUMBAI, BENGALURU,
The VC firm advised portfo-
does, hence, go lio companies that
social security Algo Legal or its
have hired
related enti-
three years.
>P15
under it, said that the grant of permissions,” CBIC said.
Saturday, June 4, 2022 them to alert
By doing this, governments and rulers successfully divert peo- IS40M is a sys- holistic approach for space debris plants as a “customs bonded y, in these times, ties or dealt with
ave been left its legal adviser AZB
aid Madan Sab- ners about the relationship.
and Part- Caution sets in ahead
Reserve Bank’s policy
of
meet permission is not in accord- Some solar power develop-
“Sequoia and SEA (and affil- on Friday
Benchmark indices pared intraday gains
ple’s attention away from important concerns. According to the tem conceived towards ensuring mitigation and warehouse” to avoid the pay- onomist at Bank
iated entities) have terminated
te on provident all arrangement
s pursuant to
were being
to end in the red. The Sensex fell 664 points
the day’s high to close at 55,769, down 0.09%,
49 points, while the Nifty was down 0.26%
from
or
to close
ance with the Manufacture ers had taken recourse to the
slashed several which any services Sensex and Nifty made weekly gains
World Food Program’s most recent estimate, 81.10 billion individ- with a holistic remediation, ment of basic customs duty ast four years. In provided to the firm by Algo at 16,584. The
of 1.61% and 1.42%,respectively. >P14
and Other Operations under scheme even as the Union
uals worldwide have been compelled to go to bed on an empty approach toward
sustainability of TURN TO PAGE 13
TURN TO PAGE 13
livemint.com
compliance veri- (BCD) of 25% on solar cells the Warehouse Regulations government planned to ramp
stomach as of the year 2019. As many as 25,000 people die every ensuring safety the space fication of UN/ and 40% on modules. Solar cos hit upon novel way AR ₹77.63 ₹0.02
2019. up domestic solar equipment
day from starvation. Additionally, famine threatens more than 50 and sustainability environment Inter-Agency A customs bonded ware- to defer duties on modules “The permissions granted manufacturing capacity to
BLOOMBERG
duty deferment is without any
million people in 45 nations. The vast industry of hatred is one fac- of the space envi- Space Debris house is a facility that holds Utpal Bhaskar
utpal.b@livemint.com
time limitation.”
While this ingenuity helps in
to the type of generating units enable the sector to play a big-
NEw DELHI deferring imposition of import
tor in this situation. According to a report, India’s economy suf- ronment while Coordination imported, duty-payable fin- ndian solar power develop-
duty, it negates the ambitious
referred herein above need to ger role in global supply
fered a huge loss due to it in 2017. Covid increased its fatality. Have reaping the benefits of sustain- Committee (IADC) guidelines ished and capital goods in I ers have hit upon a novel way
to defer payment of steep
import duties on cells and mod-
exercise of reducing depend-
ency on cheap Chinese imports
by encouraging building of
domestic solar equipment be immediately reviewed and chains.“Incidentally, it may
ules that took effect on 1 April, manufacturing capacity.
by declaring their plants as The head of a large invest-
you ever seen or heard any in-depth discussion on these topics on able utilisation of outer space and various research and storage. According to the “customs bonded warehouses,”
two people aware of the devel- Solar power developers are
declaring their plants as
ment firm with a significant
solar power generation portfo-
the necessary follow up action also be noted that the result-
opment said. lio said, however, that “develop-
social media? Even the so-called “mainstream media” should pause for national development, development activities. CBIC, “Manufacture and By declaring a solar plant as a customs bonded warehouses
ers are not breaking any law.”
taken. No further permissions ing electricity is also not ordi-
and think over it. The highest democratic values, which had gained according to ISRO. The research and develop- other operations in a bonded WE BROKE in such cases should be narily capable of being depos-
traction after the Second World War, have started to unravel as a “It’s part of the space situa- ment activities encompass warehouse is a duty defer- THE NEWS granted in terms of section 65 ited in a warehouse,” CBIC
result. In addition to politicians, erroneous behaviour has also tional awareness (SSA) pro- space object fragmentation ment scheme.” of the Customs Act, 1962,” the said in its communication.
harmed journalists and those connected to the legal system. There gramme to identify space and break up modelling, space The CBIC, in a communica- mint DATED 4 JUNE 2022 order added. Spokespeople at the minis-
is a noble view that if someone slaps you, instead of getting angry, debris and monitor them,” an debris population and micro- tion it sent on Saturday to all Under the scheme both tries of new and renewable
introspect and try to identify your mistakes. The judiciary will take ISRO official said. meteoroid environment mod- principal chief commission- director generals, principal BCD and IGST on imports energy, finance, and CBIC did
care of itself; are we journalists doing our part? “It’s to identify the potential eling, and Near Earth Objects, ers, chief commissioners, commissioners and commis- stand deferred; and for goods not respond to queries mailed
Shashi Shekhar is editor-in-chief, Hindustan. Views are personal. among others. principal director generals, sioners who are working other than capital goods, the on Saturday till press time.

Draft drugs, medical devices and cosmetics bill released for feedback CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Priyanka Sharma nitions for clinical trial, over- death, the draft proposes. “No The Centre has proposed a and startups, developers and suggestions or complaints
priyanka.sharma@livemint.com the-counter drugs, manufac- person shall himself or by any separate Drugs Technical Advi- engineers will still need to about errors.
NEW DELHI turers, medical devices, new other person on his behalf sell, sory Board (DTAB) and Medical grapple with a complex joint
Readers can alert the
drugs, bioavailability study, or stock or exhibit or offer for Devices Technical Advisory law. The medical devices have
newsroom to any errors in the

T
he health ministry plans
to replace the Drugs and
Cosmetics Act of 1940
with an updated law laying
down strict regulatory guide-
lines to keep pace with chang-
ing needs and technology.
Given the need to have com-
prehensive legislation, a com-
mittee was constituted for
framing the drugs, medical
devices and cosmetics bill,
2022 which was released on 8
July for stakeholders to give
their suggestions.
The bill proposes new defi-
investigational new drug and
imported spurious drugs,
among others.
It seeks to bring in regulation
for online pharmacies and
medical devices and penalties
such as imprisonment and
compensation in case of injury
or death during clinical trials
for drugs.
“In the light of the recom-
mendation of the Central gov-
ernment and the felt need to
have a comprehensive legisla-
tion, a committee was consti-
tuted for framing the Drugs,
The Centre has proposed separate technical advisory boards for
drugs and medical devices.
Medical Devices, and Cosmetic
Bill. The work of review and
updating of Drugs and Cos-
metic Rules 1945 was taken up
from 2016,” the government
MINT
said in a document seen by
Mint. No clinical trial can be
carried out without permis-
sion, medical management and
compensation for injury or
sale or distribute any drug by Board (MDTAB) to give sugges- a huge potential of investment paper by emailing us, with your
online mode (e-pharmacy) tions to the government from of more than ₹50,000 crore to full name and address to
except under and in accord- time to time. meet the market of more than feedback@livemint.com.
ance with a licence or permis- The draft proposes to allow ₹1 trillion. Once we study the
sion issued in such manner as the Centre to waive the fine print, we will be in a better It is our policy to promptly
respond to all complaints.
may be prescribed,” the draft requirement of conducting position to comment on the Readers dissatisfied with the
says. clinical investigation for manu- efforts of the health ministry in response or concerned about
The government has pro- facture or import of a new med- drafting this bill,” said Rajiv Mint’s journalistic integrity may
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Control Officer with prior “We are studying the draft ciation of Indian Medical sending an email to
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 LIVEMINT.COM DEALS, TECH & STARTUPS MoNDay, 11 July 2022
New Delhi 03

m MINT SHORTS
Startup funding in India drops 40%
Connected sensors turn EXPERT
VIEW
to $6.8 bn in April-June: PwC
New Delhi: Geopolitical instability appears to be taking a toll on
Indian startups with total funding declining by 40% to $6.8 bil-
lion in the April-June quarter, according to a PwC India report.
general wards into ICUs Respond to this column at
feedback@livemint.com
AjAi Chowdhry

Early-stage deals comprised more than 60% of the total with an

average ticket size of $5 million, as per the PwC India report
titled, ‘Startup Deals Tracker - Q2 CY22.’PTI
Hospitals deploy advanced tech to monitor vital signs such as BP, pulse of patients
INDIA’S DESIGN AND
Bitcoin mining declines 30%
Abhijit Ahaskar
MFG CAPABILITIES
amid crypto market slump
GETTY IMAGES
abhijit.ahaskar@livemint.com
new delHI PROVIDE AN EDGE

A
t Narayana Health’s cardiac
hospital in Bengaluru, nurses
are spending lesser amount
of time visiting patients’ beds
to record their individual
health information. This is because
around 700 beds in the hospital are now
fitted with connected sensors, which
monitor vital signs such as blood pressure,
respiratory rate, temperature, and pulse,
and relay that information to dedicated
New Delhi: The total hash rate of the Bitcoin blockchain computers and smartphones.
network has declined by nearly 30% this month, amid a These sensors are similar to patches
prolonged bear market for cryptocurrencies worldwide. used for ECGs and are placed on the US imports from Vietnam have increased by 33%. ISTOCK
From around 251 exahash per second (EH/s) on 30 June, patient’s body to capture the vitals.

the hash rate declined to around 173 EH/s on 5 July—
before making a slight recovery. The hash rate, which
refers to the computing power needed to mine Bitcoin
tokens, is an indicator of new miners joining the block-
chain, thus causing it to consume more power to validate
a token on the network. SHOUVIK DAS
NIXI announces internet exchange
points in Bardhaman, Durgapur
New Delhi: The National Internet Exchange of India (NIXI) has
announced the introduction of two new internet exchange points
(IXPs) in the cities of Bardhaman and Durgapur, in West Bengal.
The announcement was made on Saturday by Rajeev Chandrase-
khar, union minister of state for electronics and IT, skill develop-
ment and entrepreneurship. The new IXPs will help bolster
broadband internet connectivity in these regions. TECHCIRCLE
Accolite to raise headcount in India
by threefold to 8,500 in 3 years
New Delhi: Texas-based IT firm Accolite Digital plans to raise
headcount by over threefold in India to around 8,500 in the next
three years, a top company official said. Accolite Digital founder
and chief executive Leela Kaza said that the company is aiming
to grow revenue by fivefold to $500 million and increase global
headcount by around fourfold to 10,000 people by 2025. PTI
T
Inside these patches are the sensors, he pandemic has triggered so much change that observers
which connect to a real-time health mon- of history will refer to a pre-covid era and a post-covid era.
itoring system We made deft moves with a storm of unicorns, the govern-
( R T H M S ) ment fast-tracked incentives to promote indigenization, the
designed by the ₹76,000 crore semiconductor package will give us design and
Indian arm of US Honeywell’s solution provides information such as a patient’s posture, blood oxygen levels. manufacturing capabilities, and there have been other policies
technology giant Honeywell, and which to promote the Make-in-India ecosystem, too.
use internet of things (IoT) technology to provides information such as a patient’s ing to adopt such solutions, which can While on paper, it appears we have all that it takes to seize a
relay the data through the cloud to a posture, blood oxygen levels and ECG. “It allow a healthcare centre to have more bigger share of the global pie, it is important to look at where
dashboard, which can be accessed on is reliable and provides data on any vitals intensive care unit (ICU) beds. According trade is going lately.
computers and smartphones. The two you want,” said Shetty. to Shetty, 5-10% of the hospital’s beds are Recent developments such as the war in Ukraine, climate con-
companies announced their partnership To ensure privacy, patients are identi- currently dedicated to critical care, but in cerns, and the US-China tussle sent some favourable tailwinds for
in May. fied through only a bed number, Nanda- the near future, nearly half of these will be Vietnam, allowing it to emerge as one of the most preferred desti-
Renowned cardiac surgeon Dr. Devi kumar K., general manager, India at Hon- for critical care. nations for electronics. US imports from Vietnam have increased
Prasad Shetty, who is also the To be sure, the use of such by 33%, with electronics and machinery accounting for the bulk
chairman and executive EASINg THE PROCESS technology to track patient of it.
director of Narayana Health- vitals is still limited, but hos- Hài Phòng grabs spotlight
care, said nurses in most hos- NURSES have to HOSPITALS AROUND 30 to 50 pitals are warming up to Hài Phòng, Vietnam’s third largest city, is the country’s new
pitals have to spend around 15 spend around 15
minutes visiting
should focus on
making nurse’s job
hospitals are likely to them. In March, Manipal Hos-
use Honeywell’s
high-tech production centre, with Samsung, Intel, LG, Pana-
minutes visiting every patient every patient to more interesting RTHMS product by pitals announced that it will sonic, Foxconn, Pegatron, and many others moving there. The
to check and record health record health data and productive the end of this year combine a patient-monitor- port city’s proximity to manufacturing clusters, and a 12-hour
data. “Nurses hate that job, ing solution from Singapore- expressway to Shenzhen gives it an edge. The country’s electron-
and at 12 o’clock at night based ConnectedLife with ics industry, today, accounts for about 40% of its exports.
when the patient is woken up to record eywell Safety and Productivity Solutions wearable trackers from Google-owned Vietnam has been getting the ball rolling, moving to the Plus
some of these vitals, they scream at them,” said. In addition, hospitals have to decide Fitbit to track patients recovering from 1 space that strategists have been talking of. Its low labour costs,
said Shetty. on a limited number of staff who can high-risk surgeries. attractive tax incentive policies, location, favourable global trade
He said hospitals should focus on mak- access such health information. Nandakumar said the company is conditions, and many free trade agreements (FTAs) have worked
ing the nurse’s job more interesting and Narayana Health is among a growing expecting 30 to 50 hospitals to use its in its favour. It climbed from the 47th position in global ranking
productive. The Honeywell solution also number of hospitals in India who are look- RTHMS product by the end of this year. in 2001 to the 10th position in 2020, vis-a-vis exports that make
up 1.8% of the total export value of electronics globally. Geopoli-
tics has only helped this trend to gain momentum with manufac-
turers looking for hardy supply chains.

Funding continues to decline B Capital to focus on SaaS, B2B The same

factors that
Globalization in question
What we have seen lately is that glo-
balization, which suggests that the
The value of fundraising continued to fall in the week ended Friday compared to the one prior with have propelled world is one family with free move-
the number of deals also seeing a decline. Companies raised $324 million in venture capital (VC) and Joseph Rai products for global enterprises Vietnam can ment of goods and services cutting
private equity (PE) funding this week, a 26% drop from $436 million in the week before. joseph.rai@livemint.com and we are seeing hundreds of also put India in across geographies, has been in jeop-
The number of deals remained almost flat at 26 against the previous week's 27, on the back of
early-stage funding deals. In the largest deal of the week, British International Investment (BII), UK’s
new delHI founders take that path and we the sweet spot ardy. Former US President Donald
want to support them,” he said. Trump acted swiftly to checkmate
development finance institution said it will be investing up to ₹1,925 crore or $250 million, into an

B
electric vehicle manufacturing unit of Mahindra and Mahindra (M&M). Post the capital infusion, BII
Capital Group expects B Capital last month co-led a China, with the CHIPS for America Act
will hold a 2.75%-4.76% stake in the unit that will be newly corporated. software-as-a-service growth investment in insights- passed in January 2021 to mark a U-turn after decades of expan-
Apart from the M&M-BII deal, the startup ecosystem witnessed a lull in terms of venture capital (SaaS), healthcare and led customer engagement sion into Asia.
and private equity investments, with just $74 million getting infused into 23 deals, a 77% decline from business-to-business (B2B) SaaS platform MoEngage. At China’s zero-covid policy halted factory work, and broke global
the previous week. Three funding deal values remained undisclosed. platforms to comprise 60% of the early-stage level in the supply chains. Several major Taiwanese computer manufacturers
Early-stage deals dominated the week, with over 18 companies raising funds between $100,000 its investments at the early- SaaS space, it has already made with factories in Shanghai, including Quanta Computer, Compal
to $1 million. stage level in India and South- a couple of investments in the Electronics, Wistron, Inventec and Pegatron, reported double-
east Asia, said a top executive region including Singapore- digit declines due to the lockdowns. Vietnam played its cards
By Anuj Suvarna BuildNext
anuj.s@livemint.com  Madhumala at the backer of Indian startups based Nektar.ai and is well, fitting into the space created by China’s stiff stance.
Ventures* such as Meesho, Blackbuck expected to make one more India’s edge
Top funding deals 3.5 and Khatabook. Karan Mohla, partner at B soon, said Mohla. The same factors that have propelled Vietnam can also put
Private companies Fintech firms and enablers Capital. The growing interest India in the sweet spot. India’s biggest advantage in the Plus 1
raise $324 mn this Ensureedit in the B2B space will make up towards Indian SaaS can be space is its end-to-end design and manufacturing capabilities.
week  Cover 4.2 the rest, Karan Mohla, partner SaaS market,” said Mohla, who attributed to an increase in exit Vietnam is known for strong midstream activities, and local com-
Genius* 250
Deal value ($ mn) M&M electric at B Capital said in an inter- was roped in as a partner by B opportunities for investors panies focus mainly on assembly. Upstream activities, involving
Lead investors The Baker's  British International view. Capital from Indian venture with companies like Fresh- design and production, are mostly done overseas.
Dozen Investment Founded by Raj Ganguly capital firm Chiratae Ventures works Inc. listing in the US. Vietnam does not have the engineering talent that India has.
 Fireside 5 and Facebook co-founder just earlier this year to focus on There are almost 9,000 SaaS Not only is India considered to be the most digitally dexterous
Ventures*
Eduardo Saverin in 2014, B identifying innovative early- startups which have either country in the world due to the largest Gen Z workforce, we have
WayCool Capital invests out of stage firms. founders of Indian origin or a huge domestic market. And we are closer to Africa, the Middle
 Stride 6.5 a global fund across Mohla said while B have a large base of their work- East and European markets.
Ventrues sectors. It had closed Capital has made force in India, according to a However, the process of setting up business needs to be swift,
15 its second fund of several SaaS invest- Bain & Co. report published the logistics and transshipment needs to be buckled up for sus-
AntWalk
 GSV Ventures*, 7.5 $820 million in 2020. Last ments at the growth stage, it is last year. Interest in the space tainable competitive advantage. Although India has created a lot
Y Combinator year, it also raised $126.3 mil- keenly building such bets at is fuelled by acquisitions and of production-linked incentive (PLI) schemes that address some
7 10 lion for a new vehicle called B the early-stage level globally consolidation at play currently disability factors, having stronger supply chains is crucial. It is
Innoviti
 Panthera Growth*, Capital Ascent Fund II, LP. including India and Southeast in the space, the report said. important to rein in freight and travel costs and lower the carbon
Acefour Accessories MarketWolf
*debt  Sixth Sense Ventures*,
Alumni Ventures “One area we are really Asia. Other VC firms are also footprint. Even Mexico, on account of its talented workforce and
 Jungle Ventures*,
Source: VCCEdge, VCCircle Volrado Venture Dream Capital spending a lot of time globally “We have seen Indian com- keenly looking at the Indian shorter supply chains, is availing near-shoring benefits of being
is the enterprise tech and the panies build world-class SaaS SaaS market. closer to the US.
SARVESH KUMAR SHARMA/MINT
The coming era will be increasingly defined by complex dis-
ruptions queering the pitch at any time. Resilience should be
seen as an important capability, instead of just focussing on effi-

Investors flock to drone startups on new policies, applications cacy-based manufacturing at the lowest cost possible. For the
Indian market to truly arrive on the radar of global corporations,
we have to build such capacities and fix the missing pieces. And
fast… so that we can be the safest China Plus one.
Abhijit Ahaskar encouraged the domestic coming months. Chennai- “especially those providing Dr Ajai Chowdhry is the chairman of Epic Foundation and
abhijit.ahaskar@livemint.com manufacturing of drones, based Garuda Aerospace said applications for industries and co-founder of HCL.
new delHI components, and software for in June that expects its valua- business”. The first opportu-
the global market, and opened tion to touch $250 million nity, according to him, will be

I
ndia’s drone industry is tak-
ing wing on the back of
favourable policies and
emerging ways of using such
unmanned aircraft, attracting
the doors for more players to with a $30 million Series A for firms operating in the busi-
get involved in the growth of round that is is expected to ness-to-business (B2B) space.
the ecosystem,” said Varsha close by this month-end. Both Rajaram and Tagare INSTITUTE OF TECHNOLOGY
ADMISSIONS 2022
Tagare, managing director at A key reason for the growth agreed that investments in the
Qualcomm Ventures, the in the drone sec- industry will only INSTITUTE OF TECHNOLOGY
+

investments to the fledgling
sector.
According to
market researcher
Venture Intelli-
gence, the number
of deals in the sector in the 12
months through June doubled
from the year before, while the
value of investments tripled.
The industry raised $87 mil-
lion across 10 deals in the past
year, up from $24 million over
five deals in the year before.
“The recently-amended
drone rules and the produc-
tion-linked incentive (PLI)
scheme for drones have
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investment arm of US chip
firm Qualcomm Inc.
Qualcomm Ven-
tures was among
investors in drone
manufacturing
startup ideaForge’s $20 mil-
lion Series-B funding round
this April. While the venture
arm of Qualcomm is investing
in startups, the parent is build-
ing reference designs, plat-
form support, and providing
access to software develop-
ment kits (SDKs) so that
drones can be customized for
different applications. SDKs
are a collection of software
tor and increasing Long-range, increase as it
investor interest large-capacity matures. The
is that from being drones rollout of 5G net-
limited to defence
applications till a
are expected to works and the
option to acquire BTECH PROGRAMMES BTECH (CSE) + MBA
see the FIVE YEAR INTEGRATED PROGRAMME
few years ago, 5G spectrum for
most traction
The drone industry raised $87 million over 10 deals in the past
more sectors are
now looking to initially
private networks
is expected to
LAST DATE TO APPLY : 25 JULY 2022
year, against $24 million over five deals in the year before. ISTOCK use drones. Tag- spur growth as All UG Programmes are National Board of Accreditation (NBA) accredited.
are noted that well. Attractive Scholarships available.
tools that help create large based startup aspiring to build drones can be used in every- The government’s Drone APPLY ONLINE
applications. flying taxis, back in January. thing from safety and surveil- Shakti mission, announced in Website : https://nirmauni.ac.in/btech
Vishesh Rajaram, managing Yet, valuations of drone lance, to maintenance of oil this year’s Union Budget, has E-mail : ugadmissions.it@nirmauni.ac.in
Contact : 079- 7165 2585, +91 84484 48565
partner at Speciale Invest, startups still pale in compari- and gas refineries and telecom. paved the way for companies
Institute Timings : 11.00 AM to 4.00 PM ( Monday to Friday )
agreed with Tagare’s assess- son to firms in the edtech or Speciale Invest’s Rajaram to offer drones-as-a-service
ment. The VC fund led a $5 software-as-a-service (SaaS) said that long-range, large-ca- (DRaaS), which in turn, allows
million funding round in The sectors, though companies pacity drones are expected to them to shore up revenues and FOR APPLICATIONS, ELIGIBILITY AND OTHER DETAILS, REFER INSTITUTE WEBSITE
ePlane Company, a Chennai- expect them to swell in the see the most traction initially, attact more investors.
 04 MoNDay, 11 July 2022
New Delhi MARK TO MARKET LIVEMINT.COM

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%) ClOsE 1-WEEK CHANGE (%)

54,481.84 2.97 16,220.60 2.97 13,828.25 3.24 38,374.65 3.99 16,424.00 3.13 22,655.57 3.64 25640.81 3.36
1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%) 1-MONTH CHANGE (%) 3-MONTH CHANGE (%)

-0.75 -8.35 -0.83 -8.79 -0.42 -9.87 1.77 -11.67 -0.41 -9.21 0.55 -10.46 -1.30 -13.86
6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%) 6-MONTH CHANGE (%) 1-YEAR CHANGE (%)

-8.81 3.64 -8.94 3.13 -9.91 2.18 -10.39 -1.24 -9.03 2.77 -11.06 -0.08 -14.62 -0.52

m MINT SHORTS TCS Q1 result no balm All eyes on Mahindra &

High fertilizer costs put rice Mahindra’s upcoming
production under threat
Rice production is under threat in parts of Asia from high
fertilizer costs at a time demand is increasing, posing a
potential risk to food security and efforts to contain infla-
for wary IT investors electric strategy reveal
tion in the region. Crop yields may decline in Thailand, Harsha Jethmalani Vineetha Sampath
which is the world’s second-largest exporter, because of harsha.j@htlive.com Pain points vineetha.s@livemint.com
Racing ahead
high prices for crop nutrients, according to a research A multi-year low Ebit margin and elevated attrition rate were key disappointments Shares of Mahindra & Mahindra

I
in Q1FY23 earnings of Tata Consultancy Services. have appreciated by 46% in the last

M
unit of Kasikornbank Pcl. In the Philippines, the No. 2 nvestors in Indian information tech- ahindra and Mahindra Ltd
one year beating sectoral index
importing country, a lower harvest is likely to increase nology (IT) stocks are jittery largely Ebit margin (in %) Last twelve months attrition (in %)
(M&M)’s announcement of Nifty Auto's returns of nearly 16%.
the need for overseas purchases. China is worried about because of a fear that a potential eco- incorporating a wholly-
27 20
the impact of pests on the crop, while India’s output nomic recession triggered by interest 19.7 owned subsidiary, EVCo, in agree- Mahindra & Mahindra Nifty Auto
depends on a good monsoon. Most of the world’s rice is rate hikes would hamper the deal ment with British International 160
grown and eaten in Asia, making it vital for political and pipeline of Indian IT companies, thus 26 Investment (BII), is a stepping stone
economic stability in the region. In contrast to the surge impacting their FY24 revenue growth. 16
on its electric vehicle (EV) journey. 146.04
in wheat and corn prices after the outbreak of the Russia- Second, wage hikes and the return of 25 However, data on metrics such as 140
Ukraine war, rice has been subdued, but there is no guar- other costs are seen playing out in the EVCo’s revenue and margin targets
12 11.1
antee it will remain so. BLOOMBERG June 2022 quarter (Q1FY23), eroding 24.0 are not available yet and investors will
24
margins. do well to track this. The company will
Here, Q1 results of sector bellwether 23.1 shed more light on such information 120
8
Tata Consultancy Services Ltd (TCS) offer 23 and also elaborate on its technology
little comfort. In constant currency terms and platform strategy in the electric
revenue grew 3.5% sequentially, a tad 22 sport utility vehicle (SUV) segment on 100
4
lower than consensus earnings estimates 15 August, it said in an analyst meet on 115.96
of 3.6%. However, management com- Friday. This will be followed by M&M
21
mentary on demand continues to be Q2FY20 Q1FY23 unveiling the electric XUV 400 in
0
robust. As of now, the company is not see- Ebit is earnings before interest and tax Q1FY21 Q1FY23 September. 80
8 Jul 2021 8 Jul 2022
ing any signs of a demand slowdown and Sources: Emkay Global Financial Services, Nirmal Bang Institutional Equities EVCo will focus only on electric Values rebased to 100 Source: Capitaline
the deal pipeline remains strong. That four-wheeler passenger vehicles. The
said, the management is observant of SATISH KUMAR/MINT
identified assets of M&M’s four- SATISH KUMAR/MINT

macroeconomic conditions and is con- has to see a swift recovery for the com- employees in Q1FY23, which is soft. This wheeler passenger EV business will be expected to be around ₹8,000 crore
stantly interacting with clients. The TCS pany to avoid further earnings down- compares with the previous six quarters’ transferred to EVCo. The company or $1 billion. Against this backdrop,
management did not share any views on grades,” said an analyst with an interna- average of around 23,000, said analysts at has separate plans for expanding its M&M expects the proportion of EVs
how FY24 is expected to pan out, in terms tional brokerage house requesting ano- Nirmal Bang Institutional Equities. presence in the electric three-wheeler in the SUV portfolio to reach 20-30%
of revenue or margin performance. nymity. It will take a few more quarters Investors in IT stocks would do well by segment. by FY27. At the upper end, this means
“Despite intact commentary, they indi- for attrition to start declining meaning- monitoring this metric. TCS has a fresher BII and M&M will invest ₹1,925 2,00,000 units per year.
History shows the rand tends to weaken sharply when cated that the US will do better than fully, unlike what was expected initially, hiring target of 40,000 for FY23. crore or $250 million each in EVCo. “Net value accretion to M&M
the world’s economic engine is in recession. REUTERS Europe because of client concerns over he said. “Overall, a key takeaway for Another important measure, the order BII’s investment is just 1.4% of M&M’s shareholders will depend on its ability
the slowdown. In our view, this is an ini- investors in IT stocks is that margin pres- book, was flat year-on-year (y-o-y) in market capitalisation. After the capital to leverage the electrification trend
tial sign of industry commentary turning sure is underestimated by the Street. Post 1QFY23 at $8.2 billion. Unless there is a infusion, BII will hold a 2.75-4.76% and expand its market share in the
Rand’s resilience tested as US more realistic compared to the current TCS’ Q1 earnings, we feel that Infosys good spike in order inflow in the next few stake in the subsidiary. SUV segment. At
recession fears come to fore view of no impact on tech quarters, TCS’ total order Depending on the stake A meaningful present, we are not valu-
The rand’s 9% plunge in the past month may be just the spends,” said analysts at A DULL SCENARIO inflow for FY23 will at best held by BII, this implies a ramp-up in ing the EV business sep-
beginning for the South African currency, whose resil- Motilal Oswal Financial Ser- be flat y-o-y and very likely valuation of ₹40,400- charging arately as it doesn’t have
ience is being tested by fears of a US recession even as vices Ltd in a report on 9 TCS’ Q1FY23 Ebit THE management YET, due to be lower, said the Nirmal 70,070 crore. This gives infrastructure will any material presence in
local fundamentals remain supportive. History shows the July. margin and constant commentary on slowdown concerns Bang report. meaningful value to
currency revenue demand outlook for IT sector, TCS remain key to the the electric passenger
rand tends to weaken sharply when the world’s economic The Ebit (earnings before growth missed and deal pipeline stock is unlikely to Meanwhile, so far in this M&M’s EV business, vehicle segment,” said
engine is in recession. The US recessions of 2008-2009 interest and taxes) margin consensus estimates remains robust recover quickly calendar year, the TCS stock which has otherwise success of electric Motilal Oswal Financial
and 2001 knocked as much as 13% off the rand’s value. fell to a multi-year low of has declined by 13%. Given been ascribed little vehicles Services analysts in a
Based on Bloomberg scenario-planning tools, similar 23.1%, from 25% in the pre- the factors mentioned value, according to ana- report on 7 July.
conditions this time round could see the rand weaken by vious quarter, missing the consensus esti- could also disappoint on margins,” he above, the stock is unlikely to see a quick lysts at Jefferies India. Further, a meaningful
as much as 12%. In the first half of the year, the rand bene- mate of 23.6%. As such, TCS’ Ebit margin said. recovery. TCS shares are trading at a “Such global investments will help ramp-up in charging infrastructure
fited from high commodity prices, which lifted the cur- is lower than its aspirational range of In Q1, TCS’ attrition on LTM (last price-to-earnings multiple of 25x on M&M to smoothly transition to EVs. will remain key to the success of EVs.
rent account into surplus. The market remains heavily 26-28%. The margin was hurt by salary twelve months) basis, rose to 19.7% from FY24 earnings estimates, according to Any concern on the substantial fund- Meanwhile, the M&M stock
long rand, according to US Commodity Futures Trading hikes, supply-side challenges, higher 17.4% in Q4FY22. The management is Bloomberg data. A couple of brokerages ing needed for its EV business is likely touched a 52-week high of ₹1,194.90
Commission data, leaving the currency at high risk of a subcontracting costs, and an increase in hopeful that the attrition rate will start to have trimmed the company’s FY23 and to alleviate as future investments apiece on Friday after the announce-
sell-off as conditions change. South Africa could be par- travel expenses. The margin is expected moderate in the second half of FY23, but FY24 earnings estimates after the Q1 seem to be under control,” said Aniket ment. So far in 2022, the shares have
ticularly hard hit as demand for the country’s raw-mate- to start recovering sequentially from only after seeing a further spike in result. How valuations shape up from Mhatre, institutional research analyst, appreciated 46%, making it the top
rial exports falls, adversely impacting a vital source of for- Q2FY23, the management said. Q2FY23. here would also depend on whether or HDFC Securities. gainer in the Nifty Auto index. Hence,
eign exchange. BLOOMBERG Analysts are cautious. “TCS’ margin Besides, TCS hired a net 14,136 not earnings downgrades get steeper. Over FY24-27, capital infusion is near-term upsides may be capped.

Mark to Market writers do not have positions in the companies they have discussed here

Sebi mulls State-owned oil firms stay away from buying scrips under rebate scheme
risk factor Ravi Dutta Mishra & Dilasha Seth “The RoSCTL scheme was mooted count on tradeable scrips rising from officer, Federation of Indian Export

disclosure to NEw DElhI by the finance ministry and Central

Board of Excise and Customs (CBIC).
3% to about 20%, according to the Organisations (FIEO).
Apparel Export Promotion Council Exporters argue that state and cen-

B
anks and state-owned oil firms
aid investors are, in a sign of rising uncer-
tainty in global trade, refrain-
ing from buying tradeable scrips
PTI issued to exporters under the Rebate
feedback@livemint.com of State and Central Taxes and Levies
NEw DElhI (RoSCTL) scheme to avoid liability in
case export realization does not hap-
By introducing this scheme, the gov- (AEPC). tral levies are collected in cash and,
ernment virtually postponed its lia-
bility by two years. Earlier a scrip
“In the notification, there is a pro- therefore, reimbursement or rebate
vision that if the payment is not real- on such levies should also be made in
worth Rs100 could be easily sold at ized and the exporter doesn’t take cash.
Rs97-98. However, this is not the responsibility, the In a letter to the gov-
case now. One of the clauses in the importer will be liable. Garment and ernment, exporters said
scheme suggests that if there is no So unless the scrip apparel exporters that the scrips are being
export realization, the liability falls on belongs to a very trusted say the scheme as traded at discounts of

I
n a global first, the Securities
and Exchange Board of India
(Sebi) plans to issue regular
“risk factor disclosures” on
market trends, including sur-
ges and collapses, to help inves-
tors make right decisions, sour-
ces said.
The move, which is still in a
preliminary stage of discussion,
can help investors avoid a herd
mentality, which has been par-
ticularly witnessed during the
last couple of years, starting
with large-scale sell-offs when
the covid-19 pandemic hit the
country in early 2020, followed
soon by a sharp surge in buying
of stocks without understand-
ing the fundamentals and
largely because of get-rich-
quick stories and then subse-
quent losses.
“It is time for Sebi to lead by
example by making disclosures
pen.
The RoSCTL scheme was intro-
duced last year to provide rebates
against taxes and levies already paid
by exporters on inputs. The rebate is
not given as cash but as tradeable
scrips, which exporters can sell to
importers.
However, rising uncertainty over
payment for exports amid geopoliti-
cal concerns and disruption in the
supply chain has resulted in the value
of the scrips falling as much as 20%,
causing loss to exporters.
AMCs add 5.1 mn investor accounts in Q1 on rising awareness on MFs
PTI
feedback@livemint.com
NEw DElhI
the bearer of the scrip.
As such, there are fewer buyers of
these scrips in the market. Big oil
importers such as Indian Oil Corpo-
ration Ltd (IOCL), Bharat Petroleum
Ltd (BPCL), and Hindustan Petro-
leum Ltd (HPCL), even banks are not
buying these scrips as they do not
want to take on the liability.
The commerce ministry has asked
the finance ministry to drop the
clause or allow the scrip to be gener-
ated only after export realization has
happened, a government official said.
accounts were added in the last
12 months, data with the Asso-
ciation of Mutual Funds in
India (Amfi) showed.
or reliable exporter, it is now erodes 15-20%, because of
where there is no risk, which exporters are not
an importer will not
export margins of getting the intended
take the scrip of a small the domestic value under the
Rising uncertainty over payment for exports amid geopolitical concerns and company,” it said. textile industry scheme. They also
supply chain disruptions have shrunk the value of the scrips by 20%. AP PSUs and banks do alleged that importers
not want to take any are reaping all advanta-
Trade experts said that global Ukraine. risk, especially as scrips are also sub- ges of the scheme at the cost of
goods trade has already slowed in the Garment and apparel exporters ject to market premiums and will exporters. Queries emailed to the
first half of 2022 as supply chains have said that the scheme in its cur- keep on changing. “Anyone can department of commerce, ministry
continued to be affected by the covid rent form is eroding export margins question why the scrip was bought of finance, IOCL, BPCL and HPCL on
pandemic. The concerns around the of the domestic textile industry. Gar- on a day when the premium was Thursday remained unanswered till
supply chain were exacerbated fol- ment manufacturing units are facing more or less,“ said Ajay Sahai, press time.
lowing the outbreak of the war in losses of ₹1,200 crore with the dis- director general and chief executive ravi.dutt@livemint.com
Market conditions, geopoli- funds will increase this finan- tion oriented schemes, As we will see more awareness
tical situations, inflation rates, cial year,” said Harshad Che- wherein the maximum invest- about mutual funds we will see
financialization of investments, tanwala, co-founder of ment is from the retail seg- retail participation increasing,”
and increasing awareness MyWealthGrowth.com. ment, was about 107.2 million according to Chetanwala. The

on matters that can have impli-
cations for investors at large
and disclosures of important
market-wide datapoints,” said
a person in the know, explain-
ing the idea that the markets
regulator is working on.
“A simple sentence man-
dated under the present regu-
lations that certain ‘invest-
ments are subject to market
risks’ has become too cliched
and it is like a motherhood
statement that does not work
anymore. We are not a nanny
state ,” the person said.
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A
sset management com-
panies added 5.1 million
investor accounts in the
June quarter, taking the total to
134.6 million, on increasing
awareness about mutual funds
and ease of transactions
through digitization, and
experts hope that the ongoing
financial year will also be
promising.
In comparison, 9.3 million
accounts (or folios in mutual
fund parlance) were opened in
March quarter, while a stagger-
ing 32 million investor
There were fewer folios in
April-June this year than in the
March quarter, but there was
still an increase, which is an
indication that investors con-
tinued to invest despite the vol-
atility in the market.
Geopolitical tensions such as
the Russia-Ukraine war,
increasing inflation, rising
bond yields, and the US Federal
Reserve’s hawkish views on
interest rates are a few factors
to which this can be attributed,
said Priya Agrawal, money
coach at LXME, a financial plat-
Experts say the current fiscal
year seems promising. ISTOCK
form for women.
The ongoing financial year
appears to be promising in
terms of folios growth, Agrawal
said.
among the people are some of The number of as of the June mutual fund space has been
the elements that may have an folios with 43 The mutual fund quarter of 2022, witnessing a consistent growth
impact on this industry, she fund houses rose space has been rising nearly 4% in folio numbers in the past few
said. to 134.6 million in witnessing a from the prece- years.
“The majority of mutual June 2022 from consistent growth ding January- There was an addition of 31.7
fund retail investors put their 129.5 million in
in folio numbers March period. million investor accounts in
money in equity funds. The March 2022, reg- Folios are num- 2021-22, 8.1 million in 2020-21,
market conditions will have a istering a gain of in the past few bers designated to 7.3 million investor accounts in
role to play in increasing the 5.1 million during years individual inves- 2019-20, 11.3 million in
number of folios and investors. the three-month tor accounts. An 2018-19, 16 million in 2017-18,
The participation will increase period, according investor can have over 6.7 million in 2016-17 and
when stability returns to the to the Amfi data. multiple folios. 5.9 million in 2015-16.
stock market, which may hap- The industry crossed a mile- “The retail participation Tailwinds supporting the
pen in the coming few quarters. stone of 100 million folios in should continue to increase as industry include the increasing
Hence, we believe the reach May 2021. The number of folios mutual fund penetration is still mutual fund awareness driven
and penetration of mutual under equity, hybrid, and solu- low compared to its potential. by the covid pandemic.
 LIVEMINT.COM CORPORATE MoNDay, 11 July 2022
New Delhi 05

Macquarie seeks funds Bifurcation of SpiceXpress, SpiceJet to

be completed by first week of Aug: CMD
to set up EV leasing co PTI
feedback@livemint.com
NEw DElhi
owned by SpiceJet but it will be
a separate company,” he added.
While announcing the plan
to hive off SpiceXpress on 17

B
anks and shareholders August last year, the airline had
have given their approval said the logistics business has
The firm is in talks with commercial investors to raise $205 million more to hive off cargo and been valued at ₹2,555.77 crore
logistics company SpiceXpress based on an independent valu-
from SpiceJet airline and the ation exercise carried out by
Staff Writer bifurcation will be done by the the company and “the pur-
feedback@livemint.com first week of August, the car- chase consideration for the
NEw DElhi rier’s CMD Ajay Singh has said. same shall be discharged by
SpiceJet had on 17 August SpiceXpress by issuance of

M
acquarie Group, one of the last year announced it was shares of SpiceXpress to Spice-
largest foreign infrastruc- transferring its cargo and logis- Jet, subject to all approvals as
ture investors in India, is in tics services on a slump sale Spicejet CMD Ajay Singh has said the move to bifurcate the may be required”.
talks with commercial basis to its subsidiary SpiceX- operations has received shareholders’ and lenders’ nod.BLOOMBERG SpiceXpress has a network
investors to raise $205 mil- press as it will allow the com- which spans over 68 domestic
lion to set up an electric vehicle (EV) leas- pany to raise funds independ- cient and reliable air services— period of 2021, SpiceXpress and over 110 international cit-
ing and finance company, said two people ent of the budget carrier and gave it three weeks’ time to saw its revenue jump 17% on a ies, including those in the US,
aware of the development. rapidly grow. respond to the notice. quarter-on-quarter basis to Europe and Africa.
The India-focused e-mobility financing SpiceJet is under the regula- The airline has been making ₹584 crore. Singh had on 17 August, 2021
platform will be managed by Macquarie tory scanner right now. Just losses for the last four years. It While talking to PTI last said the proposed transfer of
Asset Management, which has assets of five days back, the airline was incurred net losses of ₹316 week, Singh said: “We have got business to SpiceXpress will
around $A773.1 billion under manage- issued a show-cause notice by crore, ₹934 crore and ₹998 the shareholders’ approval for allow the new company to rap-
ment. It will work on reducing the upfront the Directorate General of Civil crore in 2018-19, 2019-20 and that (hiving off SpiceXpress idly grow its innovative logis-
capital expenditure needed for the push Aviation (DGCA) after its air- 2020-21, respectively. In April- from SpiceJet). We have got the tics platform and its unique ful-
towards green mobility. As part of its plan, craft were hit by at least eight December period of 2021, the approval from our banks to do filment-as-a-service business
Macquarie, which has secured $200 mil- incidents of technical malfunc- airline posted a net loss of that. I think in the last model.
lion in commitments from South Korea’s tion since 19 June. ₹1,248 crore. phase...we should be done by “SpiceXpress will also be
Green Climate Fund, will start with the The DGCA—while stating However, the revenue from the first week of next month.” able to raise capital independ-
e-mobility financing platform for e-buses, that the budget carrier has SpiceXpress has been increas- “It will be a separate company ent of SpiceJet to fund this
shared fleets and EV charging infrastruc- “failed” to establish safe, effi- ing. In October to December called SpiceXpress. It will be growth,” he had added.
ture. Macquarie plans to establish India’s largest EV leasing and finance company. The
“Macquarie aims to raise a further $205 e-mobility financing platform will be managed by Macquarie Asset Management. AP
million from institutional investors to
capitalize the platform and, over time, the Macquarie.
platform hopes to mobilise about $1.5 bil-
500,000 electric three-wheelers, 1 mil-
Macquarie and its managed funds over- lion e-two-wheelers, 55,000 electric pas-
lion of capital (including debt finance),” see investments across 12.4GW of green senger vehicles and 7,090 e-buses.
Collectors to enforce service charge order
according to Macquarie’s website. energy capacity in India and has so far “Initially, the platform will focus on
This comes in the backdrop of state-run invested $2.5 billion. selected segments of the EV ecosystem Ravi Dutta Mishra report to the authority within which works as an alternative may submit a complaint to the
Convergence Energy Services Ltd (CESL) A spokesperson for Macquarie declined such as e-buses, shared fleets and charg- ravi.dutt@livemint.com 15 days. dispute redressal mechanism District Collector of the con-
announcing the price discovered in a ten- to comment on the specific query about ing infrastructure, and will expand into NEw DElhi “If any consumer finds that at the pre-litigation level by cerned district for investiga-
der for 5,540 electric buses for other e-mobility sub-sectors a hotel or restaurant is levying calling 1915 or through the tion and subsequent proceed-
EV INFRASTRUCTURE PUSH
T
five cities--the lowest ever, as the market scales. In doing he government has service charge in NCH mobile app. ing by the CCPA. The com-
and almost on a par with the so, the platform also aims to asked district collectors violation to the District collectors The ministry plaint may also be sent to the
operational costs of diesel MACQUARIE has IT will start with the OVER time, contribute to an enabling to ensure restaurants guidelines, a con- have been asked said the con- CCPA by e-mail at com-
buses. In what may help expe- already secured
$200 million in
e-mobility financing Macquarie’s
platform for e-buses, platform hopes to
environment for EV growth, and hotels do not violate Cen- sumer may make to hold probes on sumer can also ccpa@nic.in. “The difference
dite India’s ambitious plans commitments as shared fleets and EV mobilize about leading to increased penetra- tral Consumer Protection a request to the complaints and file a complaint between the new guidelines
for green mobility, EV prices part of its plan tion of EVs and new market Authority (CCPA) guidelines concerned hotel
charging facilities $1.5 billion of capital
submit reports to against unfair issued by CCPA and the previ-
are soon expected to be on a participants, including the by levying service charges. or restaurant to trade practices ous guidelines by the Depart-
par with internal combustion growth of financing solutions The CCPA has clarified that remove service CCPA within 15 with the Con- ment of Consumer Affairs is
engine (ICE) vehicles. the ongoing talks to raise capital. and domestic manufacturing, and con- the guidelines are not advisory charge from the days sumer Commis- that, in the intervening period,
“Macquarie is leading the development Energy Efficiency Services Ltd (EESL) tributing to decreasing air pollution in in nature and are “fully bill amount,” the sion. The com- the erstwhile Consumer Pro-
of a blended finance platform, with UN’s is running the government’s ambitious urban environments,” Macquarie said on enforceable by law”. There- ministry of con- plaint can also be tection Act, 1986 was replaced
Green Climate Fund (GCF), to drive the Faster Adoption and Manufacturing of its website. “With a 10-year implementa- fore district collectors have sumer affairs stated. filed electronically through with the Consumer Protection
adoption of EVs across India, helping Hybrid and Electric Vehicles (FAME 2) tion period, the platform is expected to also been asked to conduct The consumer may lodge a t h e edaakhil portal Act 2019, which came into
reduce the country’s CO2 emissions and scheme for e-three-wheelers and e-buses. deliver lifetime reduction of ~9.5 MtCO2e investigations upon receiving complaint on the National www.edaakhil.nic.in. effect in July 2020,” the gov-
improve urban air quality,” according to The money will be spent on subsidizing of greenhouse gas emissions.” complaints and submit the Consumer Helpline (NCH), In addition, the consumer ernment said.

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 06 MoNDay, 11 July 2022
New Delhi CORPORATE LIVEMINT.COM

Wipro top
talent to be
promoted
quarterly
FROM PAGE 1
scales, it could be 15% plus. The
early announcement of promo-
tions is another step the firm
will take to hold on to its peo-
ple,” said the executive,
requesting anonymity. Those
receiving quarterly promo-
Hardening yields to hurt ₹8k cr roads may
be moved to InvITs
income growth of banks over next 6 months
FROM PAGE 1
track record of high toll reve-
Lenders likely to report weaker profits as they reel under treasury losses amid volatility in bond market nues amid rising traffic, he said.
More projects would be con-
sidered for monetization under
Shayan Ghosh While loans to retail borrowers stood at the InvIT route this year, but a
shayan.g@livemint.com ₹34.7 trillion on 20 May, up 16.4% from decision would be taken in the
mumbAI the year ago, credit to micro, small, last quarter, depending on
medium and large enterprises stood at investors’ appetite.

tions will see a bigger jump in
salaries, the executive added.
Wipro’s plan to reward
employees comes as the tech
sector battles severe attrition.
Demand for tech workers has
risen sharply with the pandemic
leading companies globally
across sectors to digitize busi-
nesses. This is pitting tech firms
against startups and legacy firms
in the race for talent. Infosys,
India’s second-largest software
services firm, may offer a 12-13%
hike for some staff, with top per-
formers getting more. It clocked
a record attrition of 27.7% in the
March quarter, sharply higher
than 10.9% a year earlier and
25.5% in the December quarter.
On Friday, Tata Consultancy
Services (TCS), India’s top soft-
ware services firm, announced an
attrition of 19.7% in the June quar-
ter. Chief executive Rajesh Gopi-
nathan attributed it to seasonality,
saying that in this period, junior
staff leave for higher studies. TCS
has issued a pay hike of 5-8%. Top
performers have received higher
increments, according to the firm.
Meanwhile, analysts said,
offering large pay hikes and
other employee incentives
may burden firm already
struggling under rising costs.
“We expect margins to con-
tract quarter-on-quarter due to
wage hike and the continued
rationalization of staff costs amid
high attrition despite the industry
continuing to add record fresh-
ers,” ICICI Direct Research said in
an earnings preview on 5 July.
R
eeling under treasury losses ₹31.6 trillion as on 20 May, up 8.7% The ministry of road trans-
due to hardening bond from the year-ago period. port and highways is also study-
yields, banks are expected to “Systemic loan is witnessing a ing a proposal to offer NHAI
report weaker profit growth healthy revival...led by continued road projects to other opera- Roads form a significant
in the three months to June, strength in the retail and SME (small tional road sector InvITs, rather portion of the national
analysts said. and medium enterprises) segment, than just giving it to the NHAI monetization pipeline. HT
Banks maintain large holdings of while the corporate segment is also InvIT. Leading private sector
government securities, including state seeing a revival. Disbursement growth InvITs include Brookfield- tion of the national monetiza-
government loans (SDLs) and treasury across several retail products has sur- sponsored India Infrastructure tion pipeline (NMP). Last year,
bills, as part of regulatory investment passed pre-covid levels, while corpo- Trust; MEP Infrastructure the central government identi-
requirements. Therefore, any volatility rate growth was led by improved utili- Investment Trust; IRB InvIT fied national highways and
in the bond market is expected to hit zation levels and working capital Fund; Tower Infrastructure road assets worth ₹1.6 trillion to
their income. Not only do they have to requirements,” the Motilal report said. Trust; and IndInfravit, spon- be monetized by 2024-25.
set aside mark-to-market provisions for Not everyone seems convinced by sored by L&T Infrastructure InvITs are pooled invest-
the fall in bond prices (bond yields and the headline growth numbers, though. Development Projects. ment vehicles, similar to
prices move in opposite directions), Kotak Institutional Equities analysts The secretary said the gov- mutual funds, allowing individ-
they also make losses while selling such pointed out they are yet to see any con- ernment also plans to take road ual and institutional investors
investments. Loan growth is expected to improve on the back of better demand from corporate vincing signs of recovery in corporate sector InvITs public by allow- an opportunity to invest in
While yield on the 10-year bench- and retail borrowers MINT credit growth as companies have ing retail investors to purchase infrastructure projects and
mark government security (G-Sec) de-leveraged quite meaningfully over units after it secures regulatory earn a small portion of the
surged 60 basis points (bps) between banks to create an investment fluctua- Oswal Financial Services Ltd, earnings the past few years. “Micro, small and approval from markets regula- assets’ income in return.
April and June to 7.45%, corporate tion reserve out of profits earned on of public sector lenders will remain medium enterprise credit growth out- tor Securities and They typically
bond yields rose by about 70 bps. Ana- sale of investments to guard against muted, impacted by a weak treasury look does not seem very rosy, because a Exchange Board More projects would enable developers
lysts said the pressure will be visible in market risks. performance thanks to the rise in bond lot of the promoters have recently seen of India (Sebi). be considered for of infrastructure
the June quarter earnings. The 10-year Recent news reports said that banks yields. In a report on 7 June, its analysts significant hardship on account of the Besides InvITs, monetization under assets to pool
yield closed at 7.42% on Friday. have requested RBI to allow June quar- said the traction in loan growth will pandemic-induced stress,” the Kotak monetization in the InvIT route, but a multiple assets
“We expect banks under coverage to ter losses to be spread over a few quar- keep net interest income healthy and Institutional Equities report said. the roads sector under a single
decision is likely to entity (a trust) and
report 7% year-on-year (y-o-y) decline ters, instead of taking the full impact in enable expansion of margins. In its Financial Stability Report, RBI would also
in earnings led by weak operating said that while corporate sales and include around be taken in the last sell it to investors.
performance growth—a decline of EARLY SIGNS profitability have risen, a durable 1,750 km of NHAI quarter of the fiscal Such infra-
25% y-o-y—primarily on account commencement of the capex cycle assets that could structure trusts
of high treasury losses,” analysts at YIELD on 10-year MEANWHILE, ANALYSTS said the THE earnings of state- remains elusive. The maximum be offered to are popular
Kotak Institutional Equities said in benchmark G-Sec
surged 60 bps
corporate bond
yields had risen by
pressure will be
visible in the June
run lenders may be
muted, hit by a weak
revival in credit demand was seen investors under the toll-oper- among investors, especially
a report on 6 July. between April and about 70 basis quarter earnings of treasury performance, in the second half of 2021-22 and ate-transfer route in FY23. long-term revenue-generating
Kotak analysts said the one-year June to 7.45% points in the period lenders analysts said the momentum has so far contin- However, Aramane said that assets such as toll roads, as it
G-sec yield shot up 150 bps during ued in FY23, it added. toll securitization, which helps provide stable and long-
the first quarter of FY23, and this is “While personal loans remained involves raising funds from term yields. Analysts expect
likely to result in significant losses. the first quarter. While it could not be “This will be further supported by a a dominant component, credit demand investors based on future toll road InvITs to generate 9-12%
While banks have built up an invest- immediately ascertained whether RBI sustained reduction in credit cost as the from the industrial sector revived after revenue, may not happen this annual returns in the long term.
ment fluctuation reserve over the past has granted the request, there is an asset quality performance for public collapsing in 2020-21 as well as in the year or be operated at a low India has seen multiple issu-
few years, they may not utilize this April 2018 precedent when it allowed sector banks remains steady,” it said. first half of 2021-22. A significant por- scale, and most of the moneti- ances under the InvIT struc-
reserve and let the losses flow through banks to spread the losses over four That said, loan growth is expected to tion of new industrial loans was zation has to be through InvIT ture, with government entities
into the bottom line, the report said. quarters. improve on the back of better demand extended as working capital loans,” RBI and ToT routes. like PowerGrid and NHAI also
The Reserve Bank of India (RBI) allows According to analysts at Motilal from corporate and retail borrowers. said. Roads form a significant por- floating InvITs.

Green hydrogen Inflation may be flat in June, Costs, rupee key headwinds
enters renewable but is still high, shows Mint poll FROM PAGE 1

the rise in raw material prices,

energy playbook FROM PAGE 1

prices, are likely to keep fur-

alongside the depreciating
rupee. Electronics, chemicals,
durables, and metals are some
FROM PAGE 1 ther upside pressures in of the sectors grappling with
check,” she said. rising inflation and depreciat-
jects in India are largely bundled If June inflation comes in ing currency,” said Aishwarya
with thermal power. The around the poll forecast of 7%, Dadheech, fund manager at
planned pilots will be cleaner it will have averaged 7.3% dur- Ambit Asset Management. Companies with high imports will see higher cuts, given the
than the previous RTC projects ing the April-June quarter. Inflationary pressure is likely weakening rupee. MINT
as thermal power will be At its last meeting, the to impact margins and profita-
replaced by power from green Reserve Bank of India’s mon- bility of manufacturing compa- strong earnings rebound. because of macro challenges,
hydrogen-backed gas turbines. etary policy committee nies, although revenue growth Automobile companies are said Deepak Jasani, head of
A regular gas turbine-based (MPC) forecast full-quarter is expected to be strong, said also expected to report an earn- retail research at HDFC Securi-
power plant uses high pressure inflation at 7.5%. India’s infla- Mitul Shah, head of research at ings recovery on a low base ties. The windfall tax on oil
and heat to spin the turbine. Coal India has been diversifying, tion is expected to ease grad- RBI has forecast full-quarter inflation at 7.5%. MINT Reliance Securities. after three quarters of decline companies will also lead to
Experts see burning hydrogen as with forays into solar power and ually in the second half of the The banking and financial in operating margins because downgrades. “We believe earn-
an option to decarbonize gas tur- coal gasification. MINT current financial year, RBI The situation is similar maintain our forecast for a ter- services industry is likely to of supply disruptions. ings growth of oil and gas com-
bines by replacing natural gas governor Shaktikanta Das worldwide, with several major minal repo rate of 6.25% by continue supporting earnings Earnings of the oil and gas panies will be severely
with non-polluting hydrogen. ply in times ahead,” he said. said recently. central banks initiating rate April 2023, with a 35-bps rate growth. Analysts at Motilal sector will be mixed, with impacted,” Dadheech said. He
For NTPC, this would be India currently has an “If market participants take hike cycles to control elevated hike in August, followed by Oswal Financial Services expect higher crude prices and strong added that treasury losses may
another significant move in the installed renewable energy comfort from the fact that CPI inflation. 25-bps rate hikes in each of the banking companies to deliver refining margins lifting profits contribute to earnings down-
renewable energy space. Last capacity of 159.949GW, which inflation is averaging 20 bps RBI’s monetary policy com- following four policy meet- 26% profit growth in the June of oil producers, even as state- grade of banks to some extent.
week, the firm invited expres- is nearly 40% of the total (basis points) lower than the mittee (MPC) has also resolved ings,” noted economists at quarter as higher credit uptake run fuel retailers bear the Shah said that he expects
sions of interest (EoI) from installed power capacity in the RBI’s forecast of April-June, to focus on the withdrawal of Nomura. boosts net interest income impact of selling fuel below earnings downgrade to continue
Indian and global firms to set country. However, the Centre even when the average is accommodation to ensure that Economists at Barclays (NII). However, rising G-Sec costs. Hospitality, retail, and because of cost inflation and
up a pilot project for hydrogen plans to reach 500GW of above 7%, it will just prove that inflation remains within the noted that core inflation, yields are likely to put pressure theatre chains are likely to ben- demand weakness. Companies
production using electrolyzers. renewable energy capacity by inflation expectations have target while supporting which excludes food and fuel, on treasury income. Analysts at efit from the economy opening with high imports will see higher
Coal India, too, has been on a 2050 and achieve carbon neu- worsened so much that even a growth. will average around 6.1% in the Yes Securities expect lower up fully as the pandemic eased. cuts, given the weakening rupee.
diversification spree, with trality by 2070. 7% CPI print is now being wel- “We view the RBI’s new current fiscal, with risks provisioning and higher NII to Analysts expect the earnings The manufacturing sector
recent forays into solar power Since the government’s comed with a sigh of relief,” inflation forecast of 6.7% for inclined to the upside as “ser- boost bank profits by 29% from outlook of companies to face would also witness higher-mar-
and coal gasification. The pilot announcement in August 2021 Kaushik Das, chief economist FY23 as optimistic and believe vices-related inflation a year ago. Non-banking finan- pressure in the current fiscal. gin contraction due to commod-
project would be another step to develop a Green Hydrogen at Deutsche Bank, said in a inflation has yet to peak, with momentum could gain trac- cial companies and small The earnings outlook for FY23 ity cost inflation, though it has
in its diversification process as Mission, developments have report. our projection at 7.5%. We tion in the coming months”. finance banks may also see a may have to be revised lower softened somewhat, Shah added.
it plans to reduce dependence gained momentum in the space,
on its core fossil fuel business. with several industry giants and
Queries sent to the minis- renewable energy companies,
tries of power and coal, NTPC along with public sector power
and Coal India remained unan- and oil and gas companies
swered till press time. announcing plans to produce
Carlyle sees coming boom in consumption as brands take hold
D e e p e s h green hydrogen.
Nanda, chief exec- Experts see In February, the Swaraj Singh Dhanjal ments in) SBI Cards, which is entiated, if not customized, cities, there are dealers lining niches where there is product
utive of GE Gas burning hydrogen renewable energy swaraj.d@livemint.com consumer and financial servi- products which are often asso- up for an EBO of Varmora that differentiation, if there is a
Power South Asia, as an option to ministry released mumbAI ces, or Delhivery and Medanta ciated with brands. You see a signifies the brand pull,” Jain brand that has a much higher
said that with decarbonize gas the National which is consumer and health- secular shift from the unorgan- said. recognition than ours in cer-

I
power from Green Hydrogen ndia presents tremendous care, we have done a series of ized unbranded to organized The investment by Carlyle tain pockets or states and there
turbines by
hydrogen-based Policy, promising growth opportunities in con- investments in India and Asia branded.” will help the company acceler- is complementarity and syn-
gas turbines, replacing natural cheaper power, a sumer-focused businesses on the growing consumerism With its investment in Var- ate digital transformation, dis- ergy, those are the acquisitions
power plants gas with hydrogen fee waiver for and global private equity inves- theme,” Jain added. mora, Carlyle is betting on the tribution, enhance the brand we will look at,” said Jain.
could ensure a inter-state power tor Carlyle is seeking to cash in Consumers are undergoing a transformation of the building and build capacity Varmora is
higher power load transmission for on the emerging trend, said secular shift in India from materials sector from unorgan- organically Consumers are planning to grow
factor, which means more elec- 25 years for projects commis- Amit Jain, managing director unbranded to branded prod- ized to organized, as consumers through green- undergoing a its top line to
tricity at a given time compared sioned before June 2025, land in and co-head, Carlyle India ucts, he said. seek to spend more money on field expansion secular shift in ₹1,600 crore this
to conventional energy sources. renewable energy parks, and Advisors, in an interview. “When you look at the high quality products. and also through India from fiscal year, Bhav-
Ganapati D. Yadav, national mega manufacturing zones to Carlyle recently picked up a emerging markets, and where “50% of the market is unor- mergers and esh Varmora,
unbranded to
science chair of the Science and help industries wean them- significant minority stake in India is on its per capita ganized. Over 50% of flooring acquisitions. chairman, Var-
Engineering Research Board, selves off fossil fuels. tiles and bathware maker Var- income, we believe inflection in households is still traditional “Our inclina- branded mora Granito,
said that using green hydrogen The policy, aimed at promot- mora Granito Pvt. Ltd. Estab- points happen in the way con- materials or cement, and not Amit Jain, managing director and tion is to have products, Jain said said.
would also lower the cost of ing green hydrogen and green lished in 1994, Varmora’s port- sumers consume—whether it’s modern flooring solutions such co-head, Carlyle India Advisors. M&As where we It ended FY22
power and, eventually, tariffs. ammonia, also spoke of facili- folio includes premium tiles, food, apparel or the way they as tiles, wooden flooring or can add capability with a topline of
“Solar, wind and hydrogen are tating the ‘banking’ or storage faucets and sanitaryware, and build their houses and invest in marble. We like tiles as a big entiated product which has and not capacity. In a consumer ₹1,100 crore.
the major components of the of green power, where a green its products are sold through a property. What happens at category for flooring solu- created a strong customer pull. business, capacity is not of that “We plan to expand our net-
government’s renewable power producer can save sur- distribution network of over these income levels is there is a tions.” They have 200 EBOs (exclusive much relevance, it’s more work of EBOs to 400 within a
energy targets, and hydrogen is plus renewable power with an 200 exclusive brand outlets in fundamental shift from the “When we worked on Var- brand outlets), where custom- about consumer pull, the prod- couple of years, while doubling
likely to constitute 25% of electricity distribution com- India and globally. undifferentiated, unbranded mora, a few things stood out. ers walk in specifically to buy a uct capability, brand and distri- our production capacity,” he
India’s renewable energy sup- pany for up to 30 days. “If you look at (our invest- products to high quality, differ- One is the brand and the differ- Varmora product. In tier II-III bution network. If there are added.
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 LIVEMINT.COM CORPORATE MoNDay, 11 July 2022
New Delhi 07

Getting raw
IPL offer fetched 30% new Maruti Suzuki eyes
material a two-pronged plan
challenge:
CII study
customers to the KFC app to up market share
Suneera Tandon tainment tournaments, attracting mil- PTI
Ravi Dutta Mishra suneera.t@livemint.com lions of viewers, thus making it a rele- feedback@livemint.com
ravi.dutta@llivemint.com New DelhI vant marketing space for most brands. New DelhI
New DelhI KFC, as we know, is every fan’s ideal

T M
he coronavirus pandemic match-viewing partner, and we wanted aruti Suzuki India

I
ndian manufacturers are
increasingly struggling to
source raw material follow-
ing covid-related lockdowns
in China and Russia’s invasion
of Ukraine that has disrupted
supply chains across the
globe.
According to Confedera-
tion of Indian Industry (CII)
poll of 136 chief executives,
nearly 50% of CEOs indicated
mild to moderate disruptions
in supply of inputs during the
first half of 2022-23.
“About 46% of CEOs indi-
cated that rising input prices
will affect their profit by
5-10% during H1 FY23, fol-
lowed by another 28% who
expect a bigger hit to profit by
10-20%,” it said. Nearly 57% of
the respondents said firms
absorbed the input price rise,
while 44% felt their revenue
growth will be in the range of
10% to 20% during the period
under consideration. As per
the survey report, about 50%
of the CEOs expect inflation
to be in the range of 7-8% dur-
drove millions of Indians
indoors, forcing fast-food
chains to create new play-
books for marketing and
meeting consumer demand. In an inter-
view, American fast food chain KFC’s
India chief marketing officer Moksh
Chopra spoke about online activations
aimed at reaching more consumers and
the brand’s engagement with the Indian
Premier League (IPL). Edited excerpts:
Did the pandemic prompt KFC to
review its advertising and market-
ing strategy?
The covid-19 situation did not come
with a playbook; everyone was required
to show great agility in adapting to the
situation. While we had been on a delib-
erate journey to enhance customer
experience through digital, social media
and digital channels became a more
prominent part of our media strategy.
Over the past two years, we increased
our focus on our digital access points
such as the KFC app, website and pres-
to celebrate the different kinds of fans
that enjoy watching their favourite IPL
matches with a bucket of KFC chicken in
hand. Therefore, we released the cam-
paign “Cricket hai, let’s KFC”, which
aptly demonstrated a fun banter
between a grandmother and grandson
over a cricket match.This year, we took
our partnership a notch higher. Con-
sumers had to shout out ‘Howzzat’ on
the KFC App; they could then avail dis-
counts as loud as they cheered. The nov-
elty of the offer appealed to our consum-
ers too, and we witnessed over 30% new
acquisitions on the app during the dura-
tion of the offer.
Have ad spends resumed to pre-
pandemic levels?
The share of spends is based on the
nature of initiative and consumer media
consumption insights. Digital and social
media has always been a key and fast-
growing part of our media strategy and
its contribution has only grown further.
Our focus with digital and social media
Our strategy is to deepen KFC’s rele- who enjoy mass popularity, but at the is to use it in three different ways: for
vance, while retaining the distinctive- same time also with new-age influencers reach, to create two-way engagement
ness KFC is known for. Our communica- and content creators who have a niche and to order KFC digitally on the KFC
tion leverages local insights and nuan- audience. For instance, last year, for the app. Our ad spends are allocated in
ces towards building occasion new range of Value Burgers, we part- accordance.
relevance. India-first innovations like nered with the legendary Anil Kapoor, What new campaigns are lined
(MSI) plans to protect
and enhance its mar-
ket share in the non-SUV
space while expanding pres-
ence in the SUV segment,
where it has been lagging, as
part of a two-pronged strategy
to safeguard its position in the
auto sector, as per a senior MSI senior executive director
company official. (Marketing and Sales)
The company has a market Shashank Srivastava. MINT
share of 67% in the non-SUV
space, its highest in two dec- customers across various
ades, but lacks muscle in the emerging sub-segments. Sriv-
fast-growing SUV segment astava said the company just
with overall market share hov- has two models in the overall
ering around 13%. SUV segment which currently
“The objective seems to be has around 48 products. “The
clear, we need to protect and real weakness seems to be in
enhance market share in the the mid-SUV segment where
non-SUV segment while cap- our market share is just around
turing more of SUV (share)..it 3%,” he added.
is very simple, clear and quite The mid-size SUV segment
obvious goal,” MSI senior is dominated by models like
executive director (Marketing Hyundai Creta and Kia Seltos.
and Sales) Shashank Srivastava The company is also target-
said. ing to once again go past the
In the SUV seg- 50% mark in the
ment, the com- The company is domestic passen-
pany plans to targeting to once ger vehicles seg-
launch new mod- again go past the ment. Maruti

ing H1 FY23. Besides most
CEOs expected monetary
tightening to continue as
inflation remains well beyond
the Reserve Bank of India’s
comfort zone.
On prospects of growth, the
poll showed that a majority of
CEOs expected gross domes-
tic product (GDP) growth to
be in the range of 7-8%, but
34% said expansion in the
economy will be below 7%
during the ongoing financial
year. Besides, about 50% of
CEOs said rural demand will
be better in the first half of
FY23, compared to the corre-
sponding period of last year,
the survey showed.
ence on the aggregators. So, while our
products have always been ‘finger lickin’
good’, the means to get to them have
become even more ‘finger clickin’ good’.
For example, in digital, we promote tak-
eaways in restaurants using the app to
offer contactless service. In order to
make the experience even better, we
offered a 7-min service promise with
Express Pick-up. To cater to our
at-home consumers, we launched prod-
ucts like Stay-at-Home buckets on deliv-
ery, being the perfect partner for work-
ing from or at home. Through social, we
reinforced our 5X safety promise, and
made a strong connect with our con-
sumers, in true KFC style.
What does your brand stand for in a
market like India with diverse food
preferences?
‘
the Leg Piece Bucket, Rice Bowlz, who is loved by everyone, across age up for the year? els, while in the 50% mark in the Suzuki ended the
Zinger Tandoori and groups. Simultane- At present, we are celebrating our non-SUV space last fiscal at
domestic
the KFC to your Car or ously, to ensure this milestone of growing over 600 restau- comprising around 43% mar-
Bike service, further Our focus with digital burger reaches every rants strong with the Bucket Canvas hatchbacks, passenger ket share. He said
help deepen consumer and social media is to chicken lover across campaign, wherein we’ve brought sedans and vans, vehicles segment the company,
connect with KFC. use it in three ways: for the country, we part- together 50 budding artists from across it aims to bring in which has just
While we build on con- nered with Prakash the country. It’s a unique representation new features, introduced a new
cepts that are trending, reach, to create two- Raj—a star loved by all of our presence in India; these local art- technology and aggressive version of its compact SUV
we do use flavours way engagement and in South India. For a ists made the iconic KFC bucket their design language, he added. Brezza, is now gearing up to
which are acceptable to order KFC digitally campaign like Express canvas which they used to showcase Asked if the company would launch a mid-sized model later
and familiar for our Pick-up, we partnered their talent and interpretation of each of also look at bringing a brand this month to strongly chal-
Moksh Chopra
Indian consumers and Chief marketing officer, KFC India with athlete P.T. Usha. the over 150 cities we are present in. new entry-level car, he said: “It lenge the competitors. In
their palates, without How important is a is a possibility but we have to order to prune the deadwood,
losing KFC’s distinc- property like IPL to finalize our plan..we will do MSI has also decided to dis-
tiveness. drive engagement? Scan the code anything to protect our market continue the S-Cross from the
We have also been collaborating with We all know how Indians are passion- to watch Mint’s share.” In the SUV space, MSI line up and plans to focus on
celebrities and influencers basis their ate about all things cricket, and the Brand Talk is already in the process of tak- the new model which is going
popularity and fit with the specific prod- energy with which we engage with the interviews. ing a slew of measures, includ- to be produced by Toyota and
uct proposition. You’ll see us working game is unmatched. IPL continues to be ing back-to-back product feature both mild and strong
with mainstream and iconic celebrities, one of the most popular and high-enter- launches to cater to a range of hybrid technology, he stated.

Godrej Appliances eyes ₹5.5k cr turnover

PTI mium products across catego- firm is also getting a pie from
fedback@livemint.com ries like frost-free refrigerators, the aspirational customers
fully automatic washing from the smaller tier-3 and

G
odrej Appliances is tar-
geting a turnover of
₹5,500 crore in
2022-23 and around 35% of the
sales will be contributed from
its premium range of products,
a top company official said.
Besides, Godrej Appliances
is also investing ₹200 crore in
the capacity expansion of its
premium range and adding
more products, which will be
largely done at its Shirwal,
Pune-based plant, the com-
pany’s business head & execu-
tive vice-president Kamal
Nandi said.
The company has a “very
good response” from the mar-
ket for its premium portfolio
product range, in which it has
invested ₹250 crore so far,
Nandi said.
“Our efforts of the last two
years to bring out premium
portfolio across categories have
Kamal Nandi, business head &
executive vice-president of
Godrej Appliances. MINT
started paying off now very
well,” he said, adding, “I think
the premium portfolio that we
have done so... is going to get
larger in this year as more new
products in the segment are
going to be launched. We are
targeting another ₹200 crore
to be invested in this portfolio
and capacity expansion.” It is
expanding its portfolio of pre-
machines, air conditioners, air
coolers and freezers.
Godrej Appliances, a busi-
ness unit of Godrej & Boyce, the
flagship company of the Godrej
Group, aims for a turnover of
around ₹5,500 crore, which is
even 35% higher than the pre-
pandemic number of ₹4,500
crore, Nandi added.
“We were about ₹2,000
crore in 2021-22, which was a
pandemic time. This year we
are targeting a turnover of
₹5,500 crore,” he said.
In the pre-pandemic year,
Godrej Appliances’ premium
products were in the vicinity of
18-20%, Nandi said, adding,
“This share will move up to
32-35% this year.” Earlier, the
demand for premium products
was from the developed metro
and tier-2 cities but now the sit-
uation has changed and like
other makers, the Godrej group
below cities.
To cater for this demand,
Godrej Appliances has opened
more than 135 exclusive brand
stores in smaller tier-2, -3 and
-4 markets, which are selling
more than 30% of its premium
products, Nandi said.
“We know that there are
customers, who try for pre-
mium categories and premium
products, but they do not have
accessibility and availability
and as a result of that, we have
opened up a few brands outlets
only in tier-2, -3 and -4 places
and that has been our focus,” he
added.
When asked about the
expansion of the sales network,
Nandi said Godrej Appliances
products are currently sold
through about 27,000 outlets
and the company has plans to
add another 5,000 outlets by
the end of this year.

Ranveer Singh buys ₹119 cr family home

Madhurima Nandy works and the luxury residen-
madhurima.n@livemint.com tial market to continue to per-
beNGaluru form well, despite the fears of a
global recession,” said

D
espite the economic
slowdown, inflationary
pressures and fears of a
global recession, Mumbai’s
super luxury property market
is seeing increasing demand.
The latest in a slew of high
profile luxury home sales, Bol-
lywood actor Ranveer Singh
and his businessman father
Jugjeet Sundersingh Bhavnani
have bought two luxury, sea-
facing residential units—a 16th
floor apartment and a triplex
(17-19 floor)—in Sagar Resham
building in Mumbai’s upscale
Bandra Bandstand for ₹118.94
crore. It has 19 car parking lots.
It was bought via Oh Five Oh
Media Works, where Singh and
Bhavnani are directors.
The family paid over ₹1 lakh
per sq for the 11,266 sq ft apart-
ments to Enorm Nagpal Realty
LLP. It has a 1,300 sq ft terrace.
The property was registered
This PDF was originally uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) Subscribe now to get this edition before anyone else!! Backup channel:@LBSNEWSPAPER
Singh and his father Jugjeet Sundersingh Bhavnani bought two
sea-facing residential units with a carpet area of 11,266 sq ft . AFP
on 8 July, and ₹7.13 crore was
paid in stamp duty, according
to documents accessed by data
portal Indextap.com.
Analysts said the residential
apartments may be modified to
form a quadruplex, combining
all the four private units.
Bandra Bandstand is a high-
profile residential stretch, and
the Sagar Resham building,
which has four- and five-bed-
room apartments, is a stone’s
throw away from the residen-
ces of actors Shahrukh Khan
and Salman Khan.
“Bandra-Juhu belt has been
the favourite for Bollywood
celebrities. Therefore, we are
not surprised with this transac-
tion. The Bandstand location is
the most sought after. Indextap
foresees many more such high-
end property deals being in the
Abhishek Kiran Gupta, chief
executive officer and
co-founder, CRE Matrix, and
Indextap. Bhavnani and Sagar
Dewan, a designated partner at
Enorm Nagpal Realty, did not
respond to email queries.
Luxury homes in Mumbai,
India’s most valuable property
market, have continued to see
relentless demand considering
the limited supply in premium
neighbourhoods. While south
Mumbai locations such as
Worli continues to see high-
profile sales, upscale properties
in suburban areas such as Ban-
dra and Juhu have also seen
high demand.
Ravi and Neel Raheja, pro-
moters of realty firm K Raheja
Corp, bought an independent
31,000 sq ft property for ₹265
crore in the Santacruz-Juhu
area from Bharat Hari Singha-
nia, Raghupati Singhania.
 08 MoNDay, 11 July 2022
New Delhi GLOBAL LIVEMINT.COM

Shanghai finds first

Freight rates start to fall as BA.5 sub-variant
shipping demand wavers case amid outbreak
Bloomberg
feedback@livemint.com

S
hanghai reported its first
Shippers are trying to reset contract agreements to cut expenses, but costs remain manifold of pre-covid times case of the BA.5 sub-vari-
ant on Sunday, warning
of “very high” risks as the city’s
Paul Berger their routes. rising covid outbreak sparks
feedback@livemint.com Trucking spot rates fell 22% during fears of a return to its earlier
the first six months of this year, lockdown.

H
igh-price freight con-
tracts that were written
when carrier capacity
was tight and a rush to
restock inventories was
in full force are losing their shine as
slowing demand and a wavering US
economy send shipping rates sliding.
Some companies now are renego-
tiating shipping agreements they
struck at the height of the pandemic-
driven surge in freight demand or are
dipping into the spot market to take
advantage of lower rates.
The reduction in transportation
costs is good news for manufacturers
and retailers after two years of rapidly
rising expenses. It also suggests the
contribution of the freight sector to
inflation is at least leveling off. But
shippers note they are still paying
several times more than they did
before the covid-19 pandemic snarled
supply chains world-wide.
Freight specialists say different for-
ces are driving down rates across
ocean shipping and trucking, but sof-
tening demand is a common factor.
The lower rates are appearing first in
spot markets and are helping to bring
down longer-term contract rates.
The situation is a sharp turnaround
for shippers who at the start of 2022
were willing to pay record-high con-
tract rates to guarantee space on con-
tainer ships ahead of this year’s fall
and winter peak shipping seasons fol-
lowing severe delays and inventory
shortages through much of 2021.
One official at a large U.S. importer
said it recently reduced by 15% to 20%
ocean contract rates signed several
months ago. The official expects fur-
ther reductions later this year.
“Things are trending in favour of the
importers,” the official said.
Freight specialists say different forces are driving down rates across ocean shipping and trucking.
San Francisco-based freight for-
warder Flexport is seeing more ship-
pers jettison contract rates in favor of
lower rates on the spot market, said
the company’s director of ocean trade
lane management, Nathan Strang.
Long-term rates to ship goods from
China to the U.S.
West Coast almost
tripled between
June 2021 and
June 2022 to $7,981 per container,
according to Xeneta, a Norway-based
transportation data and procurement
firm. Short-term rates began to fall in
March of this year and in June
dropped below long-term rates.
Shippers aren’t having it entirely
their way. One official at a large
importer facing hundreds of thou-
sands of dollars in penalties for not
meeting contracted volumes said it is
facing pushback from some ocean
carriers. “It’s hit or miss,” the official
said.
Peter Sand, Xeneta’s chief analyst,
said shippers are willing to pay a con-
tract rate slightly
above spot price in
return for a guar-
antee their con-
tainer will be loaded onto a ship. But
Mr Sand said shippers are also trying
to ensure they don’t overpay. The
rate decreases are appearing at a time
of mixed signals from the U.S. econ-
omy.
Consumer goods imports fell by
some $1.5 billion by value in May,
according to the Commerce Depart-
REUTERS
ment, as Americans cut back on big-
ticket items like furniture and televi-
sions.
At the same time, container
imports into the U.S. by volume
remain strong and congestion at East
Coast ports is increasing.
The National Retail Federation in
a report released Friday expects
import volumes to decline compared
with robust year-ago periods from
August through November.
Trucking is also seeing a softening
of demand. But Chris Caplice, chief
scientist at online freight market-
place DAT Solutions LLC, said truck
rates are declining largely because of
a shift away from the volatile spot
market toward longer-term contract
rates as truckers see more stability in
according to DAT, dipping below the
contract rate in May for the first time
in two years. By June, the average
contract rate for the most commonly
used type of trucking, dry van, was
$2.93 per mile, 17 cents higher than
the $2.76 per mile to move a load on
the spot market.
Mr Caplice expects contract rates
to decline this year as spot rates fall,
but shippers won’t benefit unless die-
sel prices also come down. Fuel sur-
charges are currently costing ship-
pers about 80 cents per mile. “Rates
are going down but they are wiped
out by fuel surcharges to carriers,” Mr
Caplice said.
Freight specialists note shipping
rates remain well above prepan-
demic levels. The spot rate to ship a
container by ocean to the U.S. West
Coast from China on July 6 was more
than four times higher than the same
period in July 2019, according to
online freight marketplace
Freightos.
Congestion is also helping ship-
ping costs remain high on some
routes, such as China to Chicago,
which has been plagued by severe
delays on U.S. freight rail systems.
Carbochem Inc., an importer of
activated carbon used in water treat-
ment and food processing, paid
$16,000 per container in June to ship
boxes from China to Chicago, said the
firm’s president, Gavin Kahn.
Mr Kahn said the cost is down from
a high of $21,000 last year, but three
times higher than the rate he paid
before the pandemic. “We need to be
looking at probably less than $10,000
to get anywhere close to the levels we
were before and be competitive,” he
said.
©2022 DOW JONES & COMPANY, INC
The case was discovered
Friday, Zhao Dandan, vice
head of Shanghai’s health
commission, said at a press
conference Sunday. Mass test-
ing for covid will be performed
twice between July 12 and July
14 in nine districts, as well as
tests for people in some neigh-
borhoods in other districts
where infected people have
been, he added. The city
reported one local covid case
outside quarantine for Sun-
day.
The emergence of the
highly infectious sub-variant
in China’s financial capital fol-
lows BA.5’s arrival in other cit-
ies, a development that could
further test the country’s
ongoing commitment to
Covid Zero.
President Xi Jinping has
said his government would
rather tolerate some tempo-
rary impact on the economy
than let covid hurt people’s
safety and health.
Shanghai reported 57 new
infections for Saturday,
according to a government
statement, compared to 59 on
Friday. The city added 38 mid-
risk areas and one high-risk
area, the government said in a
separate statement, after iden-
tifying 40 mid-risk and three
high-risk areas the day before.
Areas and complexes where
infected people live are identi-
fied as risky.
Nationwide, China found a
total of 344 cases data from the
National Health Commission
show. The number of daily
The outbreak sparks fears of a
return to lockdown. AFP
cases in the country
rebounded to more than 100 at
the end of June after dropping
to double digits amid full or
partial lockdowns of major cit-
ies. Beijing, which along with
Shanghai previously saw
severe movement restrictions,
reported no new cases from
Saturday.
China’s leaders have yet to
give up its economic growth
target of around 5.5% this year
and has stepped up stimulus to
create more jobs and bring
down the elevated unemploy-
ment rate. The Economic Daily,
a newspaper affiliated with the
State Council, urged local
authorities not to overdo curbs
in an article published Sunday.
“Covid control and eco-
nomic and social development
have never been a single-
choice question,” wrote Wu
Jiajia, a commentator for the
paper. “No local government
has the power to oversimplify
prevention and control meas-
ures or recklessly escalate the
restrictions.”
Guangzhou, the capital city
of the southern province of
Guangdong, tested nearly 6.3
million people over the past
day and identified two com-
pounds as mid-risk areas, ask-
ing residents not to leave their
neighborhoods.

For crypto blowout survivors, the scenario Lanka Opp decides to install new govt
is ripe for some mergers and acquisitions PTI
feedback@livemint.com
political analyst Ranga Kalan-
sooriya said, adding that a new
colombo administration should agree
Paul Vigna according to PitchBook. In on a common program for

S
feedback@livemint.com May there were 20. In June, ri Lanka’s main Opposi- economic recovery.
there were 17. tion parties on Sunday It is unlikely that an all-party

I
n the rubble-strewn land of Venture-capital eased off as agreed to form an all- government will agree on
virtual currencies, cash is well. There were 249 deals in party interim government IMF-backed economic
king. April, according to PitchBook. after the anticipated resigna- reforms without some parties
A blowout in the cryptocur- That fell to 180 in May and 157 tion of President Gotabaya losing their political support.
rency market sparked a wave in June. Rajapaksa on Wednesday, fol- Wickremesinghe said Sat-
of layoffs, punished valuations The fallout is likely to drive lowing unprecedented politi- urday that it was not proper for
and drove some companies to away weaker startups as well as cal turmoil that forced him and him to leave without a govern-
bankruptcy. Now firms that venture-capitalists who came Prime Minister Ranil Wick- ment in place.
still have capital are gearing up in trying to ride the hot wave, remesinghe to offer their res- “Today, in this country, we
for a shopping spree. Ms. Jobanputra said. A lot of ignations over the mishan- Protesters stormed the home of President Gotabaya Rajapaksa’s have a fuel crisis, a food short-
“This is a very ripe scenario the weaker crypto-focused dling of the nation’s crippling home and took over the kitchen and swimming pool. REUTERS age, we have the head of the
for some M&A,” said Jalak Job- funds “will quietly go away,” economic crisis. Opposition World Food Program coming
anputra, the founder and man- she added. parties held talks to seek ways here and we have several mat-
aging partner of crypto-fo-
cused venture-capital fund
Future Perfect Ventures.
“There was just a lot of noise
in the market the last couple of
years,” she said.
to steer the country forward in
the current unprecedented
economic crisis after Raja-
‘SLR 17.85 mn found ters to discuss with the IMF,”
Wickremesinghe
“Therefore, if this government
said.

Last week, crypto-lender

Nexo agreed to acquire a Sing-
In June, Sam Bankman-Fried’s trading firm Alameda Research
acquired a minority stake in now-bankrupt Voyager Digital Ltd.AFP
That leaves the field more
open to the survivors. Binance,
paksa’s resignation.
“We agreed in principle to in President’s home’ leaves there should be another
government.”
apore-based peer called Vauld. the largest crypto exchange by form a government of unity Four Cabinet ministers have

While terms of the deal
weren’t disclosed—Vauld had
raised $27 million since its
founding in 2018, according to
research firm PitchBook—
Nexo framed the deal as one in
which a stable company with
means was coming in to help a
foundering sector.
“Some companies are in
better shape and have been
preparing for this,” Nexo
co-founder and managing
partner Antoni Trenchev said.
“Down cycles are part of the
business cycle.” Nexo is work-
ing with two Wall Street
banks, Mr Trenchev said, and
is in talks with several other
companies about potential
deals. The trickiest part, he
said, is figuring out which
firms are salvageable.
While he didn’t disclose
names or possible sale prices,
he did say that valuations
across the sector were down
significantly.
Another active buyer has
been Sam Bankman-Fried. In
June, the 30-year-old billion-
aire’s crypto exchange FTX
struck a deal with lender
BlockFi that included an
option to buy the company for
up to $240 million. The same
month, his trading firm Alam-
eda Research acquired a
minority stake in now-bank-
rupt Voyager Digital Ltd.
Just seven months ago, the
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crypto sector was riding a
wave of momentum. The value
of the entire sector had hit a
record $3 trillion. Companies
were raising record amounts
of capital and the competition
among investors was fierce.
Crypto was becoming part of
the zeitgeist as Coinbase
Global Inc., FTX and
Crypto.com all ran Super Bowl
ads.
Much like the dot-com era,
though, the timing of those
Super Bowl ads marked a peak.
The price of bitcoin dropped
steadily through the first four
months of
the year.
Trading
volumes
fell sharply, curtailing revenue
for exchanges like Coinbase,
which reported a surprisingly
wide first-quarter loss. Layoff
notices started proliferating.
Things got worse in early
May. The collapse of two
linked cryptocurrencies called
TerraUSD and Luna wiped out
a combined $60 billion worth
of value. That collapse sparked
a chain reaction of failures
across the sector.
The companies left have
watched their valuations
plummet. Publicly traded
companies are down any-
where from 50% to more than
90%. Voyager’s stock fell about
96% before it declared bank-
ruptcy. The same dynamic is
likely occurring for private
companies, as people in the
market say valuations are
down broadly. For example,
BlockFi boasted a $5 billion
valuation just six months ago.
With valuations down so
sharply, firms with money in
the bank are going to work.
Tagus Capital, a U.K. crypto
venture-capital firm, is look-
ing to deploy $100 million into
distressed crypto assets, said
Ilan Solot, a partner at the
company. He said the team is
still figuring out which compa-
nies to take
stakes in
but that the
repricing of
assets, in part because of issues
facing Celsius Network LLC
and Three Arrows Capital Ltd.,
has created opportunities to
buy distressed assets.
Mr. Solot said they are
mostly focused on investing in
cryptocurrency-infrastruc-
ture companies, such as crypto
exchanges as well as wallet-
technology and payment
firms.
Still, overall deal making in
the crypto sector has slowed
thus far.
The number of M&A deals
and venture funding fell across
the second quarter as condi-
tions deteriorated. In April,
there were 23 M&A deals,
trading volume, is eyeing any-
where from 50 to 100 deals of
varying sizes, some being
investments and others acqui-
sitions, founder and Chief
Executive Changpeng Zhao
told Yahoo Finance.
Mr. Zhao wasn’t available
for comment.
That would be a big increase
for the company. Its venture
arm, Binance Labs, has made
26 investments so far this year,
according to PitchBook. Its
largest was a $200 million
investment in Aptos Labs,
which publishes blockchain-
based software for developers.
Its most recent was a $3 million
investment in AI software cre-
ator Magic Square in July.
The crypto crash is a needed
wake-up call for a sector that
had gotten too heady, said
Chris Lehane, chief strategy
officer of venture fund Haun
Ventures, which raised $1.5
billion in March and focuses
on early-state companies.
Ideas that were little more
than a drawing on a cocktail
napkin were getting funded,
he said.
“We had almost a decade of
free money,” he said. “Now
people are going to need to
demonstrate they have real
ideas.”
Caitlin Ostroff contributed to
this article.
©2022 DOW JONES & COMPANY, INC
with all parties participation
for an interim period,” Wimal
Weerawansa of the ruling Sri
Lanka Podujana Peramuna
party’s breakaway group said.
“This will be a government
where all parties are repre-
sented,” he said.
Vasudeva Nanayakkara,
another leader of the SLPP
breakaway group said they
need not wait for Rajapaksa’s
resignation on July 13.
President Rajapaksa
informed Parliament Speaker
Mahinda Yapa Abeywardena
on Saturday that he will resign
on Wednesday after the coun-
try’s opposition parties
demanded his resignation.
Prime Minister Ranil Wick-
remesinghe has also offered to
resign.
On Saturday, protesters
stormed the home of President
Gotabaya Rajapaksa’s home,
his seaside office and the
prime minister’s residence,
saying they will stay until they
officially resign. The presi-
dent’s whereabouts are still
unknown, but a statement
from his office said he ordered
officials to start immediate dis-
tribution of a cooking gas con-
signment to the public, sug-
gesting that he was still at
work.
Soldiers were deployed
around the city and Chief of
Defense Staff Shavendra Silva
P
rotesters who
stormed the Presi-
dent’s residence
claimed to have found Sri
Lankan Rupees (SLR) 17.85
million inside his mansion.
A video shared on social
media showed the protest-
ers counting the currency
notes. Protesters said they
had found SLR 17,850,000
at the President’s official
called for public support to
maintain law and order. But
troops simply watched from
afar as crowds of people
splashed in the garden pool,
lounged on beds and used
their cellphone cameras to
capture the moment in Raja-
paksa’s sprawling residence.
On Sunday, occupants of
the prime minister’s official
residence cooked in an out-
door kitchen, played carrom —
a popular tabletop game — and
slept on big sofas.
Prime Minister Ranil Wick-
remesinghe said he will leave
office once a new government
is in place, and hours later the
speaker of Parliament said
Rajapaksa would step down
Wednesday. Pressure on both
men had grown as the eco-
nomic meltdown set off acute
shortages of essential items,
leaving people struggling to
obtain food, fuel and other
residence on Sunday. They
claimed to have handed
over the cash to the local
police.
The Rajapaksa brothers,
Mahinda and Gotabaya,
were hailed by many in Sri
Lanka as heroes for win-
ning the civil war against
the LTTE but they are now
blamed for the country’s
worst economic crisis. PTI
necessities.
If both president and prime
minister resign, Speaker
Mahinda Yapa Abeywardena
will take over as temporary
president, according to the
constitution.
Rajapaksa appointed Wick-
remesinghe as prime minister
in May in an effort to solve the
shortages and start economic
recovery.
Wickremesinghe had been
part of crucial talks with the
International Monetary Fund
(IMF) for a bailout programme
and with the World Food Pro-
gram to prepare for a pre-
dicted food crisis. The govern-
ment must submit a plan on
debt sustainability to the IMF
in August before reaching an
agreement.
“This kind of unrest could
create confusion among inter-
national organizations like the
IMF and the World Bank,”
resigned since Saturday’s pro-
tests.
Even though both Wick-
remesinghe and Abeyward-
ena, the parliament speaker,
said in their speeches that they
had spoken with the president,
they did not say anything
about his whereabouts.
Protesters also broke into
the prime minister’s private
residence and set it on fire dur-
ing the melee on Saturday. His
party official, Ruwan Wijew-
ardena, said Wickremesinghe
was inside when the protesters
gathered but security officers
removed him to a different
location. Wijewardena said
such acts will only polarize the
society and political parties.
“If these kinds of incidents
keep on going, we can wave
bye-bye to the IMF and any
international assistance that is
going to come to the country.
If there is lawlessness, if there
is no coming together among
the political groups, there is no
way the international commu-
nity can come in and help this
country,” he said.
Separately, US Secretary of
State Antony Blinken said that
Washington was tracking the
developments in Sri Lanka and
urged Parliament to work
quickly to implement solu-
tions and address people’s dis-
content.
AP contributed to this story.
 LIVEMINT.COM NEWS WRAP MoNDay, 11 July 2022
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Harsh Mariwala @smitaram CEO, Mercedes-Benz Sr. Category Head, Parle Prod-
@hcmariwala Co-founder, Rang De India ucts
Founder & chairman, Did you know 10 July is Fish The supply situation This has brought some respite
Marico Farmers’ Day? So excited has not improved.We to FMCG cos, whose margins
Passion is fleeting. that we were able to launch still have shortages of were affected by inflation...we
Perseverance is not. our Aqua fund https:// semiconductors. We will not see any further price
Combine the two and rangde.in/jaljeevika today to have congestion in hike or package weight reduc-
you can create magic invest in our farmers! shipments tion which was in offing

EPFO to pay 7.3 mn MADE-IN-INDIA WARSHIP LuLu Group opens

people in one go mall in Lucknow

R A
etirement fund body Employees’ bu Dhabi–based supermarket chain
Provident Fund Organization (EPFO) will LuLu Group opened a mall in Lucknow
consider and approve a proposal for on Sunday as it expands in the country
setting up a central pension disbursal system in of its founder Yusuff Ali.
its meeting on 29 and 30 July, paving the way for Lucknow is the fourth city after Kochi,
crediting the benefit into over 7.3 million Bengaluru and Thiruvananthapuram where
pensioners’ bank accounts in one go across LuLu has set up its highly popular
India. Presently, over 138 regional offices of the supermarket. LuLu Group India has its arms
EPFO disburse pensions to beneficiaries in their stretched over to hypermarkets, shopping
region separately. Thus, the pensioners of malls, food processing units, e-commerce and
different regional offices are getting pensions at fun stations.
different times or days. “A proposal for setting LuLu promoter Yusuff Ali M A, 66, was born
up a central pension disbursal system will be in Thrissur district of Kerala where he did his
placed in the EPFO’s apex decision making body schooling before moving to Gujarat to pursue
CBT in a meeting scheduled on 29 and 30 July,” business management. He left the country in
a source said. The source further stated that the 1973 for Abu Dhabi to join the EMKE Group of
pension would be disbursed using a central companies. He founded LuLu Hypermarket in
database of over 138 regional offices in the 2000 and now has operations in 22 countries
country and this will facilitate crediting the across the Middle East, Asia, the US, and
benefit into bank accounts of over 7.3 million Europe. It has 235 retail stores in total. PTI
beneficiaries in one go. PTI

India’s first indigenous aircraft carrier Vikrant, built at a cost of around ₹23,000 crore, successfully completed the fourth phase of sea trials on
Sunday, ahead of its commissioning into the Indian Navy next month. PTI

Mahindra plans investing in PNB will open financial bids on 11 July to select
the actuarial firm. MINT
IndiGo had cut pay of employees during covid. MINT

IndiGo staff go on battery-cell co to meet needs PNB to rope in

actuarial firm
leave over low pay
P
unjab National Bank (PNB) will select an

A
sizeable number of IndiGo’s aircraft
maintenance technicians went on sick
leave during the last two days in
Hyderabad and Delhi to protest against their
low salaries, sources said on Sunday.
On 2 July, around 55% of IndiGo’s domestic
flights were delayed as a significant number of
its cabin crew members took sick leave, with
actuarial firm on Monday for calculating
M&M looks to launch five electric sport-utility vehicles over the next few years the embedded value of insurance joint
venture Canara HSBC OBC Life Insurance
Company Ltd (CHOICE), in which the state-
Reuters are people who do it very well. We can partner with production stoppages. Many companies still face owned bank has to divest its stake as per
feedback@livemint.com them; we could be a co-investor in some form. We order backlogs because of supply problems. regulatory requirement.
New DelhI don’t need to own it and run it.” Shah said except for batteries and motors, most The New Delhi-based lender will open
Mahindra plans to launch five electric sport-util- of components for EVs were not very different financial bids on 11 July to select the actuarial

I
sources in the industry saying they ostensibly
went for Air India’s recruitment drive.
IndiGo had cut salaries of a large section of
its employees when the covid-19 pandemic
was at its peak.
New airline Akasa Air, revamped Jet
Airways and Tata group-owned Air India have
started hiring processes and this has created a
churn in the aviation industry, with many
employees looking at greener pastures.
Sources said during the last two days, a
sizeable number of IndiGo’s technicians went
on sick leave so as to not invite any
disciplinary action while protesting against
low salaries.
IndiGo did not respond to PTI’s request for
a statement on this matter. PTI
ndia’s Mahindra & Mahindra (M&M) could
consider investing in a battery-cell company to
meet future electrification needs, its CEO said,
after the company raised funds for its new elec-
tric vehicle (EV) unit at a $9.1 billion valuation.
Mahindra on Thursday raised $250 million from
British International Investment for the unit and is
exploring a partnership with Volkswagen AG to
source such EV components as batteries and
motors.
While the Volkswagen deal would meet Mahin-
dra’s “short to medium term” battery needs,
Mahindra CEO Anish Shah said the company was
open to looking at some sort of “investment with a
global leader” in the battery-cell space if it needed
to secure future supplies. “Our intent is not to get
into (manufacturing) batteries,” Shah said. “There
ity vehicles (SUVs) over the next few years. These from those of combustion-engine cars and Mahin- firm.
models are expected to contribute up to 30%, or dra produced a majority of those parts in-house. At present, PNB has stakes in two insurance
about 200,000 “If we can get an firms—PNB MetLife India Insurance Company
units, of its total agreement like we Limited (PNB MetLife) and CHOICE.
annual SUV sales by M&M’s plans come as companies have with Volks- PNB MetLife, a joint venture between
March 2027. Grow- seek to capitalize on billions of wagen to secure MetLife International Holdings LLC (MIHL),
ing demand for EVs (battery) supplies, Punjab National Bank (PNB), M Pallonji and
and disruption of dollars worth of incentives being that’s what we will Company Pvt Ltd, Jammu & Kashmir Bank
supply chains are offered by the govt to build EVs do. If there’s some (JKB), and other investors, has been
pushing automakers investment we need operational since 2001, with MIHL and PNB
to look at ways of to make to secure being the promoters of the company. PTI
having greater control over supplies and costs. those supplies, we will do that,” he said.
Some carmakers are spending billions of dollars on Mahindra’s plans come as Indian companies
mines and factories for motors and batteries - a seek to capitalize on billions of dollars worth of
departure from years of relying solely on suppliers. incentives being offered by the government to
Automakers are also wary of situations like the build EVs, part of a policy to meet national climate
Muthoottu aims at
pandemic semiconductor shortage that lead to change and carbon reduction goals.
60% sales growth

K
ochi-based mid-sized gold loan player
PM National Apprenticeship Mela to be held in 200 locations China fines Muthoottu Mini Financiers is looking to
grow its loan sales by over 60% in this
Alibaba, Tencent fiscal to around ₹4,000 crore as it embarks on a

P
radhan Mantri National Apprenticeship Mela to be conducted in 200 faster expansion.
locations across India The company, hailing from the same

C
The ministry of skill development and entrepreneurship will hold the hina’s antitrust watchdog fined Muthoot family, closed FY22 with over 25%
Pradhan Mantri National Apprenticeship Mela on 11 July, as part of the Prime companies including Alibaba Group growth and an AUM of ₹2,500 crore which
Minister’s Skill India Mission to boost career opportunities and practical Holding Ltd. and Tencent Holdings Ltd. grew from ₹1,994 crore in the previous fiscal.
training. So far, 188410 applicants have participated in the Apprenticeship Mela for not properly reporting past transactions, The larger family entity Muthoot Finance is
and 67,035 apprenticeship offers have been made on the platform as of today. according to a statement Sunday from the State a listed company with over ₹60,000 crore of
The one-day event will feature 36 sectors and more than 1000 companies Administration for Market Regulation. Tencent AUM while the other one Muthoot Fincorp is
and 500 distinct sorts of trades. Ministry of skill development and was fined a combined 6 million yuan over 12 the third-largest player with around ₹10,000
entrepreneurship will host the event across 200+ locations, giving applicants acquisitions, while Alibaba’s subsidiaries were crore of live loans.
the opportunity to shape their careers through apprenticeship training. fined 2.5 million yuan for not reporting five deals, The average loan growth rate in the previous
Candidates must have a 5th-12th grade pass certificate, a skill training the statement showed. SAMR issued penalties three years was 22%, and improved to 25% in
certificate, an ITI Diploma, or a graduate degree to participate, a ministry related to 28 deals in total. The regulator said it FY22 and hopes to clip at over 45% this fiscal.
statement said. Furthermore, the young and aspiring workforce will be able to was accelerating the disposal of existing anti- The managing director Mathew Muthoottu
choose among 500+ trades such as welding, electrical work, housekeeping, monopoly cases and will fully support the on Friday said that he expects to clip around
beauticians, mechanic work, and more. STAFF WRITER National Apprenticeship Mela is part of PM’s Skill India Mission. HT involved companies’ development. BLOOMBERG 45% this fiscal.

Twitter, Elon Musk set for unprecedented legal battle over collapse of buyout deal
FROM PAGE 1
actual business differs dramati-
cally from what it agreed to
buy. It is a high bar that very
few buyers who have gotten
cold feet have ever success-
fully invoked.
Mr. Musk’s filing didn’t pro-
vide evidence to back up his
assertion that the estimate was
inaccurate or an alternate cal-
culation.
Rather, his lawyer wrote,
“Mr. Musk has reason to
believe” that the true number
of spam accounts is “substan-
tially higher” than Twitter’s
estimate.
“This isn’t even in the ball-
park,” Mr. Goshen said of the
argument, adding that the
impact on a company’s value
This PDF was originally uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) Subscribe now to get this edition before anyone else!! Backup channel:@LBSNEWSPAPER
ment that Twitter didn’t ade-
quately respond to his team’s
requests for information relat-
ing to the bot estimate. The
contract requires Twitter to
provide whatever information
is reasonably required to com-
plete the deal and doesn’t
harm its business.
Twitter will likely argue it
provided Mr. Musk with more
information than is reasona-
ble—giving him access to its
Twitter will likely argue it provided Musk with more information than is fire hose of data in recent
reasonable—giving him access to its fire hose of data in recent weeks. weeks—and make the claim
that he appears to be request-
needs to be so dramatic that its ing the information for the
value would be halved, for 2018, healthcare company purpose of backing out of the
example. Fresenius SE got out of a deal deal, which is far from the
He recalls only one instance to buy Akorn Inc. over alleged intended purpose, Mr. Goshen
of a buyer successfully backing data breaches. said.
out of a deal on the basis of a Mr. Goshen was similarly He isn’t aware of a case in
material adverse effect: In skeptical of Mr. Musk’s argu- which a deal fell apart over
information access, though
such arguments have resulted
in price cuts.
Mr. Musk’s lawyer also
argued that Twitter should
have sought his consent before
firing two executives and lay-
ing off a third of its talent-
acquisition team, under a part
of the contract that requires
the company to not unreason-
ably interfere with the busi-
ness before the deal closes.
Of all the arguments, this
might be the strongest, Mr.
Goshen said.
Still, it isn’t clear that the
company’s actions were dras-
tic enough to be considered
unreasonable.
Most legal clashes over
soured deals end in settle-
ments, with both sides agree-
ing to a price cut or a one-time If it sues for specific per- mare” for Twitter as it faces the
payment. formance and Mr. Musk agrees prospect of a prolonged legal
Mr. Musk agreed to pay a $1 to settle, that could involve a battle. He estimated its stock
billion reverse termination fee payment of more than $1 bil- could sink to $30 if the deal
to Twitter if the deal falls apart, lion. collapses.
though that is Twitter is in a For Mr. Musk, there is sig-
only triggered Musk agreed to precarious posi- nificant financial incentive to
under certain sce- pay a $1 bn reverse tion given that its either drop the deal entirely or
narios including if termination fee if prospects as a negotiate a price cut.
his debt financing the deal falls apart, stand-alone com- Technology stocks, includ-
falls through or
though that is only pany are daunt- ing those of Twitter’s peers,
regulators try to ing, due in part to have sunk since he first made
block the deal. triggered under a digital advertis- his offer, and the Tesla Inc.
The agreement certain scenarios ing market in chief executive has lost billions
caps at $1 billion upheaval. in personal wealth as shares in
the amount Twit- Twitter shares the electric-car company have
ter could sue for damages for, closed at $36.81 Friday, or 32% also dropped.
meaning its only options right below the $54.20-per-share He already sold $8.5 billion
now are to sue for specific per- price that Mr. Musk agreed to worth of Tesla stock, likely to
formance or a maximum of $1 pay. help pay for the deal, and
billion, a tiny fraction of what it Wedbush Securities analyst should the deal go through, he
stands to lose out on should Daniel Ives on Saturday called would be on the hook to con-
the deal fall apart. Mr. Musk’s moves a “night- tribute $33.5 billion in equity.
 10 MoNDay, 11 July 2022
New Delhi LONG STORY LIVEMINT.COM

REPoRTAgE | TAlkIng PoInTs | IdEAs | InsIgHT | THE BoTToMlInE

KNOW WHY YOUR

BoyfRIEnd goT fIREd
Our explainer on the state of the Indian and global economy

Vivek Kaul “Interesting.” “Basically, interest rates are going up

mint
feedback@livemint.com
SHORT “And some of it also found its way and money is becoming more expensive,”
mumbAi STORY through venture capitalists to be invested he said.
in startups.” “You are right.”

S
he loved the rains in Mumbai. “Oh, so my job is directly linked to “But how does this impact my job?”
Dark clouds. The red gulmohars WHAT money printing!” he exclaimed. “Well, over the years, the startups tried
in all their glory. The wind. The “Yes, it is.” to build scale. They did it by essentially
glitzy roads. And the slight chill In 2020, as the pandemic spread, offering discounts and selling their prod-
that came with all this on some societal spending and CEntRal banks napping uct or service at a lower price. This led to
economic activity collapsed.
days. But his phone call had gotten her
worried. The startup unicorn he worked
for had started firing people.
The central banks went back to
their tried and tested formula
“B ut why are all the startups firing
people now?” he asked.
“In 2020, when the covid pandemic
losses. The losses had to be funded by ven-
ture capitalists (VCs). The VCs continued
to do this because the interest rates in the
As she thought about this and that and of printing money. started to spread, societal spending and rich world were low and there was a lot of
everything else, the doorbell rang. She economic activity collapsed. The central easy money going around wanting to be
opened the door and there he stood with banks went to their tried and tested for- invested. As long as the VC money kept
a bottle of wine and a parcel of pasta from NEXT mula of printing money. One estimate coming in and was greater than the losses
her favourite restaurant. suggests that more than ten trillion being accumulated by startups, these
“What’s this?” she asked as soon as he Interest rates collapsed. And dollars of money, in different cur- firms kept running by selling at a discount.
entered. “I thought you were worried money found its way into stock rencies, was created out of thin air.” The moment this changed, they had to
about losing your job. Looks like you are in markets and real estate. People “Wow!” start firing people to control costs.”
the mood to party.” began to spend. However, supply “Again, interest rates collapsed. “And now money has become more
“Oh, I am still worried about that,” he couldn’t keep up with the increase And again, money found its way expensive.”
replied. “But I found two notes of ₹2,000 in demand for goods. into stock markets and real estate “Yes. So, the VCs cannot continue to
lying on the road, just when I was getting all over the world. But there is fund the losses of startups. Which is why
into a rick.” another thing that happened this startups are firing people to control costs.
“And you kept them?” NOW time around.” Also, discounts have totally gone out of the
“Today is my lucky day!” he replied. “What?” he asked. window.”
“And why are you complaining? I got you As too much money chased the “In 2008, the central banks had “I guess this explains it,” he said.
your favourite pasta and had to take a long same amount of goods, prices printed money and pumped it into “Everything is connected.”
detour for that.” went up. The central banks were the financial system. They had also “Indeed. In fact, this also explains why
“Hmmm. You know what you did with caught napping. They have invested some of this money into foreign investors, between October and
the ₹2,000 notes kind of explains what’s decided to gradually withdraw financial institutions to prevent now, have net sold stocks worth ₹2.6 tril-
happening in the world at large and why some money that they printed. them from collapsing.” lion. When they sell stocks, they get paid
you might lose your job,” she said, chan- “Okay.” in rupees. These rupees need to be con-
nelling the real-economist inside her. “This time around, the central verted into dollars. When that happens,
“Really?” he asked, as he opened the across the world contracted.” banks of the rich world indi- the demand for dollars goes up, putting
bottle of wine. “Oh! That is a rarity,” he rectly handed over some of this pressure on the value of the rupee. This
“You spent the money you found buy- said. freshly created money to gov- explains why the value of the dollar, which
ing a bottle of wine and pasta. The money “So, in 2008 and in 2020, it ernments and the govern- was less than ₹75 at the beginning of the
you spent was an income for someone was very important for govern- ments directly handed over year, is now more than ₹79.”
else, like the wine shop owner.” ments and central banks across this money to citizens by “Okay.”
“Yes.” the world to ensure that the depositing it into their bank “A weaker rupee makes imports expen-
“Now let’s say the wine shop owner spending capacity of people was accounts.” sive for India, especially energy imports,
decides to spend that money in buying an quickly revived.” “Really?” he asked. like oil, natural gas and coal. This feeds
umbrella for his wife and raincoats for his “Sounds like a no-brainer.” “Yes. So, other than being able into retail inflation. Also, the rising inter-
children.” “It does. But it’s not very easy. Typi- to borrow at low interest rates, est rates have now led to a threat of an eco-
“Okay.” cally, people spend more money when citizens of the rich world also had nomic recession in the rich world.”
“The restaurant owner spends the they are optimistic about their economic money handed over to them which
money in buying more pasta and other future. This happens when economic they could spend.” thE RECEssion
ingredients that go into its making,” she activity is growing. Over a period, it’s a
said. “Oh, by the way, I hope you got penne function of firms expanding and, in the
pasta and not fusilli.” process, creating more jobs, which is a
“Interesting.”
“And they did spend. The trouble W hat is a recession?” he interrupted.
“It is a situation where the econ-
was that the supply couldn’t keep up omy contracts for two consecutive quar-
“Of course, I don’t make basic mis- function of innovation in the society and with this increase in demand for ters.”
takes,” he replied. higher economic pro- goods.” “Ah.”
“So, the money you ductivity, where there “Why?” “This will lead to a
spent on buying wine To keep pace with other is more output for “Well, covid had led to The only way that central slowdown in Indian
and pasta will be spent central banks and to control every unit of input.” global supply chains banks can control sky-high exports, or they may not
further. The wine shop “Now you sound breaking down. Given continue growing at the
owner might buy an inflation, the RBI has been like a proper econ- this, goods couldn’t be inflation is by engineering a same pace as they were.
umbrella and raincoats. raising interest rates. This omist,” he said. manufactured and recession, hoping that higher It will also impact remit-
The owner of the shop “Hah. I am trying shipped at the same pace tances or the money
selling umbrellas and will impact those already to explain things to as the demand.” interest rates might dampen Indians working abroad
raincoats might use that you at a very sim- “Oh.” send to their families.”
money to buy vegetables paying big EMIs. ple, almost simplis- “And then Russia consumer demand. “Hmmm.”
on his way home. And so, tic level. The econ- attacked Ukraine.” “To keep pace with
the cycle will keep repeating itself.” omy on the whole is a very complex “So?” other central banks and to control infla-
“What’s your point?” he asked, sipping creature.” “Russia is one of the largest export- tion, the RBI has been raising interest
wine. “So how do you revive spend- ers of commodities in the world and rates as well. This will impact those who
“For an economy to keep chugging ing quickly?” this sent the price of oil, natural gas, are already paying big EMIs to some
along, people need to keep spending “What the central banks fertilizers, coal, etc., soaring.” extent. It will also impact home sales.”
money.” around the world did in 2008 “Ah, this is the inflation thing you “But why can’t central banks cut inter-
“Right.” and 2020 was to print a lot of keep talking about.” est rates as they have in the past whenever
“But sometimes, things happen. They money,” she explained, having “As too much money chased the same there has been a threat of a recession?” he
disrupt this spending.” her first sip of the wine. amount of goods, prices went up. The cen- asked.
“Oh!” “But why?” tral banks were caught napping. They “Oh, that’s because inflation is still
“Like in early 2020, the covid pandemic “The idea was to drive down thought things would play out exactly like around. In fact, people can feel the infla-
started to spread and governments across interest rates. At lower interest they did post 2008, when the rate of infla- tion. And when they can feel inflation, they
the world initiated lockdowns. These rates, people would hopefully bor- tion hadn’t gone up.” tend to incorporate it into their economic
lockdowns ensured that many people lost row and spend money, and compa- decisions and make higher salary/wage
jobs. Further, even those who didn’t lose nies would borrow and expand. In End of Easy monEy demands. This leads to a situation where it
jobs had to stay at home. And when that the process, spending could be
happened, they couldn’t spend money.” revived quickly.”
“Hmmm.” “And did that happen?” he
S o, what happens now?” becomes very difficult for a central bank to
“Three things. One is that central control inflation. Hence, the only way that
banks of the rich world have decided to central banks can control inflation is by
“And when people couldn’t spend asked. more or less stop printing any more engineering a recession, hoping that
money, the incomes of others who “Yes, to some extent,” money. Two, they have decided to gradu- higher interest rates might dampen con-
depended on this spending crashed. In the she replied. “But other ally withdraw some of the money that they sumer demand,” she explained.
process, everything from restaurants to things also started along printed and pumped into the financial “That was some explanation,” he said,
cinema halls to hair saloons to shopping with that.” system over the years. This will push up sipping the last drop of wine from his
malls to gyms, suffered. This impacted “Like?” long-term interest rates. Three, they glass.
societal spending in a very negative way.” “In the years that fol- have also decided to raise short “Well, I would like my boyfriend to be
“That explains it.” lowed 2008 and until late term interest rates,” she better informed,” she smiled.
2014 and early 2015, central replied. “Thanks to you, I am.”
REviving spEnding banks continued to print “But tell me something. When we spoke

S omething similar had happened many money to keep interest rates

years back in 2008,” she said. low. With low interest rates,
“In 2008?” he asked. “I was in junior people had to look at other
yesterday, you were so agitated that you
might lose your job and you are all cool
today.”
college then.” avenues to make money. “Oh, I was fired today morning.”
“Yes, I know how young you are,” she A lot of this money “Really?”
replied. found its way into “Yes.”
“Let’s not deviate from the topic.” stock markets and “How come you are so cool about
“Yeah, yeah,” she said sarcastically. real estate all over it?” she asked.
“So, what happened in 2008?” the world.” “Because, I have made enough
“Lehman Brothers, which was the money in the last four years. Plus,
fourth largest investment bank on Wall I got lucky on cryptos.”
Street back then, collapsed.” “That’s good to know.”
“Hmmm.” “So, I was thinking, let’s move to
“AIG, the largest insurance company in Goa,” he said, trying to be all
the world, was also on the brink of failure. romantic. “The math works. I am
Many other large financial institutions unemployed and you anyway work
were in a mess. This led to the start of a from home.”
financial crisis. The stock markets and real “Ah! Do you know why I broke up
estate markets all over the world col- with the last one?” asked the Mumbai
lapsed. People started to lose jobs. Those girl used to having the last word. “You
who didn’t get fired had the fear of getting zoomers really need to grow up! Life
fired. And the societal spending capacity can’t be lived by simply running away
collapsed.” from the city at the first opportunity.”
“What happened then?” JAYACHANDRAN
Vivek Kaul is the author of the Easy
“Well, the size of many economies all Money trilogy.
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 LIVEMINT.COM MINT MONEY MoNDay, 11 July 2022
NeW Delhi 11

Have capital to last 4-5 yrs even if POWER

POINT
we have zero revenue: CoinDCX KASHIF ANSARI

We welcome your views and comments at

mintmoney@livemint.com

Abhinav Kaul & Neil Borate

abhinav.kaul@htlive.com
Their primary form of taking in and trade flows. The market is so new that
taking out funds is in the rupee form. most people in the policy thinktank
This number could be as high and in the government bodies don’t
KNOW ALL ABOUT

T PAYING RENT USING

he crypto ecosystem in 98-99%. So, INR fund transfer understand how the order execution
India is going through one remains available to all our users. On happens. And this was the context of
of its toughest phases. The the crypto transfers, we have disabled the conversation we had with ED.
double jeopardy in the
form of price crash and stiff
taxation provisions has resulted in up
it for retail users. The primary purpose of the ED was to
When it comes to crypto transfers, understand how crypto businesses
because we are an exchange, for cer- work and how the transaction flows
YOUR CREDIT CARD
to 80% slump in trading volumes on tain people, who help us in building happen from one state to another.
Indian exchanges. Mridul Gupta, the liquidity, it is important for us to And we have been able to provide
chief operating officer at CoinDCX, enable crypto transfers. For them we them with this information in a satis-
Relying on credit card for rent payment
It may help you earn rewards on spends, but using it as a
talked to Mint about the impact of the have some checks in place, basis the factory manner.
method for credit rotation comes with risks.
recently introduced 1% tax deducted eligibility. So, crypto withdrawals Have you undertaken any cost
Rent agreement
at source (TDS), notices issued by the remain open for people who provide cutting measures? Platform Charges Cards accepted needed
Enforcement Directorate (ED) and us liquidity, but for the majority of We have undertaken zero cost cut- RedGirraffe 0.46% All, except Amex Yes
the safety of investors’ funds. Edited people on the exchange it remains ting measures, as we are in a phase of
NoBroker 1% All except Amex Optional
excerpts from an interview: disabled. hyper building. We have enough cap-

‘
Housing 1% All except Amex No
Some crypto platforms have ital to last us for the next four or
What has been the impact of gone insolvent five years, even if we Magicbricks 0% or 1.18% All except Amex Yes for 0% fees
TDS on trading volumes at globally. How is have zero revenues. 99acres 0.99% All except Diners No
CoinDCX? CoinDCX placed? Crypto withdrawals We are in fact hiring CRED 1.55% All except Amex No
On the investors‘ side, there is very Any company, remain open for more people and Paytm 1.55% All except Amex No
little impact, because most of them which is in pure people who provide us building more sys- Phonepe 1.50% All* No
are long-term holders. So, when they lending and risk tems to make sure Freecharge 1.09% All except Amex Optional
are buying, there is no TDS implica- management busi- liquidity but for the that whenever the Mobikwik 2.36% All except Amex No
tion. When it comes to traders, they ness is facing the majority of people, it market goes up *Amex not working currently
are definitely readjusting their port- heat. When you remains disabled. again, people will
folios and positions. But we are yet to think of CoinDCX, come back to
Mridul Gupta

A
realize the full impact of TDS. Maybe, the business model is COO, CoinDCX CoinDCX. We are few years ago, nobody would have imagined that people
three weeks into the implementation, very different. We close to 560 people would someday be able to pay their monthly rents with
we would have a better understand- rely on transactional now, and are in line credit cards. But, it was bound to happen soon. RedGir-
ing of the impact. income. So, we make revenue by to meet our projections of having raffe was the first to allow its customers to use this facility.
The threshold for applicability charging a small fee for buying and 1,000 headcount by the end of the Benefit to users
of TDS provisions is ₹10,000 or selling. This capital is kept in cold year. Premium credit cards like HDFC Infinia/ Diners Club Black or
₹50,000 in case of specified per- custody and is not deployed on risky Last year, millions of investors Standard Chartered Utimate offer 3.3% return (cashback, reward
sons. How are you ensuring these protocols, whatsoever. entered the crypto market, but points or airmiles) on almost all spends. Even after considering
provisions are met? If for whatever reason, they are now sitting on losses. the 0.46% charge, users get 2.8% return on a big-ticket transac-
We are deducting TDS starting CoinDCX becomes insolvent, can What would you say to them? tion like rent. This helped users achieve milestone- and spend-
from the first transaction. The chal- creditors seize customers’ crypto I would recommend people to based rewards offered by credit card firms. These additional
lenge is that in crypto, every and money? think putting small amounts at a fre- rewards further pushed up the overall return from rent pay-
exchange is different, and there is no They can’t. We have ensured the quent time interval, so that they don’t ments. Users also got automated rent receipts and digital proof
common layer among them. It’s not right terms & conditions, policies and have to think about timing the mar- of rent payments, besides interest-free credit period of up to 45
possible for us to know, if you did legal recourse to challenge it? and the web3 space, and there will be standard operating procedures to ket. Second advice I would give is to days. Also, rent payments helped customers increase their overall
transactions more or less than the No, there is no legal recourse per less jobs created. It’s important for make sure that the crypto belongs to use some of the smart tools available credit card spend, whereupon they became eligible for annual
threshold. So, to be compliant with se. We have to sit with the govern- policymakers to understand these the customers and not to the share- on the platform like stop loss or limit fees waiver, credit limit enhancement and card feature upgrades.
the policy, we have ment and the policy points and draft the regulation and holders or creditors. Additionally, the orders, etc, which enable them to Entry of other players
basically started
charging TDS on all
m INTERVIEW thinktanks and iron
this out. How the 1%
tax laws accordingly.
Are users allowed to withdraw
crypto is not held on our balance trade smartly. And number three,
sheet. which is probably the most important
Looking at the success of RedGirraffe and Nobroker, real estate
brokerage companies like Housing, Magicbricks and fintech
the transactions. TDS hurts the ecosys- crypto and rupee on your plat- What was the nature of the advice is that this is the time to really platforms like Paytm, Cred, and Phonepe, also entered this new
The 1% TDS is quite challeng- tem is that because of this, there will form? recent notices to crypto sites by learn about the kinds of cryptos that space. Each had their own benefits and disadvantages. RedGir-
ing for traders, and especially for be less adoption of crypto, less com- Most of the users on our platform ED? exist and which will sustain the test of raffe had the lowest convenience fees of 0.46% but its user inter-
exchanges. Do you plan to take panies getting formed in the crypto actually don’t do crypto transfers. They wanted to understand certain times and grow over a long period. face was not good. Nobroker had the greatest number of partner-
ships with banks, while Cred allowed payment to a landlord
through UPI. Paytm and PhonePe relied on their wide customer
reach. The increase in competition opened new avenues like pay-

What a car loan costs you Many banks

ment of education fees, brokerage,
security deposits, maintenance and
office rent, but it also led to less back-
have now
I t is tempting to buy a new car, be it an upgrade, a first car or another car for the family. Whatever
be the reason, a car loan makes the purchase easier. Car loans are usually of three to five years
but some lenders may offer loans for up to seven years too. A loan for longer may mean smaller
capped the
reward points
ground checking and scrutiny.
Credit rotation and implications
To capture more market share,
equated monthly instalments (EMIs), which makes the car seem more affordable, but overall, you on rent many platforms either made the rent
pay more as interest. Don’t forget that a car is a depreciating asset, so taking a bigger loan payments agreement optional or didn’t even ask
may not be the best thing to do. But if you take a car loan for a short duration, the EMIs for it. So, users could now enter bank
will be heavy and non-payment will mean a blot on your credit report. Conditions details or UPI ID of either friends or
apply to the loan amount also. For instance, some lenders give a loan for the full family members and claim it as rent. Later, these users could ask
ex-showroom price of the car, while others may offer a loan up to 80%. Apart from the same person to transfer the amount back to their bank
the interest rate on a car loan, also take a look at the applicable processing fee and accounts. The net impact of these transactions was pure credit
other charges. rotation which only helped users to create manufactured spend-
Loan amount = ₹1 lakh. Tenure = 5 years ing and enjoy the rewards mentioned earlier. While one might

How to claim tax Lender

Interest
rate (%)
EMI (₹) Processing fee
feel that everything is fine, one should not ignore the consequen-
ces of such transactions.
Rent received by a friend or family member will be treated as

deductions on your Central Bank of India

State Bank of India
7.25-7.70
7.25-8.15
1,992-2,013
1,992-2,035
Up to 0.50% of the loan amount (minimum ₹2,000 and maximum ₹20,000)
Nil
income from rented property and added under the head of
income from house property after 30% standard deduction.
Depending on the slab rates, a tax of up to 30% + surcharge + cess

donations to charity Canara Bank

Shipra Singh
shipra.singh@livemint.com
Beginning financial year
2021, charitable organizations
have to declare details of all
Punjab National Bank
7.40-10.30
Bank of Baroda
Bank of Maharashtra
Punjab & Sind Bank
Union Bank of India
7.65-9.05
1,999-2,139
2,011-2,078
0.25% on the loan amount (minimum ₹1,000 and maximum ₹5,000)
0.25% of the loan amount (minimum ₹1,000 maximum ₹1,500)
can be levied. Even the payer, i.e. the credit card user, is required
to deduct tax u/s 194-IB at the rate of 5% if the rent is more than
₹50,000 in any month. In case of no deduction/deposit of tax to
7.70-10.95 2,013-2,172 ₹1,500 + GST government, the payer will become an assessee-in-default and
has to pay interest and penalty accordingly. Further, a case of
7.70-10.20 2,013-2,135 Not mentioned on the website
fraud and misrepresentation can be also be filed against the user.
7.70-8.80 2,013-2,066 0.25% on the loan amount (minimum ₹1,000 and maximum ₹15,000) Steps taken by banks
7.70-8.90 2,013-2,071 ₹1,000 (Nil for staff members)
Credit card issuers have been following these developments

S
ection 80G of the
Income Tax Act allows
tax deduction on dona-
tions made to eligible charita-
ble organizations. Donations
made in kind and in cash above
₹2,000 don’t qualify for tax
breaks.
“All NGOs or charitable
institutions do not automati-
cally qualify to provide their
donors with a deduction u/s
80G either. Only those organi-
zations approved by the Com-
missioner of Income Tax
(Exemptions) for receipt of
donations and issuance of 80G
certificates can do so,” said
Suresh Surana, founder, RSM
India.
The list of eligible organiza-
tions is available on the
income tax website. For tax-
payers who donate through
crowdfunding sites such as
Ketto and Milaap, the eligibil-
ity of the organizations is men-
tioned on the campaign page.
“Individuals who raise funds
for personal causes or for fam-
ily or friends don’t qualify for
80G deduction. This is peer-
to-peer crowdfunding where
the recipient is an individual
and donors in this case don’t
get tax breaks,” said Varun
Sheth, co-founder and CEO,
Ketto.
However, these platforms
don’t assume the responsibil-
ity of issuing 80G certificates
or Form 10BE (starting in the
current assessment year).
This PDF was originally uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) Subscribe now to get this edition before anyone else!! Backup channel:@LBSNEWSPAPER
donations received in a year to
the tax department through
Form 10BD. It’s only after they
declare the statement of dona-
tion and issue Form 10BE to
donors that the latter can avail
tax deduction on donations.
The due date to file Form 10BD
is 31 May of the following
financial year. For instance,
due date for the last financial
year 2020-21 was 31 May 2022.
“Form 10BE is necessary for
the donors now to avail section
80G deduction. Hence, if the
donee fails to generate this in
time or has incorrect or no
information about its donors,
the donor will not be able to
avail the tax benefit,” Maneet
Pal Singh, partner, I.P. Pasri-
cha & Co.
The eligible deduction
under 80G will be prefilled in
your Income Tax Return
(ITR), as per Archit Gupta,
founder, Clear. If the informa-
tion is not there in the ITR
form, you should contact the
organization to check whether
it has filed Form 10BD within
the due date.
Some organizations allow
50% or total deduction, as
applicable, without a qualify-
ing limit, while others come
with a qualifying limit of 10% of
the adjusted gross total
income. This means all dona-
tions made to institutes falling
in the latter category should
not exceed 10% of the adjusted
gross total income.
Bank of India
Indian Bank
Karur Vysya Bank
ICICI Bank
HDFC Bank
UCO Bank
IDBI Bank
Banks that have not updated information on their websites are not included here. Data was taken from bank websites on 7 July 2022. The EMI range is
indicative and calculated on the basis of interest rate range. In an actual situation, it may include other fees and charges. Actual applicable interest rate
may vary based on the credit profile, loan amount, tenure and as per bank’s discretion.
SATISH KUMAR/MINT
Should you buy insurance policy from web aggregator or broker?
Abhishek Bondia
I am 30 years old and plan
to buy health insurance of
₹5 lakh cover. Initially, I
was planning to buy the
policy from a web aggrega-
tor. However, a broker has
now quoted a lower pre-
mium for the same plan. Is
it right to buy the policy
from a broker?
-Name withheld on request
Brokers and web aggrega-
tors are all licensed entities
regulated by the insurance
regulator IRDAI. Each of the
various distribution entities
have a set of rules and regula-
tions that govern them. Of the
and when the volume of such transactions went up, many started
7.75-9.45 2,016-2,098 0.25% of lon amount (minimum ₹1,000 and maximum ₹5,000) restricting the spends as well as reward points on rent payments.
7.80-8.0 2,018-2,028 0.50% on the loan amount (maximum ₹10,000) RBL Bank allowed only one rent payment in a month, with a max-
imum cap of 50% of the credit limit for its Shoprite card. Axis
7.80-8.10 2,018-2,032 ₹3,000 for loan upto ₹10 Lakhs and ₹7,500 for loan above ₹10 Lakhs Bank stopped the reward points for rent payment on its ACE card
7.85-8.80 2020-2066 ₹5,500 to ₹8,500 and put a cap on its super premium cards. In June, HDFC Bank
capped all management services, including rent, to 500-2,000
7.90-8.30 2,023-2,042 0.5% of loan amount, minimum ₹3,500 and maximum ₹8,000
reward points per month.
8.05 2030 1% of the loan amount (maximum ₹1,500) Rent payment through credit card can help earn rewards but
using it as a method for credit rotation comes with its own risks.
8.10-9.90 2,032-2,120 Up to ₹2,500 Its charm is slowly fading away as many banks have capped the
reward points on rent payments and restricted the use of credit
limit for such purpose and this list of banks will continue to grow.
Kashif Ansari is an assistant professor at Hansraj College, Uni-
Source: MyMoneyMantra.com
versity of Delhi. He can be found on twitter @2jhg
ASK MINT the critical illness rider of kinds of health conditions
m INSURANCE the said policy. except the permanent exclu-
-Name withheld on request sions.
Such hospitalizations have a
various distributors, the bro- The critical illness rider higher incidence than critical
ker is recognized as an associated with term insur- illness. Also, in several cases,
insured’s representative ance provides coverage for complications in regular dis-
rather the insurers. So, if you certain illnesses only. In case eases can lead to very large
get a better product or price you are diagnosed with one of hospitalization expenses. So,
from a broker, you must go for these illnesses, you will be paid coverage for hospitalization is
this. a lump sum. Critical illnesses a must.
However, do note that retail are increasingly becoming Abhishek Bondia is principal
products have a uniform price common. So, there is a sub- officer and managing director,
for a particular product. Price stantial value in retaining this SecureNow.in.
differentiation may happen rider.
with special products. In rare do double-check the product lakh with a critical illness However, a critical illness Do you have a personal
cases, insurers may offer a dis- details and the rationale benefit rider. I would like plan is not a substitute for a finance query? Send in your
count for policies sourced behind the discount. to know if this rider is ben- standard health insurance queries at
through specific channels eficial in the long term or plan. The standard health mintmoney@livemint.com
and get them answered by
such as their own websites. So, I have taken a term should I buy a new health insurance plan covers you for
industry experts.
if you are getting a lower price, insurance policy of ₹50 insurance by discontinuing hospitalization expenses for all
 12 MoNDAy, 11 July 2022
New DelhI VIEWS LIVEMINT.COM

OUR VIEW GUEST VIEW

REUTERS

The GST launch: An inflection

point for India’s logistics sector
It helped integrate supply chains and spurred outsourcing to lend our economy a competitive edge

chains. The success of the ‘Make in India’
initiative, which was launched a few
years ago, is driving the growth of the
manufacturing sector, which contrib-
utes around 15% to our gross domestic
product. It is estimated that for each
percentage-point rise in manufacturing
sector output, the logistics and supply
chain industry has to grow one-and-a
R. DInesH half times as much.
is executive vice chairman of TVS Supply Further, GST has enabled multiple
Chain Solutions and president designate of layers of sub-component manufacturers
the Confederation of Indian Industry. to become part of integrated supply
chains. Similarly, on the consumer side,
providers. The government’s produc-
tion linked incentive (PLI) scheme and
export thrust are further catalysts of this.
Importantly, the rise of third-party
integrated logistics service providers has
helped small transport operators ally
with them and grow. India’s special
advantage of having livelihood busi-
nesses in the transport sector has been
harnessed by this win-win partnership.
The usage of e-way bills has almost made
it necessary for users and players in the
logistics sector to further develop digital
technology capabilities. This will also

What a Vivo viewfinder

retailers and distributors have a level assist in building leaner supply chains
playing field, thanks to the alignment of and achieving better capacity utilization.

F
ive years after the GST roll-out, one set-off tax credits. This process can be speeded up to the
can say that India has truly bene- A significant benefit for both the benefit of India’s manufacturing sector
fited from this game-changing manufacturing and logistics sectors is by GST being coupled with the Centre’s

reveals of our China ties implementation of “One nation one

Tax”. India has replaced the United
States as the second-most favourable
manufacturing hub, according to Cush-
the ability to now optimize a supply
chain, whether it be warehousing or
transport planning, and link it with sales
planning to enable quick delivery to con-
Gati Shakti initiative of integrating six
different ministries digitally aimed at
providing users with online information.
The organization of the logistics
man & Wakefield’s 2021 Global Manu- sumption points. This can be done now sector has lead to more than 40 million
facturing Risk Index. on a real-time basis through the use of people being employed by it, as against
India’s case against the firm raises broader questions of our policy stance vis-a-vis Chinese Not only has the Goods and Services technology, and most importantly, with- 22 million five years ago (in the pre-GST
Tax (GST) unified the country into one out having to bother about tax-based era). This kind of robust growth will be
businesses and other relations after Galwan. Doctrinal clarity could reduce uncertainty common economic market, it has also allocation efficiency. enhanced by more outsourcing, which
resolved frictions between states by ‘Just in time’ operations have become would lead to more jobs being generated
building a tight interlocking system a reality in India, as in the developed by this sector.
between buyers and sellers. The use of world. Logistics companies have bene- Further value addition will happen

T
he meeting of G-20 foreign minis-
ters in Bali had hectic activity on its
sidelines. External affairs minister S.
Jaishankar met Russia’s Sergei Lav-
rov and the US’s Anthony Blinken.
But Jaishankar’s first meeting was
with his Chinese counterpart, Wang Yi, making
it the second between the two ministers in three
months, signifying the criticality our relation-
ship with China. The latest engagement, as
conveyed by the read-out, was dominated by
lingering problems at the Line of Actual Con-
trol. India-China relations have been rocky
since the 2020 Galwan confrontation, and, as
ties remain testy, that problem has spilled over
into India’s business and trade dynamics in a
way that raises questions over India’s attraction
as an investment destination. The latest exam-
ple is the Enforcement Directorate’s (ED) inves-
tigation of China-based phone maker Vivo’s
local operations for alleged money laundering
and other related charges. While the details of
the probe are still sketchy, three broad points
emerge from the case.
including perhaps Vivo’s extravagant sponsor- technology and the transparency this fited, as the usage of technology has when the utilization of infrastructure
ship of the Indian Premier League, it does seem ensures has resulted in high compliance reduced cash flow cycles, making and capacities goes up with rising levels
and minimal leakage. As was initially finance management a lot easier. There of outsourcing taking place with the help
that a desire for optics outweighs the agency’s budgeted, monthly gross GST collec- is complete integration of processes that of logistics service providers. GST has
need to follow a prudent path of inquiry. tions have crossed ₹1 trillion. This involve manufacturers, logistics service enabled such significant improvements
This brings us to the final and broader issue at revenue buoyancy augurs well for the providers and consumers. GST has already. Going forward, the tracking of
hand. Ever since Galwan, Indian authorities country and its economy. removed any need of re-engineering infrastructure under development and
have let a security stand-off bleed into our trade The logistics sector has been a major supply chains for tax arbitrage and man- its utilization will further accelerate this.
beneficiary of GST, as observed over the agement. Integrated service providers, Overall, the benefits of GST have been
and investment ties. In other words, the gov- past five years. The benefit has been such a TVS SCS and others are all part of impressive. One can safely say that what
ernment seems to be using reprisals against two-fold. First, seamless transportation a large supply chain and are able to add mobile technology did to the country’s
Chinese investors in India to solve a border reforms have resulted in the faster true value. communication sector has happened to
problem. First, it issued marching orders to Tik- movement and turnaround of products The supply chain has moved from Indian supply chains and the logistics
Tok and a clutch of other apps, which was fol- (a reduction of at least 12% to 15% in being the problem of lower-level sector, thanks to GST. The entire sector
transport time between major cities and employees to being a strategic focus of has begun to enjoy the benefits of this tax
lowed up with similar diktats to other Chinese in some cases as much as 30% to 40%). CXOs. The use of technology has also regime, and its growth over the next few
companies. It has been argued that India’s state Second, the introduction of the e-way resulted in awareness of the need to out- years is expected to result in multiple
capacity must be leveraged to counter China’s bill has facilitated and streamlined sup- source more and more services to enable benefits for the country. The logistics
border incursions and expansionism at every ply chain management for most compa- companies to focus on their core compe- sector will always see the introduction of
level, including trade and investment, because nies. Logistics service providers have tencies, while leveraging the capacity GST and e-way bills as the inflection
become part of manufacturing supply and capability of integrated logistics point that catapulted it ahead.
Beijing’s statecraft and business outreach are
joined at the hip. But such a belligerent argu-
ment flies in the face of India-China trade data:
total trade between the two nations touched
$115.5 billion in 2021-22, growing 33.6% over
the previous fiscal year. What’s more, the dice
continues to be loaded against India, with our www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Friday, July 13, 2012 Vol.6 No.167 `3.00 24 PAGES
+ 4 MARKETS PAGES

The first obvious wrinkle is how the ED has trade deficit with China widening to $72.91 bil- MARKETS: Sensex retreats
1.47%, most in six weeks >2
TELECOM: EGoM to ask Supreme Court to
extend auction deadline >5

belatedly woken up to the vast sums of money lion from $44 billion. The juxtaposition of these
17,302.57
BANKING: Malaysia’s CIMB drops plan to Open
buy RBS India assets >8
EXCLUSIVE PARTNER 17,232.55
CORPORATE: Dentsu agrees to buy Close
Aegis in £3.16 billion deal >10
Sensex intra-day on 12 July

Vivo’s management allegedly repatriated to two seemingly contradictory trends unfortu-

SENSEX 17,232.55 æ 256.59 NIFTY 5,235.25 æ 71.05 DOLLAR `55.93 Æ `0.31 EURO `68.15 Æ `0.02 GOLD `29,140 æ `60 OIL $99.95 Æ $1.77

Victorious warriors
IT EARNINGS CONTINUING HEADWINDS QUICK EDIT

Infosys cuts guidance; IIP makes weak Paralysed,

China. The fund transfers were not trifling— nately suggests that the government, while TCS beats expectations
recovery in May
B Y A SIT R ANJAN M ISHRA
asit.m@livemint.com
TURNING POSITIVE
as always
O n Thursday, the
Union cabinet
deferred taking decision

win first and then go to war,

Year-on-year growth:
························· on two important issues
NEW DELHI
10 in % before it—disinvestment
Analysts caution TCS

over ₹60,000 crore—and somehow bypassed helpless about our growing trade dependence performed better ‘only HOW THEY STACK UP A weak recovery in factory
output in May after two
months of contraction under-
8

IIP
in Steel Authority of India
Ltd (SAIL) and amending
the Forward Contracts
in relative terms’, say scored the continuing head-
6
(Regulation) Act.
growth disappointing Infosys TCS winds facing the Indian econo- 4 5.8 2.4 It is not unusual for the
my. However, with both whole- cabinet to defer decisions
for both in dollars Jan-Mar quarter Apr-Jun quarter % change sale and retail inflation remain- 2
when they require greater
ing elevated, the central bank is deliberation. But in this
8,852 9,616 8.6 0
B Y L ESLIE D ’M ONTE & Revenue unlikely to announce a rate cut case, it simply was in

the ED’s radar without raising any alarm, even on China, wishes to publicly portray a muscular while defeated warriors
S RIDHAR K . C HARI (R crore)
13,259.33 14,869 12.1 at its monetary policy review on -2 no mood to do anything:
························· 31 July. The amendment Bill was
MUMBAI/BANGALORE -4
The Index of Industrial Pro- deferred as the Trinamool

I f investors and analysts ex-

pected to get a clear view of
where the information tech-
nology (IT) sector is heading in a
slowing global economy, the two
Profit
after tax
(R crore)
2,316

2,895
2,289

3,318
-1.2
14.6
duction (IIP) grew 2.4% in May,
mostly on the back of strong
9.3% growth in consumer dura-
bles even though demand for
consumer non-durables re-
-6
Apr 2011 Jan May

IT heavyweights, Tata Consul-
Source: CSO
SANDEEP BHATNAGAR/MINT
Congress—a usual suspect
in derailing important
business—objected.
And the cabinet
tamely acquiesced.
Volume growth No. of clients added mained flat. Manufacturing and conclusion based on one The “decision” on SAIL,

though other businesses and individuals are state by going after Chinese companies. This
tancy Services Ltd (TCS) and In- (in %) electricity grew 2.5% and 5.9%, month’s data, said D.K. Joshi, however, takes the cake.
fosys Ltd—which posted April- 5.3 52 51 respectively, while mining pro- chief economist at credit rating It had to be postponed as

go to war first and then

June quarter results on the same
day for the first time—provided
little help with their contrasting
outcomes and conflicting out-
look.
Before the markets opened on
Thursday, India’s second largest
42 duction contracted 0.9%. agency Crisil Ltd. the minister concerned
3.3 Analysts were hesitant to take “The sustainability of the was not available. It is
29
the May number as a sign of re- growth in consumer durables is strange that the highest
2.2 2.7 vival in industrial activity, with questionable,” he said. “Any executive decision-making
revisions of past data giving out possible failure in monsoon body should not be aware
Jan-Mar quarter Apr-Jun quarter Jan-Mar quarter Apr-Jun quarter conflicting signals. The Central will put additional pressure on of the peregrinations of
Statistics Office (CSO), which already-weak consumer non- one of its members.

routinely hauled up for much smaller amounts. can have many unintended consequences, but
software exporter Infosys
shocked investors by cutting fis-
cal 2013 growth guidance to 5%
from 8-10% indicated in April. It
No. of employees added Share performance (in %) releases the data, revised the durables segment.” Opposition from
April number downwards to a difficult allies is a mere
19,156 9.39 contraction of 0.9% from TURN TO PAGE 3® excuse now, if it was
13,831 3.61 growth of 0.1% reported earlier, ever a vaild one. The
0.57

seek to win.
attributed the cut to cross-cur- 10,676 9,236 while the February number was ALSO SEE simple fact is this
rency volatility in its Western Jan-Mar quarter Apr-Jun quarter revised upwards to 4.3% from government doesn’t
markets and a pricing decline. the provisional 4.1%. >MARK TO MARKET: Four takeaways seem to want to govern.
Infosys’s results were particu- It will be difficult to draw a from May IIP data >P14
-12.65
larly disappointing since the ru-

This also begs the question of whether the gov- the most detrimental is the awkward signal it
Jan-Mar quarter Apr-Jun quarter
pee had depreciated around 8%
in the quarter against the dollar. Infosys Jan-Mar quarter Apr-Jun quarter
And since every percentage-
point dip in the rupee adds 35-40
guidance 8-10%
*For the fiscal year ending 31 March 2013
5%* Wadia Group EYE ON ELECTION

CCI nod to `648 crore

basis points (bps) to the margins
of IT companies, they were ex-
pected to do marginally better in
Source: Company websites
TCS did gain 270 bps from the
AHMED RAZA KHAN/MINT

wealth, equivalent to $2.06 bil-

the quarter under review. A basis
point is one-hundredth of a per-
ernment’s political agenda is distracting the ED sends out to potential foreign investors. Can we
centage point,.
Infosys’s rupee gains were off-
set by a drop in pricing—3.8%
from the trailing quarter. The sil-
ver lining was volume growth at
2.7%. Also, compared with 51 cli-
ents Infosys added in the quar-
firms to pay
parent royalty
rupee, but these were offset by
wage hikes (8% in India and
lion.
TCS, which declared results
UP highway project
2-4% on-site) and hiring (13,831
employees) in the quarter. It also
after market hours, lost 1.8% to
end at `1,236.10. The BSE IT In- for use of name
suffered a forex loss of `93 crore. dex dropped 5.11% to close at B Y L IZ M ATHEW West Bengal chief minister
While TCS does not provide 5,384.39 points, the biggest loser B Y S APNA A GARWAL liz.m@livemint.com and TMC chief Mamata Banerjee
guidance, the management said among sectoral indices. sapna.a@livemint.com ························· has been demanding a bailout
it “continues to see good de- For the last 13 quarters, TCS ························· NEW DELHI package for her debt-ridden
mand from global corporations” has posted better profit numbers MUMBAI

B K eeping in mind the forth- state.

SU N TZU
ter, TCS added 29. and “will deliver ahead of the than Infosys. And for the April- iscuit maker Britannia In- coming presidential elec- While a Congress minister said

from its core mandate. But another obvious afford an approach that offers so little doctrinal
Moreover, Infosys’s volume
growth was just around half that
at India’s largest software ex-
porter TCS, which beat expecta-
tions to post a consolidated net
profit of `3,318 crore—a 14.6%
increase over the trailing quarter
and 37.4% over the year-ago pe-
riod under Indian accounting
Nasscom guidance if the curren-
cy levels do not fluctuate too
much”, even as Infosys chief fi-
nancial officer V. Balakrishnan
described Nasscom’s forecast as
“ambitious”.
Software lobby body Nasscom
has predicted 11-14% growth for
the IT sector in fiscal 2013.
June quarter, TCS outperformed
closest rival Infosys, no longer
considered the bellwether of the
IT industry. Investors, too, have
been reposing more confidence
in TCS, which gained 9.39% in
the April-June quarter, while In-
fosys lost 12.65%.
Dipen Shah, head of research
dustries Ltd, Go Airlines
(India) Ltd and other Wadia
Group companies plan to pay
their 276-year-old parent a roy-
alty to use its name in an ar-
rangement modelled on the one
that the house of Tatas has in
place.
The plan was outlined in the
tion, the Congress-led United
Progressive Alliance (UPA) took
a series of decisions on Thursday
aimed at benefiting states that
the ruling coalition is banking on
to support its candidate, Pranab
Mukherjee.
A day after the Union govern-
ment cleared a `45,000 crore
the TMC’s move was “political”
and that it had blocked the Bill
“just for the sake of opposing it”,
TMC leader and minister of state
for urban development Saugata
Ray said the allegation was “un-
founded”.
“Mukul Roy wrote to the PM
requesting to defer the FCRA Bill

question arises: why has the ED not yet ques- clarity on our overall ties with a military adver-
rules—after market hours. But analysts cautioned that
TCS performed better than Info-
sys “only in relative terms”. They
noted growth was disappointing
for both companies in dollar
terms—a better indicator since
Indian IT firms earn in dollars
and spend in rupees.
Infosys’s revenue fell 1.1% to
at Kotak Securities Ltd, said,
“TCS’s results were mixed, with
its dollar revenues coming in
above expectations whereas Ebit
(earnings before interest and
tax) margins coming in margin-
ally lower than what we had ex-
pected. Average realizations
moderated by about 1.3%, indi-
annual report of Britannia In-
dustries released on Monday
that said a formal structure has
been created under Nowrosjee
Wadia and Sons (NWS) to serve
the common interests of all
group firms and enable them to
share their resources.
The Wadia Group’s presence
package for Uttar Pradesh, the
cabinet committee on infrastruc-
ture (CCI) approved a `647.98
crore national highway project in
the politically crucial state.
In a development that looked
like the political fallout of this
decision, key ally Trinamool
Congress (TMC) blocked a Bill to
because he wanted to be present
in the cabinet meet when it is
taken up to put our views for-
ward,” Ray said. The FCRA
amendments are aimed at allow-
ing the introduction of options
trading, among other things
The decision to defer the item
on the cabinet agenda as re-

tioned Vivo’s auditors who signed off on its sary? In today’s climate of global uncertainty,
$1.75 billion from the preceding
quarter and net profit dropped
10.2% to $416 million. TCS’s rev-
enue rose 3.4% to $2.73 billion
on a quarter-on-quarter basis,
while its net profit rose 3.2% to
$604 million.
The Infosys stock on Thursday
dropped 8.15% to close at
cating some pressure from cli-
ents and mix change. The man-
agement has maintained its opti-
mistic outlook despite the uncer-
tain macro scene and in contrast
TURN TO PAGE 3®
ALSO SEE
is spread across sectors, includ-
ing food (Britannia), garments
and furnishings (Bombay Dye-
ing and Manufacturing Co. Ltd),
plantations (Bombay Burmah
Trading Corp. Ltd), chemicals
(Citurgia Biochemicals Ltd and
National Peroxide Ltd), realty
(Bombay Realty) and aviation
give more powers to the Forward
Markets Commission (FMC), the
commodity market regulator.
Railway minister and TMC lead-
er Mukul Roy had written to
Prime Minister Manmohan
Singh on Wednesday evening
just a few hours after the Union
government decided to approve
quested by the TMC should be
seen as an attempt by the ruling
party to accommodate the sulk-
ing ally, said two Congress lead-
ers aware of developments.
“The Congress is of the view
that it is not yet time to rupture
TURN TO PAGE 2®

accounts every year? While the probe may yet we must not allow a confused picture to replace
`2,265.25 on BSE, making it the (Go Air). the financial package for Uttar
>You cannot drop price and create volume,
biggest loser in the Sensex pack, says Infosys CEO Shibulal >P3 It would be the first time the Pradesh, expressing his party’s ALSO SEE
as the benchmark index lost >MARK TO MARKET: Infy goes from bad diverse businesses would be tap- reservations on the Forward
Mint is also available for R6.50 with 1.47% to end at 17,232.55 points. to worse...making TCS’s muted growth Contracts Regulation Act >Cabinet approves `10,000 crore
Hindustan Times in Delhi-NCR only It lost `11,548 crore of investor look impressive >P14 TURN TO PAGE 3® (Amendment), or FCRA, Bill. package for electronics sector >P9

progress to other local counter-party dealings, the message of an open economy.

MY VIEW | MoDerN TIMeS

Why Modi’s views on our ‘servant class’ are a good omen

not go to college should not hold important
MANU JOSEPH positions. As though being a graduate is an
achievement, or proof of intellect or anything
meaningful. Isn’t it the easiest thing to be if
someone else is paying for it—to become a
graduate? But the quest for college degrees is
bureaucrat called William Thackeray (not the its there are enough of them in Malabar to This is what creates that occasional ‘beau-
famous writer) in 1807: “It is very proper that supply the whole peninsula.” tiful Indian story’—a poor man struggles all
in England, a good share of the produce of the The diabolic hope succeeded. The British his life and spends all his money on the edu-
earth should be appropriated to support cer- suppressed “that haughty spirit” and created cation of his daughter, who studies under the
tain families in affluence, to produce sena- “industrious husbandmen”. This resulted in streetlight and then finally gets a degree. I
tors, sages and heroes... The leisure, inde- a Nehruvian elite and later a middle-class used to know many children like this, on their

W
e know that Indians have immense
stamina for useless issues. But we
may not have realized that it can
often drown even the voice of Prime Minister
Narendra Modi. This, when what he said was
sensational. On Thursday in Varanasi he gave
a speech to educators who had assembled to
discuss the implementation of the National
such a sacred Indian practice that politicians
usually don’t scoff at it. Certainly a prime
minister taking it down is unprecedented.
But is it true that India’s present education
system emerged from a diabolic British plan
to convert India’s brightest into unthinking
clerks? Many Indians believe that Jawaharlal
Nehru was the one who began the process of
pendence and high ideals which the enjoy- with that peculiar character—unremarkable way to degrees. Most of them struggled with
ment of this rent affords has group thinkers fearful of what was called “academics”. As a result, they
enabled them to raise Brit- entrepreneurship. Not long went through their childhoods being called
ain to pinnacles of glory. His call for a ago, the forces that contrib- stupid. They may even have believed it, even
Long may they enjoy it. But uted to this were celebrated though they were probably very smart.
in India that haughty spirit, better way to as Nehruvian virtues: an Modi’s pronouncement is significant in the
independence and deep obsession with studies, not context of his speech: a new education policy
thought which the posses-
educate the to be knowledgeable, but to that will bring fields like carpentry, machine

is a journalist, novelist, and the

Educational Policy. He said that modern
India’s education system “emerged from
creator of the Netflix series,
‘Decoupled’
slavery”. And that it’s objective was petty.
“The British, in their self-interest, set up a
system of education that was meant to incu-
bate a servant class.” He said very little has
changed since the colonizers left. And that it
was time India created more useful people
than “degree-holders”.
Not having a college degree has been a
stigma in India. As a result, many have faked
their degrees even when they do not require
such certificates in their lines of work. Modi
himself has been accused of this. More amus-
ing than politicians faking their degrees is the
imagination of graduates that people who did
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taming the middle-class by creating rewards
for procuring certificates of higher educa-
tion. But he himself may have been co-opted
by the British in this sphere, just as he was by
socialism and other religions of his time.
When I was reading, The Man Who knew
Infinity, a biography of the mathematician
Ramanujan by Robert Kanigel, I came across
a piece of historical record, a comment by a
British bureaucrat that gave a peep into how
the British planned to control Indians. It was
so dramatic that it sounded like one of those
periodical hoaxes that patriots circulate on
social media. But it was not a hoax. It was an
authentic extract from a Report on Canara,
Malabar and Ceded Districts by a British
sion of great wealth some-
times gives ought to be sup-
country than find a job in an office. Nehru
invested India’s meagre
repair and plumbing into mainstream
schooling for students who are interested in
pressed. They are directly
averse to our power and
what the British resources in higher educa-
tion for the elite instead of
these activities. Also, one of the proposals is
that college students will have the option to
interest. The nature of left us is good universal primary educa- leave studies midway for a job and return to
things, the past experience tion. This was his under- resume their hunt for a degree. This is
of all governments, renders news for India rated flaw, write Jean Drèze humane, given that most Indians get a bad
it unnecessary to enlarge and Amartya Sen in An start in life and need to take care of them-
on this subject. We do not Uncertain Glory. selves before they can educate themselves.
want generals, statesmen and legislators; we The poor, who wish to make something of I wish this had happened decades ago.
want industrious husbandmen.” the lives of their children, are sucked into the There were so many superb mechanics and
As I am a Malayalee and have a cultural powerful idea of education because they tend athletes and artists who were made to feel
obligation to advertise what some colonizers to imitate the rich, who encourage them dumb because they couldn’t quite under-
thought of us, at least then, I am delighted to through the careful use of compliments, reas- stand a rhombus. Millions of childhoods,
point out that Thackeray also says in the let- sured that education will only herd the poor spent in pain, and wasted, because some peo-
ter, “If we wanted restless and ambitious spir- into a hutch where the rich hold all the cards. ple had a semi-literate idea of education.
 LIVEMINT.COM VIEWS MoNDay, 11 July 2022
NEw DElhi 13

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

How Indian companies could win Venture capital must get over
its EV power pack blind spot
a worsening war for digital skills Innovations for better EV battery technology are starved of funds

They must take responsibility for a well-thought-out talent strategy to avert finding themselves at a competitive disadvantage

BLOOMBERG

ANJANI TRIVEDI
is a Bloomberg Opinion columnist covering
industrial companies in Asia.

MILAN MITRA &

SATHYA PRATHIPATI
are, respectively, an expert associate partner in
McKinsey & Company’s Bengaluru office and a
senior partner in Mumbai.

O
ne of the world’s biggest battery
companies is mulling a reversal on
a $1.3 billion project to churn out

E
ven before covid, many Indian compa-
nies were forging ahead with digital
transformations. The pandemic
accelerated these efforts. By the end of
the decade, India could be well on its way
to being a trillion-dollar digital economy.
But there’s a big problem: demand for digital
talent in India is far greater than its supply. In
2020, there were 390,000 openings for digital
jobs and only 225,000 people ready to take them.
By 2024, the figure could be close to 900,000
people.
This gap is bad for individual companies, and
it is bad for India. Many of the world’s leading
companies are making tech-related investments,
drawn by India’s high-quality and relatively low-
cost talent. In 2021 alone, venture capital firms
invested almost $36 billion in Indian startups,
compared to $10.7 billion in 2017. That growth
won’t continue if the talent is not there.
Companies can’t wait, or assume, that the digital
talent gap will be filled. They need to act. Here are
six ways companies can prepare themselves.
Get off on the right foot: This starts even before
recruitment, by designing a tech-oriented
employee value proposition that offers clear career
paths for digital colleagues such as DevOps and site
reliability engineers. This means seeing talent as
part of the brand, so that those being recruited can
imagine themselves working there. Then comes
identifying the right type of people for the organi-
zation and building a targeted approach to find
them. Develop tools to create an efficient and can-
didate-friendly recruitment process that manages
the candidate’s experience from the first interac-
tion to Day One on the job. First impressions
matter: if the pitch is unclear, it will be rejected.
Set up a talent ‘war room’: The search for talent is
intense. It’s important, then, to set up a dedicated
system, with support from top leadership, to
attract, recruit and onboard digital talent. The war
room defines functional skill-sets and tracks
progress against targets, while defining new
processes. It also builds digital talent capabilities
through collaborations with relevant stakeholders,
including compensation, legal and finance.
Build training programmes that are extensive,
mandatory and focused: Retraining existing staff can
be cost-effective—half as much as a new hire—and
builds loyalty. (New hires are two to three times
more likely to leave than longer-term employees.)
The larger idea is to create a culture of learning, in
which people share knowledge and best practices
with their peers, and a culture of mentorship for
experienced staff to help others grow.
Create a supportive, self-driven culture: For tech
talent to thrive, give people the autonomy to work
on discrete products—think more working and less
‘managing’. Keep the talent focused on building
business innovations rather than chasing approvals,
and get their feedback on a regular basis. Manage
performance by using well-understood metrics,
while providing opportunities for growth. The
principle is to invest in tools for digital talent to feel
empowered and ready to do interesting work that is
related to their skills.
Focus on motivation: In the tech talent world,
skill level is the coin of the realm. So, companies
need to provide relevant professional develop-
ment opportunities. This is a top issue for tech
talent, according to McKinsey research. Busi-
nesses that do well in keeping their talent develop
different experiences that can help people
advance, and offer the freedom to experiment.
Invest in prevention: It is possible to create a
‘predictive attrition model’ to identify those at
high risk of leaving. This model uses data drawn
from across the employee lifecycle to identify
patterns that enable companies to develop both
individual scores and company-wide ‘hot spots’.
On that basis, they can deploy specific interven-
tions to persuade people to stay.
We believe talent will become the single most
important factor in enabling tech-led business
building. Clearly, there is a need for more and
better education in general. But there are many
matters within the control of companies. It is up to
them to take responsibility for a well-thought-out
talent strategy. Those who don’t will be at a
competitive disadvantage, with unwelcome
consequences to them, and to India.
electric vehicle (EV) power packs in Ari-
zona. South Korea’s LG Energy Solution Ltd
cited surging costs and slowing demand for
its rethink. That’s a blow to EVs and batter-
ies, and to US supply chain onshoring. It is,
however, an opening for the funding of
under-the-radar tech breakthroughs.
So far, the energy storage industry has
been dominated by giants like China’s Con-
temporary Amperex Technology, BYD,
Samsung SDI and LG Energy Solutions.
Their scale has allowed them to gain market
share and supply demand. By making incre-
mental improvements to their batteries’
energy density and charging speed, it’s been
enough to keep investors satiated. That
largely shut out big funding for smaller but
promising tech startups. Investors prefer to
focus on EV makers more than batteries.
Now, as costs for everything from labour
to raw materials rise, big players like LG are
being forced to reconsider their strategy. As
the South Korean firm contemplates a cut-
back in Arizona, it struck a non-binding deal
with a Kansas-based miner, Compass Min-
erals, to supply lithium carbonate and
hydroxide. In June, the firm broke ground
on a nickel processing plant in Indonesia.
Regardless of the potential impact of LG’s
move, the recalibration is an opportunity to
get investors focused on technologies that
can move the needle. Nomura analysts esti-
mate over 40% of its battery production
capacity will be in the US by 2025.
Several startups are researching options
for better and cheaper batteries for EVs and
grid use, along with EV charging infrastruc-
ture. Across the energy storage supply
chain, small firms are looking for lower cost
options by using more abundantly available
materials like sodium, sulphur, manganese
and in some cases, no metals at all. With
progress on the cathode-side of the battery
topping, firms are now focused on other
parts like the anode, separator and electro-
lyte. Others are looking for processes that
will help store more energy.
Yet, they consistently run into funding
issues, given the hard-to-understand nature
of their product. On the face of it, the num-
bers don’t look bad: $3.3 billion of invest-
ments have been disclosed by around 34
battery-related startups since 2017. But
given the global green goals that need to be
met, it’s a paltry sum. Juxtaposed with the
fast funding for jazzy electric car startups
that haven’t quite delivered on their prom-
ises, it’s even smaller, and compared with
the $210 billion invested in fintech last
LG Energy Solution is rethinking its big EV
battery project in the US BLOOMBERG
year—led by crypto and blockchain—it’s
minuscule. Yet, as millions of people sit
through power outages across the globe,
our energy crisis needs solutions.
However, we are far behind on EVs and
an energy transition. Venture capitalists shy
away from innovations that aren’t digital.
Electrochemistry hasn’t exactly been a hot
investment space, either. Investors can’t
quite assess the efficacy and incremental
nature or risk the way scientists can, some
small firms say. Nor are they willing to put
their conviction and money behind tech-
nologies for manufacturing. Even the likes
of Tiger Global are writing relatively small
cheques. Late last month, Chase Coleman’s
firm led a $25 million Series A round for
India’s Battery Smart, a battery-swapping
provider, along with a couple of existing
investors. That’s a small sum.
The prospective vacuum created by LG
(and potentially its peers) will open up the
battery investment landscape, but barriers
to entry remain far too high because of the
large incumbents. Focused venture capital
and private equity firms led by scientists and
engineers, not just financiers, should open
their eyes a bit wider and come to terms
with reality: There will be no big break-
through anytime soon.
Instead, several battery chemistries are
likely to co-exist. The choice of range and
safety will be left to consumers. It’ll go
beyond the two choices drivers currently
have: nickel, cobalt, manganese packs or
lithium iron phosphate. The latter repre-
sent the tried and tested safer version that
won’t take you as far, but do the job for now.
Silicon anodes, sulphur-based cathodes,
cheaper lithium anodes and cell architec-
ture, where firms like the Warren Buffett-
backed BYD have had success, are where
high-profile investors need to start putting
their money and lead the way. If even
Charles Koch’s energy empire, which has
long been against climate regulation, is now
betting hundreds of millions on batteries,
then surely this is the best way forward.
Startups could take over three years to
run positive cash flow. Meanwhile, “scaling
up new technologies from the lab to mass
production can take as long as 10 years,”
according to BloombergNEF analysts.
Without money, that will take far longer and
push the mass adoption of EVs across the
world further out. ©BLOOMBERG

MY VIEW | PArAllAx VIEw

Our herd of unicorns can’t gallop too far from reality

companies, a few of which are valued at close
SANDIPAN DEB to $10 billion and more. Most of them are
essentially brokers that don’t even charge
customers a brokerage fee. A few of them
even pay customers to sign up with them.
What sort of business sense is that?
Three, the world needs to call out this valu-
ation bluff at some point of time. Boasts
about millions of users are meaningless if no
one is paying or if the company is selling
products and services at deep discounts. And
a focus on the top line without the slightest
Except to enrich smart promoters, who, at
every new round of funding—series C, D or
X—cash out on a bit of their holding based
on valuations driven by feverishly ambitious
Excel spreadsheets. And, as a couple of
recent cases indicate, a few of them may also
Silicon Valley and thousands of people dis-
covered that all those stock options in the
media-hyped companies they worked for
were worth nothing. One hopes India does
not see anything like that bloodbath.
It is important to recognize the valuation

I
ndia has more than 100 unicorns—start-
ups that are valued at $1 billion or more. As
many as 42 unicorns appeared last year, as
against 37 in the previous 10 years. And in
the first two months of this year, according
to a March 2022 report from HDFC Securi-
ties, a new unicorn was added every five
days. The brokerage firm predicted that
There are several factors working here.
One, promoters and their financiers are
hoping that these companies will be able to
achieve some sort of monopolistic position
in five or eight years’ time—the sort of posi-
tion a Facebook enjoys in social media—and
once that is reached, they will be able to
charge subscribers for premium services
interest in the bottom line can only lead to a be embezzling funds from the companies. game for what it fundamentally is. Unless a
bad end. There have also Maybe this is only to be company produces real value, it is merely
been several reports about expected. After all, most passing-the-parcel on a grand scale. Most
employees of these uni- The necessity promoters possibly realize investors are betting on being able to sell
corns—especially in edu- that though the ride is some of their stake at a profit to another
cation tech and hospitality of turning a heady, it may not last very group. The key objective, it would seem, is to
industries—misleading long and they need to take exit with as high a return on investment as
and defrauding customers
profit that care of their long-term possible before the bluff is called. Because in

is a former editor of ‘Financial

Express’, and founder-editor of
‘Open’ and ‘Swarajya’
magazines
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India could see over 100 new unicorns
emerge this year.
Things have changed a lot since then. Post
Russia’s invasion of Ukraine and global infla-
tionary pressures, money is not so cheap any
more. But even before Vladimir Putin sent
his army across the border, if one cared to
look, there were cracks showing in the
apparently glorious Indian unicorn façade.
February 2022 was as good as it gets for
Indian unicorns and it may not be the same
again for some time.
Sooner or later, common sense has to kick
in. The vast majority of these unicorns have
no discernible revenue models, let alone any
path to profitability. Consider the ‘fintech’
and make money. But perhaps only one
startup among 50 can attain that. In the
meantime, all 50 are burning cash like there
is no tomorrow with wild advertising bud-
gets and consumer promotions.
Two, take a look at the stock price charts
of PayTM, Zomato and Policybazaar. It is
utterly puzzling why people—and more
importantly, supposedly sensible mutual
funds—subscribed to these share issues. The
balance sheets of these companies can
hardly even be termed red. They are the
deepest shade of maroon. And none of them
in their share issue documents offered any
reasonable explanation of how they can ever
be profitable.
to meet their astronomical
sales targets.
underpins any financial health. Besides, as
long as you keep up the
most cases, someone is going to call the bluff
at some point in time. The final aim is to list
Four, what exactly are
some of these companies
business will hype, you can get away
with a ridiculously large
the company on a stock exchange, and if the
company has no profits to make and no
selling? How many of us catch up with a expense account. intrinsic worth, it is the retail investor who
need groceries delivered in As the classic song from loses money.
10 minutes, and why? How lot of startups the 1942 film Casablanca One of the lessons of the Ukraine war is
can any firm make money says, “The fundamental that it is the real stuff that matters. The West
from charging a customer things apply, as time goes declared unprecedented sanctions on Rus-
₹10 for someone to pick up a cake from a by.” I happened to be in the US in March sia, yet is also forced to import Russian oil,
bakery five kilometres away and bring it to 2000 when the dotcom bubble burst, attend- gas and minerals at prices that it has little
her in half an hour? Not that the customer is ing a conference organized by an American control over. In fact, Europe faces the pros-
complaining—after all, who wouldn’t want software company. Many of its clients—com- pect of a very bleak winter if Putin decides to
dreary odd jobs to be taken care of for an panies that had been trading on Nasdaq at ration its oil and gas supplies. One should
inconsequential fee. But many of these ser- awesome valuations—went belly-up almost keep that in mind before getting too excited
vices make no commercial sense. overnight. Offices were emptied out all over about India’s unicorns.
 14 MoNDay, 11 July 2022
New Delhi BUSINESS OF LIFE WORKPLACE LIVEMINT.COM

For leaders, too much

empathy is a bad idea ISTOCKPHOTO

Radha Dhir, the chief executive and country head (India) of JLL.

MONDAY MOTIVATION

Why ‘me’ time

should never
ever be missed
JLL India head Radha Dhir talks about
productivity and mentorship
Rashmi Menon
rashmi.m@livemint.com

F
or Radha Dhir, the chief executive and country head (India)
of JLL, finding ways to reduce one’s carbon footprint in
every way possible is the need of the hour. It’s something she
encourages at her workplace and follows in personal life too. For
instance, during weekdays, everyone in her family uses one
bucket of water for bathing purposes. “It’s a rule in my house. You
can treat yourself with a shower only on weekends,” she says.
Leadership is not a popularity contest; it’s a series of balancing acts between many important stakeholders; and (below) Marshall Goldsmith. What’s more, she avoids using elevators in residential buildings
as much as possible, and follows a vegetarian diet.
Marshall Goldsmith on pany goes broke or is bought over. And leader- ward. It doesn’t just apply to regrets or remi- Mumbai-based Dhir took over the leadership mantle of the
ship is not a popularity contest; it’s a series of niscing about the glory days of the past, but also commercial properties’ services firm last year, after having
where to draw the line balancing act between many important stake- shedding notions that one closely held on to for worked at Yes Bank and Deutsche Bank. She has a YouTube
holders. In fact, focusing a lot on empathy can years like delayed gratification. Most of the peo- channel and a podcast on fitness, and is a trained classical singer.
when it comes to empathy also lead to burnout among the leaders. ple I coach are have mastered it. In an interview, she talks about her mentors and productivity
at the workplace and What’s interesting to note is that leaders
today are nicer, thoughtful and inclusive than
One of my favourite stories is that of Jack
Welch, the former chairman and CEO of Gen-
hacks. Edited excerpts:

what he learnt from the ever, and their feedback is worse than ever. eral Electric. At one point in his life, Welch Who do you consider your mentor?
Why? The expectations of employees are totally underwent triple bypass surgery and thought I have been fortunate to have a mentor to guide me at three dif-
‘Bhagavat Gita’ about different today. The employees can afford to he might die. When he recovered, a friend asked ferent stages of my career. They all were my superiors in my pre-
leave their jobs and don’t put up with bad atti- him what he learnt about life when he thought vious organisation. All of them took a keen interest in my career
making life choices tude from bosses. Behaviours that were toler- he was dying. “Why am I drinking a damn cheap and its progression. They guided me on how to grow businesses,
ated five or 10 years ago, in fact even celebrated wine?” Welch responded. Welch had an incred- taught the importance of building an
Rashmi Menon
20 years ago, would get a leader fired today. So ible wine collection, he was rich, and yet he ‘Being a mentor internal and external network, how to
the leaders today are much more under watch. drank cheap wine. He was waiting for the wine means being create strategy and, more importantly,
rashmi.m@livemint.com So, what can a leader do? in his collection to appreciate in value. That’s how to be an effective leader and
It is what it is. One option is to whine about it insane. And he realised, what was he doing? a trusted develop a team of leaders.
advisor, friend, One major insight you incorpo-

W
e talk about empathy as
nothing but good would
come from it. But it’s
important to talk about
when empathy is not so
useful,” says Marshall Goldsmith, an author and
one of the world’s leading executive coaches.
Empathy has often been called a workplace
essential, especially for leaders. But Goldsmith,
who recently released The Earned Life (co-au-
thored by Mark Reiter), cautions that leaning
too much towards empathy may harm leaders
as well as the organisation.
While in India a few weeks ago for an event
hosted by human resource services organisa-
tion Randstad India, Goldsmith spoke to Mint
about where to draw line when it comes to
empathy at the workplace, why achievement
does not equal to happiness, and why delayed
gratification may not necessarily bring satisfac-
tion. Edited excerpts:
In the pandemic era, there’s far more con-
versation on the importance of empathy.
Why is too much of it bad?
It’s good to be empathetic but you are not
doing any of the employees a favour if the com-
and the other, to make the best of it. One thing ‘What am I waiting for when I almost died?’
I talk about in the book, and it talks about lot of Sometimes you need to be happy. If you keep buddy, and rated with the help of your men-
things I learnt from the Bhagavat Gita... in life Hollywood is trying to be an actor because that’s delaying gratification your whole life, you know confidante’ tor’s guidance?
you have a choice, bad and worse. Pick the bad what they love, and they are all broke. So it’s a what you will get? Delay. You know what you One key piece of advice I got was to
and make the best of it. nice theory but it’s ridiculous. will not get? Gratification. be nimble and quick to respond to
In the book you say that achieving some- You coach so many business leaders. What Do you have any regrets? changing external factors, and not be emotionally attached to
thing you wanted to achieve doesn’t always is that one common behavioural aspect I really don’t have much regrets. I pretty existing/ past decisions. As a leader, you must learn to make
bring happiness. Why? you work on with them? much make peace…I mean, I have made thou- tough decisions, and I have always remembered that all decisions
Achievement is good if it’s connected to a We are brought up in a society where we need sands of mistakes but if you ask me what I would are taken keeping the organisation and clients in mind.
higher sense of purpose. Otherwise it’s a fool’s to prove how smart and wonderful we are over change if I could go back in time, I would say What does being a mentor mean to you?
game for two reasons. You don’t have control of and over again. Although it’s hard to stop, you nothing. If I get rid of the mistakes I would get To me, being a mentor means being a trusted advisor, friend,
the results, and what (referring to leaders) rid of everything I learnt from those mistakes. buddy, and confidante, who is there to provide guidance and sup-
happens after you have to stop doing So, I am happy with my life. port in navigating a career and enabling another person’s profes-
achieve the results, ‘Achievement is good if it’s that. Stop being right Any mistake that helped you grow sional and personal development. This is most effective when you
you want more connected to a higher all the time or being immensely? keep in mind the mentee’s needs which he or she would have
results. the smartest person, It would be fighting to make it to the high defined upfront.
You can achieve a sense of purpose. Otherwise let other people be the school football team. It was the best thing that Your productivity principles?
lot and be happy or it’s a fool’s game’ heroes. When you are happened to me. I was a terrible athlete and it I believe that if you want to do something, you will have to find
achieve a lot and be at the bottom, it’s diverted my focus on studies. Sure, I was disap- time for it. So, taking care of one’s physical and mental well-being
miserable. The satis- okay to try proving pointed at the time but in hindsight I was lucky. is important. For me, carving out time for workouts, listening to
faction is minimal. So, never assume that how smart you are. When you are at the top, you Another stupid mistake was getting seriously music, playing a sport or spending time with family helps me stay
achievement leads to happiness, gives meaning have to quit doing that. It’s not about you being injured during a surfing trip when I was 27. productive. You have to find “me”. Do not be a unidimensional
to life or helps in finding peace. a hero, rather letting others being one. That’s Some of my friends egged me to ride a giant personality.
On the other hand, don’t assume that because what leadership is all about. wave, which lead to me breaking my neck in two
you are happy, you are achieving a lot either. Your book also talks about letting go. How places. I wasn’t sure whether I would be able to Monday Motivation is a series featuring founders, business leaders
There is a ridiculous saying, ‘Do what you love important is it in the workplace? walk again. That was a mistake. Good news is I and creative individuals who tell us about the people they look up
and the money will follow’. Every waitress in Letting go is a key component to move for- didn’t die, I am not a quadriplegic. I was lucky. to and their work ethics.

It’s vital to have an honest talk about that appraisal letter ISTOOCKPHOTO

Openly discussing review transparent communication is well gation on the listener to act on them per- ties, all go a long way in motivating them
known to build trust among colleagues. haps; a genuine listening ear is sometimes to come back with a bang. Encouraging
reports creates a sense sufficient in improving a situation. them to work in unison with co-workers,
of deeper ownership LET’S TALK Managers also need to show a lot of investing time in reading, networking
Congratulating every team member who patience in such instances. They need to with people they look up to in the organi-
and pushes people to has received a positive review is an impor- show a genuine interest in understanding sation and, most importantly, believing in
tant acknowledgement of their efforts and why a team member failed to meet their the organization and its processes must be
do better work presence. Celebrating performance out- targets in the current quarter or the previ- key focus areas in such discussions.
comes, however big or small, creates a ous one. They need to ask employee what All developmental conversations are
Mark T. Fernandes sense of deeper ownership and stronger they felt about their appraisal. Such efforts bi-partite in their very nature. For the
accountability. help bolster confidence and faith in the employee, this would mean taking up

T
he appraisal season has almost
wrapped up for the financial year in
most organisations. Some people
are celebrating after reading their per-
formance feedback letters, others are
unsatisfied with how they were evaluated.
There’s a step missing in this exercise,
however. After distributing the letters,
managers need to walk an extra mile and
own their team members’ appraisal rat-
ings by communicating the results to
them in a fair and transparent manner.
Whether an employee has performed
well or not, it’s important for a manager to
have an honest conversation with them
and make them aware of what they have
done to deserve the raise, and/or what
they can do to improve their performance.
Such an exercise pushes people to intro-
spect and encourages them to find ways to
become better workers. What’s more,
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Giving feedback is more important
when an employee has had an unsatisfac-
tory year. They need the most attention
and care. Negative feedback often contra-
dicts the stories we tell about ourselves—
what we’re good at and what we’re capable
of—and sometimes even confirms our
worst fears. But without feedback, there is
minimal possibility for growth, resulting
in the Golem effect, wherein a manager’s
low expectations affect a subordinate’s
performance even further.
Ironically, when it comes to appraisal
ratings, many managers don’t say much—
a reason for this evasiveness stems from
their inability to have authentic, crucial
conversations around what is working and
what isn’t and why. It’s true that such con-
versations are uncomfortable, but a team
can’t grow in a place where two-way feed-
back isn’t regular and consistent.
TRUST ISSUES
After receiving a bad review, it’s not
uncommon for employees to suddenly
become negative about everything and
everyone in the work ecosystem. They
think of their reviewing authorities as
their biggest enemies and even start hat-
ing the organisation. They see themselves
as victims and become passive aggressive
and actively disengaged.
While such behaviour is not profes-
sional, one can’t always completely blame
the individual. When conversations that
matter are avoided, it’s natural that trust
deficits hit an all-time high, leading to an
environment of toxic scepticism and a
feeling of victimisation. What is most
needed in such instances is a safe space,
where team members and express their
thoughts and concerns. There is no obli-
employee, pushing them do better and
reminding them that active support is
available whenever required. It also
reminds them that this is perhaps just a
temporary phase and should not demoti-
vate them. Counselling cannot happen if
manager’s aren’t ready to listen and allow
room for “healthy venting”.
It’s important to understand that speak-
ing with such employees and providing
necessary guidance whenever and wher-
ever required by being emotionally and
physically available, is key to their turn-
around process. Of course, there are peo-
ple who don’t improve themselves despite
consistent feedback and reminders, but a
manager’s duty is to give them enough
chances before giving up on them.
Checking on them, supporting them
with a mentor, engaging with them mean-
ingfully in all team discussions and activi-
ownership and accountability for per-
formance and behavioural shifts. While
having such conversations regularly, it is
also important to be open about aspira-
tions, needs and wants.
For the manager, it would mean nurtur-
ing a climate where employees are
allowed to be open, and can have conver-
sations related to their career as well as
performance. It also helps the manager to
become better at their job.
For any workplace to grow, it’s impor-
tant to have space for constant two-way
feedback. We grow from learning from
each other and by looking after each
other.
The author is a senior vice president, human
resources, with Kotak Life.
Write to us at businessoflife@livemint.com