MuMBAI, NEw DELHI, BENGALURU, kOLkATA, CHENNAI, AHMEDABAD, HyDERABAD, CHANDIGARH*, pUNE*, LUCkNOw* VOL. 6 NO.

291

Thursday, December 7, 2023

Think Ahead. Think Growth.

mint primer QUICK EDIT

Stormy Monday: Room for

Why our cities vroom
November’s auto sales figures
are flood-prone are splendid. Over 2.85 million
vehicles were sold last month,
according to data released on
BY N. MADHAVAN Wednesday by the Federation
Cyclone Michaung has brought India’s fourth largest city, Chennai, to of Automobile Dealers Associa-
its knees. Its recent efforts to prepare for such extreme weather events tions. This is the highest
have been found to be wanting. Mint explains why the city, which monthly figure on record,
prides itself as an ideal investment destination, needs to do a lot more. roundly beating the previous
high of 2.57 million units in
March 2020, a point when a
transition from Bharat Stage 4
emission norms to Stage 6 rules
had led many customers to
advance their purchases to beat
anticipated price hikes. A big
boost came from festive-season
Rising Impact demand, as Dhanteras and
India faced significant loss from extreme weather events in the first nine
Diwali were celebrated during
months of 2023. the month. But overall demand

2,923 80,653 1.84

Human Houses
lives lost destroyed
How hard did Cyclone
1 Michaung hit Chennai?
The slow-moving cyclone dumped
an unprecedented 43 cm of rain in
just 35 hours leading to massive
flooding across the city. This
caused a major power outage
which lasted more than 36 hours
and it disrupted telecom services,
including the internet. Thousands
of residents were evacuated by
boat while many more struggled
without food or drinking water.
Eight people have died. Chennai
airport, one of India’s busiest, was
shut down due to water-logging on
Monday and all incoming flights
were diverted to other nearby
airports. Scores of train services
were cancelled. Arterial highways
were cut off too.
AFP
mn hectares 92,519
Crop area Livestock
affected killed
Source: Centre for Science and Environment
What was the
2 economic impact?
It is expected to be severe. Many
industrial estates in and around
the city have been flooded and its
impact will be known in the
coming days. The automobile and
electronics cluster of
Sriperumbudur and Oragadam—
home to Hyundai, Daimler,
Renault-Nissan, Foxconn and
many other global majors—had to
shut operations on Monday and
operated with skeletal staff on
Tuesday. With airports shut, trains
cancelled and roads flooded,
economic activity came to a halt
for two days. Chennai’s famed IT-
hub is still under water. Experts
fear economic loss could run into
hundreds of crores of rupees.
also appears to have recovered
from its pandemic slump. It
wasn’t just personal four-
wheelers, with 360,000 units
sold, that touched a new high,
but also two-wheelers, selling
almost 2.25 million. The offtake
of more expensive products, by
and large, had recovered faster
from the pandemic. A broader
pick-up is, therefore, especially
welcome. Sales could yet
decline a bit from this level as
the calendar year draws to an
end, although looming price
hikes by some manufacturers
might spur price-sensitive pur-
chases. In all, it’s a vroom story
with room for more.
MINT METRIC
by Bibek Debroy

When Navin Bhatt was declared dead,

3 Have things returned to
normal?
Not yet. Almost 36 hours after the last drop
Funeral rites performed, tears were shed.
of rain, parts of the city are still flooded and
Mistaken identity by the cops,
without power. While the administration Must rank among the worst of flops.
has been working on a war footing, such is
the scale of damage that it is taking
A wrong Navin interred instead.
frustratingly long to restore normalcy.
Airports resumed operations on Tuesday
and train services too have begun but most
industrial estates are yet to resume work.
QUOTE OF THE DAY
At the end of next week, we need
4 Why is Chennai so
unprepared?
Compared to earlier years,
5 What more should
Chennai do?
Not just Chennai but all Indian
COP to deliver a bullet train to
Chennai was theoretically better cities that are prone to extreme
speed up climate action. We
prepared as it had built a network weather events need to be better currently have an old caboose
of storm water drains (at a cost of prepared. They include Bengaluru,
₹4,000 crore). But due to the poor National Capital Region and
chugging over rickety tracks.
quality of construction and the Mumbai. All of these cities had
massive amount of rain that faced extreme weather events
Chennai received, it failed to recently. As per the World
evacuate the water in many parts Meteorological Organization, India
of the city. Rampant lost $4.2 billion in 2022 to climate SIMON STIELL
encroachment and choking of disasters, pointing to the need for a climate chief, UN
water bodies, especially in the disaster mitigation plan. If such a
southern outskirts, is another plan is not put in place soon, not
reason for the present crisis. just Chennai but the entire nation’s
Simply put, the city is paying the claim of being an ideal investment
price of unplanned development. destination will be questioned.

MINT PODCASTS

WELL-BEING MATTERS TAX ON MINORS NEW INCENTIVE

Amid a rise in hybrid working, led by Mint’s Shipra Singh Sorout speaks As India Inc. looks beyond wage hikes
the covid-19 pandemic, wars, and with Nitesh Buddhadev, founder of to retain high performers, firms are
geopolitics, a key Nimit Consultancy, focusing on person-
question that arises about the tax rules alized upskilling
is: How can firms that become appli- programs as an
ensure the well-be- cable on a minor incentive. Nishchae
ing of their staff? child when she/he Suri, managing
Join Leslie D’Monte earns a cash prize, director India for
and Jayanth N. gets an inheritance, Cornerstone, talks
Kolla in conversation with Susanna or her/his parents invest in their to Devina Sengupta on The Working
Sjoberg, an organizational mental name. Tune into this podcast to gain Life about how upskilling can be the
health expert, to find answers. some useful insights. crucial ace up HR’s sleeve.
 PLAIN FACTS

In charts: Growing cult

of derivatives trading
BY NITI KIRAN

I
ndia’s derivatives market has seen exponential growth in the past few years. This segment tends to lure investors as one
can take a larger exposure with a lower investment—you put just a fraction of the notional value to trade in the futures
and options (F&O) segment, which could significantly push profit margins (but also losses). While these products are seen
as a pathway to make a quick buck, they also come with their own share of risks, leaving the market regulator worried. At
a recent quarterly board meeting, Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch expressed
concern about retail investors participating in equity derivatives trading, saying it was the regulator’s responsibility to caution
investors, adding that Sebi was not worried about systemic risks.

F&O basics What’s going on?

Derivative: A product whose value is derived from
other securities, such as shares, forex, a commodity or
any other asset. These are contracts that come with a
fixed expiry date.
Example:
A futures contract takes place when a trader
agrees to buy/sell a specific underlying asset at a
pre-decided price at a future date. This helps them
hedge against risk of volatility.
The derivatives trading volumes in India have overtaken the
cash market volumes by a huge margin, all within the last five
years. Investors across the world show great proclivity
towards derivatives markets, but India’s ratio of derivatives
volumes to its cash market volumes is astounding, indicating
unbounded excitement.
Ratio between equity derivatives and cash market turnover
(total for BSE and NSE)
400 395.6

The most common variants 300

of derivatives are
forwards, futures,
options and swaps. 200

100

0
2004-05 2023-24
Data till 30 September 2023

Derivatives-to-cash volumes ratio

India 422
Germany 36
Factors driving recent boom Israel 17
 Leverage combined with the ease of onboarding Brazil 13
 Interface of the new-generation trading apps
South Korea 12
 Shorter-duration options are boosting volumes and
are set to spike it further US 9
Worries abound Hong Kong 5
 The exponential growth and retail frenzy worry the Japan 2
market regulator as individual investors lack expertise to
trade in this segment Australia 2
 The F&O segment has a dismal win ratio, a Sebi study Spain 2
revealed Poland 1
 Currently, no curbs at play; only risk disclosures
Data as on 31 July 2023

The trade leaderboard

Retail investors currently have over a one-fourth share in turnover in equity derivatives—with nearly 35% in index options,
followed by 31% each in index futures and stock options. But proprietary traders (brokers trading with their own money
rather than clients’) remain the biggest investors, and their share has been consistently rising. More sophisticated investors
such as foreign institutional investors have also been tightening their grip over derivatives.
Share of clients in equity derivatives (notional turnover) at NSE (%) Product-wise participant profile, % share in turnover
Proprietary traders Individual investors Corporates (Apr-Sep 2023)
FPI DII Others Index futures Stock futures
Proprietary traders 33.7 35.9
FY16
Individual investors 31 16.2
FY17 Corporates 10.9 7.1
FY18 FPI 13.5 24.2
FY19 DII 3.4 8.8
FY20 Index options Stock options
FY21 Proprietary traders 49.4 59.1
Individual investors 34.9 30.7
FY22
Corporates 2.7 3.5
FY23
FPI 7.8 4
FY24 DII 0.1 0.2
0 20 40 60 80 100
FY24 data till September 2023.

The sustained interest in F&O trading,

despite significant losses and regulatory 58.54 billion
warnings, underscores the allure of market Number of
rallies and zero-day options (a one-day contracts traded
bet). While this trend may persist, the Sebi on NSE’s equity
report's revelation should act as a collective derivatives
wake-up call. Derivatives trading demands in-depth segment so far
this fiscal, up
knowledge of products and risks; blindly entering this arena
from 41.76 billion
leads to inevitable losses. in FY23
Satish Menon, executive director, Geojit Financial Services

Fraught with risk

However, dabbling in derivatives can prove risky as it can easily turn into a weapon of mass destruction. Many individuals
lack the expertise to deal with this segment. A Sebi study in January pointed out that nine out of 10 investors lose money in
F&O trading, and senior citizens suffer the most.
Share of lossmakers in equity F&O segment (in %) Average loss realized by lossmakers in equity F&O segment,
FY22, by age group (in ₹)
FY19 FY22

89 90 -65,780 <20 years

87
85 -58,735 20-30 years
83
-116,821 30-40 years
76
-172,651 40-50-years

-208,661 50-60 years

All individuals Active Non-active -244,970 60 years+

Active traders are defined as individual traders who had
traded more than five times during a year. Data for only individual investors.

Source: Sebi, National Stock Exchange, BSE, Axis Mutual Fund report
PARAS JAIN/MINT

PEANUTS by Charles M. Schulz

 MUMbAI, NEW DELHI, BENGALURU, kOLkATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCkNOW* VOL. 6 NO. 291 Rs. 10.00 18 PAGES

Thursday, December 7, 2023

How sustainability became Festive season sees cautious

livemint.com serious business uP10 spending uP7

SENSEX 69,653.75 357.61 NIFTY 20,937.7 82.6 DOLLAR ₹83.32 ₹0.06 EURO ₹89.91 ₹0.41 OIL $76.51 $1.46 GOLD ₹61,969 ₹132

Sebi notices to FPIs IMF for debt swap,

local fund raising
Ola Electric
races to file
DON’T MISS
MINT

DRHP in
in Hindenburg saga in climate action two weeks
Alisha Sachdev
FPIs in Adani firms did not maintain, disclose ownership info Puja Das alisha.sachdev@livemint.com
puja.das@livemint.com NEW DELHI
DUBAI Centre seeks Parliament nod
Pavan Burugula

B
havish Aggarwal-led Ola to spend ₹1.29 trillion in FY24
bUILDINg CASE
T
pavan.burugula@livemint.com he International Mone- Electric aims to file draft The central government on Wednesday
NEW DELHI tary Fund (IMF) is keen share sale papers in the sought Parliament’s approval to spend ₹1.29
The issuance of show-cause notices to the FPIs is indication
on debt-for-climate next two weeks, two people trillion in FY24, which included redistributing

T
he stock market regulator
has issued show-cause
notices to about a dozen
foreign investors that
owned big chunks of
Adani group companies as it seeks to
lift the veil on their true ownership,
two people aware of the matter said.
The notices charge the investors
with failing to maintain and disclose
information about their ultimate
beneficiaries.
The Securities and Exchange
Board of India’s (Sebi) notices to the
foreign portfolio investors (FPIs) fol-
low its investigations after US short-
seller Hindenburg Research high-
lighted them in a damning report
released in January. The report said
several of these funds had the bulk of
their investment portfolio concen-
trated in Adani group companies.
Following the report, most of these
funds either exited or reduced their
stakes in Adani group companies.
The Adani group has rejected the
allegations in the Hindenburg
report.
“The notices mostly pertain to
beneficial ownership information of
the funds, which was in question
post-Hindenburg allegations, and
that Sebi has completed its probe into the allegations. funds among ministries and departments.
swaps for countries struggling aware of the matter said, ahead
 ABOUT a dozen FPIs have received show-cause notices from Sebi in to raise funds for climate of the electric two-wheeler This was the first supplementary demand for
connection with Hindenburg report probe change-related action, manag- maker’s plans to go public early grants for FY24 by the government. >P2
 THE notices allege violation of disclosure norms by these foreign funds ing director Kristalina Georgi- next year.
 THEY are said to have violated Sebi guidelines on maintenance of eva said. The agency is devis- The company is also press- FPI equity assets at 22-month
beneficial ownership information ing key performance indica- ing ahead with an aggressive high, overcoming Oct setback
 THE Hindenburg report had highlighted tors for emerging and Kristalina Georgieva, retail strategy, including
Equity assets for foreign portfolio investors
the names of some of these funds developing countries to managing director, IMF. REUTERS launching products at a dis- (FPIs) hit a 22-month high at $674.66 billion in
 POST the report, most of these project their climate actions count and cutting prices of cur- the fortnight ended 30 November, driven by
funds either exited or pruned forward and get relief to fund up by one percentage point rent products, trying to consol- a significant revival in their flows after a two-
their stakes in Adani group them. “We haven’t yet found over the next few years,” Geor- idate its market position ahead month hiatus, and a 7% rally from the lows of
companies the formula for how to do gieva said. of its listing. October-end. >P4
that... but we are thinking Additionally, she suggested According to the people
about it,” the IMF chief said in deployment of direct and indi- cited above, the company NFRA debars two accountants
an interview. rect subsidies worth $7 trillion wants to file its draft red her-
Debt-for-climate swaps to fight climate change, in the ring prospectus (DRHP) before
for lapses in DHFL audit
help reduce national debt in context of about $7.1 trillion of 20 December, before bankers The National Financial Reporting Authority
exchange for policy commit- direct and indirect subsidies and financial market partici- (NFRA) has debarred two partners of
ments or spending by debtor provided by governments pants break for year-end holi- Mumbai-based firm for alleged professional
misconduct in auditing Devan Housing
countries. Innovative swaps across the world. “Just think days. This deadline, one of the Finance Corp. Ltd’s (DHFL) FY18 accounts, as
the funds are in the process of A show-cause notice is issued by can help indebted govern- what we can do with $7 trillion two people said, was critical for part of its efforts to improve audit quality.>P6
responding to these notices,” one of Sebi once its investigation team con- ments get access to funding for if we were to deploy that in the the initial public offering (IPO)
the two people cited above said on cludes the probe. The parties are climate change-related action. fight against climate change,” to happen before next year’s
the condition of anonymity. required to respond to the charges “Decarbonization is very Georgieva said. general elections. Arbitration pacts binding on all
The market regulator last month mentioned in the notice; after this, difficult for countries with She also said developing Ola declined to offer a com- companies in a group: SC
informed the apex court that most of the case goes to adjudication in high levels of debt. Fortu- economies need to do more to ment on Mint’s queries. In a significant verdict, the Supreme Court
its investigations in the Adani-Hin- which Sebi passes orders. nately, the number of coun- raise local financing and The Bengaluru-based elec- on Wednesday held that an arbitration deal
denburg matter have concluded and An email sent to Sebi and Adani tries that are in debt distress is deepen capital markets to tric vehicle maker was last val- can be binding on non-signatory firms under
the regulator will not seek additional group remained unanswered. relatively small. But the num- invest in climate action. And ued at $5.4-5.5 billion in Octo- “group of companies” doctrine. A five-judge
time for the same. The Supreme Maintaining beneficial ownership ber of countries that are close that is an area where IMF can ber when it raised $384.43 mil- constitution bench headed by Chief Justice
Court has reserved its order in the to that distress is significant. help, she added. D.Y. Chandrachud made the ruling. >P8
matter. TURN TO PAGE 6 And we see those levels going FULL INTERVIEW ON P2 TURN TO PAGE 6

App fiasco: BoB now EU liquor cos for

traces consent forms 50% cut in tariff
Shayan Ghosh Dhirendra Kumar
shayan.g@livemint.com dhirendra.kumar@livemint.com
MUMBAI NEW DELHI

B L
ank of Baroda (BoB) is
trying to trace the paper
trail behind a recent
scandal where some employ-
ees allegedly created false app
sign-ups using random mobile
phone numbers, two officials
at the state-owned lender said.
The bank has asked branches
to produce customer consent
and registration forms for
signing up on the bob World
app and changing mobile
numbers.
Branches have been told to
upload the forms on an inter-
nal portal in the next few days,
while regional offices have
held virtual meetings with
branches to highlight the
urgency of the matter, the
people cited above said on the
condition of anonymity. Bran-
An external agency is
supervising BoB’s audit. REUTERS
ches have also received a doc-
ument on how to upload these
forms on the portal. Each
branch will be able to see a list
of its bank accounts for which
documents need to be fur-
nished. Mint has seen a copy of
the document.
Following an Al Jazeera
TURN TO PAGE 6
iquor makers in Euro-
pean Union (EU) have
pressed for a halving of
India’s import tariff in their
free trade discussions, a top EU
liquor industry executive said.
According to Pauline Basti-
don, director of trade & eco-
nomic affairs at spiritsEU- Pauline Bastidon, director of
ROPE, an apex body of multi- trade and economic affairs,
ple liquor manufacturers in spiritsEUROPE.
the EU, the share of European
spirits in the Indian market ject in India, the spirits indus-
was a mere 2.5% of the total try body chief suggested. Also,
alcohol market of 385 million spiritsEUROPE has sought
cases in 2022. India currently protection of intellectual
levies 150% tariff on imported property (IP) and geographic
liquor. indication (GI) rights for its
Negotiators in India-EU free products in the proposed FTA
trade agreement (FTA) talks with India. GI rights refers to
should address regulatory protection of the geographical
issues at federal and state lev-
els since alcohol is a state sub- TURN TO PAGE 6

Global luxury brands knock at India gate

Varuni Khosla smaller cities with a lot of
varuni.k@livemint.com wealth once the bigger city
NEW DELHI markets become better devel-
oped. India has a big advantage

G
lobal luxury brands
spanning apparel, cos-
metics and accessories
are gunning for the Indian
market, at a time malls dedi-
cated for the uber-rich are
sprouting across the country.
According to multiple indus-
try executives, a dozen luxury
brands are close to opening
their first India stores, or look-
ing to scale up their presence
in the country.
Dolce & Gabbana of Italy
plans to start its Indian journey
with private appointments in
December, to be followed by
full-fledged stores in Delhi and
Mumbai, while rival Italian
firm Golden Goose will start
with a store at The Chanakya,
a luxury mall in Delhi’s Cha-
nakyapuri, the people cited
above said on the condition of
anonymity. French luxury
Italian firm Golden Goose is set to open a store at The Chanakya
luxury mall at Chanakyapuri in New Delhi.
firms S.T. Dupont and Jacque-
mus are also weighing an India
entry, while Spain’s Balen-
ciaga is working on its first
store in Mumbai. Loro Piana,
owned by French luxury firm
LVMH, is said to be making a
comeback, after having exited
the country earlier.
“India has very many mar-
kets beyond the big cities. I can
say with confidence that all the
BLOOMBERG
luxury companies in France
are thinking of India in a seri-
ous way,” said Bénédicte Epi-
nay, CEO of Comité Colbert,
France’s official luxury associ-
ation representing 95 of the
world’s top luxury brands.
“Maybe these brands may
expand their stores in big cities
and take a digital approach [to
smaller cities] to begin with
but later will start to go to the
with smartphone penetra-
tion,” Epinay said.
On Wednesday, Aditya Birla
Fashion formed a joint venture
with French footwear brand
Christian Louboutin for the
Indian market, with both part-
ners holding equal stake. Lou-
boutin was already present in
India, but as an independent
company.
Brioni, an Italian menswear
brand, last month launched its
first store in India through
local partner DS Luxury, a part
of tobacco-to-spices major
Dharampal Satyapal Ltd.
French department store Gal-
eries Lafayette last year
announced its plans to come to
India, and will begin opera-
tions in Mumbai in 2024 and
DLF Ltd’s Emporio mall in
TURN TO PAGE 6
02 ThursDay, 7 DeceMber 2023
MuMbai ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
Over 31% rise in offences stoking
‘Raise domestic financing to
fund climate action projects’
group enmity last year
New Delhi: Over 1,500 cases were registered under IPC section
153A that penalizes promoting enmity between different groups,
including offences of hate speech, across India in 2022, a 31.25%
increase from 2021 but a 15.57% decline from 2020, according to
the National Crime Record Bureau. Of the 1,523 cases, the highest
were reported from Uttar Pradesh (217) followed by Rajasthan Puja Das collaboration with the World Bank. I
(191), Maharashtra (178), Tamil Nadu (146), Telangana (119), puja.das@livemint.com talked to leaders from Africa, and they
Andhra Pradesh (109) and Madhya Pradesh (108). PTI DUBAI completely embrace our objective of
setting a target somewhere between

D
eveloping economies 0.5% and 1% increase of tax to GDP
Garba dance is in UNESCO’s need to do more domesti- based on better policy, and stronger
cally to raise financing institutions using digitalization.
cultural heritage list and deepen domestic Second, we know that many devel-
MINT
capital markets to partici- oping economies have difficulty
pate and invest in climate action, said attracting private investors because of
International Monetary Fund (IMF) complicated regulations and red tape.
managing director Kristalina Georgi- So, we have built again, a big pro-
eva in an interview held during the cli- gramme in that area. Help countries to
mate summit in Dubai. stand tall for private investors to see
The IMF has identified domestic them.
resource mobilization as an area Third, we work concretely on mov-
where it can help. As part of the plan, ing more financing to developing
the IMF will start a new programme countries, not only through the RST
with the World Bank on tax, quality of (Resilience and Sustainability Trust).
spending and local currencies and The RST is our most direct contribu-
bond markets next year to help devel- tion, but also by bringing development
Ahmedabad: UNESCO has approved the inclusion of Guj- oping economies tap their tax poten- finance and private financiers
arat’s traditional Garba dance in its ‘Representative List of tial to finance development goals. Its together to discuss opportunities.
the Intangible Cultural Heritage of Humanity’, chief minis- objective is to set the target between a We are also very loud that we need
ter Bhupendra Patel announced on Wednesday. India had 0.5% and 1% increase in the tax-to- more money from the rich world. You
nominated Garba, performed across Gujarat and in many GDP ratio based on better policy and promised $100 billion a year. Where is
other parts of the country during the Navratri festival, for stronger institutions using digitaliza- it? Please show us the money. So, it’s
inclusion in the list. PTI tion. Georgieva said the IMF is also in the last 10 years has jumped from advanced economies now moving thirds of the emission increase comes not going to be one thing, it will be a
interested in debt-for- climate swaps $20 per tonne on average, IMF analy- towards industrial policy and green from fast-growing emerging markets combination of factors. And when
to help developing economies with sis shows that it has to go up to $85 by subsidies—which overall is a good in developing economies. countries have strong fundamentals,

‘
Lalduhoma to be sworn in as new climate change adaptation and mitiga- 2030 to be impactful. Direct and indi- track to accelerate So, what do we do good things happen.
tion. She said many developing econo- rect subsidies worth $7.1 trillion must decarbonization—they in that difficult con- What is the IMF bringing to
Mizoram CM on Friday mies have difficulty attracting private be deployed to fight climate change, become more attractive We have identified text? COP28?
Aizawl: ZPM legislature party leader Lalduhoma will be sworn investors because of complex regula- said Georgieva. Edited excerpts: for private investors First, we recognize We bring our assessment of how far
in as the new chief minister of Mizoram on Friday, a Raj Bhavan tions. So, the IMF is working on mov- Managing expensive budgets and because it’s easier to domestic resource that the developing we are in implementing the Paris
official said. Besides Lalduhoma, other members of his council ing more financing to costs can be difficult invest in the developed mobilization as economies do need to Agreement. The emission reductions
of ministers will also be sworn in on Friday at 11 am in a function developing countries, INTERVIEW for
m developing world. an area where the do more domestically to are not at par with what is necessary
at the Raj Bhavan, the official said on Wednesday. Earlier in the not only through countries. What are So, in that environ- raise financing and also for the world to remain on track for 1.5
day, Lalduhoma met Governor Hari Babu Khambampati at the direct contribution but the solutions? ment, it is difficult for
fund can do to deepen domestic cap- degrees Celsius on the increase of
Raj Bhavan and staked claim to form the government.The gover- also by bringing development finance Yes, it is difficult in a world that has emerging markets and quite a lot ital markets. We have temperatures. Our research shows
nor invited him to form the government. PTI and private financiers together to dis- gone from one shot to another with developing economies Kristalina Georgieva identified domestic that nationally determined contribu-
cuss opportunities. the consequence being fiscal space in to invest in climate IMF managing director resource mobilization as tions, taken together, are likely to
To accelerate decarbonization and countries has shrunk in some coun- action. And yet, if they an area where the fund deliver in this decade only an 11%
World on verge of breaching 5 meet the 1.5 degree celsius target, tries. The fight against inflation means don’t, the world is can do quite a lot. Next reduction vis-a-vis 2019. To stay on
Georgieva suggested countries, that interest rates are high, and for cooked because even if the US, year, we will start a very big pro- track for 1.5 degree, or at least for 2
climate tipping points: report including India introduce carbon pri- countries with a high level of debt that Europe, Japan and Australia bring gramme on tax, quality of spending degrees, we need between 25% and
ISTOCKPHOTO
ces for trading. Though carbon price eats up resources. On top of it, with their emissions down to zero, two- local currencies, and bond markets in 50% emission reduction this decade.

J&K reorganization, Centre seeks nod for more spending

quota bills passed Rhik Kundu
rhik.kundu@livemint.com
tary Ajay Seth said the Centre is
confident of achieving its FY24
NEW DELHI fiscal deficit target of 5.9% and
PTI Kashmir brought by the gov- committed to lowering the fis-

T
feedback@livemint.com ernment will give justice to he central government cal deficit to 4.5% of GDP by
Dubai: The world is in danger of surpassing the five vital those deprived of their rights on Wednesday sought FY26.

T
limits crucial for life on earth due to current warming levels, h e L o k S a b h a o n for the last 70 years and Parliament’s approval to According to the latest data
a team of 200 scientists warned in a critical report released Wednesday passed the asserted that reservation to the spend ₹1.29 trillion in FY24, from the Controller General of
at the UN climate conference here on Wednesday. Released Jammu and Kashmir displaced people will give which included redistributing Accounts, the government’s
at the international climate conference (COP28) in Dubai, Reorganisation (Amendment) them a voice in the legislature funds among ministries and fiscal deficit during the first
the Global Tipping Points report is the most thorough Bill, which seeks to nominate as well. departments. seven months of the current
assessment ever done on the boundaries of natural systems, two members from the Kash- He said that Jammu and In its first supplementary financial year stood at ₹8.03
according to the scientists. PTI miri migrant community and Kashmir has suffered due to demand for grants for FY24, trillion, or 45% of the annual
one representing displaced two blunders committed by tabled in the Lok Sabha by min- estimates of ₹17.87 trillion.
persons from Pakistan-occu- the country’s first prime min- ister of state for finance Pankaj In its economic review
PowerGrid emerges as successful pied Kashmir ister Jawaharlal Chaudhary, the Narendra released last month, the
(PoK) to the legis- The bills were Nehru -- first Modi-led Bharatiya Janta Party The Centre has maintained it will meet the ongoing year’s fiscal finance ministry said buoyant
bidder for inter-state project lative assembly. passed after over announcing a (BJP) government sought Par- deficit target from higher tax proceeds and non-tax revenue. MINT tax collection will give more fis-
New Delhi: Power Grid Corporation of India Ltd (Powergrid) on The House also six hours of ceasefire and liament’s permission for addi- cal space to the centre for
Wednesday said it has emerged as the successful bidder to set up passed the debate over two then taking the tional spending of ₹58,378 trillion for fertilizer subsidies, or 42.45% of its gross market spending and that government
an inter-state transmission project.The company has received a Jammu and Kashmir issue to crore in the current fiscal, after it surged to a record ₹2.55 borrowing of ₹15.43 trillion for revenue was expected to sub-
days and a
Letter of Intent (LoI) in this regard on Tuesday, Powergrid said Kashmir Reser- the United which involves a cash outgo. trillion in FY23. FY24—leaving its borrowing stantially exceed budgeted esti-
in an exchange filing. PTI vation (Amend- spirited reply by Nations. It also sought permission to Mint had on 7 November plans unchanged for the ongo- mates amid increased eco-
ment) Bill, which Amit Shah “Had Jawahar- spend ₹70,968 crore, which reported India’s fertilizer sub- ing fiscal. So far, the Centre has nomic activity. The request for
seeks to change lal Nehru taken can be met through enhanced sidy bill may touch ₹2 trillion maintained it will meet the the first supplementary
Modi to address fintech event the nomencla- right steps, PoK receipts and savings under var- this financial year as higher ongoing year’s fiscal deficit tar- demand for grants 2023-24
ture of a section of people who would have been part of India ious heads. consumption and costlier natu- get comfortably from higher comes five months ahead of the
Infinity Forum 2.0 on Saturday are eligible for quota in now. It was a historic blunder,” The government said it will ral gas took up initial estimates tax proceeds and non-tax reve- general elections, slated for
New Delhi: Prime Minister Narendra Modi will address the sec- appointment and admission. he said. incur an additional expendi- of ₹1.75 trillion. In the first six nue, including dividends from May 2024..
ond edition of the flagship financial technology event Infinity The bills were passed after The home minister said a ture of ₹13,351 crore for fertil- months of FY24, fertilizer sub- the Reserve Bank of India (RBI) The government, which is
Forum 2.0 on Saturday, the finance ministry said on Wednes- more than six hours of debate plan to have zero terror inci- izer subsidies and ₹14,524 crore sidies had already crossed 63% and state-run banks, which it seeking a third consecutive
day.The event will be hosted by the International Financial Ser- spanning over two days and a dent in Jammu and Kashmir for the Mahatma Gandhi of the full-year allocation. said will offset any revenue term in the general elections,
vices Centres Authority (IFSCA) and GIFT City, under the aegis spirited reply by home minis- has been in force for the last National Rural Employment During September, the Cen- shortfall from unmet disinvest- has been rolling out several
of Government of India, the ministry said.The forum is hosted ter Amit Shah. three years and it will be suc- Guarantee Scheme. tre announced it will borrow ment targets. welfare measures, including
by IFSCA as a global thought leadership platform on financial The home minister said the cessful by 2026 when there In the FY24 budget, the gov- ₹6.55 trillion for the second half Last week, department of fertilizers, food and other sub-
services. PTI two bills related to Jammu and will be no violence. ernment had allocated ₹1.75 of the ongoing financial year— Economic Affairs (DEA) secre- sidies.

Thali cost rises in Nov as festival demand pushes up veggie prices: Crisil CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
Puja Das tomato prices. Prices of pulses mon person’s budget. Onion ture. The data also reveals the Maharashtra, Gujarat, Rajast- suggestions or complaints
puja.das@livemint.com also shot up 21% on-year. and tomato retail prices have ingredients (cereals, pulses, han, and Madhya Pradesh is about errors.
NEW DELHI However, the cost of a non- soared, driven by festive broilers, vegetables, spices, edi- estimated to have caused sig-
Readers can alert the
veg thali remained unchanged demand. ble oil and cooking gas) driving nificant damage to the standing
newsroom to any errors in the

T
he cost of home-cooked
vegetarian and non-vege-
tarian thalis (plates)
increased significantly in
November as festival demand
pushed up vegetable prices and
due to lower output in the
kharif season amid erratic rains.
While the cost of a veg thali
rose 10% on month to ₹30.3 in
November, that o a non-veg
thali went up 5% to ₹61.2.
There has been a 9% on-year
rise in the cost of a veg thali,
driven by a 93% increase in
onion and 15% increase in
on-year, said rating agency
Crisil.
A veg thali comprises roti,
vegetables (onion, tomato and
potato), rice, dal, curd and
salad. A non-veg thali is the
same as the veg thali, except dal
is replaced by chicken (broiler).
Onion and tomato prices
recorded 58% and 35%
on-month increases, respec-
tively, in November. On-month,
the cost of the non-veg thali
increased at a slower pace than
that of the veg thali because of a
marginal 1-3% decline in prices
The cost of the veg thali rose
9% on-year, driven by a 93%
and 15% increase in onion and
tomato prices. Prices of pulses,
which account for 9% of the veg
thali cost also shot up 21%
on-year. However, the cost of
non-veg thali remained the
Onion and tomato prices recorded 58% and 35% on-month same, as per the Crisil report.
increases, respectively, in November. HT The average cost of prepar-
ing a thali at home is calculated
of broiler chickens, which meaningful bearing on the daily based on input prices prevail-
account for 50% of the non-veg expenses of a common person. ing in north, south, east and
thali cost. Onion, tomato and These commodities have west India. The monthly
pulses ae fundamental ingredi- seen a jump in prices in the past change reflects the impact on
ents of an Indian thali and have a few weeks, impacting the com- the common man’s expendi-
the change in the cost of the
thali. “In the case of onions, the
prevailing supply crunch in the
market owing to the early
depletion of stocks from the
2022-23 rabi season and esti-
mated lower output from
Kharif 2023, coupled with the
festive demand resulted in a
synergistic impact on onion
prices leading to the rise,” said
Pushan Sharma, director,
research at Crisil Market Intel-
ligence and Analytics.
“Additionally, the unsea-
sonal rainfall last month in
crop of late kharif onion which
is expected to further tighten
the onion supply in the market.
The prices are expected to
remain firm until the arrival of
rabi onions from February,”
Sharma added.
As far as tomato is con-
cerned, lower acreage under
the 2022-23 rabi season and
unseasonal rainfall in northern
states, including Punjab, Hary-
ana and Himachal Pradesh led
to an uptick in the retail prices
on month in June (38%) and
July (236%) this year.
paper by emailing us, with your
full name and address to
feedback@livemint.com.
It is our policy to promptly
respond to all complaints.
Readers dissatisfied with the
response or concerned about
Mint’s journalistic integrity may
write directly to the editor by
sending an email to
asktheeditor@livemint.com
Mint’s journalistic Code of
Conduct that governs our
newsroom is available at
www.livemint.com

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LIVEMINT.COM DEALS, TECH & STARTUPS ThursDay, 7 DeceMber 2023
MuMbai 03

Paytm to cut small

E-sports earnings on the rise personal loans
Reuters
feedback@livemint.com
India’s 42.5 crore gamers, second only to China, saw a string of e-sports events with substantial prize money beNGaluru

Shouvik Das view with Mint. “Large-scale tourna-
shouvik.das@livemint.com ments have showcased the opportu-
New delhi nities that the sector offers, and since
India has one of the largest bases of
P
aytm will issue fewer
rise of competitive e-sports in the sub-₹50,000 (about
country. Developers are being $600) personal loans,
funded to create their own titles, the digital payments firm said
while monetization of these games is on Wednesday, weeks after

O
nline sporting
(e-sports) events are
emerging as a big reve-
nue opportunity with
growing enthusiasm
for the nascent gaming sector in
India, industry executives said.
The country, with 42.5 crore gam-
ers, second only to China, saw a string
of e-sports events this year with sub-
stantial prize money on offer. On 27
August, e-sports firm Nodwin Gam-
ing, a subsidiary of the only publicly-
listed gaming company Nazara Tech-
nologies, concluded the second edi-
tion of its Battlegrounds India Master
Series (BGMS). The tournament set
up its highest-ever prize pool of ₹2.1
crore (~$252,000), with ₹1 crore
(~$120,000) earmarked for the win-
ner. It was also broadcast live on tra-
ditional broadcasting platform, Star
Sports Network, as well as on digital
game-broadcasting platform, Rooter.
Pune-based gaming, media and
entertainment firm JetSynthesys has
also seen similar numbers in its ongo-
young users globally, the potential of
e-sports tournaments as a business is
proportionally significant.”
Sudhir Kamath, chief operating
officer of Nazara Technologies, con-
curred. “Nodwin is the single-largest
revenue contributor for Nazara,
driven by the scale of its network in
organizing large-scale e-sports
events. This opportunity will only
grow as more users come online, and
the propensity to pay for games and
gaming grows among users,” he said.
As with other new-age companies,
The statistics, industry stakeholders said, show that there will be significant the proliferation of mobile phones
business opportunities for gaming firms over the next five years. HT and cheap internet data are fuelling
the gaming industry.
ing cricket-based e-sports tourna- These statistics, industry stake- Salone Sehgal, partner at gaming-
ment, Global e-Cricket Premier holders said, show that there will be focused venture capital firm Lumikai,
League (GEPL). The tournament, significant business opportunities for said a “progressive” policy approach
which is set to conclude on 8 Decem- gaming firms over the next five years. is boosting game development across
ber, attracted more than 1.5 lakh par- “E-sports has always been a signifi- the country, which, in turn, will cre-
ticipants, and offers a net prize pool of cant driver of revenue for us, and over ate multiple domestic titles, drawing
₹2.51 crore (~$300,000). The tourna- the next five years, the monetization in more users. “A push for mobile
ment is also being streamed on Reli- potential of this sector is significant,” gaming, driven by affordability of
ance group-owned Sports18, and dig- said Rajan Navani, founder and chief data, has caused a boom in mobile
itally on JioCinema. executive of JetSynthesys, in an inter- gaming—which will contribute to the
being realized right now. This will
boost the overall sector,” Sehgal said.
Last month, Rooter chief Piyush
Kumar told Mint that the company
was on track to profitability, driven by
an increase in monetized broadcast-
ing audiences on the platform. Earlier
this year, Kumar said during Rooter’s
latest funding round that the com-
pany expected to hit profitability by
next year, driven by this demand.
Despite tailwinds such as a large
population with a younger demo-
graphic, challenges persist. For one,
Indian users have a limited spending
propensity, and the domestic market
is relatively less mature.
“In comparison with the global
market, India is still at nascent sta-
ges—in developed markets, e-sports
events and tournaments present the
highest monetization opportunity for
businesses. In India, this is still at a
nascent stage where real-money
games, which are the easiest to mone-
tize, contribute the largest chunk of
the revenue,” said Nazara’s Kamath.
the central bank tightened
rules on consumer lending
after a surge in demand.
The non-bank lender said it
will expand its portfolio of
higher-ticket personal and
commercial loans to lower-
risk and high-credit-worthy
customers, expecting “good
demand” for loans of more
than ₹50,000.
This comes after the
Reserve Bank of India recently
raised the amount of capital
that banks and non-bank len-
ders need to set aside to cover
potential defaults when giving
out personal loans.
The RBI, also India’s bank-
ing regulator, tightened its
rules, after a surge in such
small-ticket loans, particularly
of those less than ₹50,000, and
an increase in delinquencies.
Paytm is getting “ultra con-
servative” in this segment,
Bhavesh Gupta, the company’s
Paytm will focus more on high
ticket personal loans. MINT
president and chief operating
officer, said on a call with
analysts.
“On the back of recent
macro development and regu-
latory guidance, in consulta-
tion with our lending partners,
we have decided to reduce less
than ₹50,000 loan distribu-
tion,” Gupta said.
This, he estimated, will lead
to a near 40%-50% drop in the
volume of loans Paytm issues
through its post-paid product,
but will have a minimal impact
on revenue growth.
Paytm’s post-paid loans
accounted for about 56% of
total loans in the July-Septem-
ber quarter, per company data.

Google’s new AI
wants to catch rival
Shouvik Das
shouvik.das@livemint.com
New delhi

G
oogle on Wednesday
announced its new
foundational artificial
intelligence (AI) model, Gem-
ini, replacing its Pathways
Language Model (PaLM) that
so far powered all of its genera-
tive AI applications and
offerings.
The new offering will come
in three sizes—Nano, Pro and
Ultra—and debuted through
Google’s AI chatbot, Bard, in
English across 170 countries
including India.
However, while claiming
that the new AI model
“exceeds state-of-the-art” AI
models, Google executives did
not reveal the size of the model
in terms of the number of data
parameters, or how it com-
pares with OpenAI’s Genera-
tive Pre-trained Transformer
(GPT)-4 model that underpins
the latest versions of ChatGPT,
at a media roundtable ahead of
the announcement.
Eli Collins, vice-president of
product at Google DeepMind,
said Gemini is “more efficient”
than previous AI models
developed by Google.
However, while Google said
Gemini outperforms OpenAI’s
GPT-3.5 during the roundta-
ble, they did not offer a
reference as to whether the
Sundar Pichai, chief executive
officer, Google Inc. MINT
model would outperform
GPT-4 as well.
Gemini Nano will be the
smallest, lightest version of the
AI model, and will be used in
localized applications.
A version of Gemini Nano
was piloted Wednesday
through Google’s newest
smartphone, Pixel 8 Pro, and is
also available in India. Bard,
will be powered by Gemini
Pro, but will support only
English. Support for other lan-
guages will be expanded sub-
sequently.
Other products such as
Search, Ads and Chrome will
continue to use PaLM for the
time being, and be switched to
Gemini eventually. Google
also said a new version of its
Bard chatbot—Bard ‘Advan-
ced’—will also be launched
“early next year”, and use the
Gemini Ultra model.

Ashv raises $10 mn

from NY investor
K Amoghavarsha This investment marks our
k.amoghavarsha@livemint.com foray into rooftop solar
beNGaluru finance,” said Nikesh Kumar
Sinha, managing director,

N
on-bank lender Ashv
Finance on Wednes-
day said it has raised
$10 million in Series E funding
from New York-based invest-
ment firm Encourage Capital,
through its private equity fund
Encourage Solar Finance LP.
The company, earlier
known as Jain Sons Finlease
Ltd, will use the funds to
expand its presence across the
country. It also plans
to launch a new initi-
ative to finance roof-
top solar projects for
micro and small businesses.
This is the second invest-
ment in the micro, small and
medium enterprises (MSME)
lending space by Encourage
Capital in 2023. In April, it
acquired a significant minority
stake in Svakarma Finance Pvt.
Ltd, a Mumbai-based impact-
focused MSME financier.
“We aim to accelerate our
expansion and strengthen our
presence while improving our
technology and data system.
Ashv Finance.
“Ashv aims to disburse ₹390
crore worth of loans to micro
and small enterprises in the
rooftop solar space in the next
five years. This capital will also
help us reach out to more
micro and small businesses
and scale our assets under
management (AUM) to
₹1,800-2,000 crore,” Sinha
said.
Intellecap, the
advisory arm of
impact-focused Aav-
ishkaar Group, acted
as the sole advisor to Ashv
Finance for this transaction.
Earlier, the startup had
raised $3.5 million in Series D
funding from Developing
World Markets, Triodos
Investment Management BV
and Aavishkaar Venture Man-
agement Services Pvt. Ltd,
in 2018.
Mumbai-based Ashv
Finance, part of the larger Aav-
ishkaar Group, offers cash-
flow-based loans to MSMEs.
04 ThursDay, 7 DeceMber 2023
MuMbai MARK TO MARKET LIVEMINT.COM

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

69,653.73 0.52 20,937.70 0.40 18,680.00 0.49 50,517.35 1.16 21,074.15 0.60 35,115.78 0.19 41,174.45 0.18
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

69,296.14 69,534.93 20,855.10 20,950.75 18,588.55 18,677.25 49,937.35 50,223.45 20,949.25 21,055.10 35,049.27 35,154.60 41,099.21 41,244.95
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

69,744.62 69,395.01 20,961.95 20,852.15 18,698.80 18,594.40 50,621.80 50,184.35 21,093.00 20,978.10 35,245.77 34,945.01 41,287.71 41,029.89

m MINT SHORTS Opec+ output cuts do Why December quarter

Traders bet on substantial ECB of FY24 is likely to be
rate cuts in 2024 amid concerns
Traders are ramping up bets on the extent of monetary
easing from the European Central Bank (ECB) in 2024 as
policymakers signal they’ve probably tightened enough
not faze OMC stocks lacklustre for PVR Inox
to bring inflation back to target. Markets fully priced six Manvi Agarwal Vineetha Sampath
Energized Dull show
quarter-point rate cuts by the ECB in 2024 for the first feedback@livemint.com vineetha.s@livemint.com
Shares of HPCL, BPCL and IOCL The industry’s gross box office
time, a move that would take the key rate down 150 basis
collection is expected to drop

S
have sharply beaten the Nifty 50

T
points to 2.5%. There’s almost 90% chance of the easing hares of state-run oil market- index recently.
he ICC Men’s World Cup sequentially in Q3FY24 and this
cycle starting in the first quarter of next year, a scenario ing companies (OMCs) inclu- 2023 is expected to cast a would hurt PVR Inox’s earnings.
that was barely contemplated earlier. While policymak- ding Bharat Petroleum Corp. 180 shadow on PVR Inox Ltd’s
Industry's gross box office collection (in  crore)
ers are still warning of the threat posed by inflation, Ltd (BPCL), Hindustan Petro- HPCL BPCL IOCL Nifty 50 performance in the December quar-
they’ve also acknowledged that further hikes above 4% leum Corp. Ltd (HPCL) and 163.41
ter (Q3FY24). The release dates of 4,000
will likely not be needed. “The European economy has Indian Oil Corp. Ltd (IOCL), have risen 160 big-ticket movies were rescheduled
been steadily deteriorating over the past 12 months as 20-47% in the past one month, beating 155.95 due to the mega sporting event
financial conditions have tightened,” said Gareth Isaac, the benchmark Nifty 50 index. which took place during 5 Octo- 3,000
head of multi sector portfolio management at Invesco. If Investors are optimistic about the 143.07 ber-19 November. This will weigh
140
traders are right, the ECB will be the first among major muted outlook for crude oil prices and on occupancy and, hence, PVR
central banks to cut rates next year. BLOOMBERG anticipate a robust December quarter Inox‘s Q3 profitability, even though 2,000

(Q3FY24), driven by resilient marketing 120

the multiplex operator screened
margins even as outlook for refining mar- specific cricket matches to compen-
gins appears muted. Brent crude oil pri- sate for the limited number of movie 1,000

ces have come off from the recent highs 115.64 releases.
100
of around $95 per barrel in September to Elara Securities (India) said occu-
0
hover around $76.3 per barrel at present. pancy levels in October – November Q4FY23 Q3FY24
For now, concerns about near-term were closer to 20%, a mere 60%
surge in crude oil prices have been miti- 80
30 Dec 2022 6 Dec 2023 recovery versus pre-covid. “Exhibit- Note: Q3FY24 number is till the first weekend
of December
gated. In a meeting on 30 November, Weakening global economy continue to ors break-even (Ebitda) at 18-19% Source: Ormax India, Sacnilk, Company, JM Financial
Values rebased to 100 Source: Capitaline
Opec+ (Organization of the Petroleum weigh on the markets. REUTERS occupancy levels and such a per-
PRANAY BHARDWAJ/MINT
Exporting Countries and allies, includ- PRANAY BHARDWAJ/MINT
formance will negatively affect prof-
ing Russia) agreed to lower oil produc- (H1FY24), HPCL and BPCL profits sur- potential long-term risk to returns. itability in Q3FY24,” the brokerage during the Cricket World Cup, mov-
tion by 2.2 million barrels per day in the passed all previous annual earnings led For now, expectation of better mar- said in a 1 December report. ies such as Leo and Tiger 3 had a
first quarter of 2024. Oil prices have not by higher refining margin. IOCL’s per- keting margins sets the stage for near- Ebitda is short for earnings before decent run at the box office. “These
reacted meaningfully to the news, even formance exceeded market estimates. term growth for OMCs. “Gross market- interest, taxes, depreciation and are telltale signs that cinema-going
as the cuts amount to around 2% of HPCL’s management indicated that ing margin (GMM) on petrol stands at amortization. For perspective, PVR habit is back,” said analysts at JM
global supply. One reason could be it is its leverage is approaching peak levels as ₹8.2 a litre in Q3-to-date, while there is Inox’s occupancy stood at 32.3% Financial Institutional Securities in
Construction firms cut jobs for the first time in 10 months, insufficient to counter the growth in large expansion projects are set to start a gross marketing loss of ₹0.6 a litre on in Q2. a report on 4 December.
and input prices fell at fastest pace since 2009. BLOOMBERG non-Opec output. Besides, concerns within six months. The new projects are diesel. In the week ended 28 November, Still, all is not lost. December has Moreover, only a portion of the
over a weakening global economy con- crucial to support the firm’s $9-billion GMMs on petrol and diesel stood at ₹9.7 begun on an upbeat note. merger synergies have been rolled
tinue to weigh on the markets. expansion initiative for the next five a litre and ₹4.7 a litre, respectively,” Ranbir Kapoor-starrer Animal is out. By Q1FY25, PVR Inox expects
UK construction output drops Declining crude prices have a positive years. BPCL will spend about ₹1.5 trillion Prabhudas Lilladher analysts said in a generating a buzz and all synergies to be real-
for third month in S&P survey influence on OMCs’ profita- report dated 30 November. has opened to a great Considering the ized, and this would
UK construction firms suffered a third straight month of bility as it reduces the cost of UnPaCKInG ThE DynaMICS “However, sustainability response. Sam dull prospects lead to an operating
declining output as the housing market slump forced buying oil, pushing margins of higher-than-normalized Bahadur, too is likely to for Q3, sharp margin improvement
builders to cut back on projects. S&P Global’s construc- up. Expectation of robust InvESTORS are ExPECTaTIOn of ThE recent rally in GMMs is questionable in help Q3 earnings. near-term of 200 basis points.
tion purchasing managers’ index was much weaker than earnings this fiscal year is optimistic about the better marketing OMC stocks suggests the light of upcoming elec- Upcoming films such as In Q2, its Ebitda mar-
muted outlook for margins sets the that investors are upsides may be
expected, edging down to 45.5 last month. It marked the also contributing to the pos- crude oil prices and stage for near-term adequately factoring tions,” it added. Dunki, Aquaman and gin stood at about 22%.
second-lowest score since the first covid lockdown. itive outlook. expect a robust Q3 growth for OMCs in the brighter picture To be sure, there is spec- Salaar-Part 1 will aid tough for “The company’s focus
Economists had forecast a slight rebound to a reading of “FY24 is turning out to ulation about potential cuts footfalls and thus boost PVR Inox on leveraging scale and
46.7, with figures below 50 signalling a contraction. The be a blockbuster year for in retail prices of auto fuels occupancy levels. technology mean
survey released Wednesday added to evidence of a deep- OMCs with strong dividends. After a in the next five years to expand its refin- before the general elections. If it hap- Besides the healthy screen-economics
ening downturn gripping the sector after a surge in inter- robust H1, H2 so far has been better than ery and petrochemicals capacity, explo- pens, it would dampen marketing mar- pipeline, PVR Inox introduced should only improve. So should the
est rates made more projects unprofitable. Construction expected for OMCs, except for some ration, production city gas distribution gin prospects. The recent rally in OMC schemes to acquire new customers, return on capital employed,” said
firms cut jobs for the first time in 10 months, and input intermediate inventory losses likely in as well as renewables business. stocks suggests that investors are ade- such as PVR Inox Passport, a JM’s report.
prices fell at their fastest pace since 2009. “A slump in Q3, if oil prices stabilize at $80-85 a bar- The management anticipates execut- quately factoring in the brighter picture. monthly pass for watching 10 mov- PVR Inox’s share has risen by
house building has cast a long shadow over the UK con- rel, which would, however, mean strong ing a substantial part of this capital “The market’s optimism on OMCs will ies for ₹699. That said, investors will nearly 30% from 52-week lows in
struction sector, and there were signs of weakness core earnings in Q4,” said Emkay Global expenditure between FY26-28, leading to depend on whether crude sustains closely monitor the effectiveness of May, but in 2023 so far, the stock
spreading to civil engineering and commercial work dur- Financial Services analysts in a 24 an increase in the use of borrowed capital b e l o w $ 8 0 a b a r r e l , ” J M the strategies in increasing occu- remained flat. Considering the dull
ing November,” said Tim Moore, economics director at November report. during those years.Note, initiating lever- Financial Institutional Securities ana- pancy. prospects for Q3, sharp near-term
S&P Global Market Intelligence. BLOOMBERG In the half-year ended 30 September age through the expansion plans poses a lysts said. It is worth noting here that even upsides may be tough.

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

Bitcoin up 16%, rises HZL okays FY24 2nd dividend Sebi and RBI share concerns
above $44,000 mark over AIFs masking bad loans
Reuters
feedback@livemint.com
to distribute this money is the
question to be asked. Here,
BEngaluru that clarity is missing,” said
Bloomberg Deven Choksey, managing Reuters our assessment,” Narayan said.

H
feedback@livemint.com industan Zinc Ltd. director of KR Choksey Invest- feedback@livemint.com Private credit funds fall
(HZL) on Wednesday ment Managers. MuMBai under the broad category of

B
itcoin traded close to declared a dividend for Group chairman Anil Agar- AIFs for the purpose of regula-

$44,000 after notching
its longest winning
streak since May, a rally driven
in part by expectations of looser
monetary policy.
The largest digital asset
climbed for six days through
Tuesday, advancing roughly
16% to as high as $44,491 before
giving up some gains. Its 2023
rebound from last year’s crypto
rout now stands at 163%.
Bitcoin is up almost 80%
since mid-September, a rally
that saw it take out the $30,000
and $40,000 levels in quick
succession. Along with wagers
that the Federal Reserve may
start cutting interest rates next
year, its rise has also been
fuelled by speculation that the
US may be close to allowing its
first spot Bitcoin exchange-
traded funds.
BlackRock Inc. filed with the
Securities and Exchange Com-
Bitcoin is up almost 80% since
mid-September. BLOOMBERG
as Avalanche and meme-crowd
favourite Dogecoin have also
been advancing.
The bullish overall mood is
evident across a range of coun-
tries. Bitcoin on South Korea’s
Upbit and Bithumb exchanges
at one point was trading about
4% above the prevailing global
price on Wednesday, a return
of the so-called “kimchi pre-
mium” that made headlines
during the pandemic-era bull
run in digital assets.
the second time this fiscal,
amounting to ₹2,535 crore, of
which the major benefactor
will be cash-strapped Vedanta,
holding a 64.9% stake.
The dividend of ₹6 per share
is below the ₹7 that the com-
pany had announced in July
and lower than ₹26 in March as
well as ₹13 in January.
The announcement comes
at a time when Vedanta’s
UK-based parent, Vedanta
Resources, is battling a host of
rating downgrades, triggered
FPI equity assets at 22-month high, overcoming Oct setback
Ram Sahgal
ram.sahgal@livemint.com
MuMBai
Vedanta, holding 64.9%, will be
the major benefactor. BLOOMBERG
by worries over outstanding
dues, including $4.2 billion
that the company has to pay by
fiscal 2025.
“The parent needs money.
Whether the company is gen-
erating enough free cash flow
FPI equity assets rebounded
from a low of $629 billion at
October end, marked by out-
flows of $2.95 billion, aligning
M
wal had told CNBC-TV18 in
October that Vedanta had
lined up finances of about $1
billion in January and $500
million-$600 million due in
August to pay the dues.
Meanwhile, Hindustan Zinc
—in which the government
holds a 29.54% stake— plans to
create separate entities for its
zinc, lead, silver, and recycling
businesses. The company’s
shares, which are marginally
up so far this year, were mostly
unchanged at ₹325.3.
arket regulator and
the central bank share
concerns over instan-
ces of alternative investment
funds (AIFs) being used to
mask bad loans in the financial
system, a top official said on
Wednesday.
The Securities and
Exchange Board of India (Sebi)
has seen “dozens of cases” of
“egregious regulatory viola-
tions” by AIFs, such as to avoid
recognition of non-perform-
ing assets, Ananth Narayan, a
Taking a U-turn
This indicates a significant revival
in flows after a two-month hiatus.
tions in India.
Sebi is investigating cases
involving ₹15,000 crore to
₹20,000 crore where AIFs
have been misused to circum-
vent rules, Reuters reported in
October. The market regulator
Private credit funds fall under intends to enforce a code of
the broad category of AIFs. MINT conduct to prevent this, said
Narayan.
whole-time Sebi member, said Sebi has asked that all liabil-
at an event in Mumbai. ities and assets of these funds
“(We) have shared our con- be held in dematerialised
cern with the Reserve Bank of form, which will allow for
India (RBI), which agrees with greater transparency, he said.
tame inflation, but has kept the So far in FY24, FPIs invested
rate constant with a cautious $19.2 billion, after having sold
stance. Markets will watch out shares worth $23.56 billion in
for the RBI to ease its stance to the previous two fiscal years.

mission in June to launch such
a product, suggesting crypto
could soon gain wider appeal as
an asset class.
“Surely the ETF story is well
and truly priced?” said Tony
Sycamore, a market analyst at
IG Australia Pty. The recent
high volatility and “jet-fuelled”
move up in Bitcoin is instead a
reminder that crypto is “more
responsive to a Fed pivot and
policy than other asset classes,”
he said.
For now Bitcoin momentum
is overshadowing any concerns
that the surge is at risk of
becoming too stretched.
Smaller virtual currencies such
E
In Abu Dhabi, crypto mining
hardware retailer Phoenix
Group Plc jumped 35% on its
debut on Tuesday. The firm is
the first crypto-related listing
in the Middle East. In El Salva-
dor, Nayib Bukele said in a
posting on X this week that the
nation’s Bitcoin investments
had turned profitable. He’s
running for reelection after
stepping down as president
last week.
Another prop for sentiment
is the so-called Bitcoin halving
due next year, which will cut in
half the amount of tokens that
Bitcoin miners receive as
reward for their work.
quity assets of foreign
portfolio investors (FPIs)
hit a 22-month high at
$674.66 billion in the fortnight
ended 30 November, driven by
a significant revival in their
flows after a two-month hiatus,
and a 7% rally from the lows of
October-end. FPI assets stood
at $686.95 billion in the fort-
night ended 15 January, 2022.
Interestingly, a day after the
revival on 1 December, Nifty
surpassed its previous high of
20,222.45 on 15 September, to
reach a new peak of 20,291.55.
It continued to rise, setting a
fresh record at 20,961.95 on 6
December.
with the stock market falling to FPI net investment (in $ billion) “neutral” from “withdrawal of Out of the $674.66 billion in
40
18,838 on 26 October. In Sep- accommodation”. equity assets for the fortnight
tember, when the market hit a 30 “FPI sentiment has turned ended 30 November, financials
high of 20,222.45, FPIs sold net bullish, given the accounted for $216
20
shares worth $1.77 billion. jump in their FPI equity assets billion or 32%, fol-
In addition to the cash pur- 0 equity assets and rebounded from lowed by informa-
chases in November, FPIs now they will sup- a low of $629 bn tion technology
0
started covering their bearish 2019-20 2023-24* port the rally, at October end, (9.75% at $65.79
bets on index futures contracts -10 which might see a billion) and O&G
marked by
(Nifty, Bank Nifty and Finnifty) few pauses here and consumables
from 175,698 cumulative short So far in 2023-24, FPIs‘ net
-20
and there,” said outflows of at $56.69 billion
contracts to 22,954 cumulative investments are $19.2 bn. MINT
*Up to 5 December Source: NSDL
Rajesh Palviya, $2.95 bn ((8.4%). FPIs
long contracts on 6 December. SATISH KUMAR/MINT
SVP, research, at invested $454 mil-
“Revival in FPI flows since 196,378 contracts on 22 be provided at the end of RBI Axis Securities. lion in capital
November is pretty impressive, March),” UR Bhat, co-founder, rate setting committee’s policy “It’s also possible that the goods sector, $424 in consumer
borne by resumption of buying Alphaniti Fintech, said. “With meeting on 6 December .” upcoming Budget might offer services, $256 million in auto
and covering bearish index election results behind us and The RBI raised rates by 250 some sops for foreign inves- and auto components egment
positions, which were the sec- resumption of the Israel-Ha- basis points from 4% in May tors,” However, Palviya did not and $239 in IT in the fortnight
ond-largest (net shorts were mas hostilities, more cues could 2022to 6.5% in February to specify the nature of offerings. according to NSDL data.
LIVEMINT.COM CORPORATE ThursDay, 7 DeceMber 2023
MuMbai 05

Himadri to set up
PVs grapple with inventory woes lithium-ion facility
Reuters
feedback@livemint.com
Wedding and festive seasons push two-wheeler registrations to record levels in Nov; CV sales remain subdued
H
imadri Speciality
Chemical said on
Alisha Sachdev positive movements in key sectors Passenger vehicle registrations at Wednesday it would
alisha.sachdev@livemint.com such as cement and coal. Backlogs in 3,60,431 units grew 17% over Novem- set up a facility to make lithi-
New DelHi orders might also contribute to a sales ber 2022, far higher than wholesale um-ion battery components
boost,” Fada said. numbers, which were up 3.9% from a for an estimated project cost of

T
wo-wheeler registrations
reached record levels for a
single month in November
on the back of increasing
liquidity and robust buying
during the festive and wedding sea-
sons. According to data released by
automotive dealers body, the Federa-
tion of Automobile Dealers’ Associa-
tion (Fada), on Wednesday, two-
wheeler registration was at 2.247 mil-
lion units, surpassing the previous
high of 2.07 million in March 2020,
just ahead of the BS-VI changeover.
This signifies a reversal in fortunes
for a segment which has been strug-
gling for many quarters since the out-
break of covid, especially for entry-
level vehicles.
Fada said the two-wheeler cate-
gory is poised to benefit from a liquid-
ity boost in the near term, particularly
in agricultural regions, as well as the
ongoing marriage season.
Sales are expected to be fuelled by
around 3.8 million weddings. How-
ever, challenges for the segment per-
Two-wheeler registrations were at 2.247 million units in November, surpassing
the previous high of 2.07 million in March 2020.
sist as “severe weather conditions
impacting rabi cultivation may affect
rural incomes, potentially dampen-
ing sales”, it said.
For commercial vehicles, however,
November was “challenging”, Fada
said, as sentiment remained subdued
amid delays in delivery, and unsea-
HT
sonal rainfall in some parts India.
Commercial vehicle registrations
in November clocked 84,586 units
compared to 86,150 units a year-ago,
down 1.82%. But a recovery is in sight.
“The CV category is expected to see
some recovery, driven by renewed
business activities post-elections and
On the other hand, despite a record year ago in November. ₹48 billion ($576.12 million).
festive sales, passenger vehicle inven- Pace of production growth in Shares of the company
tories remain at over 60 days, leading November, however, was slower jumped nearly 6% to a record
to calls for production rationalization compared to October (15.9%) as retail high of ₹307. Lithium-ion batteries power EVs
and higher discounts in December. demand surged ahead of production, Lithium-ion batteries, and will play a key role in India’s
“November this year witnessed a according to monthly sales data which power electric vehicles climate change goals. REUTERS
strong surge in the PV category, reported by auto firms. (EV) and used to store energy,
primarily fuelled by Deepa- This indicates that auto- are expected to play a key role iron phosphate, one of the key
wali and the launch of new makers have taken meas- in India’s goal to be a net zero materials used in making lithi-
and appealing models.
Improved supply chains ~60
days inventories
ures to manage high
inventory levels by
emitter of greenhouse gases by
2070.
um-ion battery cells, in phases
over the next five-six years, the
coupled with new rationalizing factory- The country is expected to company, said in a stock
launches, effectively for PVs despite gate dispatches ahead see sales of more than 10 mil- exchange filing.
catered to the festive record festive sales of New Year. lion EVs a year by 2030, rising The company added that at
demand, marking the peak “The industry’s stock more than ten fold from the the full utilization of the plant,
point in sales,” said Manish levels, because of higher last fiscal year, according to a it expects to generate a reve-
Raj Singhania, president FADA. retail than wholesale this recent annual Economic Sur- nue of about 4 times the capital
“However, the period following month, has come down a bit from vey. expenditure.
the festivities saw a noticeable slow- 335,000 to 330,200 units estimated Himadri Speciality was The first phase of the capac-
down, coupled with a critical chal- at the end of November. However, at among at least a dozen Indian ity expansion, at an estimated
lenge of slow-moving inventory due 30-35 days inventory, stocks in the and foreign companies which cost of ₹11.25 billion, will be of
to a mismatch in demand and supply channel were on the higher side and participated in the govern- 40,000 MTPA and opera-
which is still not resolved. This issue is an area of concern,” Shashank Sriv- ment’s auction this year of tional in 27 to 36 months at the
casts a shadow over the otherwise astava, Maruti Suzuki’s senior execu- some newly found lithium eastern Indian state of Odisha,
positive trends, highlighting the tive director, said. This will prompt blocks. The plant will aim to said the company, which also
need for strategic adjustments in lower wholesales in December, he make 200,000 million tonnes makes specialty chemicals for
inventory management.” added. per annum (MTPA) of lithium textile, oil and gas.

ArcelorMittal to set
up 3 scrap facilities
Krishna Yadav
krishna.yadav@livemint.com
New DelHi

A
rcelorMittal Nippon
Steel India Ltd plans to
establish three scrap
processing plants in Gujarat
and Maharashtra. This move
comes as leading steel manu-
facturers in India expect chal-
lenges in meeting their scrap
requirements via imports.
The firm will invest around
₹100 crore to set up three ded-
icated scrap processing cen-
tres—one at the flagship plant
in Hazira, another in Ahmeda-
bad, and the third in Khopoli,
by December 2024. The move
will also help it achieve its car-
bon emissions reduction tar-
gets by maximizing the utiliza-
tion of steel scrap. “We aim to
significantly increase the scrap
mix, while reducing depend-
ence on steelmaking from pri-
mary raw material such as iron
ore and coal,” Dilip Oommen,
chief executive, ArcelorMittal
Nippon Steel India, said.
The company currently has
a capacity to produce 9 MTPA
of steel and seeks to maximise
the use of steel scrap substan-
tially during steel production
to support its decarbonisation
targets. The company claims
to have achieved 32% reduc-
tion in CO2 emissions inten-
sity in December 2022 as com-
pared to the 2015 levels. With
the scrap processing centres, it
seeks to achieve 9% scrap mix
by the end of 2025, through a
combination of the new Basic
The scrap centres will be in
Gujarat and Maharashtra.
WIKIMEDIA COMMONS
Oxygen Furnace and existing
Electric Arc Furnace (EAF).
Currently, it has a scrap mix
of 3-5% of steelmaking capac-
ity at the EAF.
Due to insufficient domestic
scrap production, India relies
heavily on imports to fulfil a
significant portion of its scrap
needs. However, imports face
challenges as countries world-
wide prioritise domestic recy-
cling to minimize use of envi-
ronmentally harmful feed-
stocks such as iron ore in steel
production.
In FY23, India had imported
7 million tonnes of scrap, but
companies expect a decline in
imports and exploring options
to process scrap domestically.
Tata Steel aims to venture into
secondary steel manufactur-
ing. JSW Steel plans ₹175crore
investment to set up a shred-
der in Maharashtra next year.
Besides, JSW Steel also plans
to establish scrap processing
units across India.

Air India rejigs

250-aircraft order
PTI As against the earlier order
feedback@livemint.com of six A350-900 and 34 A350-
1000s, Air India has changed

T
ata Group-owned Air it to 20 A350-900s and 20
India, which placed a A350-1000s, the source
250-aircraft order with added.
Airbus earlier this year, has In response to a PTI query,
rejigged the order, which will Air India spokesperson said,
now have more number of “We regularly review our
A321neo aircraft, according to orderbook based on business
sources. requirements
As part of the Air India placed and opportuni-
250 aircraft orders for 470 ties, and exercise
order with Air- aircraft from contractual flexi-
bus, the airline Airbus and bilities as appro-
was to acquire priate”.
Boeing worth
210 narrow-body When reached
A320 family $70 billion earlier for comments,
planes, compris- this year Airbus said, “It is
ing 140 A320neo up to our cus-
and 70 A321neo tomers to dis-
and remaining 40 wide-body close their strategy.”Tata
A350s, consisting of six A350- Group took control of loss-
900 and 34 A350-1000s. making Air India in January
Air India has tweaked the 2022.
order with Airbus and will Earlier this year, Air India
now acquire 140 A321neo and placed orders for 470 aircraft
70 A320neo, while the order from Airbus and Boeing at
for 40 A350s has also been $70 billion (based on pub-
rejigged, the source said. lished list prices).
06 ThursDay, 7 DeceMber 2023
MuMbai CORPORATE LIVEMINT.COM

Sebi issues notices NFRA debars two partners

to a dozen FPIs in
Hindenburg saga for lapses in auditing DHFL
FROM PAGE 1

data was not mandatory at the

time the FPIs made these Move follows NCLAT upholding NFRA’s jurisdiction on audits done before its constitution
investments, the second per-
son said.
“Sebi introduced the benefi- Gireesh Chandra Prasad
cial ownership disclosure gireesh.p@livemint.com France’s SMCP and Fursac
norms in 2019 under the New DeLHi have partnered with Reliance
revised FPI rules. However, the Brands Ltd to enter India.

T
transactions being probed by he National Financial
Sebi pertain to a period prior to
2019 when there was no regu-
Reporting Authority
(NFRA) has debarred two Luxury
latory requirement to keep the partners of a Mumbai-based
beneficial owner data with
them. Also, these funds desig- Adani group stocks slid after
firm for alleged professional
misconduct in auditing Devan Hous-
apparel,
nated their senior fund manag- the Hindenburg report. REUTERS
ers as beneficial owners, which
was permitted under applica- tions, making it very difficult to
ing Finance Corp. Ltd’s FY18
accounts, as part of the watchdog’s
efforts to improve audit quality.
accessory
ble rules in countries including ascertain the actual beneficial
Mauritius,” this person said. owners, said the people cited
The regulator debarred a partner at
Chaturvedi & Shah LLP for 10 years, brands head
Earlier, fund managers were above. and another for five years. The disci-
required to provide an under- Also, different countries
taking to Sebi confirming they have different definitions of
plinary orders apply to the individual
partners, not the audit firm.
for India
have obtained beneficial own- beneficial ownership. In India, NFRA said in its order that the audi-
ership information and will beneficial ownership generally tors had failed to meet the require- FROM PAGE 1
provide the same to Sebi if means a person or an entity ments of the audit standards, violated
required. After 2019, it became who owns more than 10% stake the law in significant areas, and did not Delhi in 2025. Last week,
mandatory for all FPIs to pro- in a company or a fund. How- apply professional scepticism and due France’s SMCP, the parent
vide beneficial ownership ever, in certain global jurisdic- diligence sufficiently to challenge company of accessible luxury
information. tions, funds are allowed to des- management assertions. The order brands Sandro, Maje, Claudie
Sebi has struggled to dis- ignate their fund manager or was signed off on Tuesday. Pierlot and Fursac, also
cover the beneficial ownership their chief executive officer Devan Housing Finance is now part Devan Housing Finance is now part of the Piramal Group, after it was acquired as part of debt resolution plan. MINT announced its entry into the
of offshore funds (CEO) as benefi- of the Piramal Group, after it was Indian market in partnership
mentioned in the Sebi has struggled cial owners. Such acquired as part of a court-monitored part of a Kozhikode-based audit firm, guilty of professional misconduct on 2018. The regulator aims to step up the with Reliance Industries-
H i n d e n b u r g to trace beneficial employees may or debt resolution plan. In January 2021, K Varghese & Co. the ground of procedural lapses, with- quality of not only audits but also of the owned Reliance Brands Ltd
report. According ownership of may not own any 94% of the creditors of DHFL had voted The branch auditors of DHFL are out any factual finding of errors in the preparation of financial statements. (RBL).
to a report sub- offshore funds equity in the com- in favour of a resolution plan by the preparing to move the Supreme Court accounts audited, is very demoraliz- Earlier, NFRA had taken stringent In a sign of growing appetite
mitted by the pany or fund. Piramal Group and the deal was cleared for relief from NFRA’s disciplinary ing,” this person said. action against the auditors of Infra- for luxury goods in India,
Supreme Court
named in the
On 24 Novem- by different regulators and the National orders. Branch auditors have a limited role structure Leasing & Financial Services Emporio is looking to add new
appointed com- Hindenburg ber, the market Company Law Tribunal. A person informed about the in certifying localised transac- Limited (IL&FS) group entities outlets and is in talks with mul-
mittee dated 6 report regulator told the Emails sent to the audit move said the firm had com- tions in branch offices, this for FY18 and had made far tiple European brands. “We
May, Sebi Supreme Court firm, the two partners and plied with all relevant person said, adding that reaching observations are looking at 6-7 uber luxury
explored various that it is investi-
avenues, but with little success. gating 24 different cases per-
Piramal Group on
Wednesday seeking 94%
Creditors who
audit standards applica- branch auditors do not
ble to the branch audit, question NFRA’s retro- FY18
Period of
about auditor independ-
ence in addition to giv-
openings at Emporio and our
other mall, The Chanakya,
“Various avenues have been taining to the Adani-Hinden- comments remained adding that this was ver- spective jurisdiction. ing its interpretation of over the next six months,”
pursued, including Directorate burg saga. Of these, it has com- unanswered. favoured Piramal’s ifiable from records sub- NFRA’s disciplinary misconduct in the law in areas like non- Pushpa Bector, DLF’s senior
of Enforcement, Central Board pleted investigation in 22 cases, The development resolution plan mitted with NFRA. orders and the legal chal- audit at DHFL audit services offered by executive director for the
of Direct Taxes and various while in the other two, the reg- comes shortly after the NFRA’s orders do not lenges mounted by the the auditor to the audit cli- retail division, said. In terms of
securities market regulators in ulator is awaiting information National Company Law contain any findings of auditors are likely to be ent or its group companies. rental structure, the Guru-
seven jurisdictions where the from foreign regulators. Appellate Tribunal (NCLAT) last errors or misstatement in the eventually settled by the The regulator has also, through gram-based developer will
42 contributories are situated. The probe was initially sup- Friday upheld both NFRA’s jurisdic- accounts audited by the branch audi- Supreme Court, bringing more clarity its orders, explained what constitutes continue to follow the mini-
Sebi has drawn a blank,” the posed to be concluded in six tion on audits done prior to its consti- tors, this person said on condition of on the new regulatory regime for stat- management services which auditors mum guarantee and revenue-
panel report said. months. However, in May, Sebi tution in 2018 and the disciplinary anonymity. utory audits. are not allowed to offer to their audit sharing approach with retail
The problem seems to be the had sought more time from the orders issued by the audit watchdog in The “charges are on allegation of NFRA was conceived in the Compa- clients. Some of the audit firms have partners, she added.
complex layering of these apex court to conclude its the case of four individual branch procedural lapses. Audit procedures nies Act of 2013 after the Satyam scan- gone to court challenging those In past month alone, two
funds across multiple jurisdic- investigation of the matter. auditors of DHFL for FY18, who are are means of audit. Holding auditors dal, but was set up only in October orders. new malls dedicated to luxury
were launched, including
Mumbai’s Jio World Plaza and
the Phoenix Mall of Asia in

EU liquor makers for 50% cut in tariff Ola Electric races to file draft Bengaluru. “India is experi-
encing an economic growth
with which a cultural shift is

FROM PAGE 1 According to Bastidon, the

origin of the product, such as
Scotch in the case of whiskey,
from false claims to the attrib-
utes of that region.
“In India, there will be
growth. But on both sides,
trade relations will see a real
pickup if India and the EU
agree on an FTA favourable for
both sides. So, there should
probably be two scenarios.
Without FTA, the growth will
probably be a lot more moder-
ate. And with an FTA, the trade
ties will be much closer, and
the growth will be higher,”
Bastidon said.
Vinod Giri, director-gen-
eral, Confederation of Indian
Alcoholic Beverage Compa-
nies (CIABC), the apex body of
the Indian alcoholic beverage
industry, questioned the EU’s
intent. Pointing to the ongoing
trade talks between India and
the UK, he said: “There is close
geographical proximity, low
transport costs, and a tax-free
trade relationship between EU
and the UK. Considering that,
there is no reason why India
should offer the EU a trade
deal any different from the UK
on tariffs, non-tariff measures,
exclusions, and product spe-
cific rules.” India and the UK
value of EU’s spirit exports to
share sale papers in two weeks happening. The country’s lux-
ury market is projected to
grow three times over the next
India in 2022 was a mere €59.7 seven years. I see huge poten-
million compared to €875 mil- FROM PAGE 1 tial and am opening stores
lion to China. across markets,” said Gaurav
The delegation of spiritsEU- lion, including about $240 Gupta, a designer. “One would
ROPE represents 31 associa- million in debt, from Temasek be surprised at the kind of cou-
tions of spirits producers and the State Bank of India. ture being consumed in the
(including associations of Aus- However, it is expected to seek country. Big conglomerates
tria, Bulgaria, Germany, Spain a valuation of nearly $8-10 bil- are taking India’s luxury very
and France, among others) as lion when it hits the public seriously now, and that is a big
well as 11 leading multinational markets to raise about $700 sign of development.”
companies including Diageo, million. Global luxury brands are
Pernod Ricard, Moët Hen- Ola Electric has been the also increasingly turning to
nessy, etc. The delegation is in market leader in India’s electric local collaborations and cap-
India currently levies 150% tariff on imported liquor. BLOOMBERG India to push policy makers for two-wheeler market for the sule collections, trying to
tariff relief, a demand that is past 12 months, even as compe- make inroads into a burgeon-
have made progress on their on alcohol at 47% and 49%. Of proving to be a critical trade tition from TVS Motor Com- ing market. “It’s about show-
trade talks and that in my view course, states like Gujarat, barrier for EU spirits. pany, Bajaj Auto and Hero Mot- ing the world that they’re
should work as guidance for Bihar, Nagaland and Mizoram The EU liquor trade is con- oCorp is now intensifying. Bhavish Aggarwal-led Ola Electric has been the market leader in invested in India,” said Raah-
EU as well, added prohibit con- centrated in premium spirits— In November, data from India’s electric two-wheeler market for the past 12 months. uul Kapoor, founding partner
Giri. The seventh sumption of alco- vodka, gin, etc.—which are at vehicle registration dashboard of Luxury Ampersand Frolics.
The seventh round of hol. the bottom of India’s alcohol Vahan showed Ola Electric led FY24, company papers with affordable product, the S1 X+, is His company brings haute lux-
round of consul- consultations for Given that consumption chart as brown the pack with 29,764 units reg- Ola’s FY25 business projects now available with a flat ury brands’ products to the
tations for the the India-EU FTA India is the sec- liquor (such as whisky, brandy, istered—a substantial 32.6% showed. Mint saw a copy of the ₹20,000 discount, bringing Indian market. India’s rapidly-
India-EU FTA is ond largest spirit etc.) is consumed more in market share. TVS Motor fol- financial highlights from its down its ex-showroom cost to growing class of ultra-rich
is scheduled to
scheduled to market in the India. lowed with 20.8%, trailed by projected FY25 business ₹89,999 and making it one of individuals are hungry for lux-
begin next Janu- begin next world after China, The EU and India are nego- Bajaj Auto (12.8%), Ather model. The papers also high- the most affordable e-scooters ury and this, Kapoor predicts,
ary. January spiritsEUROPE tiating an agreement on GIs as Energy (10.1%), and Greaves light that the company expects in the market. will mean that a large part of
Excise duty on sees India as a well. This is an opportunity to Electric (formerly Ampere, at to improve its Ebitda margins However, incumbents such the luxury business revenues
alcohol is an easy growing market further improve the protec- 4.8%). from negative 157% in FY22, as Bajaj Auto and Hero Moto- in India will come from
source of tax revenue to states, for liquor business, particu- tion of GIs on both sides, with At the same time, Ola Elec- and negative 43% in FY23 to Corp are steadily gaining mar- bridge-to-luxury brands.
and so the taxes are high. Kar- larly in the premier segment, opportunities for Indian pro- tric, which sold 150,000 (positive) 6.6% in FY26. ket share and asserting their Bridge-to-luxury brands
nataka levies the highest tax on Bastidon said, adding that ducers and in turn the farmers e-scooters in FY23, has cut To hold on to its lead in presence in the segment, scal- help consumers experience
liquor at 83% followed by overall trade volume of EU who provide the essential down its sales estimates from e-scooters, the company is roll- ing up both production and dis- luxury without having to shell
Maharashtra (71%) and Telan- spirits is €9 billion, and the US ingredients needed for these 2.5-5 million units in FY25 and ing out products at steep dis- tribution for their products, as out a hefty price associated
gana (68%). Haryana and Goa and China are major exporting quality Indian food and drink beyond, to 900,000 units in counts to lure in new, price- well as launching new, with top-of-the-league high-
have the lowest excise duties countries. products, Bastidon said. FY25 and 300,000 units in sensitive buyers. Its most revamped products. fashion brands.

Bank of Baroda traces consent forms in bob World app fiasco

FROM PAGE 1
report in July, the Reserve
Bank of India (RBI) in October
barred BoB from onboarding
fresh customers on the app,
citing “material supervisory
concerns”. A BoB spokesper-
son said the bank has since
started a comprehensive and
rigorous audit related to the
mobile banking onboarding
process. The latest exercise,
officials said, aims to find
accounts where mobile num-
bers were added or changed,
or where bob World was
downloaded without follow-
ing proper procedure.
“The audit is being man-
aged and supervised by an
external agency,” a BoB
spokesperson said. “The very
purpose of the audit is to iden-
tify gaps in terms of adequacy
of documents or data errors
where SOPs have not been fol-
lowed in some branches. The
bank has already carried out
substantial corrective meas-
ures and we are committed to
strengthening our onboarding
processes further,” the
spokesperson added, terming
the allegations speculative.
“The number of accounts
where documents are
required to be uploaded ran-
ges from 200 in small bran-
ches to about 1,800 in larger
branches for some regions,”
the first of the two bankers
cited above said. The banker
added that in many cases reg-
istration forms are unavailable
at the branches. That is
because on so-called login
days, or days when employees
focus on specific products,
employees had to seek out cus-
tomers and enable bob World
without these forms.
“Bankers used to call bran-
ches they are attached to and
get the customer’s bob World
app activated without these
forms. It was an operational
lapse, but we had to do it given
the circumstances and the
push to bring more people on
bank belongs to the account-
holder. Banks have no author-
ity to deal with such assets of
the account-holder when not
consented to by the account-
holder,” said Mukesh Chand, a
senior counsel at law firm Eco-
nomic Laws Practice.
BoB’s internal portal has an
option for employees to say
that documents for a specific
account are unavailable.
Employees can use the “not
The Bank of Baroda fiasco throws light on the importance of available” option where
consent in financial transactions. MINT mobile number seeding form
or bob World registration
board,” the banker added. “In financial matters, the form is unavailable; however,
The fiasco also throws light consent of the account holder they have to mention the rea-
on the importance of consent is paramount, as the amount sons behind that, the banker
in financial transactions. lodged or deposited with the said.
“Although that option is seems like a tough task.
available, our regional office He said that if branches got
has said it cannot be used and more time, they could still
a document has to be have done it, but the short
uploaded. We deadline has
fear this might After Al Jazeera’s made it worse.
lead to some report in July, RBI “After the first
employees again barred BoB from round of audits
using unfair onboarding fresh where some
means like faking
customers on the accounts were
those consent checked, the
forms just to bob World app in bank is now scan-
a v oi d b ei ng October ning more
pulled up for their accounts, trying
failure to com- to look for suspi-
plete the task,” said the first cious ones. Uploading these in
banker. a hurry is a difficult task since
The second banker said that we already have regular bank-
given the staff shortage and the ing activities,” the second
limited time to upload forms, it banker said.
LIVEMINT.COM CORPORATE ThursDay, 7 DeceMber 2023
MuMbai 07

Festive season sees EGF optimistic about solving GST issues

Varuni Khosla a progressive government at without paying any taxes and

cautious spending varuni.k@livemint.com

NEW DELHI
the Centre and in many states.” using offshore accounts which
The federation said it hopes are banned by the government.
the Centre acknowledges them They are using outdoor adver-

T
he E-Gaming Federation
(EGF), a self-regulatory
body for the online gam-
ing industry, is optimistic about
a near-term solution to goods
Consumers spent on gifts, mobile phones; avoided expensive purchases and services tax (GST) and the
tax burden imposed by the gov-
ernment recently.
Suneera Tandon EGF’s chief executive Anu-
suneera.t@htlive.com raag Saxena expressed confi-
NEW DELHI dence that all the issues on vari-
ous regulations, including the
Anuraag Saxena, CEO,
E-Gaming Federation.
as a group of companies focus- tising. Games of skill, where the
sing on enhancing player pro- real money games sit, are regu-
tection and emphasized they lated by the Centre, and games
are not trying to circumvent the of chance are regulated by the
law unlike offshore betting states. But in the last two years,
entities. “Companies in the 71 notices have been sent to the
skill-based gaming sector are firms for tax evasion to the tune
proactively subjecting them- of ₹1.12 trillion in FY23-24.
selves to rules and norms in “Our expectation of the gov-
India. At the same ernment is to
time, there are a The industry is understand the
whole bunch of united in sector better and

B
y several accounts, Indians pressing matter of the new GST companies that presenting a the intent of the
were set to splurge this festive regime, and the establishment revenue. The process for the are not. There will compelling sector better. For
season. And they did—shop- of self-regulatory bodies, will government and the industry always be bad and example, we are
business case to
ping online and on cars and be addressed during the ongo- to find some kind of a balance is good players in a one of the very few
two-wheelers, but for many tra- ing discussions with govern- ongoing,” he added. sector and we are the govt, Anuraag sectors that is ask-
ditional retailers and consumer goods ment representatives. When new industries evolve, confident there is Saxena said ing for more regu-
makers, the season was merely satisfac- In an interview, Saxena said it takes time for stakeholders to enough enforce- lations. We are
tory. As the lights dimmed on the mega the industry is united, and will form a consensus, Saxena said. ment to weed out very confident
sales period that began in October and present a strong business case “There has been a period of flux bad players from this industry they will come up with a tax
stretched on until Diwali in mid-Novem- to the government, showcasing and we may be seeing the tail- in India,” he added. regime that is both fair and
ber, a pattern is emerging on how Indians the positive social impact of the end of that period. Within fairly While on one hand, the gov- encouraging for the firms,” he
shopped—making for an interesting nar- sector. short time, we should be able to ernment has come down hard added. The sector aims to com-
rative on the country’s growth and con- “As far as the GST issue is ensure that there are regula- on the real money gaming sec- ply with self-regulatory bodies
sumption patterns. concerned, we’re very optimis- tions encouraging Indian gam- tor pressing for self-regulatory (SRBs) to enhance safety in the
While companies did report growth tic that it will resolve in the very ing companies and curb or dis- bodies, the entire offshore bet- ecosystem and attract more
over the previous year’s festive season, near future. The government courage those that may not be ting industry is illegally operat- players to gaming platforms.
several of them, especially offline sellers of will be looking to find a balance subject to our laws. This (GST ing and flouting laws. These However, the government has
apparel, lifestyle and consumer goods, between providing a fillip to the issue) is something which will companies are running busi- currently postponed its plan to
said shoppers at the mass end of the mar- Offline sellers of apparel, lifestyle and consumer goods said shoppers at the mass end industry while maximizing its get resolved given that we have nesses through remote servers establish SRBs.
ket spent frugally. These consumers spent of the market spent frugally. HT
on gifts and mobile phones, but went easy
on more expensive purchases. makers reported record sales in Novem- getting stuck in retail rush.”
“It was decent. I won’t say great, but it ber.
was decent,” said B Sumant, executive
Biscuits maker Parle Products reported
But as this report had cautioned, con- 10-11% growth this festive season versus a
director, ITC Ltd, which sells a range of sumer sentiment had seemed subdued, year ago, but said demand had been okay.
Dream11 prepares for pivot in M&A plan
products including packaged foods, gour- with many shoppers responding to a sur- “I’m not saying it’s been terrific,” said
met coffee, soaps, and deodorants. vey saying they planned to spend less than Krishnarao Buddha, senior category head Ranjani Raghavan sports and gaming startups porate development team, after “What we want to do is we
“I think the stress in the economy is in the previous year’s festive season, and at Parle Products, adding that demand in ranjani.raghavan@livemint.com seeking “significant minority’ the exit of Dev Bajaj. Bajaj was want to make sure that we solve
what is affecting the bottom of the econ- were only eyeing small purchases. rural markets had not improved sequen- NEW DELHI or full control deals. “We want the head of Dream Capital, a the breadth and depth of sports
omy. At the top of the econ- tially. to focus on our inorganic strat- $250 million fund that the problems in India,” Jain said.
SHOPPING TRENDS
S
omy, people have money and Distributors of fast-moving porta Technologies Pvt egy. That’s what our corporate company had incubated to “Sports-related health and fit-
they are buying, but you need consumer goods said growth Ltd, which operates the development invest in sports ness has a huge overlap with
everyone to buy. We are see- INDIA’S higher-than- E-COMMERCE AMONG categories was not promising. sports platform Dream team is going to be The sports related compa- sports—almost every sports fan
ing some of that strain.” expected GDP growth order volumes grew fashion, beauty and “There has been growth Sports and Dream 11, will fund doing. We’re nies. The fund has is also actively or passively into
in Sep quarter had 37% from a year personal care were company has
What had fuelled expecta- fuelled expectations earlier, as per a study most prominent in from festive to festive (sea- potential acquisitions of going to focus on been scouting for now been wound health and wellness and fitness.
tions of bumper festive sales of bumper sales by Unicommerce terms of volumes son), but only value growth, around $50 million to up to fewer bets, but larger ticket sized up and absorbed So that is a big overlap. I would
this year was India’s higher- i.e., pricing growth; volumes $100 million through internal larger bets,
acquisitions since back into the par- say sports, commerce, sports,
than-expected GDP growth in may have suffered,” said accruals, potentially raising around $50 mil- ent company gaming and health and fitness
the September quarter. Vidhi Maheshwari, 38, said she waited Dhairyashil Patil, president, All-India equity, cofounder Harsh Jain lion to $100 mil- it pivoted its Dream Sports, are some of the areas we want to
E-commerce order volumes grew 37% for Diwali sales to buy clothes and beauty Consumer Products Distributors’ Federa- said in an interview. lion kind of bets, strategy while also keenly look at for investing
from a year earlier during the just-con- products apart from gifting items. “I did tion (AICPDF). “Festive season was largely The sports company has which will help us prompting a shift heavily in the near future,” Jain
cluded festive season, according to Uni- spend because of the sales everywhere. I okay and not as expected. Distributors are been scouting for larger ticket invest in organic in the company’s said. The company is pivoting its
commerce, maker of an e-commerce soft- usually wait for Diwali for electronics, but still sitting on a lot of inventory.” sized acquisitions since it piv- growth, in sports and sports strategy. Dream Sports is the strategy at a time when it is fight-
ware platform. Fashion and beauty and this year I didn’t have anything on my list,” Packaged foods did well, followed by oted its strategy over the last related areas,” Jain said. umbrella organisation for ing a battle on the taxation front
personal care were among the most prom- said the New Delhi-based marketing pro- beauty and personal care as well as home two months from making The company appointed Raj Dream11, FanCode, DreamX, because of the GST council’s
inent in terms of order volumes. Auto- fessional. “I prefer shopping online than care, he said. minority transactions in small Rathi in October to lead its cor- and DreamSetGo. 28% tax on online gaming firms.

Have fun Catch the latest column of

with facts A
on Sundays A quiz on the week’s development.

hindustantimes htTweets www.hindustantimes.com

08 ThursDay, 7 DeceMber 2023
MuMbai NEWS WRAP LIVEMINT.COM

NEWS
100,000
THE NUMBER of cabs Rapido, a bike-taxi
$5 bn
THE VALUE of shares that ByteDance,
6.15%
THE ESTIMATED consumer price index-
2.85 mn
THE NUMBER of vehicles that Indian
₹1 tn
THE MARKET capitalization of the 397
IN and auto-aggregator company, said it has the owner of viral apps TikTok and based inflation in India in Nov, up from customers bought in Nov, highest ever for small and medium enterprises (SMEs)
NUMBERS on its platform as it is set to launch a cab
booking service across India.
Chinese version Douyin, has offered to
buy back from investors.
4.87% in Oct, and above RBI’s tolerance
limit of 6%, according to Barclays.
any month, according to the Federation of
Automobile Dealers Associations.
listed on the NSE Emerge platform, the
first time it crossed the mark.

HOWINDIALIVES.COM

ABFRL, Christian THE AFTERMATH Hero MotoCorp,

Louboutin form JV Ather ink EV pact

A H
ditya Birla Fashion and Retail Ltd ero MotoCorp on Wednesday said it
(ABFRL) on Wednesday announced a has inked a pact with Ather Energy for
joint venture (JV) with high-end Parisian an interoperable fast-charging
footwear brand Christian Louboutin, further network for two-wheelers in the country.
strengthening its play in India’s small but Through the collaboration, EV users will be
growing luxury-goods market. able to seamlessly use both VIDA and
The joint venture envisages the transfer of the AtherGrids across the country.
current Indian business into a newly- The combined network will cover 100 cities
incorporated subsidiary of ABFRL, in which the with over 1,900 fast-charging points, Hero
partners will hold equal stake. MotoCorp said in a regulatory filing.
The move follows ABFRL’s 2022 Ather Energy co-founder and CTO Swapnil
announcement to bring luxury department Jain termed the collaboration a massive win
store chain Galeries Lafayette to India via large for Indian OEMs (original equipment
stores and a dedicated e-commerce platform. manufacturers) to collaborate on scaling up
The JV with the iconic footwear brand will charging infrastructure. “With this
help ABFRL develop and shape the future of interoperability we are already demonstrating
luxury market in India, said Ashish Dikshit, how it is beneficial for all OEMs to be on one
managing director, ABFRL. standard. We believe that public charging
Christian Louboutin’s Group CEO Alexis infrastructure for two-wheelers is now set for
Mourot said that India is an extremely important a collaborative expansion,” Jain noted. PTI
market for the brand. SUNEERA TANDON

A drone visual shows cars submerged in an area flooded after the landfall of Cyclone Michaung, in Chennai, Tamil Nadu, on Wednesday. Rescuers
used boats to reach people stranded in their homes amid widespread flooding in the city. PTI

The investments will be executed through Adani

Arbitration pacts binding on The new framework will be applicable from 1 April
2024, Sebi said in two separate circulars. MINT
Green Energy Limited.

‘Adani to scale up
AFP

all companies in a group: SC Sebi’s framework for

NDCF calculation
AGEL’s RE portfolio’
T
o promote ease of doing business, capital

A
dani Group has plans to invest $75
billion in energy transition initiatives
by 2030, its chairman Gautam Adani
said on Wednesday.
The investments will boost the group’s
vision to have 45 gigawatt of renewable
energy capacity by 2030, Adani said in a
statement.
markets regulator Sebi on Wednesday
Apex court says pact is binding even on non-signatory firms that are part of the group decided to standardize the framework for
calculation of available net distributable cash
flows by REITs, InvITs and their respective
PTI considering its utility in determining the inten- and that the parties intended to be bound by it by holding companies.
feedback@livemint.com tion of the parties in the context of complex the act of conduct,” it said. The new framework will be applicable from 1
NEW DELHI transactions involving multiple parties and mul- Besides chief justice Chandrachud, Justice April 2024, the Securities and Exchange Board
tiple agreements,” the bench said in its judge- Narasimha wrote a concurring judgement in the of India (Sebi) said in two separate circulars.

“We are committed to large-scale
renewables, developing an indigenous, fully
integrated manufacturing ecosystem and
green hydrogen solutions. At the Adani
portfolio level, a total investment of $75
billion by 2030 on our energy transition
initiatives will further our vision to have 45
GW renewable energy capacity by 2030 and
strengthen the pivotal role played by AGEL in
India’s glide path to decarbonization,” the
group chairman said.
The investments will be executed through
Adani Green Energy Limited (AGEL).
AGEL has emerged as the second-largest
global solar PV developer in the US-based
Mercom Capital Group’s latest annual global
report.
I
n a significant verdict, the Supreme Court ment. matter. A detailed verdict is awaited. Under the rules, the Net Distributable Cash
(SC) on Wednesday held that an arbitration Besides the chief justice , Justices Hrishikesh The case was referred to a larger bench in May Flow (NDCF) is computed at the level of real
agreement can be binding on non-signatory Roy, P.S. Naras- 2022 by a three- estate investment trusts (REITs), and
firms under the “group of companies” doc- imha, J.B. Pardi- judge bench infrastructure investment trusts (InvITs) and
trine. According to the doctrine, a firm wala and Manoj The judgement said it was not headed by then their holding companies (HoldCo) or special
which is not a signatory to an arbitration agree- Misra were part of necessary that only those who are chief justice N.V. purpose vehicles (SPVs).
ment between two parties can be held bound if the bench that Ramana, saying Further, the minimum distribution should
such a company is part of the same group of delivered the unan- signatories to an arbitration that certain aspects be 90% of the NDCF at the Trust level as well as
companies which agreed to such a clause or imous judgment. agreement are bound by it of the ‘group of the HoldCo/SPV level. This is subject to
agreement. The judgement companies’ doc- applicable provisions in the Companies Act or
A five-judge constitution bench headed by said it was not nec- trine needed recon- the Limited Liability Partnership Act. PTI
Chief Justice D.Y. Chandrachud made the ruling essary that only those who are signatories to an sideration. The constitution bench dealt with
in its judgement on a plea filed by Cox and Kings arbitration agreement are bound by it. “Require- certain questions including “whether the group
Ltd in a dispute arising out of arbitration agree- ment of a written arbitration agreement does not of companies doctrine should be read into Sec-
ment.
“The ‘group of companies’ doctrine must be
mean that non-signatories will not be bound by tion 8 of the Arbitration Act or whether it can
it, provided there is a defined legal relationship exist in Indian jurisprudence independent of any
Uniqus acquires
PTI retained in the Indian arbitration jurisprudence between the signatories and the non-signatories statutory provision.”
Goodera’s ESG tech

C
onsulting firm Uniqus Consultech Inc.
RBI’s monetary has acquired volunteering experience
‘Airline sector to see $25.7 bn profit’ host Goodera’s global ESG technology
policy meet begins platform, an acquisition that will help it bag
marquee ESG clients, the company said in a
$23.3 billion, significantly higher than the statement on Wednesday. The acquisition will

R
BI’s high-powered rate-setting panel on
Wednesday began its 3-day
brainstorming on the next set of bi-
monthly monetary policy amid expectation of
continued pause on the short-term key
lending rate, as the GDP growth gains
momentum, and inflation remains
manageable. RBI left the benchmark policy
rate (repo) unchanged in its past four bi-
monthly monetary policies.
RBI governor Shaktikanta Das will unveil
the decision of the six-member MPC
(Monetary Policy Committee) on 8 December.
On expectations from the MPC, Aditi Nayar,
chief economist at Icra, said that with the GDP
Airlines are expecting to carry a record
4.7 billion passengers in 2024.
$9.8 billion projected by the International
Air Transport Association (IATA) in June
this year.
IATA has more than 300 airlines as
members. The airline industry’s operating
profit is expected to touch $49.3 billion in
2024 from $40.7 billion this year. In 2024,
the total revenue is estimated to grow 7.6%
to $964 billion compared to 2023.
“Some 4.7 billion people are expected to
travel in 2024, a historic high that exceeds
the pre-pandemic level of 4.5 billion
recorded in 2019,” IATA said.
AFP Industry passenger load factor is nearing
its 2019 level, which is supporting the
The platform, called ‘Contakt’, is already seeing a
number of pilot deployments.
Haptik launches gen
see Goodera’s ESG technology platform
renamed ESG UniVerse, and its teams and
existing clients become a part of Uniqus.
Uniqus didn’t disclose the valuation of the
deal. According to Uniqus, companies can
automate the collection, maintenance, and
approval of their ESG data and ensure precise
disclosures against global frameworks,
standards, and rating requirements using ESG
UniVerse.“One of the major challenges faced
by companies in the area of ESG is the weakly
ISTOCKPHOTO integrated data that resides across different
information systems,” said Jamil Khatri, co-
founder & CEO of Uniqus. RHIK KUNDU

T
data for the second quarter of 2023-24
appreciably higher than the MPC’s last
forecast, and continuing concerns on various
aspects of food inflation, “we expect the MPC
to pause in its December 2023 review, amidst
a fairly hawkish tone of the policy document”.
The MPC comprises three external
he airline industry is projected to
register a net profit of $25.7 billion in
2024, as more normal growth is
expected in both passenger and cargo
segments, global grouping IATA said on
Wednesday.
For 2023, the net profit is estimated at
AI chatbot platform
financial recovery of the airlines, IATA
director, policy and economics, Andrew
Matters, said. Global economic Artek buys Kemira’s
R
developments, war, supply chains and eliance Jio Infocomm-owned artificial
regulatory risk will be the main factors that
could positively or negatively impact the
intelligence (AI) startup, Haptik, on
Wednesday launched a dedicated
oil & gas business
airline industry’s profitability. PTI generative AI platform for clients to build

members and three officials of RBI.
TV18, Moneycontrol operator E18 to merge with Network18
PTI virtual assistants and back-end information
support.
The platform, named ‘Contakt’, is already
seeing a number of pilot deployments, which
it says will grow over time.
In an interview with Mint, Aakrit Vaish,
chief executive of Haptik, said that companies
M
umbai-based Artek Group has
acquired Finnish chemicals company
Kemira’s oil and gas business for $280
million, according to a company statement.
Artek has acquired the asset through its US-
based subsidiary Sterling Specialty Chemicals
and the deal is expected to close in the first

N
etwork18 Media & Investments Ltd and TV18 Broadcast Ltd that are already piloting the generative AI quarter of 2024, subject to customary closing
announced, through a statement on Wednesday, a scheme of conversational assistant platform include conditions and regulatory approvals.
arrangement in terms of which TV18 and E18, which owns and operates brokerage firm Upstox, e-commerce platform “The acquisition of a high-quality oil & gas-
the moneycontrol website and app, will merge with Network18. Tira, Tata Group’s consumer goods brand related portfolio from Kemira is another step
The proposed scheme will consolidate TV and digital news businesses of the Starbucks, and education group Indian in our global vision and growth strategy of
Network18 group in one company and will help create a platform-agnostic School of Business, among others. becoming a leading specialty chemicals
news media company with footprints across languages, straddling both TV and Contakt will allow clients to accept text, player,” said Vishal Goenka, director at Artek
digital, it added. This will present an opportunity to all shareholders to audio and image queries through chat Group.
participate in the media business of the group through one listed entity. The interfaces, Vaish said, thereby Approximately 250 employees are
merged entity will comprise the TV portfolio of TV18 (20 news channels in 16 making the platform ‘multi-modal’ in expected to transfer to Sterling Specialty as
languages and CNBCTV18.com), digital assets of Network18 (News18.com nature. It will use OpenAI’s Generative Pre- part of the transaction.
platform across 13 languages and Firstpost) as also moneycontrol website and trained Transformer (GPT)-3.5 and GPT-4 Artek expects to explore “future growth
app. Viacom18, with its portfolio of JioCinema and 40 TV channels, will be a models by default, but will offer clients the opportunities” with its existing oil & gas
direct subsidiary of Network18. Network18 will continue to hold its investment This will present an opportunity to all shareholders to participate in the ability to access multiple LLMs upon business, Goenka said. Artek has previously
in ticketing website BookMyShow. LATA JHA media business of the group through one listed entity. REUTERS discretion. SHOUVIK DAS been globally acquisitive. MAYUR BHALERAO
LIVEMINT.COM GLOBAL ThursDay, 7 DeceMber 2023
MuMbai 09

m MINT SHORTS
Weapons supplies to Armenia may
Saudi Arabia seeks to Italy tells China it
is leaving Belt and
trigger new war, Azerbaijan warns
Azeri President Ilham Aliyev on Wednesday warned France and
India against providing Armenia with weapons it deems a threat,
saying such supplies could trigger a new war in the region. Azer-
contain war spillover Road Initiative
baijan “will have to react to protect its people” should Armenia Reuters
start receiving “serious installations” from France and India, Ali- feedback@livemint.com
yev told a conference in Baku, saying he’d already given advance Rome
warning to “everybody.” The demand from the Azeri leader fol- Riyadh urges restraint by Washington as Houthis attack ships in Red Sea
I
lows three months after his forces launched a lightening offen- taly has officially informed
sive to restore full control over Nagorno-Karabakh, an area con- China that it is quitting the
trolled by Armenians since the collapse of the Soviet Union three Reuters Belt and Road Initiative
decades ago. Aliyev reiterated that Azerbaijan had no intention feedback@livemint.com (BRI), dismissing fears the
of invading Armenia. BLOOMBERG RIyaDh/DubaI move might sour relations and
damage the Italian economy,

S
audi Arabia has asked the US to
PBOC steps up yuan support show restraint in responding to
attacks by Yemen’s Houthis
after Moody’s outlook cut against ships in the Red Sea, two
BLOOMBERG
sources familiar with Saudi
thinking said, as Riyadh seeks to contain
spillover from the Hamas-Israel war. The
Iran-aligned Houthis have waded into the
conflict that has spread around the Middle
East since war erupted on 7 October,
attacking vessels in vital shipping lanes and
firing drones and missiles at Israel itself.
The group, which rules much of Yemen,
says its attacks are a show of support for the
Palestinians and has vowed they will con-
tinue until Israel stops its offensive on the
Gaza Strip—more than 1,000 miles from
China ramped up its support for the yuan via the daily refer- their seat of power in Sanaa.
ence rate, as market sentiment took a hit after Moody’s Inves- The Houthis are one of several groups in
tors Service cut its credit outlook for the nation. The People’s the Iran-aligned “Axis of Resistance” which
Bank of China (PBOC) set the daily reference rate for the have been attacking Israeli and US targets
managed currency at 7.1140 per dollar, versus an average esti- since the start of the conflict on 7 October,
mate at 7.1486 in a Bloomberg survey. The gap between the when their Palestinian ally Hamas sparked
two was the largest in more than two weeks, a sign that Bei- the war by attacking Israel.
jing is boosting its efforts to prevent declines in the Chinese Their role has added to the conflict’s
currency. Moody’s Investors Service cut its outlook for Chi- regional risks, threatening sea lanes
nese sovereign bonds to negative on Tuesday, citing the through which much of the world’s oil
nation’s increased usage of fiscal stimulus and property mar-
shipped, and worrying states on the Red
ket downturn. AFP Sea as Houthi rockets and drones fly
towards Israel.
Riyadh, the world’s top oil exporter, has
Apple iMessage set to avoid EU’s watched with alarm as Houthi missiles have
been fired over its territory.
digital dominance crackdown With the Houthis stepping up attacks on
Apple Inc.’s iMessage service looks set to win a carve out from shipping over the past weeks, two sources
new European Union (EU) antitrust rules to rein in Big Tech plat- familiar with Saudi thinking said Riyadh’s
forms after watchdogs tentatively concluded that it isn’t popular message of restraint to Washington aimed
enough with business users to warrant being hit by the regula- to avoid further escalation. Riyadh was so
tion. European Commission officials are leaning toward the far pleased with the way the United States
reprieve for Apple as part of a five-month market investigation was handling the situation, the sources
which concludes in February, according to people familiar with added.
the matter. If designated under the Digital Markets Act, the com- “They pressed the Americans about this
pany would have faced potentially onerous obligations to make and why the Gaza conflict should stop,” one
iMessage work with rival online messaging services, such as Meta of the sources said.
Platforms Inc.’s WhatsApp or Facebook Messenger—a move that The White House declined to comment.
Apple has strongly contested. BLOOMBERG The Saudi government did not respond to
government sources said on
Wednesday.
Italy in 2019 became the
first and so far only major
Western nation to join the Italian Prime Minister
trade and investment pro- Giorgia Meloni. REUTERS
gramme, ignoring warnings
from the US that it might let More than 100 countries
China take control of sensitive have signed agreements with
technologies and vital infra- China to cooperate on BRI
structure. infrastructure and building
However, when Prime Min- projects since the scheme was
ister Giorgia Meloni took launched in 2013. The then
office last year, she said she Italian prime minister
wanted to withdraw from the Giuseppe Conte hoped for a
deal, which was championed trade bonanza when he signed
A file photo of Houthi supporters at a rally in Sanaa, Yemen, to show support for by President Xi Jinping, saying up in 2019, but Chinese firms
Palestine. REUTERS it had brought no significant seemed to be the main benefi-
gains to Italy. ciaries.
an emailed request for a comment on the backed militias in Iraq. The 2019 accord expires in Italian exports to China
discussions. The Houthis have emerged as a major March 2024 and an Italian totalled €16.4 billion ($17.7 bil-
As Saudi Arabia presses for a ceasefire to military force in the Arabian Peninsula, government lion) last year
halt what it has called a “barbaric war” in with tens of thousands of fighters and a source said Rome Italy in 2019 from €13 billion
Gaza, its diplomacy reflects a wider policy huge arsenal of ballistic missiles and armed had sent Beijing a became the first in 2019. By con-
aimed at promoting regional stability after drones. letter “in recent and so far only trast, Chinese
years of confrontation with Iran and its Senior sources in the Iran-aligned days” informing major Western exports to Italy
allies. Focused on expanding and diversify- camp told Reuters the Houthi attacks China that it rose to €57.5 bil-
nation to join the
ing the Saudi economy, were part of an effort to put would not be lion from €31.7
Riyadh this year normalized pressure on Washington to renewing the investment and billion over the
ties with Tehran and is seek- The Houthis are get Israel to halt the Gaza pact. trade programme same period,
ing to exit the war it has been one of several offensive, a goal that Iran There was no according to Ital-
waging with the Houthis in groups that have shares with Saudi Arabia and immediate com- ian data.
Yemen for nearly nine years. other countries in the ment from China. Italy’s main euro zone trad-
The sources said Saudi Ara-
been attacking
region. “We have every intention of ing partners France and Ger-
Israeli and US
bia was seeking to advance One of the sources, who is maintaining excellent rela- many exported significantly
the Yemen peace process targets since the based in Tehran, said Houthi tions with China even if we are more to China last year,
even as war rages in Gaza, conflict began representatives had dis- no longer part of the Belt and despite not being part of the
worrying it could be derailed. cussed their attacks with Ira- Road Initiative,” a second gov- BRI, which is modelled on the
Yemen has enjoyed more nian officials during a meet- ernment source said. old Silk Road that linked China
than a year of relative calm amid direct ing in Tehran in November, agreeing to “Other G7 nations have to the West.
peace talks between Saudi and Houthi offi- carry out actions in a “controlled” way that closer relations with China Looking to maintain strate-
cials. would help force an end to the Gaza war. than we do, despite the fact gic ties, foreign minister Anto-
The Houthi attacks during the Hamas- The source was briefed on the matter. they were never in (the BRI),” nio Tajani visited Beijing in
Israel war have elevated their profile in the Another of the sources said Tehran did he added. September and President Ser-
Iran-aligned camp which also includes not seek “all-out war in the region” that Italy will assume the presi- gio Mattarella is due to visit
Hamas, Lebanon’s Hezbollah and Iran- would risk drawing it in directly. dency of the G7 in 2024. China at some stage next year.

मध्यप्रदेश राज्य सहकारी विपणन सघं म्यायावदत M.P. POWER GENERATING COMPANY LIMITED
SUPERINTENDING ENGINEER (P&W), OFFICE OF THE EXECUTIVE DIRECTOR (GEN.)
जहांगीराबाद, भोपाल SANJAY GANDHI THERMAL POWER STATION
क्र./्यां./1039/2023 भोपाल, वदनांक : 06.12.2023 BIRSINGHPUR, DISTT.-UMARIA 484 552 (M.P.)
E-mail ID : sepnw.sgtps@mppgcl.mp.gov.in, Fax No. : 07655-260226
वनविदा सच
ू ना (वविती्य आमंत्रण) No. 511-0100/SGTPS/P&W/E-NIT-27/3861 Birsinghpur, Date : 05.12.2023

विपणन संघ द्वारवा Contract of Rice Mill of Markfed on "As is Where is" Basis & Establishment of E-TENDER INVITING EXTENSION NOTICE
New Rice Mill of Minimum 08 TPH Capacity with Sortex Plant & on Lease Basis for 15 Years को M.P. POWER GENERATING CO. LTD. Invites Electronic tenders from manufacturer/reputed supplier/
लीज पर संचवावलत करने हेतु िैध वनविदवाकवारों से E-Tender प्रणवाली के अनतर्गत www.mptenders.gov.in पर के िल contractor, for the supply/works of following items for SGTPS, MPPGCL Birsinghpur.
Online ऑफर 15 िर्ग की लीज के वलए वदनांक 22.12.2023 को शाम 05:30 बजे तक आमवं रित की जवाती है। वनविदवा SL. MPPGCL PARTICULARS Estimate TENDER E.M.D. LAST DATE DUE
प्रपरि एिं कवार्ग के संबंध में अनर जवानकवारी एिं अवनिवार्ग शततें वनविदवाकवारों को मधरप्रदेश शवासन के ई-वनविदवा के पोर्गल No. TENDER-ID (In Rs.) COST (In Rs.) of closing DATE of
(In Rs.) of online e-TENDER
www.mptenders.gov.in पर प्रवाप्त होंरी एिं विपणन संघ की िेबसवाइर www.mpmarkfed.mp.gov.in पर भी submission OPENING
अिलोकनीर होंरी।
1 2023_ Procurement of 6 Axle, broad 5,94,84,533/- 5000/- 5,94,900/- 15.12.2023 19.12.2023
क्र. Tender का्यया का नाम MPPGC_ gauge, 1400/1600 HP diesel
Ref. No. 316605_1 Locomotive for Wagon Tippler
of CHP, SGPTS, MPPGCL,
1. 1760 Contract of Gangeruva/Distt. Seoni Rice Mill of Markfed on "As is Where is" Basis & Birsinghpur
Establishment of New Rice Mill of Minimum 08 TPH Capacity with Sortex Plant & After
2 2023_ Design, Engineering, and supply 5,27,30,904/- 5,000/- 5,27,400/- 12.12.2023 15.12.2023
Possibilities of Renovation/Maintenance/Strengthening on Existing Storage Capacity Then to MPPGC_ of Horizontal Re-heater top bank,
Create Balance new Storage Capacity by Bidder on Lease Basis for 15 Years (2nd Call) 316608_1 Intermediate & Bottom Bank Coils
2. 1761 Contract of Garra Distt Balaghat (Old) Rice Mill of Markfed on "As is Where is" Basis & for 210 MW, ABL make Boiler of
Establishment of New Rice Mill of Minimum 08 TPH Capacity with Sortex Plant & After unit no. 1 & 2, PH-I at SGTPS,
MPPGCL, Birsinghpur
Possibilities of Renovation/Maintenance/Strengthening on Existing Storage Capacity Then to
Create Balance new Storage Capacity by Bidder on Lease Basis for 15 Years. (2nd Call) 3 Tender Design, engineering, and supply 5,58,99,669/- 5,000/- 5,59,000/- 12.12.2023 15.12.2023
ID 2023_ of pendent Re-heater coils from
नोट : आिशरक होने पर उपरोक्त वनविदवा सचू नवा से सबं ंवधत वकसी भी प्रकवार की सचू नवा अथिवा सश
ं ोधन सबं ंधी जवानकवारी MPPGC_ inlet leg to outlet leg including all
के िल उपरोक्तवानसु वार पोर्गल एिं िेबसवाइर पर प्रदवश्गत की जवािेरी । 316607_1 support arrangements, Header
Bend and Work of replacement
म.प्र. मवाधरम/112651/2023 मुख्य अवभ्यनता (वस.) of existing coil & erection, testing,
commissioning of complete set of
new Pendent Re-heater coil from
inlet leg to outlet leg in unit no. 2 of
210 MW ABL make boilers of PH-I,
SGTPS, MPPGCL Birsinghpur.
Note : Lowest bidder shall be
decided on lowest package basis.
4 2023_ Procurement of Primary air 42,06,370/- 1000/- 84,200/- 12.12.2023 15.12.2023
MPPGC_ tube and complete core air tube
308059_1 assembly for coal burner for Unit
no. 3 & 4, SGTPS, MPPGCL,
Birsinghpur.
5 2023_ Procurement of Gas Distribution 19,27,530/- 1000/- 38,600/- 12.12.2023 15.12.2023
MPPGC_ plates for ESP installed at unit
309034_1 no. 1 to 4, SGTPS, MPPGCL,
Birsinghpur.
6 2023_ Procurement of “Filter elements 13,39,728/- 1000/- 26,800/- 12.12.2023 15.12.2023
MPPGC_ for coal mill system and fans”
309532_1 installed at Unit No. 1 to 4, SGTPS,
MPPGCL, Birsinghpur
7 2023_ Procurement of Economizer coils 3,36,80,445 5000/- 3,36,900/- 21.12.2023 26.12.2023
MPPGC_ (Intermediate and Bottom bank)
317090_1 along with accessories installed
at boiler of Unit No. 4, SGTPS,
MPPGCL, Birsinghpur.
8 2023_ Procurement of “Spares for ESP 98,80,813 2000/- 1,97,700/- 21.12.2023 26.12.2023
MPPGC_ internals" installed at Unit no. 1 to
317154_1 4, SGTPS, MPPGCL, Birsinghpur.
These tenders are being invited through e-tendering system/For viewing detailed E-NIT, downloading
tender documents and participating in Electronic Tender, for any clarifications and/or due date extensions or
corrigendum, please visit the website www.mptenders.gov.in regularly/Any clarifications and/or due date
extensions or corrigendum shall be issued on the website www.mptenders.gov.in only.
Superintending Engineer (P&W)
M.P. Madhyam/112615/2023 O/o Executive Director (Gen.)
10 ThursDay, 7 DeceMber 2023
MuMbai LONG STORY
HOW SUSTAINABILITY
beCAme SeRIouS buSIneSS
Sustainability is getting mainstreamed. And CSOs in Indian companies have a hefty role to play
Sayantan Bera
sayantan.bera@livemint.com
neW delHi
A
pple Inc., the largest company
in the world by market capitali-
zation, released an intrepid
commercial this September. In
the film, which garnered over
four million views on YouTube, senior
Apple executives, including chief executive
Tim Cook, is seen nervously preparing
before a meeting with the proverbial
Mother Nature.
“This is my third corporate responsibility
gig today, so who wants to disappoint me
first?” Mother Nature asks, condescendingly.
A few minutes later, she calms down after
the Apple team briefs her on the steps taken to
make its operations less damaging to the envi-
ronment. Eliminating plastic packaging by
end-2024, using 100% recycled aluminium in
its products, running on clean electricity, and
transporting more products by ocean rather
than air which reduced transport emissions.
Plus, the promise that all Apple devices will
have a net zero climate impact by 2030.
A product is considered net zero when
greenhouse gases emitted during produc-
tion and distribution is negated by adopting
emission reduction measures, in addition to
steps like planting trees which offsets emis-
sions by absorbing carbon dioxide from the
atmosphere.
“Ok! Good! See you next year,” a pleased
Mother Nature says before walking towards
the exit. The team members breathe a sigh
of relief.
The promotion by Apple underlines that
environment, social and governance (ESG)
objectives are no longer only about regula-
tory and legal compliance. Mindful consum-
ers, especially in developed markets, are
pushing for cleaner and greener products.
Investors, too, are keen to see businesses take
steps to reduce their carbon footprint and
prepare for a rapidly warming world, though
they are less willing to accept lower returns.
“Sustainability has become extremely
important because of a well-informed global
consumer base. In some industries like
healthcare, the consumer is paralysed by the
complexity and opacity. But in others like
cosmetics, fabrics, fashion, automobiles, the
loud voice of consumers can no longer be
ignored. Firms have been quick to listen,” said
Urvashi Bhatnagar, co-author of the book,
The Sustainability Scorecard: How to Imple-
ment and Profit from Unexpected Solutions.
Large corporations and their investors
care about ESG metrics also because of
material risks. For instance, when a soda
company uses large volumes of water, it can
lead to a water shortage and affect future
business operations, besides opening the
door for litigation and penalties.
“In the venture capital
space, sustainability is
viewed as a route to
innovative products. Air
Company (New York-
headquartered), which
makes carbon-negative
vodka and sustainable
aviation fuel by drawing
carbon dioxide from air,
is an example,” Bhatna-
gar added.
By 2030, the world
needs to cut emissions by
28% to limit temperature
rise to 2% above pre-in-
dustrial levels, or reduce
emissions by 42% for the
1.5°C goal, as per the Paris
Agreement signed in
2015, the latest Emission
Gap Report by the United
Nations said last month.
Crossing the temperature
threshold means more
severe climate disasters,
including droughts, heat-
waves, and excess rainfall.
The ongoing COP28 (UN’s
climate change conference) is
about turning things around
but national governments
cannot do it alone, Antonio
Guterres, the UN secretary-
general said a few days back.
“Businesses, financial institu-
tions, civil society, cities,
states and regions are all criti-
cal in the race to net-zero.”
Besides, the cost of inac-
tion is high. For instance,
according to the CDP India
Disclosure report 2022, of
the 122 companies which
responded to a survey, 104
confirmed climate-related
risk and opportunities in at
least one of their key business
areas. The financial impact
reported by these companies
from climate-related risks
was estimated at ₹2.8 trillion.
ASHISH ASTHANA/MINT CDP is a charity that runs a
global disclosure system for
LIVEMINT.COM
tions team. “2015 was a landmark year due
mint
SHORT to the Paris Agreement and adoption of sus-
STORY tainable development goals (SDGs) at an
United Nations summit. Investors started
asking questions and those were deeper
WHAt than the voluntary reporting done by com-
panies,” said Madhulika Sharma, CSO at
Sustainability heads are crafting a ITC Ltd, a conglomerate with business
clean growth path for large interests ranging from consumer goods and
businesses. The role is integral to agribusiness to hotels, paper and tobacco.
business strategy and energy “That is how sustainability got main-
transition, beyond what was once streamed and integrated across corporate
a PR and brand building exercise. functions. Globally, if you listen to CEO
speeches in annual general meetings, a quar-
ter of it is on sustainability aspects,” she added.
WHy Sharma said that the position of a CSO has
evolved into a strategic role. It is no longer
Investors are asking questions about a good-to-have, once in a year public
around decarbonization targets relations (PR) engagement. Sustainability is
and material risks from adverse being integrated in an organization across
climate events. Consumers functions—so much so that in some organi-
too are demanding low zations, the strategy and sustainability
carbon footprint products. teams often sit together.
A CSO’s primary task now is to set targets
and arrange resources, find the right set of
but people to implement the sustainability pol-
icy, ensure monitoring, and report the
Smaller companies still look at progress to the management. “You are not
sustainability with a lens of doing it all alone. A CSO’s role is to cascade
regulatory compliance. Also, the sustainability strategy across divisions.
sustainability is still one of those Also, to see if they have the right resources
business areas that is first to get to move the needle,” Sharma said.
its funding frozen during a crisis. At ITC, in addition to business perform-
ance, sustainability aspects are now taken into
cognizance while deciding the variable pay of
investors, companies and states. employees in different divisions. “We are now
on a Sustainability 2.0 framework with
Survival Of The greeneST? focused operational targets,” the CSO added.
I ndia has targeted net zero emissions by The focus areas include a pivot to renewa-
2070. A part of its low-carbon develop- ble energy, responsible water use, climate-
ment strategy rests on decoupling growth resilient agriculture, social farm forestry and
from emissions, by nurturing a low-emis- sustainable packaging of consumer goods.
sion industrial system. Which means busi- “Globally, the CSO role is going to be a
nesses must step up. But are they? strategy function. Essentially, the role of this
Only about a fifth of the 586 Indian com- strategy person will be to set forth the direc-
panies surveyed had a good sustainability tion, what the firm is going to be in the future,”
disclosure, and most did not have a road said Urvasi Bhatnagar, the author of the book,
map to achieve Net Zero, found the Crisil quoted earlier. “For instance, Philips is known
Sustainability Yearbook, an annual publica- as a consumer electronics company but it now
tion based on the ratings company’s ESG regards itself as a healthcare and circular
framework, released last year. Sustainability medical devices company. They know what
disclosures include data on emissions, they want to be in the future,” she added.
energy mix , water use, waste disposal and In fact, at Novelis, a producer of flat rolled
recycling, among others. and recycled aluminium, the chief strategy
But it’s not all gloomy. Some large con- officer—Pierre Labat—is also the CSO.
glomerates have successfully turned water Novelis is a subsidiary of Hindalco Indus-
positive (returning more water to the envi- tries Ltd, the flagship company of the Aditya
ronment than they use, say, by investing in Birla Group. Apart from aluminium, the
watershed development projects), and group’s businesses span sectors such as
increased use of renewable energy, setting cement, chemicals, mining, fashion, and
themselves on a cleaner growth path. retail. Decarbonization (lowering emission
Also, 131 companies have set a target to intensity), recycling, biodiversity conserva-
reduce emissions by joining the global Sci- tion and reaching net zero by 2050 are
ence-based Target Initiative (SBTi). The SBTi among its key sustainability targets.
provides a path to reduce emissions in line According to Deeksha Vats, group sus-
with the Paris agreement goals. Six Indian tainability officer at Aditya Birla, the vision
companies are now part of the Dow Jones of a company defines how it uses its sustain-
Sustainability Index (DJSI), which comprises ability head. In mature organisations, the
500 global sustainability leaders. sustainability officer works closely with
For instance, UPL Ltd, a manufacturer of investor relations, the chief financial offi-
agrochemicals and seeds, has positioned cer’s office, and technology, procurement,
itself a ‘sustainable agricul- and logistics teams.
ture solutions’ company. “The role requires hard
“Our DJSI score is the Six Indian companies are skills like an understand-
highest among agrochem- now part of the Dow Jones ing of the regulatory envi-
ical companies globally. ronment, operations and
Our sustainability per- Sustainability Index (DJSI), technology, and the soft
formance also enabled us which comprises skills of being a collabora-
to get a $1.5 billion green tor,” Vats said.
loan,” said a spokesperson 500 global sustainability
for the company. BeyOnd The uSual
leaders.
Corporates exposed to
‘hard-to-abate’ sectors like A t Eicher Motors, mak-
ers of the popular
steel, cement, energy—they use carbon as an Royal Enfield bikes, sustainability is closely
integral part of the production process or, linked to its work with local communities in
where emissions are an integral part of pro- the Himalayas—which it calls the spiritual
duction—see climate action as an opportu- home for its riders. “As a consumer brand,
nity to raise funds at attractive rates, said Royal Enfield has a power of influence. We
Rahul Prithiani, global head of consulting at look at the whole sustainability piece with a
Crisil Market Intelligence and Analytics. strategic lens going beyond regulatory man-
“Some of the bigger corporate groups dates,” said Bidisha Dey, executive director
started quite a few years back. They have a at the Eicher Group Foundation.
strategy on sustainability. Mid-tier corpo- Dey elaborated that the work in Royal
rates are a few years behind but smaller Enfield involves onboarding its supplier
companies are largely driven by compliance and dealer ecosystem on the sustainability
requirements,” Prithiani added. journey (such as zero effluent discharge in
What are these compliances? The stock service centres), beyond the usual targets
market regulator, Securities and Exchange around water use and renewable energy. On
Board of India, introduced ESG related circularity, its new Meteor cruiser-style
non-financial information disclosure back bikes are manufactured with more than
in 2012. This was meant for the top 100 90% recyclable or reusable parts.
listed companies, which was later extended Interestingly, to prepare its sustainability
to unlisted entities in 2020. In 2021, Busi- strategy, Royal Enfield partnered with the
ness Responsibility and Sustainability Forum for the Future, an international sus-
Reporting (BRSR) was made mandatory for tainability organization that works with
top-1,000 listed companies from 2022-23. businesses and governments to help them
transition to a ‘just and regenerative future.’
The new CSO Anna Biswas, India managing director at
S o how has the role of a chief sustainability Forum for the Future, pointed to a recent
officer (CSO) evolved for large businesses? report that flagged how sustainability
In India, about two to three decades back, heads, at times, struggle for resources to
sustainability was linked to social and phi- realize commitments made on paper.
lanthropy-oriented work. Then, in 2013, the “Unfortunately, sustainability is still one
Corporate Social Responsibility (CSR) Act of those business areas that is the first to get
came in and it mandated that companies its funding frozen during a crisis,” she said.
spend 2% of their net profits on CSR activi- Nonetheless, the Indian landscape is dif-
ties. Around the same time, India also put in ferent from other countries, Biswas added.
place ESG based reporting standards. The CSR spending in India is mandatory. So,
reporting was then mostly done by the CSR, even during a crisis, these funds would be
environment or the corporate communica- available to meet sustainability targets.
LIVEMINT.COM MINT MONEY ThuRsDay, 7 DeceMbeR 2023
MuMbai 11

What’s a realty fund worth? MINT 20* MUTUAL FUND

SCHEMES TO INVEST IN
That depends on the math 20
We have hand-picked 20 mutual funds for your portfolio that have jumped
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3-years return 5-years return Corpus

EQUITY (%) (%) (₹ cr)
LARGE-CAP
At some real estate funds, the familiar term ‘net asset value’ can mean different things UTI Nifty Index Fund - Growth 16.98 14.69 12,598
HDFC Index Fund - Nifty 50 Plan 16.82 14.46 9,809
Jonathan Weil Under generally accepted account- Category average 16.06 14.27
feedback@livemint.com ing principles, NAV per share for
EQUITY FLEXICAP
open-end mutual funds and other reg-

T
he term “net asset value,” or
NAV, is so commonplace for
anyone buying a mutual
fund, investors hardly give it
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son to question it.
But in a corner of the market that has
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This raises issues of comparability
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istically reflect the performance of
their underlying assets. Both have
become a concern for investors since
rising interest rates began hurting
many commercial real-estate values.
Shares of publicly traded REITs,
which typically don’t report NAV, have
plunged; the MSCI
US REIT Index is
down 25% since the
end of 2021. Yet
NAVs have shown little volatility at
some of the biggest nontraded REITs
focusing on commercial real estate.
The NAV per share at Blackstone Real
Estate Income Trust, known as Breit
and the biggest of these kinds of funds,
is up 2% since the end of 2021, and Star-
wood Real Estate Income Trust’s is
down 5%.
Investors in some cases have rushed
to sell shares, prompting several funds
to curb redemptions. Blackstone, for
example, said last week that November
repurchase requests for Breit were $1.8
billion and that it fulfilled $1.2 billion of
these.
Requests have been falling steadily
this year. In January, Breit repurchased
$1.3 billion of shares, but requests were
four times that amount. The fund has
capped redemptions for 13 consecutive
months and restricts withdrawals to 2%
of NAV per month and 5% per quarter.
How such funds calculate NAV is of
particular importance to investors
because, unlike publicly traded REITs,
their shares don’t trade on exchanges.
istered investment companies is a bal- Canara Robeco Flexi Cap 17.11 16.18 10,084
ance-sheet measure of net worth; it Parag Parikh Flexi Cap 22.51 21.80 44,038
isn’t just price. Category average 18.59 15.95
According to fund filings, there are
many adjustments nontraded REITs EQUITY SMALL AND MIDCAP
make to calculate non-GAAP NAV. Axis Midcap 19.97 19.27 21,962
Some don’t subtract all their liabilities. SBI Small Cap 26.93 23.18 21,140
Some include fair-value gains and Category average Midcap 26.07 20.32
losses on their own debt; others don’t. Category average Smallcap 32.65 23.54
Some update their real-estate assets’
values more frequently than others or EQUITY (TAXSAVER)
rely more heavily on third-party firms Canara Robeco Equity Tax Saver 19.17 17.94 6,042
to value them. Mirae Asset Tax Saver 19.59 17.95 17,532
A spokesman for Starwood declined Category average 20.22 16.14
to comment. Blackstone said that “if
Breit’s NAV was governed by GAAP
accounting, the result would be virtu-
HYBRID
BALANCED ADVANTAGE
ally identical” and that “our valuations
Edelweiss Balanced Advantage 12.92 13.09 9,338
are further supported by the fact that
Breit has sold more than $16 billion of ICICI Prudential Balanced Advantage 13.02 12.09 49,871
assets across 321 properties at a pre- Category average 12.28 11.31
These funds have broad leeway to define their NAV measurements. ISTOCKPHOTO mium to NAV since 2022, when inter-
est rates began to rise.” ARBITRAGE
They are sold mainly to individual ing NAV with help from outside advis- Blackstone also pointed to a transac- Kotak Equity Arbitrage 5.22 5.20 28,958
investors through financial advisers. ers and appraisers. They disclose tion announced in January in which Tata Arbitrage 4.89 NA 7,682
The NAV sets the price, and investors lengthy valuation policies describing the University of California’s invest- Category average 4.89 4.90
sell shares back to the company at the their methodology and include broad ment arm bought $4.5 billion of Breit
NAV. A limited sec- disclaimers. shares at their published NAV. Returns since Date of Corpus
ondary market “NAV calculations are not governed However, UC Investments’ purchase OUT OF THE BOX launch launch (₹ cr)
exists, but transac- by governmental or independent secu- came with a big concession. Blackstone BHARAT Bond ETF - April 2031 4.74 23-Jul-20 12,902
tions usually occur rities, financial or accounting rules or also pledged $1.1 billion of its own Breit Motilal Oswal S&P 500 Index Fund 16.07 28-Apr-20 2,654
at a discount to NAV. standards,” Breit said in its latest shares to pay UC Investments in case it Returns as on 4 December 2023; Corpus data as of October 2023; Growth option in regular plans has been used
“Shareholders assume they know annual report. “Further, there are no failed to earn 11.25% a year after fees Absolute returns for 'Out of box', CAGR for the rest. For detailed methodology refer to:
what the term ‘net asset value’ means accounting rules or standards that pre- over a six-year holding period. Ordi- Keep a smart, flexible and minimalist MF portfolio
https://www.livemint.com/money/personal-finance/keep-a-smart-flexible-and-minimalist-mf-portfolio-11638378827521.html
and that it’s applicable across all prod- scribe which components should be nary Breit shareholders aren’t offered Download mint app for latest in Business News - https://bit.ly/32XEfFE
uct types. But the definition of net asset used in calculating NAV, and our NAV such downside protection. *Debt funds can be viewed in the full table online
value can vary,” said John Cox, founder is not audited by our independent reg- Some investors say the practice of Data and analysis by CRISIL Research Compiled by Neil Borate
and chief executive officer istered public accounting using the NAV label on a non-GAAP
of Cox Capital Partners in Some investors firm.” financial measure might cause confu-
Philadelphia, an invest- say the practice Starwood REIT and sion. Securities and Exchange Com-
ment manager that spe-
cializes in nontraded
funds. He said his firm
of using the NAV
label on a non-
GAAP financial
other non-traded REITs
included the same lan-
guage word for word in
mission rules prohibit companies in
their filings from using “titles or
descriptions of non-GAAP financial
Is there any way to gift money to
bought shares of Breit and
other nontraded REITs at
discounts on the second-
measure might
their annual reports.
Many also include cau-
cause confusion tionary language in their
measures that are the same as, or con-
fusingly similar to, titles or descriptions
used for GAAP financial measures.”
a non-resident Indian friend?
ary market earlier this disclosures disavowing The SEC hasn’t moved to stop the
year. that their NAV metrics practice by nontraded REITs, notwith- ISTOCKPHOTO
“A lot of our business is based on reflect their financial condition. The standing its rule, passed in 2003 after a Harshal Bhuta
explaining why NAV is not an indica- annual reports by Breit, Starwood wave of accounting scandals. An SEC
tion of fair market value,” Cox said. REIT and others go on to say: “We cal- spokeswoman declined to comment. I am a resident Indian. I
“They should call it `price.’ They culate and publish NAV solely for pur- Ted Christensen, a University of want to gift some money to
should say, ‘This is our price per share’ poses of establishing the price at which Georgia accounting professor, took my close friend who now
and just leave it at that.” we sell and repurchase shares of our issue with the practice. The NAV label- lives outside India. He
So how do many nontraded funds common stock, and you should not ing, he said, “is similar to a company holds NRO (non-resident
calculate NAV? view our NAV as a measure of our his- calculating a non-GAAP earnings met- ordinary) as well as NRE
Generally, they say they estimate torical or future financial condition or ric and calling it ‘net income.’ ” (non-resident external)
their assets’ fair values when calculat- performance.” ©2023 DOW JONES & COMPANY, INC accounts in India. Can I
transfer the money to his
NRO/NRE accounts in
India? Will it count under

Top China tech fund spurns AI stocks on risks
Bloomberg
feedback@livemint.com
A
technology-focused
China equity fund out-
performing 98% of
peers this year advises caution
over the frenzy in artificial
intelligence themes, saying it
might be the biggest under-
priced risk in the market.
“There are huge funda-
mental risks, especially in
terms of public safety, in AI at
this current stage,” said Yun
Bingwang, an investment
officer at Qingdao Luxiu
Investment Management Co.
in an interview last week.
“These uncertainties mean
that we cannot make invest-
ment decisions.”
Yun’s Luxiu Lvjing Fund
has returned 76% this year,
according to fund tracker
Shenzhen PaiPaiWang Invest-
ment & Management Co.,
trouncing the benchmark CSI
300 Index by 88 percentage
points. That puts the fund,
which primarily invests in
global tech companies, in the
top 2% among 10,308 peer pri-
vate-fund products.
The fund owes its outper-
formance to bets on online
retailer PDD Holdings Inc.,
best known for hit shopping
LRS (liberalised remit-
tance scheme)? Will it
attract TCS (tax collected at
source)? If it attracts TCS,
app Temu and domestic bar- to buy. He compares missing The leading stock-focused what compliance do I have
gains trailblazer Pinduoduo, out on AI this year to side step- mutual funds this year also to do?
amid the stock’s slump earlier ping the euphoria in Chinese count software, media and —Name withheld on request ASK MINT further compliance obliga-
m
this year. The market mis- private tutoring names in early chip shares that benefited N R I TA X AT I O N tions on you. Note that the gift
judged Chinese 2021, with some from the trade as their biggest A resident individual is per- received by your friend out-
consumers’ shift In China, six out firms losing holdings, according to data mitted to gift money to non- side India would become taxa-
back into pre- the top ten almost all of their from financial website East resident Indians (NRIs) or per- Alternatively, you may gift ble in India to the extent of the
mium products performers on value later that Money Information Co. sons of Indian origin (PIOs) by him the sum of money by mak- amount which exceeds
after the end of the benchmark year after a shock Still, there’s yet to be any AI remitting it in their NRO ing an outward foreign remit- ₹50,000.
Covid controls, overhaul over the company that ticks all the accounts. Such gift would be tance to his foreign bank Harshal Bhuta is partner at
gauge this year
said Yun. Dip sector. boxes for Yun, a former Didi considered under LRS. How- account. The remittance P.R. Bhuta & Co. Chartered
buying in Apple were lifted on In China, six Global Inc. director. He’s also ever, such NRIs or PIOs should would be covered under LRS Accountants.
Inc. shares in late AI wagers out the top ten worked for Tencent Holdings qualify as a ‘relative’ under the and would also be subject to
2022 also con- performers on the Ltd. and has more than two company law definition. Since TCS, at 20%, if the amount of Do you have a personal
tributed to benchmark gauge decades of experience in you want to gift the sum of remittance exceeds ₹7 lakh. finance query? Send in your
returns. this year were lifted on AI China’s tech and internet money in rupees to your The bank would collect this queries at
While Yun is keeping tabs wagers, with Dawning Infor- industries. Yun manages friend, you won’t be able to amount of TCS from you over mintmoney@livemint.com
and get them answered by
on how AI is disrupting tech mation Industry Co.’s 73% around 1 billion yuan ($140 make the gift by money trans- and above the remittance
industry experts.
giants, he said there’s no rush advance helming the charge. million) in assets. fer to his NRO account. amount and there would be no

A GOOD ALTERNATIVE: WHY YOU SHOULD INVEST IN GOLD VIA A STRUCTURED ROUTE
as its value often appreciates in response to currency fluctuations. efiting from enhanced returns and added flexibility. Structured
Over the past decade, gold prices (in rupees) have witnessed Gold can help reduce volatility gold products are financial instruments that combine the proper-
POWER notable growth due to a 52% depreciation of rupee/dollar, solidi-
fying its role as a currency hedge.
% of gold in an
0% 2.5% 5% 10%
ties of a traditional gold investment and can provide (safety from
the impact of any down move in the gold price) additional fea-
POINT Low correlation: Gold exhibits a remarkably low correlation
equity portfolio
tures such as principal preservation.
of -0.15 (approximately) with the Nifty in the period of 2000- Returns (%) 11.20 11.20 11.20 11.10 Flexibility and customization: It offers investors the oppor-
MUDIT SINGHANIA 2023, making it an ideal diversification tool. tunity to customize their investments based on their risk appetite
Volatility (%) 6.40 6.30 6.10 5.80
Reduces volatility: Incorporating gold into your equity port- and investment goals. These products can be structured in vari-
Respond to this column at folio, even in modest proportions, can significantly diminish vol- Sharpe ratio 1.75 1.79 1.83 1.91 ous ways, offering different invest-
feedback@livemint.com atility while preserving returns. Data shows that adding an alloca- *Nifty 50 index considered as Equity Portfolio, Source: Alpha Alternatives Structured gold ment horizons, risk levels, and return
tion of gold to an equity portfolio, say Nifty 50 index, from 0% to Time period January 2000 - August 2023 products offer a profiles.

I
n an era of financial intricacies and market uncertainties,
understanding the significance of portfolio stability and diver-
sification is paramount. Gold, renowned for its historical resil-
ience and value appreciation amid economic turbulence, emer-
ges as a compelling choice. With a low correlation to equity mar-
kets, gold serves as an effective diversification tool, reducing
portfolio volatility while enhancing risk-adjusted returns. Addi-
tionally, gold’s performance during rate-cut cycles and its role as
a store of value further underscore its relevance in navigating
diverse market conditions.
Gold as a hedge: Gold has historically demonstrated its resil-
ience during times of economic uncertainty, often appreciating
when other assets falter. Its value tends to hold steady, if not
appreciate, during periods of economic uncertainty. The consist-
ent depreciation of the dollar/rupee exchange rate has become
a defining characteristic of the Indian financial landscape.
Against this backdrop, gold has emerged as a compelling choice,
10% decreases the annual volatility from 6.4% to 5.8% and
increases the Sharpe ratio from 1.75 to 1.91, thereby providing
much better risk adjusted returns.
Gold’s resilience: Gold’s resilience shines in economic tur-
bulence. During significant market downturns like December
2007 to November 8 (-55% Nifty, +18% Gold), Dec ‘10 to Dec ‘11
(-25% Nifty, +36% Gold), Feb ‘15 to Feb ‘16 (-22% Nifty, +9% Gold),
and Dec ‘19 to May ‘20 (-21% Nifty, +21% Gold), gold consistently
outperformed, acting a reliable hedge against market volatility.
Historical track record: Gold has thrived during major rate-
cutting cycles by the Federal Reserve in this millennium. Consid-
ering the current high interest rate environment and future
expectations of rate cuts, the current macroeconomic environ-
ment is lucrative for gold investments. The recent two rate cuts
done by the Federal Reserve during the 2008 crisis and covid-19
pandemic has resulted in gold appreciating at an astounding
average CAGR of 40% per annum. Considering the current all-
Principal preservation: Further-
PARAS JAIN/MINT range of more, structured gold products often
time high interest rate regimes of the federal reserve and future benefits and provide investors with additional fea-
expectations of rate cuts, the macroeconomic environment right opportunities tures, such as principal preservation.
now look ripe for investments in gold. for investors These features can help mitigate risks
Gold also holds an immense store of value. For one, it’s and provide a more predictable return
immune to inflation as Gold’s purchasing power remains unaf- stream. During times of crises when cash
fected by inflation or currency devaluation. Second, it also serves is king and all assets sell off, having a downside-preserved exposure
as a safeguard against political and economic turbulence. In fact, to gold is vastly better than an outright position in most assets.
gold has emerged as the safest asset class for investment during In conclusion, structured gold products are a unique and
geopolitical stress. This can even be seen in central banks world- increasingly popular way for investors to gain exposure to gold.
wide bolstering their gold reserves recently. In 2022, purchases With their flexibility, downside shield, and customizable fea-
tripled historical averages of 450 million tonnes. tures, these products offer a range of benefits and opportunities
To move beyond physical gold, structured gold products have for investors. However, investors should carefully research and
been gaining popularity in recent years as investors seek alterna- take advice from their financial advisor before investing in struc-
tive ways to invest in the precious metal. These products offer tured gold product.
investors the opportunity to gain exposure to gold while also ben- Mudit Singhania is head-commodities, Alpha Alternatives
14 ThursDay, 7 DeceMber 2023
MuMbaI
OUR VIEW
Our youth bulge could
enlarge valuations too
Various factors have powered Indian stocks upwards and corporate earnings must keep up
for a sustainable surge even if longer investment horizons start supporting larger PE ratios
I
n big ways and small, the meta-narrative
behind India’s economic rise and stock
market boom has been falling into place
ever since the country began to pay
market economics more than academic
attention after the Cold War ended in a
Soviet loss and US victory. Bulls of the current
bull run may display a recency bias in the
inspiration they draw, but much of their opti-
mism—as reflected in the BSE Sensex rising
above 69,653 on Wednesday—is valid. Foreign
institutional investors are back in action as
buyers; their dithering in 2022 after yield gaps
with safe US debt got squeezed now seems like
old hat. An enlarged base of retail investors has
held indices up, even as India’s economy has
recovered from its covid contraction robustly
enough to keep up a relatively pacy trajectory.
After output lost to the pandemic was plugged
in 2021-22, official GDP growth was placed at
7.2% in 2022-23, a rate that was beaten in the
first half of 2023-24. This not only contrasts
with India’s dismal pre-pandemic slowdown,
corporate profits have upped their share in the
overall income pie as well. And if Sunday’s
state-election results boosted expectations of
domestic policy stability under a Narendra
Modi administration beyond 2024, signs
have also grown steadily of US-led global geo-
politics working in India’s favour.
As bursts of exuberance can lead to asset
inflation on stock exchanges, typically fed by a
central bank’s easy-money policy to tide over a
crisis, whether stock prices have gone too high
is a question that attends every market rally.
With shares afloat on the ebb and flow of
demand and supply, prices can go up and
down in a wide range. It is for would-be buyers
to judge what they think the apt price for any
Here’s an ‘officious’ list of 10 principles for a regulator
PRATIP KAR
T
he idea of penning this down came
from a re-reading of Machiavelli’s
Prince. This book laid down principles
of statecraft back in 1513, but remains valid
today. In the same spirit, this is an ‘officious’
list, entirely unsolicited, of principles for
regulators of all kind. Readers, please do pay
heed to caveat emptor.
is a former executive director
Know your principal constituency well: A
regulator must ab initio know whose inter-
of the Securities and Exchange
Board of India.
ests it must primarily protect. This ought to
be written into the Act of law that establishes
and governs the regulator. But doing this is
one thing and it getting encoded in the regu-
lator’s internal belief system is another. The
regulator must be aware of the needs, diffi-
culties and expectations of the constituency
it serves, and it must play a developmental
role. It’s like the ‘Principality’ that Machia-
velli talks about; when it flourishes, the
country prospers.
Hear, listen and build listening posts: The
regulator should be aware of perceptions of
it held by its principal constituency and
VIEWS
ISTOCKPHOTO
share is. For easy comparison, it helps to stan-
dardize the quoted figures. Since the basic
point of buying a slice of a company is to get a
sliver of what its business earns, a good way to
size up a share on value-for-money is to look at
what must be paid for every rupee earned by
that share. This is captured by the share’s
price-earnings (PE) ratio. If this ratio works out
to 25, it means an investor is being asked for
₹25 per rupee earned by each share in the last
fiscal year (i.e. if it’s a ‘trailing’ ratio). In a fast
expanding economy, businesses usually aim to
increase revenues and profits quickly. Listed
firms that show steeper upward curves tend to
have higher PE ratios, with buyers rushing in
well ahead of profit upswells. Chances of dis-
tant jackpots to be hit also explain marvels like
triple-digit PE ratios. Of course, frequent bets
placed on yet-to-profit startups means infinite
ratios don’t deter investors either. In India, as
elsewhere, high risks for high returns account
for much market participation.
While the pace of growth is a crucial part
of any investor’s calculus, and it has a clear
impact on equity price levels, there is another
way to look at a PE ratio. It also represents an
investment horizon. On paper, a PE ratio of 25
means it will take 25 years for the share to pay
back the price paid for it if earnings stay con-
stant. And if profits over the years happen to
grow, full payback—with the share still held—
would be that much closer. This perspective
suggests that a longer investment horizon, an
inalienable privilege of youth, could make
high PE ratios look less expensive. Given
India’s booming demat-account activity, a
youth bulge could plausibly support higher
valuations just by virtue of patience. But this
doesn’t mean a market bubble is no risk.
GUEST VIEW
other people connected with it. For this, the
regulator should set up appropriate high-fi-
delity listening posts to relay feedback and
provide early warning signals. The regulator
must develop transparent mechanisms to
gather the opinions of its constituency and
other relevant players, especially about their
concerns over its policies and impending
changes. If policy shifts are well informed
and implemented through open consulta-
tions, they will be accepted more easily.
Use advisors but choose them carefully: It is
not possible for a regulator to know every-
thing in its field of oversight. It must select
advisors from among representatives of its
primary constituency, intermediaries who
are linked to the business under regulation,
critics of the regulator, experts in the field,
academics and the media. But the regulator
must also stay aware that many will seek and
lobby for inclusion in this list of advisors for
reasons that are personal.
The regulator’s policy pronouncements
are bound to impact its constituency and its
environment. So all policies must be well
formulated and amended with caution and
circumspection.
It would serve the broad purpose well for
the regulator to set up forums for weekly,
fortnightly and monthly open interactions
Indian girls are challenging the
rest of the country to keep pace
They want education, jobs and also fun. It’s crucial that we enable and not stifle their aspirations
ANURAG BEHAR
is CEO of Azim Premji Foundation.
W
hat do girls want? Not girls
whose families have access to
newspapers like this, but
average Indians. Most of the 1.4 billion.
From high mountains to the coasts,
from desert dunes to the riverine
islands, from jungles to the dusty fertile
smoky plains, and in the slums of
metropolises and gali-koochas of the
kasbas.
On a small island in a giant river, and a
thousand and five hundred kilometres
from there, in a dense jungle on a tiny
hill, when I asked this very question,
“What do you want?”, the responses
were identical. “We want to dance,” and
then they asked me to play Jhoome Jo
Pathaan on my phone and let loose with
the pulsating rhythm.
Wherever there is opportunity, I ask
this question of groups of girls and
boys—those who are in class 9 or older.
These boys and girls want many similar
things. But across the country, there is
greater commonality in what girls want.
Common enough also are the shackles
on their desires, which don’t exist for
boys. It is usually clearly expressed:
“Will our families and community let us
do all this?”
Girls want education: Never have I
come across a girl who did not want to
pursue the next higher level of educa-
tion. Many boys just want to get out and
do something else. But not girls. They
want to go to a higher secondary school
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(be it intra- or inter-department) among senior
management personnel and other members
of the staff. This will help the organization
function as one entity rather than as a cluster
of islands out of touch with one another.
The regulator must build a team: Effective
regulation takes team work. The regulator
must build a strong, cohe-
sive and modern team that
keeps itself updated with
latest developments in the
field, is technologically
savvy, understands the dis-
tinctive features and
responsibilities of the job,
and grasps the importance
of guarding its own reputa-
tion. On the reputation of
team members rests that of
the regulator.
Preserve confidentiality:
Because the regulator’s job
involves dealing with a
wide range of confidential matters, it must
build impervious and impregnable walls
through administrative mechanisms to pre-
vent leakage of confidential information.
Such administrative mechanisms should
include appropriate norms of discipline
whenever confidentiality breaches occur.
LIVEMINT.COM
MY VIEW | OThEr SPhErE
and then college. The distance to a one can be a performer on a YouTube
college or higher secondary school is channel popular in a local area. Becom-
always a big concern for them. Distan- ing this person is far more relatable, and
ces of 5km to 10km are common. A cycle so can be aspired for. This is true of even
helps, but not always. The route may be the more ‘mainstream’ choices. They
too unsafe, or parents may just not like can see proximate examples of police-
the idea of long-distance cycle rides. women or officers who come from
Out-of-pocket expenses, even when modest backgrounds and are relatable.
education itself is free, can become an On a misty winter evening, a group of
obstacle. This thirst for education is a girls was pleading with me to get a sec-
tidal force. Despite improvements, ondary school opened in their village.
hundreds of thousands of girls are still Because the nearest one was 15km away,
forced to drop out each year. Girls out- and while the boys took rooms on rent
pace boys in enrolment at nearly every and lived near the school, girls were not
level of education, but it doesn’t always allowed to and riding that distance
translate to better opportunities. every day in that terrain was impossible.
Girls want jobs: They want greater So, they had to all drop out after class 8.
independence, dignity and remunera- When they understood that I was not a
tion that comes from work. The large government officer, they wanted jobs,
majority vociferously want jobs. From
the remotest rural areas to the metros.
They want to work outside their homes.
The most common desires are to be
and if not that then “at least give us
sewing machines”.
In another part of the country, they
had access to a school nearby, they were
doctors, nurses, teachers or govern- determined to go to college, and they
ment officers. Many want to join the had the confidence that they will get
police or the army; unsurprising, given jobs. But they wanted some musical
what they must bear in their daily lives. instruments for their band, so that
In each group, you will find one or two they could turn professional in their
who want to become a politician, singer, region. One of them wanted to emulate
dancer, actor or sportsperson. Neeraj Chopra.
Girls want to have fun: The dance to The dreams and hopes of girls are
Jhoome Jo Pathaan was not an oddity. being fired up. But their unshackling
Similar things happen in almost every from mores and prejudices is not
group. They want to dance and sing. keeping pace. Nor are the practical
They want to travel and see the world, enablers of their desires—access to edu-
at least the district headquarters. They cational institutions, safe and secure
want to wear good clothes and put on infrastructure, adequate jobs of the kind
make-up. they want, guidance and counselling on
They must want other things too. what to do, social support when
But in a group, with someone like me required, and financial backing.
present, they won’t share everything. As aspirations are rising without the
Education, jobs and fun—that’s the unshackling of societal norms and
chorus of girls across the country. Many enablers of empowerment keeping
of these aspirations are stoked by access pace, the chances of their fulfilment are
to media through the internet, the like less than what they used to be even two
of which was not available even a few decades earlier. Yet, this increasing gap
years ago. For example, a few decades is a good thing because it is coming
ago, the aspiration to become an actor from new aspirations. Which is the last
meant becoming Madhuri Dixit, which thing we should stymie. The girls of
was obviously so far-fetched that it was India are challenging the rest of the
out of the realm of possibility. Today country to keep pace. We had better
being an actor has wider possibilities— hurry because they are the future.
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Monday, December 9, 2013 Vol.7 No.292 `3.00 in Delhi­NCR/`4.00 outside Delhi­NCR 24 PAGES
DELHI
Total seats: 70 28* 31 8
CHHATTISGARH
Total seats: 90 48 40
RAJASTHAN
Total seats: 199 160 23
MADHYA PRADESH
Total seats: 230
*Leading in one constituency at the time of going to press
164* 58
Source: Nielsen
NIFTY 6,259.90 ® DOLLAR `61.42 ® EURO `84.09 ® GOLD `30,575 ® OIL $111.61 ®
The results point not just to trends that will hold sway in the 2014 general
election, but even to a rewriting of the entire lexicon of Indian politics
B Y A NIL P ADMANABHAN relevance of the four states, it cannot be argued
anil.p@livemint.com that the elections to the four state assemblies
······································ were meant to be a dipstick measure of the na-
NEW DELHI tional mood.
T he simple verdict of the just concluded
elections to four state assemblies is a 4-0
win for the Bharatiya Janata Party (BJP),
And what they have revealed is that the elec-
torate isn’t angry. It is furious.
So much so that the chief ministers of Rajas-
There’s [no] magic about
or a 0-4 loss for the Indian National Congress. than and Delhi, Ashok Gehlot and Sheila Diks-
That, though, is just part of the story. hit, carried, apart from their own crosses, an-
The story of these elections is as much about other one arising from the non-performance of
the BJP’s victory as it is about the Congress’ the Congress-led United Progressive Alliance
decimation and the spectacular debut of the (UPA), a phenomenon that psephologists have
Aam Aadmi Party (AAP). started describing as “double
And while the four states (re- anti-incumbency”.
sults to the fifth, Mizoram, are Three of the four states saw
due on Monday) send only 72 direct contests between the
representatives to the 543- The BJP wave is yet Congress and the BJP. In most
member Lok Sabha, there are other states, there are strong re-
to assume the tidal
regulations—too much is
enough pointers in the results gional parties. Indeed, in Uttar
not just to trends that will hold
sway in the 2014 general elec-
proportion of the Pradesh, for instance, there are
two, as there are in Tamil Nadu
tions, but even a rewriting of the anti-Congress and West Bengal, and now And-
entire lexicon of Indian politics. hra Pradesh. That lends cre-
The obvious message from sentiment, but it dence to an opinion that these
these elections is about the an-
ti-Congress mood across India.
is there elections are a prelude to the
main contest in April-May 2014,
The trend is clearly visible in a sort of semi-final.
Madhya Pradesh, Rajasthan and The near wipe-out of the Con-
Delhi, where the party was re- gress only improves the odds for
bad, too little is bad.
duced to an also-ran. Eventually, the Congress the BJP. Even more worrying for the Congress is
ended up with a single-digit seat tally in Delhi that its traditional vote banks of Dalits and
and, in Rajasthan, it came perilously close to Muslims have deserted it—as they did in Rajas-
forfeiting its status as an opposition (anything than. Yes, Sonia Gandhi, the party’s president,
less than 20 seats or a tenth of the assembly).
While statisticians can split hairs about the TURN TO BACK PAGE ®
ALSO SEE
>Sandeep Shastri: AAP, an alternative with a difference >P3 > Capital Account: Assembly election results likely to spur
>Steady rise in female voters >P6 outperformance by Indian markets >P15
>Praveen Chakravarty: Much ado about nothing? >P8 >Graphic: India votes for change >P12­13
>Shuchi Bansal: Revolution of rising expectations >P9 >Arvind Kejriwal: People wanted an alternative and
>Where does Congress go from here? >P11 that is what they found in us >P24
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Discrimination is an important virtue for regulator. Popularity is not the aim, regula-
a regulator: The regulator must discriminate tion is. It is enough for the regulator to be
between the sets of advice it gets. Some of it effective and efficient. If a policy or action
will be sagacious, while some would only pleases constituents (or others), then it will
seem so, and it can also expect mischievous be worthwhile for the regulator to examine
hidden motives in a garb of innocence. why this is so. Similarly, being “the world’s
While the regulator should let all advice and first” or the glory of playing a pioneer (like
suggestions flow in, it must the spacecraft in Star Trek) should not moti-
exercise fine judgement on vate a regulator’s policies and actions. Its
Regulation what it eventually heeds. focus should be on the work to be done.
Change is necessary and The regulator must have sufficient investi-
could do with a inevitable: No policy is cast gative and enforcement powers: Regulators
in stone. None can remain must have real teeth, not dentures, to bite.
short checklist fixed like the North Star. At To enable a regulator do its job effectively, it
in the spirit of times, change is necessary;
but change for the sake of it
must be armed with the authority to probe
violations and enforce rules, and it should
Machiavelli’s may serve little purpose.
Laws and policies need to
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personnel who are adequately trained to
advice on be reviewed periodically, make good use of modern technology like
simplified and redundancy artificial intelligence (AI) and aids like
statecraft weeded out with caution, behavioural analysis to help in the detection
lest in the process impor- of fraud and other criminal activity.
tant essentials are lost. Just A regulator must be feared and respected:
as surgeons may need to remove a dysfunc- The regulator must be widely respected for
tional or injured kidney but must retain the its policies. It must deliver on its promises
one which is working well, rules and policy and promise only what it can deliver. It must
measures must not be abandoned that serve be unsparing and fearless in its actions
a critical purpose. against misconduct, malfeasance, infringe-
A regulator must not try to win a popularity ments and violations—as specified in the
contest: There is no such thing as a popular statute. For that, it must be feared.
LIVEMINT.COM VIEWS ThursDAy, 7 DeceMber 2023
MuMbAI 15

MY VIEW | ecO SquAre M I N T C U R AT O R

CoP-28: Let local climate actions Alternate investment funds in

India face harsher regulation
outdo our global commitments The murky uses to which funds were put invites greater oversight

India should address its domestic vulnerabilities even as it keeps pushing hard for climate justice on the international stage

AP

ANDY MUKHERJEE
is a Bloomberg Opinion columnist covering
industrial companies and financial services
in Asia.
LEENA SRIVASTAVA
is an independent expert on climate change
and clean energy.

T
here are plenty of high-performing

D
iscussions at CoP-28 in Dubai have
reached a crescendo with the world
witnessing its highest temperatures
ever, the paradox of having an oil
magnate holding the presidency of
CoP-28 and with the developed
world still far from fulfilling its responsibilities and
commitments—be it on mitigation support, adap-
tation finance or Loss and Damage funding. And
yet, there seem to be many pressures on the devel-
oping world, with India often in the cross-hairs, to
assume leadership on climate actions. In the first
week of CoP-28 events, India has been called out
for refraining from signing the Pledge on tripling
renewable energy capacities by 2030 and dou-
bling energy efficiency, as also the Declaration on
Climate and Health.
The challenge, in the case of the former, is not
the renewable energy (RE) and energy efficiency
(EE) pledges, but an underlying commitment to a
phase-down of unabated coal power, in particular
ending “continued investment in unabated new
coal-fired power plants.” India has ambitious plans
to enhance its coal production capacity from 777
million tonnes in 2021-22 to over 1 billion tonnes in
2023-24. With 75% of its electricity coming from
coal thermal plants, amounting to over 200GW in
May 2023, India needs to evaluate its options on
energy security. Its RE capacity stood at about
125GW (net of hydro). Thus, while India is commit-
ted to more than tripling its RE capacity by 2030
with a target of 450GW, most of this capacity
addition really caters to incremental electricity
demand for powering an 8% rate of economic
growth. In other words, India cannot recognize a
phase-down of coal power production, in absolute
terms, in the same document that we commit to
enhanced RE and EE targets, unless we vastly
increase our feedstock dependence on volatile
international markets for lower-carbon gas (think
of the Russia-Ukraine war and Israel-Hamas con-
flict) in the interim, or have adequate cutting-edge
technologies and financial support to aim for much
higher growth in renewables.
The Declaration on Climate and Health, on the
other hand, merely calls upon countries to factor in
the positive health implications of low greenhouse
gas (GHG) emission pathways, assess GHG emis-
sions from the health sector and define procure-
ment standards for national health systems. It pro-
vides an additional emotive argument for pursuing
low-carbon development pathways in general.
India’s health systems are in urgent need of infra-
structure upgradation with reliable electricity pro-
vision in its rural areas a key barrier to better health
services. It is also well researched that climate
change, with melting permafrost and extreme
events, will exacerbate the demand for health
infrastructure in complex and compounding ways.
Therefore, as India seeks to strengthen this infra-
structure, it makes eminent sense to prioritise the
use of renewables, especially in primary health
centres, and focus on the energy efficiency of med-
ical equipment and processes in line with our EE
commitment.
Undoubtedly, climate related transformations in
development pathways that countries need to
adopt are challenging, but they also provide an
opportunity to correct the mal-development and
inequities that have been perpetrated in all coun-
tries across the world, India being no exception.
The above two global initiatives are but examples.
In making its choice to invest huge amounts in coal
production (or natural gas for that matter) and the
associated infrastructure, India could be pushing
more expensive and difficult clean-energy choices
into the future but increasing system costs in the
form of stranded infrastructure and assets when
domestic commitments are ratcheted up. There is
a case here for some hard-nosed analysis of leap-
frogging to much lower-carbon or no-carbon
futures. We may also have an opportunity to har-
ness the potential of decentralized renewable
power generation in both urban and rural settings,
which could enhance India’s ambitions on RE
while facilitating more secure and reliable RE
through new business models, as being designed
in other countries.
In a similar fashion, the quality provisions of the
Health for All initiative can be bolstered through
custom-designed RE solutions to meet the
demands, including cooling demand, of health
facilities. We also need to recognize that enhanced
access to clean and reliable energy in itself can go a
long way in preventing a large number of diseases
associated with water and air pollution. India thus
needs to look at the cross-cutting issues of climate,
energy and health, even if the country may be
reluctant to acknowledge the same on an interna-
tional platform.
A good example of an international commitment
with a domestic imperative lies in the LiFE initia-
tive of Prime Minister Narendra Modi. At CoP-26
held in Glasgow, India launched the Lifestyle for
the Environment (LiFE) initiative, recognizing the
necessity of behavioural change to drive climate-
friendly solutions among individuals, communities
and organizations. At CoP-26, the Prime Minister
called upon all stakeholders to contribute to defin-
ing our future choices, and was rightly lauded by
the global community for the focus he brought to
individual behaviour change. Merely enhancing
clean supply solutions without creating popular
demand would lead to partial success at best. In the
last two years, however, the country has made little
substantive progress on this critically important
issue. Some demand changes have been effected, as
seen for example in the robust growth of electric
vehicles (EVs), but this was driven primarily
through sector-specific incentive schemes. We
have not succeeded in making EVs a preferred
choice for vehicle users for sustainability reasons.
India needs to take greater control of its domes-
tic vulnerabilities while keeping the pressure on
for climate justice internationally.
private investment vehicles in India,
but it’s the few set up for dubious
purposes that may bring harsher regula-
tory scrutiny. So far, the most egregious
use of alternative investment funds (AIFs)
has been by non-bank finance companies
(NBFCs), several of which employ bespoke
structures for regulatory arbitrage.
When it looked like their big-ticket bor-
rowers like real-estate projects were going
to default, some financiers took recourse to
new funds tailor-made for them by Wall
Street firms. Investors who pooled money
were issued senior securities, earning them
interest. The finance company also con-
tributed but in a smaller junior tranche that
ranks lower down in the repayment order
and is the first to absorb any losses. These
private funds then lent money to the same
stressed borrowers who, in turn, repaid
their original loans and avoided bank-
ruptcy proceedings. Finance companies
were pleased, since any mark-to-market
losses on the securities they now held
would be far lower than the provisioning
burden they would have had to bear in case
of soured credit. This is how at least some
shadow lenders ‘evergreened’ their loan
books to avoid being on the radar of the
Reserve Bank of India (RBI), their regula-
tor. But the Securities and Exchange Board
of India (Sebi) has cottoned on to that
sleight of hand. According to a Reuters
report, Sebi detected at least a dozen cases
involving $1.8 billion to $2.4 billion where
AIFs ave been misused to sidestep other
regulators like RBI.
The amounts involved may be small, but
the problem with such shady practices is
that they invariably lead to stiff regulation.
And that could slow down the blistering
growth of AIFs, a broad category that
includes venture capital, private equity,
real estate funds and private credit. A
Mumbai-based PE investor pointed out to
me that it’s mostly Wall Street firms that
sponsored these cute structures. The same
marquee buyout specialists will be the first
to complain when, as a direct consequence,
regulation in India takes a sterner turn.
Currently, it’s international investors
who dominate India’s alternative-asset
landscape. But a rising number of affluent
Indians are also looking at them for returns
superior to what they can get from public
equity, debt and residential real estate. For
a growing class of high-net-worth individ-
uals, the minimum ticket size of $120,000
is not a showstopper.
However, the game will not stop with the
rich. Domestic institutions’ participation
AIFs had helped shadow lenders evergreen
their loan books ISTOCKPHOTO
will increase, too, once insurance and pen-
sion firms are given more leeway to invest
in alternative assets. Since that will indi-
rectly bring the regular Indian saver to the
rich person’s playground, it’s one big rea-
son why Sebi cannot afford to ignore dodgy
structures. A global PE sponsor buying a
riskier portion of a fund would be par for
the course, but a local NBFC that’s not the
sponsor providing a loan-loss cushion to
make its balance sheet look good? Or a big
international retailer using a fund to get
around foreign direct investment limits?
Regulators are losing their patience.
The zeitgeist is in Sebi’s favour. The US
Securities and Exchange Commission
(SEC) came out with rules in August to
tighten its grip on hedge funds and private
equity. Their industry associations have
sued the SEC, alleging that the agency has
gone too far and that the new rules “would
fundamentally change the way private
funds are regulated in America.” Which is
perhaps why Sebi wants to act early. The
alternative-asset industry in India has ven-
ture capital and hedge funds as its two
bookends. The main body, however, con-
sists of private equity and private credit.
Whereas just a decade ago these two asset
classes were a $200 million sideshow, now
they command $83 billion, or more than
four-fifths of the $100 billion committed by
investors to private funds.
If past growth is any guide, it won’t take
too long for the firepower to grow to a point
where the industry can flex its lobbying
muscles—both in New Delhi and Washing-
ton—to thwart any attempt to rein it in.
Even now, it isn’t exactly easy for Sebi. A
tussle between the regulator and the fund
lobby has been playing out for more than a
year, a newspaper reported in July.
The stakes are increasing on both sides.
Alternative funds will continue to be the
fastest-growing segment of India’s invest-
ment landscape, Crisil, an affiliate of S&P
Global, noted in a report last year. That
growth has been made possible by light-
touch regulation: As conduits of foreign
capital into the country, the industry has
enjoyed a lot of latitude. But now that local
Indian savers are getting entangled, expect
an end to private funds’ freewheeling ways.
The questionable deals of global private
equity firms have made that outcome more
or less inevitable. ©BLOOMBERG

GUEST VIEW

Rework the risk-reward matrix for innovation gains

filing. Among 55 nations, India is ranked
LLOYD MATHIAS & GAURAV BHAGOWATI 42nd on the International IP Index 2023
(eleventh edition) developed by the Global
Innovation Policy Center, US Chamber of
Commerce. In patent filings, directly related
to investment in research, India scores much
much criticism about the lack of a longer-
term innovation strategy at these IITs.
An audit report published in 2021 by the
Comptroller and Auditor General of India
seems to agree on several counts. Assessing
the performance of eight IITs between 2014
has afforded it the kind of risk-taking and
entrepreneurial mindsets necessary to spur
innovation.
India, which has had just about three gen-
erations since independence, is witnessing
the emergence of its current Gen Z as the
India Inc must turn its focus towards
world-class innovation. The key, of course,
is a commitment by both private industry
and the government to longer-term invest-
ments, aided by tax incentives that could
create inter-generational social value at

T
wo recent back-to-back events have
helped showcase India’s rise in the
polity of nations: the country’s suc-
cessful hosting of the G20 summit, which
managed some path-breaking geopolitical
agreements, and the Chandrayaan-3 mis-
sion that was executed flawlessly and cost
effectively, validating India’s space industry.
lower than top spenders such as Israel, South
Korea, Sweden, Japan and the US, and also
below some BRICS peers.
The World Intellectual Property Organi-
zation ranks India 40th in the Global Inno-
vation Index 2023. By this assessment,
despite performing above expectations rela-
tive to GDP and producing more innovation
and 2019 across a range of research areas, it first generation that is educated, competi- scale in mission mode (and do not merely
found that most were una- tive, and, most importantly, motivate family or individual wealth).
ble to nurture innovation fearless in placing big bets In the final analysis, can India innovate at
consistently and had failed We must drive on innovation. The very all at the same rate as, let’s say, the US? Will
to attract enough non-gov- real possibility of failure the next big thing such as the next Facebook,
ernment-funded research lateral thinking seems less of a worry to Gen Google, Microsoft or the next AI wonder
projects. In India, of the Z and it’s time to make way emerge from India?
broadly 10,000 institu-
freed of its usual for it. Today’s youth are India has all that is required to make it

are, respectively, a business

strategist and independent
director; and managing partner
at Pharos Strategic Partners.
India is being seen as a country with a
deep history and culture that is moving for-
ward firmly. As India’s presence grows com-
mensurate with its increasing economic
heft, it must dial up its innovation quotient,
and build on its strong grounding in tech-
nology, IT services and now also digital pub-
lic infrastructure (DPI).
For India, beyond the current disruption
created by rapidly evolving technologies
such as artificial intelligence (AI) in mature
innovation ecosystems such as the US and
Europe, the central long-run question is
how well and consistently we can innovate.
A key indicator of India’s low—albeit
growing—innovation capabilities is patent
output relative to its level of innovation
investment, it ranks low on infrastructure,
business sophistication and institutions.
Despite encouraging signs and islands of
excellence, India has some way to go before
it can compete with the best. Here are three
areas it needs to focus on to drive innovation:
First, build truly world-class centres of
excellence. India has just a few real world-
class centres of excellence for innovation
beyond those at the Indian Institute of Sci-
ence in Bangalore and a few Indian Institutes
of Technology (IITs). These have strong
linkages between industry, government and
academia. While Brand IIT is still a power to
reckon with in Silicon Valley, there has been
tions teaching technology,
over 95% have not submit-
deterrents so
ted any intellectual prop-
erty for protection and the
that emerging
remaining 5% annually file India gets more
only between 2,000 and
2,500 patents collectively. innovative
Second, create an ena-
bling environment for
India’s Generation Z to succeed. This will
address a complex sociological factor that
has been behind a relatively weak ability to
take risks and innovate. While this phenom-
enon requires deeper study, it’s clear that
India differs from the US, where several gen-
erations of prosperity over the last 250 years
also awake to realities of the
current world, which is one
where responsible tech-
centric innovation can
have a far-reaching impact
on human lives in more
ways than meet the eye
right now.
Third, it’s time we stop
celebrating jugaad and frugal innovation
and instead focus on world-class innovation
in mission mode. While cheap workarounds
as a premise for innovation may be truly
Indian, it’s reactive and short-term at best,
solving just well enough for resource or time
scarce environments.
happen: world-class tech talent, rapidly
maturing startup entrepreneurial ecosys-
tems, access to smart capital and big finance,
strong academic institutions, world-class
business leaders, strong and consistent mac-
roeconomic fundamentals and a supportive
policy environment.
Powerful innovation takes place when
lateral thinking leads to solutions that lie
between the usual ‘yes’ and ‘no’ responses.
The famous lateral thinking evangelist
Edward de Bono called this state of thinking
“Po”. What is required is a pedagogical and
economic re-crafting of the risk-reward
matrix that encourages lateral thinking and
innovation at scale.
 Summit
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