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Thursday, February 29, 2024
RIL, Disney tie up in ₹70K cr Byju’s can’t access rights issue

livemint.com India joint venture uP1 funds for now, says NCLT uP1
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‘Builders of a Better India’
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Chief Guest Lifetime Achievement Award Special Jury Award Tube Investments of India
and Cholamandalam Finance
Shri Ashwini Vaishnaw Venu Srinivasan Natarajan Chandrasekaran
TVS Motor Company Tata Sons Vellayan Subbiah will now represent India at the
Honourable Minister for Railways, EY World Entrepreneur Of The Year Awards at
Communications, Electronics & IT, This company has been built by I want to thank the jury Monte Carlo in June 2024
Government of India thousands of people. I want to express and EY for this great honor, which encourages
This is an award that has been integrally supported by
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for entrepreneurs than now to be in India.
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Think Ahead. Think Growth.
mint primer QUICK EDIT
Mayday: The Power tilt

take-off woes ahead
Results declared on Tuesday for
of ailing airlines 15 seats in the Rajya Sabha rep-
resenting Uttar Pradesh, Hima-
chal Pradesh and Karnataka saw
BY ANU SHARMA the Bharatiya Janata Party (BJP)
SpiceJet boss Ajay Singh and Busy Bee Aviation have submitted a win 10. More stunning was the
rescue plan for bankrupt airline Go First. Previously, efforts to revive cross-voting in its favour, par-
Jet Airways have met with limited success. Mint explains the flight ticularly in Himachal. Six Con-
path of recovery and the challenges associated with it. gress legislators and three inde-
pendents that this party was
counting on voted in favour of
the BJP’s Harsh Mahajan. That
gave him 34 votes to level the
score with Abhishek Manu
Singhvi, the Congress candidate
whose presumptive tally had
been 40. The tie led to a draw of
lots in which the BJP candidate
won. That was plain luck. But
denuded support for the Con-
gress raised the question of
whether its state government in
Shimla had lost its majority
backing. We may not know
unless it comes to a floor test,
but there’s little doubt that the
How difficult is it to What will it take to Congress is proving unable to
1 revive airlines in India?
Running an airline is a risky
2 achieve it?
Primarily, the course correction
retain the power it won in elec-
tions not long ago. More signifi-
business. Virgin Atlantic founder for a failing airline in a market like cantly for India, with these new
Richard Branson famously said: “If India requires a hawk-eye over wins, the National Democratic
you want to be a millionaire, start costs, fund infusion and a Alliance’s strength in the Rajya
with a billion dollars and launch a proactive management. In Sabha will rise to 117, which
new airline.” Revival of airlines is addition, support from vendors, would bring it within sniffing
challenging because a profitable aircraft and engine lessors, as well
distance of the 121 needed for a
carrier is an output of several as maintenance companies for
things, such as the right fuel price restructuring of dues’ repayment House majority. If attained, it
band, perfect aircraft type, solid plans will be necessary. To regain could consolidate the BJP’s leg-
maintenance contracts, great customer trust, an airline may also islative hold and ease the pur-
network, good slots at airports, need to be rebranded; on-time suit of its policy agenda.
skilled workforce, etc. In fact, the performance at competitive fares
only revival story over the past will also help. While Indian
three decades is that of SpiceJet, aviation is a deregulated market
which got a second lease of life in run on the forces of demand and
December 2014 in the form of
support from the government and
supply, a soft push from the
government for revival can go a
MINT METRIC
a new management. long way in changing fortunes. by Bibek Debroy
REUTERS
Did a floating bridge float away,

3 What has the government
done, and what can it do?
Jet fuel costs make up nearly 40% of Indian
Or was fake news on display?
airlines’ expenses, compared to a global
A segment seen all at sea,
average of 20-25%. The civil aviation Vizag officials don’t agree.
ministry has been working to reduce value
added tax on jet fuel and, so far, 19 states
Mere maintenance - so they say.
and Union territories have rationalized it.
Airlines are also seeking inclusion of
aviation turbine fuel under the goods and
services tax to reduce the cost burden. QUOTE OF THE DAY
SpiceJet chairman Ajay Singh.
The UK and India have historical
How have revivals What happens to Go
4 played out elsewhere?
They’re rare. Mexico relaunched
5 First now?
We do not know yet. Last week, it
relations, which are now entering a
new era of increased cooperation
former state airline Mexicana de finally received two financial bids, and collaboration. I remain
Aviacion in December and has six months after the launch of bid
plans to add 10 planes in 2024. invitations. The two bids are: a committed to working towards
Founded in 1921, this was Mexico’s joint bid by Ajay Singh and Busy strengthening the economic and
biggest airline and flagship carrier Bee Aviation, and another by bilateral trade relationships...
before ceasing operations in Sharjah-based Sky One Aviation. A
August 2010. ExpressJet Airlines lot depends on the committee of
of the US is also gearing up for a creditors now—it is expected to
relaunch in the second half of come to a decision on the bids
2024 under new ownership. The within a fortnight. Go First owes SUNIL BHARTI MITTAL
former regional capacity provider ₹6,521 crore to lenders. Formerly BHARTI ENTERPRISES
for United Airlines suspended backed by the Wadia Group, the FOUNDER AND
operations in 2020, resumed airline filed for insolvency on 2 CHAIRMAN
flights but filed for bankruptcy May 2023 and suspended flights
protection in 2022 after covid. with effect from 3 May.
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PLAIN FACTS
Feb in charts: Nvidia’s

rally, recession bells
BY PAYAL BHATTACHARYA & PRAGYA SRIVASTAVA
E
very month, Mint’s Plain Facts section brings out an update on the key global economic data to thread together the big-
gest developments in the world that are worth paying attention to. The accompanying analysis and charts attempt to
explain how each story is creating ripples on the global stage, where it is headed in the coming weeks, and whether it
can impact India. This month, we explain how economies are falling prey to recession, Türkiye’s never-ending troubles with
inflation, and rising global temperatures.
Economies face slowdown in growth

for two successive quarters 1 Slowdown Blues
Year-on-year growth (%) in real GDP, quarterly TWO GROUP of Seven (G7) economies slipped into a
Q3 2023 Q4 2023 technical recession (two successive quarters of decline in GDP
growth) in the December-ended quarter. With a 3.3% decline
on top of a 0.4% contraction in the September quarter, Japan
UK Japan Ireland Germany has now lost its title of the world’s third-biggest economy to
-0.1 0 Germany. The decline has reportedly been due to a fall in the
-0.3 -0.4 -0.3 value of the yen, which slumped over 18% against the dollar in
-0.7 2022 and 2023. The UK also reported negative economic
growth in both quarters of the second half of 2023—first 0.1%,
and then 0.3%. However, the relatively modest magnitude of
these contractions suggests that the UK might be experiencing
stagflation rather than a full-fledged recession at this point.
-2.3 The downturn is not limited to these two economies alone.
Israel, Finland, Germany and Ireland also shrank in the
-3.3 December quarter. For Ireland, it was the fifth straight quarter
Source: Bloomberg
of negative growth.
2 War-Hit Economy Israel's economy faces sharp

downturn as war continues
ISRAEL’S ALL-OUT war in Gaza since 7 October last year has Year-on-year growth (%) in GDP, quarterly
taken a heavy toll on its economy. The country’s GDP plunged a 6.4
whopping 19.4% in the December quarter. This is the first
estimate since the war began. In the same quarter last fiscal, the 2.6 2.9 2.7
country’s economy had expanded 6.4%. Private spending has Q4 2023
shrunk and so have investments in fixed assets. Sequentially, Q4 2022 Q1 2023 Q2 2023 Q3 2023
private consumption saw an annualized decline of 26.9%, while
fixed investments dropped by almost 68%. Reports suggest that
the war has also led to shortage of labour as Israel has mobilized
300,000 people as military reservists. Besides, many Palestinian
workers from the occupied West Bank, who earlier used to cross
the borders to work in Israel, have been barred from doing so
since the war began. Hence, many sectors, especially
construction and agriculture, have been affected. However, -19.4
government spending has surged due to war-related expenses,
Source: Bloomberg
compensations for victims’ families, and evacuation measures.
3 Turkish Gloom Rising prices and a falling lira remain

pain points for Türkiye
THE TURKISH economy has been reeling under the Year-on-year consumer price Daily value of Turkish lira
pressure of rapidly rising prices for quite some time inflation (%) against US dollar
(in inverse scale)
now. In January, inflation reached almost 65% year-on- 100
15
year, the highest since November 2022. The month-on-
18.7
month jump of 6.7% in prices was the highest since 80
August 2023. Reports suggest that the 49% increase in 64.9 20
minimum wages by the government in December as an
60
aid for people to deal with the rising cost of living has
25
inflamed inflation further. The move was made ahead of
48.7
the March 2024 elections. The ‘hotels, cafes and 40
restaurants’ sector experienced the biggest annual rise 30
in prices (92.3%), followed by education (79.8%) and 20 31.1
health (78.6%). The central bank has also announced
eight back-to-back interest rate hikes since May 2023. 35
0 2 Jan 2023 26 Feb 2024
Plus, the lira has been under stress as it plunged to an all- Jan 2022 Jan 2024 Source: Bloomberg
time low against the US dollar on 21 February.
The year started with a sharp spike in

average global temperature 4 Global ‘Warning’
Average global sea surface temperature in January of LAST MONTH, the world recorded the warmest January at least
each year (in °C) since 1940, and the 12-month global average temperature
21.0 20.97 (February 2023 to January 2024) rose past the critical 1.5°C mark
relative to the pre-industrial period, the European Union’s
Copernicus Climate Change Service (C3S) said. The rise in
20.5 temperature along with climate change is already causing
20.15
problems for several countries, with the agriculture economy
taking a hit. Over a decade ago, climate scientists had chosen 1.5°C
20.0
as the threshold beyond which certain effects of climate change
would become irreversible. It refers to the difference between the
19.5 average global surface temperature as compared to the pre-
industrial climate of the late 1800s. In 2015, leaders from 195
countries had signed the landmark Paris climate agreement,
19.0 pledging to limit temperature rise within this threshold. However,
1979 2024
Source: Copernicus Climate Change Service, Mint calculations
in November 2023, a United Nations report had said that there was
a vast gap between actions planned and what needed to be done.
5 Roaring Rally Surge in Nvidia's stock has made it a

contender for the club of top US firms
THE BREATHLESS rally in the share prices of Nvidia Corp., Daily closing price of Nvidia Corp. shares (in $)
a chip-maker based in the US, has made it a contender to join 787.01
800
the club of the world’s biggest companies. In February, it
surpassed the $2-trillion mark in market capitalization, albeit
briefly, after a strong revenue forecast. Nvidia’s stock has 600
gained nearly 60% in 2024 so far. The company, which is a
leading supplier of chips in the artificial intelligence (AI)
revolution, has already surpassed market capitalization of 400
Amazon.com Inc. and Alphabet Inc. With the rise in adoption
of AI by several companies, the company has seen a massive
interest and is set to benefit from the technological shift. The 200
roaring rally by Nvidia wasn’t only good news for the US, but 232.06
the spillover effect also lifted Asian tech stocks. As a result, last
week, Japan’s Nikkei 225 surpassed its previous record set in 0
28 Feb 2023 27 Feb 2024
1989. The surge in Nvidia’s shares has brought in optimism
Source: Yahoo Finance
amid recession bells ringing in Europe.
PARAS JAIN/MINT
PEANUTS by Charles M. Schulz
NeW DeLhI, MUMBAI, BENGALURU, kOLkATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCkNOW* VOL. 18 NO. 52 Rs. 10.00 . Price with Hindustan Times Rs. 15.50 20 PAGES
The public sector gap in Physics Wallah’s Maheshwari

livemint.com Centre’s capex spree uP10 open to acquisitions uP5
SENSEX 72,304.88 790.34 NIFTY 21,951.15 247.20 DOLLAR ₹82.93 ₹0.03 EURO ₹89.56 ₹0.42 OIL $81.89 $0.46 POUND ₹104.71 ₹0.49
RIL, Disney tie up Byju’s can’t access

rights issue funds
Small-cap
valuation
DON’T MISS
fears rock
in ₹70K cr India JV for now, says NCLT markets
Ram Sahgal
Nita Ambani to be chairperson, Uday Shankar vice-chairperson Ranjani Raghavan & ram.sahgal@livemint.com
Sneha Shah MUMBAI
After atta and rice, Centre now
Lata Jha & Gaurav Laghate
F
ears of an asset bubble in plans Bharat masur dal
NEW DELHI/ MUMBAI BeAMINg MUMBAI
small-cap stocks lashed After Bharat atta and rice, the Centre plans
T
he National Company the markets on Wednes- to launch Bharat masur (lentil) dal, but at
R
Reliance to control the JV which will be India’s largest media and
eliance Industries Ltd and Law Tribunal (NCLT) on day, dragging down bench- about ₹89 per kg, without a discount. The
entertainment business, invest ₹11,500 crore in the venture lentil pricing comes despite inflation being in
The Walt Disney Co. have Wednesday asked mark indices, a day before the
joined forces to create a KEY TAKEAWAYS—RELIANCE DISNEY JOINT VENTURE edtech company Byju’s to con- expiry of the February series of control and with huge quantities of masur
media behemoth with (in crore) (in %) sider extending the closing derivatives. Small- and mid-cap lying in government stocks. >P2
enough muscle to take on 46.82 date of its contentious rights counters faced the brunt of the
streaming giants Netflix and Amazon issue beyond 28 February, and selloff, on reports that the mar- Restore defunct appellate body,
in one of the world’s fastest-expanding 36.84 directed it to keep the funds ket regulator had called for India says at WTO conference
media and entertainment markets. untouched. Byju’s now needs to call an stress tests of mutual funds’
70,352 India has sought the revival of the World
A new joint venture will combine A person familiar with the extraordinary general meeting small-cap schemes, and stop- Trade Organization’s (WTO’s) appellate
the businesses of Reliance’s associ- Value 16.34 company’s thinking, however, within 30 days. REUTERS page of incremental flows into
of JV
25,806 body—which has remained defunct for over
ate company Viacom18 Media Pvt. said on condition of anonym- small-cap schemes by a leading four years after the US refused to approve
Value of Disney's
Ltd and Disney’s Star India. RIL will assets ity that it will not extend the company, as per the provisions fund house. its members—at the trade body’s 13th
also invest ₹11,500 crore into the JV, Viacom18 Disney RIL deadline since the court only of the law. The tribunal will The Nifty and Sensex fell a Ministerial Conference in Abu Dhabi. >P2
valuing the combined entity at Viacom18 is owned 74% by Reliance Industries asked it to “consider” an exten- hear the matter next on 4 April. little over a percent each, slid-
₹70,352 crore on a post-money basis, Source: Mint research and company statement (RIL), 13% by Paramount and 13% by Bodhi Tree sion, but did not direct it do so. The NCLT also expanded ing below the psychological RBI pushes for climate risk
excluding synergies. The funds collected the scope of the investigation levels of 22,000 and 73,000 to
Mukesh Ambani’s Reliance will through the rights issue will be by seeking written submis- 21,951.15 and 72,304.88, as for-
disclosures for banks, NBFCs
SIGNAL STREET
control the JV with a majority stake. kept in a separate escrow sions within two weeks from eign portfolio investors (FPIs) The Reserve Bank of India (RBI) has called
The deal will create a RIL will control the JV will also be granted
While Viacom 18, majority-owned by account and will not be used markets regulator Sebi, bank- and retail investors sold a pro- for financial institutions, including banks and
joint venture of Star JV with an effective exclusive rights to large non-bank financiers to disclose climate
RIL, will hold 46.82% in the JV, RIL India and Viacom18 stake of 55-60% distribute Disney films for any purposes and it “should ing regulator Reserve Bank of visional ₹1,879.23 crore and
change risks. RBI believes the move will help
on its own will hold 16.42%, while not be withdrawn till the dis- India, the corporate affairs ₹200 crore, respectively. customers, depositors, investors, and
SARVESH KUMAR SHARMA/MINT
Disney will own 36.84%. Viacom 18 is posal of the matter”, the tribu- ministry and the registrar of However, the Nifty Midcap regulators understand the risks better. >P9
owned by RIL with 74%, and Para- assets across entertainment (TV Disney content assets. nal’s Bengaluru bench said. companies. 150 and the Nifty Smallcap 250
mount Pictures and Bodhi Tree Sys- channels such as Colors, Star Plus, The combined Reliance-Disney Byju’s now needs to call an Separately on Wednesday, fell more sharply by 1.8% and
tems with 13% each. Bodhi Tree is a Star Gold) and sports (Star Sports streaming entity will also be three- extraordinary general meeting the court also issued a notice to 1.89% each to 17,749 and Mumbai airport sees fall in flight
joint venture between former top and Sports18), besides content four times bigger in terms of total (EGM) within 30 days and Byju’s on its lenders’ petition 14,895.25, as panicky investors delays after govt restrictions
Disney executive Uday Shankar and streaming on over-the-top video hours of programming than the likes secure 51% of the votes to to invoke insolvency to repay pulled out cash amid reports of The Mumbai airport saw fewer delays in
James Murdoch’s Lupa Systems. platforms JioCinema and Hotstar, of Netflix, and may even look at expand its authorized share around $1.2 billion worth of flight arrivals after recent steps to resolve
Nita M. Ambani will head the reaching more than 750 million acquiring smaller, niche language- capital.The court noted that loans that the company had TURN TO PAGE 6 congestion and delays. Just 4% of arrivals
Reliance-Disney JV as its chairper- viewers across India. It will also get specific entities that are struggling to Byju’s had already given an raised first in November 2021. were delayed over 30 minutes in the 16–24
son, while Shankar will be vice- exclusive rights to distribute Disney survive, according to industry undertaking not to allot new Its lenders have accelerated February period compared with over 26%
Safeguard mid, small cap during 11 November–10 December. >P7
chairperson. films and productions in India, with shares without increasing the investors: Amfi to MFs >P4
The JV will bring together media a licence to use more than 30,000 TURN TO PAGE 6 authorized share capital of the TURN TO PAGE 6
02 ThursDay, 29 February 2024
New Delhi ECONOMY & POLICY LIVEMINT.COM
m MINT SHORTS
Six parties declare income totalling
After atta and rice, Centre PM Modi to
launch 29
₹3,000 cr in 2022-23; BJP tops list
New Delhi: The six national parties have declared a total income
of nearly ₹3,077 crore in the 2022-23 fiscal, with the BJP getting
the highest share, totalling around ₹2,361 crore, the Association
now plans Bharat masur dal petroleum
projects
for Democratic Reforms (ADR) said on Wednesday. The ruling
BJP’s income forms 76.73% of the total income of the six outfits Rituraj Baruah
during FY 2022-23, the ADR also said. PTI rituraj.baruah@livemint.com
Govt to offer no discount despite inflation in control and with huge quantities lying in stocks NEW DELHI
‘Law committee may bat for

P
rime Minister Narenda
Puja Das In January, food inflation, compris- Modi is set to inaugurate
simultaneous polls in 2029’ puja.das@livemint.com ing nearly half the overall consumer 29 projects and lay the
MINT
NEW DELHI price basket, was 8.30%, down from foundations for 10 more in the
9.53% in December 2023. petroleum sector worth ₹1.49
A
fter Bharat atta and rice, the On Wednesday, masur dal prices at trillion ahead of elections.
Union government is plan- the all-India retail level remained at par He will flag off an oil tanker
ning to launch Bharat with the last month but were 0.8% lower from the ONGC Krishna
masur (lentil) dal—but, at than a year ago, according to the con- Godavari deep water project
around ₹89 per kg, without sumer affairs ministry data. on Saturday, which will carry
a discount – a senior official told Mint. “In a way, all these measures would be 'first oil' from the Krishna
Normally the Bharat brand comes covered under so-called food subsidy to Godavari Basin to Mangalore
with hefty discounts. The lentil pricing bring down consumer prices and tame Refinery and Petrochemicals
comes despite inflation being in control inflation. Despite this, the existing CPI Ltd. First oil was produced
and with huge quantities of masoor inflation data shows a 13% increase in from the block on 7 January.
lying in government stocks. The all-In- rice. The government is overestimating The peak production of the
New Delhi: The Law Commission may recommend add- dia average retail price of masur dal was food inflation because it is not picking field is expected to be 45,000
ing a new chapter to the Constitution on ‘one nation, one ₹93.5 a kg on Wednesday. up the weight of free food. Secondly, it barrels per day of oil and
election’ and simultaneous polls for Lok Sabha, state “In the first phase, Nafed (National shows a clear bias in favour of consum- around 10 million metric stan-
assemblies and local bodies by mid-2029, sources said on Agricultural Cooperative Marketing ers but often it costs farmers because dard cubic metres per day
Wednesday. It may also recommend synchronizing terms Federation of India Ltd) and NCCF In the first phase, 25,000 tonnes will be distributed through Kendriya Bhandars. MINT when prices went up, growers of wheat, (MMSCMD) of gas.
of legislative assemblies in three phases in the next five (National Cooperative Consumers' Fed- rice and onion could not take full advan- Officials with knowledge of
years so that the first simultaneous polls can be held in eration of India Limited) will process tonnes of masur in our stock, mostly in from the existing 8,000-9,000, Union tage of it. So, in a way you are transfer- the developments said PM
2029, when elections for the 19th Lok Sabha are due. PTI and pack 25,000 tonnes of the pulse and the PSF (price stabilisation fund).” consumer affairs, food and public distri- ring resources from farmers to consum- Modi will also inaugurate the
it will be distributed through Kendriya In the last calendar year, India bution minister Piyush Goyal said ear- ers, which is not a great policy,” said Visakh Refinery Moderniza-
Bhandar across the country,” the official imported about 3.1 million tonnes of lier. Ashok Gulati, distinguished professor at tion Project (VRMP) on the
‘Domestic manufacturing of quoted above said. pulses, half of it masur, mostly Queries sent to the spokes- the Indian Council for Research same day. The project is being
“The sales are expected to from Canada and Australia. person and the secretaries of on International Economic executed by Hindustan Petro-
semiconductors next big sector’ start from the first week of Bharat masur dal will be consumer affairs, food and Relations. leum Corporation Ltd (HPCL)
Mumbai: Domestic manufacturing of semiconductors is the
next big space and many companies are expected to venture into
March once the modalities
are ready.” ₹89
cost fixed by govt
available in 1-kg packs. public distribution minis-
As part of its retail try remained unan-
all-India average
be protecting the most ₹93.5
“The real policy should to modernize and enhance
capacity at Visakh Refinery at
this segment, a senior MeitY official said on Wednesday, adding “Although masur dal intervention to tame swered. vulnerable and the Visakhapatnam, Andhra Pra-
that a $2 billion digital economy is what India seriously needs. prices are not high, we for 1 kg Bharat inflation, the government Prime Minister Naren- retail price per kg remaining ones should be desh at an investment of
MeitY secretary S. Krishnan said the digital economy is expected have decided to sell it masur is selling Bharat rice at ₹29 dra Modi, in his Independ- as on Wednesday aligned to the market. If ₹26,264 crore. The Mumbai
to grow at a faster pace in the next few years. PTI under the ‘Bharat’ brand to a kg, Bharat atta at ₹27.50 ence Day speech last year, the government has to High North Redevelopment
make the basket bigger. per kg and Bharat dal (chana) pledged to curb inflation in enter, then it should be only Phase IV of ONGC with an
Hence, we will not offer masur dal at ₹60 per kg through Nafed, remarks made months ahead of marginal intervention. If you are investment of ₹3,977 crore is
All states, UTs saw extreme at a discounted rate. We have decided to NCCF and Kendriya Bhandar. general elections due in April-May this saying poverty has come down to 5%, another project to be inaugu-
keep the price almost the same as the The number of retail points, includ- year. As a result, the government has why are you giving free foodgrains to rated by the prime minister on
weather events in 2023: report market price at around ₹89 a kg,” the ing mobile vans and e-commerce sites, taken a series of preventative measures, 60% of the population? That’s where the Saturday. The project involves
AFP
official said. “We have around 720,000 have been increased to nearly 18,000 including retail intervention. conflict is.” the drilling of 43 wells.
No immediate plan ‘Restore WTO dispute settlement body’

on farmer talks again Rhik Kundu &
Dhirendra Kumar
eral system is ineffective, said
Biswajit Dhar, professor at
Centre for Economic Studies
Puja Das put along the Punjab-Haryana NEW DELHI and Planning, JNU, New Delhi.
puja.das@livemint.com border until then. Samyukta “There is no point in having
I
New Delhi: India recorded extreme weather events on 318 NEW DELHI Kisan Morcha (Non-Political) ndia on Wednesday pressed a WTO if you don’t have an
days in 2023, with all states and UTs experiencing such and Kisan Mazdoor Morcha for the revival of the World appellate body in place. It’s
T
events on at least one day, a report stated on Wednes- he government does not (KMM), the two farmers' out- Trade Organization’s extremely important that India
day.These events resulted in 3,287 human deaths, 124,000 have an immediate plan fits spearheading the protest at (WTO’s) appellate body, which has always made this important
animal deaths, the report added. Himachal Pradesh to resume talks with the Shambu and Khanuari has remained defunct for over point,” Dhar added.
recorded the highest number of days with extreme weather protesting farmers, but it will borders announced a series of four years after the US refused A paralyzed appellate body
at 149, followed by Madhya Pradesh with 141, and Kerala find a solution soon, Union protests until a decision on the to approve its members. At the at WTO serves US interests bet-
and Uttar Pradesh with 119 each. Eight states recorded more agriculture and farmers' wel- next move is made on 29 Feb- WTO’s ongoing 13th Ministe- ter, as US-backed programmes
than 100 days of extreme weather. PTI fare minister Arjun Munda ruary. rial Conference (MC13) in Abu like the Inflation Reduction Act
said on Wednesday. The two umbrella bodies Dhabi, India said this should be will not be challenged, said Ajay
He is in a group of ministers represent 200 farm unions. the top priority for any reform Srivastava, the founder of
‘Notifying place under UAPA not to engaging with farmers on their Farmers from Punjab began process of the multilateral India pressed for the revival of the WTO’s appellate body, which Global Trade Research Initia-
current protests. marching to the trade body. has remained defunct for over four years. tive (GTRI).
seize properties of the innocent’ The fourth The 4th round of national capital India also pitched for effec-
REUTERS
“Local manufacturing now is
New Delhi: The Delhi High Court has observed that the intent round of talks talks held in on 13 February. tive formalization of the ongoing system. India emphasized and appellate body reports. the top priority for the US and
of notifying a place under the provision of the anti-terror law is held over a week Chandigarh was Union home ing informal dispute settlement that the outcome of any reform The three main stages of the not trade. However, the US is
to ensure that it is not used for unlawful activities, and is not to ago in Chandi- inconclusive, minister Amit reform discussions among process should provide for the WTO dispute settlement pro- not the only country taking
seize the properties of innocent owners who are not the members garh was incon-
driving farmers to Shah on Wednes- WTO members, the commerce restoration of the appellate cess are: consultations between advantage of this situation;
of an unlawful association. PTI clusive, driving day said the gov- ministry said in a statement on body, which remains a top- the parties; adjudication by many other nations are spend-
farmers to resume ‘Delhi ernment is com- Wednesday. most priority for panels, and, if ing billions on WTO-incom-
resume ‘Delhi chalo’ protest mitted to the wel- With the US blocking the the country,” the With US blocking applicable, by the patible domestic subsidies to
Revised US GDP slightly lower chalo’ protest. fare of farmers appointment and reappoint- ministry added. appointment, appellate body; promote manufacturing,” Sriv-
“There is no and till now more ment of its members since Typically dis- reappointment of and the imple- astava said. “It’s unlikely that
despite stronger spending immediate plan to resume the than ₹3 trillion has been given December 2019, the appellate putes at the WTO its members, the mentation of the there will be any progress in
The US economy expanded at a slightly slower rate at the end of talks, but the government will directly to the peasants under body’s membership shrank are settled in two
appellate body’s ruling, which
restoring the WTO’s appellate
last year as a downward revision to inventories masked stronger soon find a solution to address 'PM Kisan Samman Nidhi' from seven to four, posing a ways—one is par- includes counter- body at the MC13.”
household spending and investment. Gross domestic product farmers' concerns,” said scheme. challenge to WTO’s dispute ties finding a membership measures if the “India has engaged in good
rose at a revised 3.2% annualized pace in the fourth quarter, com- Munda on the sidelines of the Farmers want the govern- resolution mechanism. mutually agreed shrank from 7 to 4 losing party fails faith in the facilitator-driven
pared with a prior estimate of 3.3%. Consumer spending annual general meeting of the ment to fulfill demands, “India reiterated its long- solution, particu- to implement the informal dispute resolution
advanced at a 3% rate, faster than initially estimated, Bureau of Indian Council of Agricultural including a legal guarantee for standing position that a credi- larly during the ruling. reform discussions between
Economic Analysis figures showed Wednesday. Inflation was Research. minimum support prices, pen- ble and reliable WTO DS sys- phase of bilateral consultations, The entire multilateral trad- certain members, despite defi-
revised higher. Last year the economy expanded 2.5%, marking Farmers said they would sion for farmers and farm tem is the bedrock of an equita- and two, through adjudication, ing system hinges on the dis- ciencies with the process,” the
an acceleration from 2022 and far outperforming the broader pause their ‘Delhi chalo’ march labourers, and farm debt ble, effective, secure and including the subsequent pute settlement body, as with- commerce ministry said.
eurozone and Japan. BLOOMBERG till 29 February but will stay waiver. predictable multilateral trad- implementation of the panel out it, the rules-based multilat- rhik.kundu@livemint.com
Regulatory reform soon for ease of doing business, better governance CORRECTIONS AND
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LIVEMINT.COM DEALS, TECH & STARTUPS ThursDay, 29 February 2024
New Delhi 03
m MINT SHORTS ABC Impact lifts India Rupyy eyes market

Accenture to acquire Mindcurv for share push with
expanding its commercial services
Bengaluru: In a bid to expand its commercial services for cli-
ents, American IT giant Accenture Plc has agreed to acquire Ger-
man IT services provider and data analytics company, Mindcurv,
investment with fund 2 used CV financing
according to a press release. Accenture Song, the parent com- Samiksha Goel
pany’s digital agency, agreed to acquire the Essen-headquartered samiksha.goel@livemint.com
IT Services company for an undisclosed amount. Mindcurv is a BengAluRu
provider of digital services to clients in the manufacturing, retail, The fund, targeting $650-750 mn, marked its first close at $550 mn in Jan
R
consumer goods, life sciences and chemicals sectors, most of upyy, the digital lending
whom are based in Europe. Mint could not independently ascer- and used-car financing
tain the terms of the acquisition. Emails sent to Mindcurv and Sneha Shah platform of CarDekho
Accenture remained unanswered until press time. JAS BARDIA sneha.shah@livemint.com Group, is planning to expand its
MuMBAI services to include financing of
used commercial vehicles to
T
Thrasio files for bankruptcy in emasek-backed impact invest- boost its market share in FY25,
ment firm ABC Impact is ramp- Namit Jain, founder and chief
an attempt to restructure debt ing up investments in India executive, said.
with its second fund. The fund, “We will launch a new prod-
with a target corpus of uct line for commercial vehicle
$650–750 million, marked the first close financing, in the first quarter of Namit Jain, founder & CEO,
at $550 million in January. Around one- next financial year,” Jain said. Rupyy.
third of this amount will be earmarked for At present, Rupyy provides
social and impact investments in India, loans for buying used passen- “What we’ve seen in commer-
Sugandhi Matta, chief impact officer, ABC ger vehicle, new cars, and elec- cial, and used commercial vehi-
Impact, said in an interview. tric vehicles. Jain said the used cles is that the degree of tech-
ABC Impact, a growth-stage investor, commercial vehicles market, nology adoption and digitiza-
had backed homegrown firms such as comprising light commercial tion is very poor…[W]e would
agritech startup Cropin, edtech startup vehicles such as pick-up trucks, want to introduce a lot of tech-
Vedantu and healthcare startup Health- is twice the size of the about nology intervention that we
care at Home from its $300-million first ₹60,000 crore used passenger had brought for used cars and
Thrasio Holdings Inc. has filed for Chapter 11 bankruptcy pan-Asia fund. “We are very bullish on car market in India. digitize this sector.”
as part of a deal with lenders to provide it with fresh capital India as a market. Roughly one-third of Commercial vehicle financ- Parent CarDekho, an auto-
and get rid of about $495 million of debt. The company, an our first fund was invested in India and we ing will address a substantial tech unicorn, posted revenues
Amazon.com Inc. seller, initiated the process in New Jer- are expecting to maintain that ratio from market demand, Jain said. of ₹2,331 crore in FY23, mark-
sey, according to a filing dated 28 February. It is seeking to the second fund as well,” said Matta. Despite widespread financing a 46% increase over FY22.
pay employees’ wages, as well as suppliers dues, while the According to David Heng, chief execu- ing options for During the same
case is ongoing. The restructuring support agreement tive officer, ABC Impact, India is a very used commercial Rupyy intends to period, its losses
reached with lenders of both its revolving-credit facility stable market. “The potential in India is vehicles, address- introduce digital widened from
and its term loan will see Thrasio’s interest payments immense. The quality of founders is phe- ing about 90% of solutions for the ₹535 crore to
delayed for a year. Some creditors have committed as much nomenal. India has been an early adopter Sugandhi Matta, chief impact officer, ABC Impact. the transactions, used commercial ₹562 crore. But it
as $90 million in new financing for the Walpole, Massachu- of technology, and has a fair bit of challen- the lack of tech-
vehicles sector to does not include
setts-based firm. BLOOMBERG ges where impact investors can play a part lion,” said Matta, an engineer and MBA year. Though Matta refused to divulge the nological integra- accounting gains
by supporting businesses that bring about graduate, with nearly two decades of target corpus, people in the know said it is tion and digitiza- simplify the loan of ₹290 crore,
a change,” he said. “Mission-aligned investment experience with firms includ- looking to raise $650–750 million. The tion compared process representing an
Climate-tech startup StepChange founders are seeking mission-aligned ing Leapfrog, Actis, and Temasek. firm is backed by Temasek Trust, Pavilion with passenger exceptional one-
investors like us.” It backed 12 startups from its first fund Capital, MapleTree, Seatown Holdings, SP vehicle financing time mark-to-
gets funds from Flourish Ventures The fund will support companies seek- raised in 2019. With the first fund fully Group, and Sembcorp. offers opportunities, he added. market gain on investments in
Climate-focused software-as-a-service (SaaS) startup Step- ing Series B funding and “We are looking to expand Rupyy intends to introduce associates. Adjusted for these
Change has raised an undisclosed amount in a funding round beyond, said Matta. “Our style GROwTH FInAnCInG our LP base in the second digital solutions for the sector gains, the reported losses stood
from venture capital firm Flourish Ventures. The infusion comes of investing is very evidence- fund. A lot of global sovereign to simplify the loan process, at ₹246 crore, CarDekho said.
nearly a year after the Bengaluru-based startup raised $4 million based and we are looking to THE second fund of THE company is ABC IMpACT wealth funds, and family offi- aligning it with their existing The company said it had
(₹32.92 crore) in a seed funding round co-led by Beenext and deploy capital in equal meas- ABC Impact will
support companies
looking to write
cheques anywhere
backed 12 startups
from its first fund, a
ces, among others, have technological initiatives in the maintained a strong growth
Global Founders Capital. The round also saw participation from ures across social and climate seeking Series B between $10 million third of which was evinced interest, even as our used-car market. trajectory due to its growth
other venture capital firms such as Genesia Ventures, White- opportunities. However, val- funding and beyond and $45 million deployed in India existing investors are re-up- While the processing time engines, including insuretech
board Capital, Saison Capital, and Seedstars.Founded in 2022 by uation continues to be a chal- ping their commitments,” for used-car loans has consid- platform InsuranceDekho, and
Ankit Jain and Sidhant Pai, StepChange offers solutions to large lenge in the Indian market. Matta said. erably decreased compared Rupyy, along with its South-
corporate enterprises and financial institutions to improve their Our investment in the country will be a deployed, ABC Impact will now begin The firm is betting big on financial and with a decade ago, transactions east Asia business. The firm,
environmental, social, and governance (ESG) metrics, manage matter of timing and correct pricing.” investing from its second fund. digital inclusion, agritech, healthcare, and for used commercial vehicles which holds 14–15% share of the
climate risk, and reduce emissions across their supply chains, “We are looking to write cheques any- The final close of the second fund is climatetech, and has built a pipeline of still lag, often requiring 5–6 used-car financing space, is
in-house operations, and financial portfolios. K. AMOGHAVARSHA where between $10 million and $45 mil- likely to be announced by the end of the investments in India, she added. days to finalize, Jain said. aiming for a 20% share in FY25.
New Delhi MARK TO MARKET LIVEMINT.COM
S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE
72,304.88 -1.08 21,951.15 -1.11 20,020.40 -1.34 58,387.30 -1.29 22,457.65 -1.16 39,019.19 -1.82 44,998.14 -1.94
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN
73,095.22 73,162.82 22,198.35 22,214.10 20,292.85 20,323.50 59,150.65 59,296.00 22,722.30 22,746.40 39,743.66 39,896.95 45,888.55 46,036.63
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW
73,223.11 72,222.29 22,229.15 21,915.85 20,335.65 19,987.35 59,370.00 58,218.10 22,764.55 22,421.45 39,896.95 38,950.41 46,066.48 44,877.67
m MINT SHORTS
South Korea’s retail investors
Vi needs more funds to succeed
join craze for India bonds Vineetha Sampath
Heavy load through, the company will take too small to turnaround VIL’s balance
The craze for India’s bond market has reached as far as vineetha.s@livemint.com another six to seven months to roll out sheet, given its heavy debt burden.
Vodafone Idea's net debt rose for the
South Korea, where a bond fund that’s been mostly dor- third consecutive time in Q3FY24 5G. As of the end of December, its net
A
mant for a decade is suddenly getting lots of interest. mid heightened competi- Its peers Bharti Airtel Ltd and Reli- debt stood at a whopping ₹2.1 trillion.
Net debt (in trillion)
Mirae Asset Management Co.’s fund dedicated to Indian tion in the telecom sector, ance Jio have already rolled out their For perspective, the company’s annu-
2.5
debt has grown to about 32 billion won ($22.5 million) raising funds is crucial for 5G networks. alized Ebitda in Q3 was around ₹8,600
from 24 billion won at the end of last year, thanks to the Vodafone Idea Ltd’s (Vi) 2.15 This network expansion could cur- crore. It will have to pay off about
first net inflow in about three years, according to Kim Jin survival. However, inves- 2
1.96 tail the drop in Vi’s subscribers. ₹40,000 crore debt annually from
Ha, head of the global fixed income division at South tors were visibly disappointed after the In the December quarter (Q3FY24), FY26.
Korean money manager. “The public is growing more company announced that the board of the company lost 4.6 mil- Besides the potential
interested in India, unlike the past when only a few insti- directors had approved a fundraise of 1.5 lion subscribers, compared INVESTOR fundraise, growing the
tutional investors showed interest,” he said in an inter- up to ₹20,000 crore through equity or to 1.6 million in the July- MOOD Arpu is also crucial to Vi’s
view. Kim said he’s met eight securities firms and banks equity-linked instruments, causing Vi’s September quarter. profitability.
dealing with local retail investors this year with inquiries shares to plunge almost 14% on 1 However, average reve- THE fundraise Remember, the company
about India’s bond market, compared with virtually none Wednesday. What gives? nue per user (Arpu) grew was on the cards,
and investors
is currently running in
in 2023. India and US stocks have been in the spotlight, One of the company’s promoters will 2% sequentially to ₹145, seemed to have losses. Migration from 2G
with the rally to records playing out in the backdrop of a participate in the proposed fundraise 0.5 aided by a change in the factored that in to 4G would support Arpu
still-nascent recovery in Chinese equities. BLOOMBERG and is likely to invest about ₹2,000 entry-level plan and sub- growth, but to compete
crore. This means that 90% of the fund- scriber upgrades. HOWEVER, lack of with giants such as Airtel
funding details has
ing will have to come from external 0 Hemang Khanna, an created an and Jio, expanding its net-
Q4FY22 Q3FY24
investors, on which there is insufficient analyst at Nomura Finan- environment of work is essential.
Note: Figures as on quarter end
clarity at the moment. Sure, the fun- The proposed fundraise is too small to cial Advisory and Securities uncertainty According to news
Source: Company, Kotak Institutional Equities
draise was on the cards, and investors turn around Vi’s balance sheet. (India), wrote in a report on reports, Vi is likely to opt for
PRANAY BHARDWAJ/MINT
seemed to have factored that in, going 27 February, “If VIL is able a follow-on public offer for
by the 82% rally in the stock over the company being in a better financial Vi is also looking to raise funds via to tie up the entire fundraise, it will be the equity fundraise.
past six months (as of Tuesday). How- position than it is now,” said Viveka- debt, and hopes to bring in ₹45,000 a material positive. However, VIL will The company plans to have a share-
ever, uncertainty prevails after the nand Subbaraman, an analyst at Ambit crore through a combination of equity not be fully out of the woods, in our holders’ meeting on 2 April to approve
recent announcement, which perhaps Capital. and debt. view. Repair, recovery and rollout of the funding, and it expects to complete
explains the huge fall in Vi’s stock price “Also, the funding announcement If the company does manage to raise 5G will take time to fructify and will be the equity fundraise within the next
on Wednesday. lacks details and thus investors are per- funds, it plans to expand its 4G cover- crucial to an improvement in its out- quarter.
“VIL’s earlier attempts to raise funds haps sceptical of VIL’s ability to raise age and roll out a 5G network. look.” If these efforts bear fruit, investor
have not been successful despite the funds,” he added. If and when the fundraise goes To be sure, the proposed fundraise is sentiment will improve.
The snappy moniker Magnificent Seven is being applied

globally to other high-growth stocks. ISTOCKPHOTO JK Cement’s expansion plan will up volumes, keep debt elevated
‘Magnificent Seven’ style Harsha Jethmalani JK Cement surprised analysts print. So far so good, but higher market and entering Bihar
Gaining strength
monikers pop up everywhere harsha.j@htlive.com by commissioning its greenfield
JK Cement's grey cement volume growth in recent quarters has got a
capital expenditure (capex), would enhance its revenue
The stellar rally in the Magnificent Seven tech megacaps integrated cement plant at boost from capacity expansions largely for new capacity addi- diversification and provide an
I
is prompting analysts across the globe to apply the nvestors in JK Cement Ltd are Panna, Madhya Pradesh, within Grey cement volume (in million tonnes) Year-on-year growth (in %) (right-hand scale)
tion, could keep debt elevated in impetus for growth. So, we have
snappy moniker to other high-growth stocks. At least sitting on handsome gains, 18 months and ramping up 20 25
the medium term. The company revised our Ebitda estimate for
three recent research reports adopted similar appella- with its shares having rallied capacity utilisation to around recently announced ₹2,850 FY25 and FY26 higher by 16%
20
tions. Analysts from Goldman Sachs Group Inc. released 61% over the past year due to a 90% within a year, said a Motilal 15 crore capex for an addit-ional six and 15%, but an EV/Ebitda valua-
a report in Tokyo last week highlighting a group of stocks combination of factors that Oswal Financial Services report. 15 million tonnes per annum of tion of 16.5 times is expensive,”
that could serve as Japan’s equivalent of the Magnificent could boost its earnings per- The company has expanded 10 10 capacity, funded via debt and said Mangesh Bhadang, senior
Seven that have powered US stocks to a record high. On formance. Amid heightened its dealership network and, internal accruals. The company VP, Centrum Broking Ltd.
5
Tuesday, an independent equities analyst who publishes competition, timely capacity through robust marketing cam- 5 has planned capex of ₹1,200 Meanwhile, the paints seg-
on Smartkarma used ‘Europe’s Magnificent Eleven’ as additions and strategic regional paigns, tapped new markets in 0 crore in FY24, ₹2,200 crore in ment continues to clock operat-
title for a report on the so-called GRANOLAS, which diversification have boosted JK central india. Motilal Oswal esti- 0 -5 FY25, and ₹1,800 crore in FY26. ing losses. The management
FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24*
comprise the region’s biggest names including GSK Plc, Cement’s prospects, and grey mates JK Cement will clock At the end of December 2023, its expects it to achieve Ebitda-
*estimated Source: Company, Motilal Oswal Financial Services
Roche Holding AG and ASML Holding NV. Over in Paki- cement volume growth has been around 14% compound annual gross debt stood at ₹4,585 crore, breakeven by FY26. But
stan, Chase Securities released a note dubbed ‘Pakistan’s good. The company has guided growth rate in grey cement vol- and this is expected to peak at whether it is able to achieve this
Magnificent Seven’ on the same day for the so-called for double-digit volume growth ume from FY23 to FY26, higher to expand its footprint in the ures such as implementation of ₹5,600 crore by FY26. remains to be seen, given that
SHIMPLE, a grouping which includes the nation’s big- in grey cement in FY24, faster than the industry. Last week the eastern market. waste heat recovery systems. “New capex will help JK competition in the paints busi-
gest tech company Systems Ltd and Hub Power Co., a than the industry’s anticipated company completed the acquisi- JK Cement also remains These should help reduce its Cement maintain its consistent ness has shot up with the entry of
major utility. BLOOMBERG single-digit growth. tion of Odisha’s Toshali Cement focused on optimisation meas- operating costs and carbon foot- volume growth in its existing new companies.
Mark to Market writers do not have positions in the companies they have discussed here
Promoters offload record Safeguard

MINT MACRO TRACKER
mid, small
₹1.15 trillion shares in 2023 cap investors:
Launched in October 2018, Mint’s macro tracker provides a monthly comprehensive report
on the state of the economy, based on trends in 16 high-frequency indicators. For each
indicator, the value in each month is assigned a colour-coding (red, amber and green) to
Mayur Bhalerao denote where it lies relative to the five-year average (worse, in line, or better). As of January
mayur.bhalerao@livemint.com
MUMBAI
Cashing in
Largest stake sales by listed companies in 2023
Amfi to MFs 2024, four of the 16 indicators were in red, five in green, and seven in amber—an improvement
from six months ago.
Now 1 month ago 2 months ago 4 months ago 6 months ago
Company (Promoters/Seller) in crore stake sold (in %) Jash Kriplani
F
amily business promoters CONSUMER ECONOMY PRODUCER ECONOMY
such as the Adanis and Adani Green Energy jas.bardia@livemint.com
Anil Agarwal (Vedanta) as (Infinite Trade & Investment Ltd 11,169 9.2 MUMBAI Passenger vehicle sales Tractor sales PMI composite Core* output
And S.B. Adani Family Trust) (y-o-y change, %) (y-o-y change, %)
well as professional ones such (y-o-y change, %)
20 30 62
I
15
as private-equity firms raked in Coforge
ndustry body Association of 10 -6.9 20 -15.3 60 3.9
11,000 40.0 61.2 12
the moolah big time by selling (Hulst BV) Mutual Funds in India 0 10
58
9
56
stakes in their companies in the (Amfi) has asked mutual -10 0 54 6
bull run of 2023. That year, the Adani Enterprises funds to put in place safe- -20 -10 52 3
9,600 5.0 -20 50 0
benchmark BSE Sensex rose (S.B. Adani Family Trust) guards to protect the interests -30
Feb 2023 Dec 2023
Feb 2023 Jan 2024 Feb 2023 Jan 2024 Feb 2023 Jan 2024
18.7% and the NSE Nifty, 20%. of all investors in mid- and *8 core infrastructure industries
The promoters sold shares Adani Power small-cap funds. Amfi sent this
(Afro Asia Trade &
worth ₹1.15 trillion ($14 billion) Investments And Worldwide
8,710 8.0 letter after markets regulator Broadband subscriber base Domestic air passengers Banks’ non-food credit* Rail freight traffic
(y-o-y change, %) (y-o-y change, %) (y-o-y change, %) (y-o-y change, %)
in all, a staggering 161% rise from Emerging Market ) Securities and Exchange 20 60 18 10
8.6 15.8 6.4
the ₹44,013 crore in 2022, and Board of India (Sebi) raised 15 45
4.7 16 8
Interglobe Aviation 6
way higher than any other year 5,746 7.0 concerns of “froth building up 10 30
14
4
(Shobha Gangwal) 12
in the past 10. Top of the list are in small and mid-cap seg- 5 15
2
10 0
the Adani group, which diluted Adani Ports & Special
ments” amid continuing flows 0 0 8 -2
stake in five group companies; Economic Zone 5,282 4.1 in such funds. Feb 2023 Nov 2023 Feb 2023 Jan 2024
Feb 2023 Dec 2023
Feb 2023 Jan 2024
*Adjusted for HDFC-HDFC Bank merger
Barings PE, which sold stake in (S.B. Adani Family Trust) Amfi cited Sebi’s directive to
Coforge, and Shobha Gangwal, fund houses, in a letter dated
whosold her entire stake in Sona Blw Precision 27 February. “In the context of
InterGlobe Aviation. (See chart Forgings 4,917 20.5 the froth building up in the EXTERNAL SECTOR EASE OF LIVING
(Singapore VII Topco III Pte)
for the top 10 list.) small and mid-cap segments of
Import cover Rupee vs dollar CPI inflation Core CPI inflation
The sales have helped reduce Adani Energy the market and the continuing (forex reserves in months) (m-o-m change, %) (y-o-y, %) (y-o-y, %)
promoter debt levels, helped Solutions 4,565 6.0 flows in the small and mid-cap 14 0.5 8 3.6
11.3 0.2 5.1 7
invest in new businesses, and (S.B. Adani Family Trust And schemes of mutual funds, 13 7 6
Fortitude Trade) 0
gave PE firms exits at good lev- Trustees, in consultation with 12 6 5
els. The latter, in particular, took Hdfc Asset Unitholder Protection Com- -0.5
5 4
the rise in promoter sales to a Management Co. 4,079 10.2 mittees of the AMCs, shall
11
(Abrdn Investment Management) 10 -1 4 3
new high last year, experts said. ensure that a policy is put in Feb 2023 Jan 2024 Feb 2023 Jan 2024 Feb 2023 Jan 2024 Feb 2023 Jan 2024
“In the last seven years alone, Vedanta place to protect the interest of
there has been $350 billion (Twin Star Holdings)
3,983 4.1 all investors,” the letter read. Labour-intensive sector exports Trade balance Real rural wages Labour force participation rate
investment from PE, VCF, angel Sebi has asked trustees of (y-o-y change, %) (as a % of total trade) (y-o-y change, %) (in %)
Source: Prime Database, NSE & BSE 10 42
funds, etc, into equity, credit mutual funds to look into -2.5 0 -19.2 2 -0.1 40.6
and real estate," said Nilesh SATISH KUMAR/MINT
“appropriate and proactive” 0 -10 1 41
Shah, MD, Kotak Mahindra contribute to some of the stake Parakh, CEO, Bigul, said the measures, including but not -10 -20
0 40
AMC. “Given the normal tenure paring, the rich valuations of trend may continue this year in limited to moderating inflows, -20 -30
-30 -40 39
of 7-10 years for a fund, these listed companies, which indi- consumer, infrastructure and portfolio rebalancing, etc. -1
Feb 2023 Jan 2024 Feb 2023 Jan 2024 Feb 2023 Jan 2024
sales, where PE is promoter, will cate that stock prices are high realty sectors. "To my mind, the The regulator has also Feb 2023 Nov 2023
increase.” relative to their earnings or asset sales will be greater in cases directed mutual fund trustees For each indicator, an average band (shown in grey) is constructed around the five-year average value. The size of the grey band rises with volatility. Values falling above this band
Lakshmi Iyer, CEO-invest- values, also played their part. where PEs are promoters. The (through the Amfi letter) to are in green, those falling below are red, and those within this band are coded amber (the red/green coding is reversed for inflation). While calculating the five-year average, data for
some indicators for April-May 2020 and 2021 have been removed to eliminate lockdown-induced skews in the trend. All data as of 28 February 2024.
ment & strategy, Kotak Alter- Experts also see the momen- markets are giving an attractive consider steps to ensure that
Source: Centre for Monitoring Indian Economy, Bloomberg, Mint calculations
nate Asset Managers, said while tum carrying through in 2024, exit to these entities," said Jyo- investors are protected from
Sebi’s restriction of 75% pro- especially for companies where tivardhan Jaipuria, founder, first-mover advantage of Data: Payal Bhattacharya; Graphics: Paras Jain
moter holding in listed firms did PE firms are promoters. Atul Valentis Advisors. redeeming investors.
LIVEMINT.COM CORPORATE ThursDay, 29 February 2024
New Delhi 05
'We will raise more capital if Luxury investments rising in

India’s booming economy
an interesting buy comes up' Varuni Khosla
Varuni.K@livemint.com
NEW DELhI
Crazy rich Indians
Number of ultra-high-net-worth individuals in India
2022 12,495
I
ndia’s booming economy
has fuelled a surge in invest- 2023 13,263
Physics Wallah co-founder says the company is still in search of newer growth areas ments in expensive watches, 2028* 19,908
art and other luxury collecti-
bles among the country’s Increase (%) in ultra-high-net-worth individuals
Sneha Shah super-rich. Asia
World India
sneha.shah@livemint.com Opulent symbols of wealth 4.2 2.6
MuMBAI such as Rolex watches and MF 28.1 38.3 50.1
6.1
Husain artworks offer the
T
he drubbing that the sector ultra-rich not only status but Change in 2023
has received, coupled with also potentially lucrative Projected change: 2023 to 2028
the funding winter has returns. *projected Source: Knight Frank's The Wealth Report 2024
thrown open a fire sale of For India’s 1%, who account
assets among edtech firms. for 40% of the country’s
Westbridge-backed edtech unicorn wealth, rare timepieces and There are also promising outside India.
Physics Wallah is evaluating inorganic exquisite artworks offer ways returns to be had in these cate- About 12% of India’s UHN-
deals, co-founder Prateek Maheshwari to diversify their portfolios. gories in both domestic and WIs bought a new home in
said in an interview. According to 'The Wealth international markets, the 2023 and a similar percentage
The firm that turned profitable in Report 2024' by Knight Frank, report found. plan to do so in 2024, the
FY21 has set aside a war chest of around nearly 17% of India’s super- “The demand for rare col- report said. This is lower than
$100 million for its inorganic plans, he rich (those with a net worth of lectibles is rising across age the global average of 22%. The
said on the sidelines of India Digital $30 million and above) bought groups in India, and as wealth average Indian UHNWI owns
Summit in Mumbai. The company coveted collectibles using continues to grow, we expect 2.57 homes and a sizable 28%
acquired six assets in the recent past and their investable wealth in further investments in these rented out their second homes
is on the lookout for more good assets, 2023. asset classes,” it said. during 2023.
Maheshwari said. But Indians still love real The number of ultra-high- According to Knight Frank’s
According to him, a lot of startups that estate. According to the net-worth individuals (UHN- Luxury Investment Index,
took the cash-burning route are finding report, 32% of super-rich Indi- WIs) in India grew by 6.1% in which tracks 10 popular luxury
it difficult to raise more capital now with ans invested in property last 2023, and their number is pro- investments, art was the best-
the macros and valuations changing year. jected to grow by 50% – from performing asset in 2023, with
along with cash flow and capital being The report said expensive 13,263 to 19,908 – an 11% price
less available. "So, we are being oppor- Prateek Maheshwari, co-founder, Physics Wallah. watches were the top luxury in the next five The number of increase. Other
tunists and evaluating a couple of good investment category for years, far outpac- ultra-high-net- luxury assets such
deals,” Maheshwari said. physical centres and phygital is the way about opening residential schools. more than 15,000 employees under- super-rich Indians in 2023, ing the global worth individuals as rare whisky still
Asked about the capital set aside for forward,” Maheshwari said. According “There is a huge gap that we have seen in took a cost rationalization exercise last followed by art. average. in India grew by hold long-term
these growth plans, Maheshwari said to him, the company has opened 150 our school education system and our year. Calling it a performance linked Jewellery also featured on The number of
that the company has $60 million from centres across 105 cities in the last 18 model of residential schools aims to decision, Maheshwari said the company the list. This contrasted with wealthy individu-
6.1% in 2023, and value, having
generated 280%
the fund raise. “Fundamentally, we are months. “We are opening one centre address it,” Maheshwari said, and added continues to be a net hirer. “We are on a global preferences, where art als globally is it’s projected to returns over the
a cash generating company and every five days. We are aggres- that the firm is also looking to tap hiring spree, not the other way reigned supreme, followed by expected to grow grow by 50% past decade, it
can put that incremental cap- sively prioritising growth and into upskilling and the col- around,” he said. watches and classic cars. by 28.1% to 8.02 said. The report
ital to use. I am also open to cornering more market lege education space to Asked about the learn- India’s super-rich also lakh by 2028. In added that while
raising more capital if an
interesting acquisition 150%
Physics Wallah’s
share,” he added. make India's youth job
In June 2022, Physics ready. K cr
The revenue that
₹2 ings as a founder from the
Byju’s episode, Mahes-
invested in wine and rare
whisky, but relatively less than
2023, their number rose to auction houses saw record-
4.2%, 6.26 lakh from 6.01 lakh breaking sales in 2023, the
opportunity comes up.” Wallah raised $100 mil- “We have successfully wari said that notwith- than their global counterparts. the previous year. About 90% luxury investment index
Though the company overall revenue lion from Westbridge started some of the new the firm expects to standing the problems The report did not consider of Indian UHNWIs expect dipped slightly at the end of
has grown 150% in terms of growth in FY24 Capital and GSV Ventures. business lines for us, close FY24 at and slugfest with the real estate to be a luxury their wealth to increase this the year as the value of some
overall revenue and is likely While the funds hold 9% which will give us growth in investors, Byju Raveendran investment. year, and almost 63% of these assets fell or saw minimal
to close FY24 with ₹2,000 stake in the company, the FY28 or FY29,” he said. should be credited with creat- Shishir Baijal, chairman and expect it to grow by more than gains. However, experts said
crore revenue, it is still in search of founders together hold around Maheshwari co-founded the ing the edtech category in India. managing director of Knight 10%. The report added that this could have been a market
newer growth areas. 91% stake in the company that was last company with Alakh Pandey in 2016. “People make mistakes. But we have to Frank India, said Indians have 32% of India’s UHNWIs have correction rather than a cause
“Online will continue to drive our valued at $1.1 billion. The company that was bootstrapped for give credit where it is due and this man a long-standing appreciation invested in real estate. Inter- for major concern, with some
business as currently around 55% of the Till now, the company has acquired the first eight years is preparing inter- has single-handedly created edtech as a for collectibles of various estingly, nearly 14% of their losses simply reflecting a stabi-
business still comes from selling online six firms as part of its efforts to bulk up nally for a public listing over the next category in the country and has been at kinds, and that this was driving combined residential portfolio lisation of previously inflated
courses. We are also betting big on the the top line. The company is bullish 24–36 months. The company that has it for so many years,” he said. the growth. comprises properties located assets.
‘Govts Social sector spending short of target India should give more sops for
backing Naman Suri
Spending dissection focus on improvement in the fabrication units: Qualcomm
down on EV naman.suri@livemint.com
NEW DELhI Public sector spending grew from 6.7% of GDP in FY18 to
7.8% in FY23.
quality of social spending,
especially public spending. It’s
also crucial to balance alloca- Gulveen Aulakh annual basis and had the sec-
subsidies’ Estimated social sector funding as a % of GDP Share of public spending under
I
ndia’s social sector spending different social services (in %) tions across sectors by direct- gulveen.aulakh@livemint.com ond largest research and devel-
deficit could increase to ₹15 In FY2023* ing funds towards underrepre- BARCELONA opment centre in the world in
trillion by fiscal year 2028, India FY23 8.3 Other Health sented sectors and geographies the country. The senior execu-
Alisha Sachdev
I
below the Niti Aayog’s recom- 39 26 while looking at solving for ndia should beef up the tive said that Qualcomm was
alisha.sachdev@livemint.com mended spending threshold of NITI Aayog Total public improving societal outcomes,” quantum of its $10 billion participating in enabling the
NEW DELhI 13% of gross domestic product recommendation 13 spending on said Amit Chandra, the founder financial incentive scheme to electronics and manufacturing
social sector
(GDP). ₹21 trillion of ATE Chandra Foundation. attract semiconductor fabrica- ecosystem of India as it was a
A
s governments in many According to a joint report, BRICS
11 Private sector spending in tion majors, said Rahul Patel, ‘very strategic’ market for the
(excluding India)
countries are “backing India Philanthropy Report Education FY23 saw 10% growth, reach- Qualcomm Technologies’ company.
down” on subsidies on 2024, by philanthropy organi- 36 ing ₹1.2 trillion, fuelled by ris- group general manager for “Qualcomm is building the
electric vehicles along with the zation Dasra and global man- OECD nations 24 Numbers don't add up to 100 ing contributions from family connectivity, broadband and latest wi-fi elements out of
because of rounding off
end of a wave of early adopters, agement consulting firm Bain philanthropy and retail donors. networking. Chennai, modem products out
Source: India Philanthropy Report 2024 *BE= Budget Estimates used
the demand for EVs has seen a & Co., India’s social sector This trend is expected to per- Patel believes India is com- Qualcomm Technologies of Bangalore and Hyderabad,
dip, says Martin Jahn, member spending in FY23 was around sist, driven by them and CSR. In peting against developed group general manager designing processing engines,
of the board of management for ₹23 trillion ($280 billion), respectively (FY22 numbers). country’s social sector funding FY23, CSR reported moderate nations like the US, Europe, Rahul Patel. building products that go into
sales and marketing, Skoda accounting for 8.3% of GDP. However, India has not been deficit rises to ₹15 trillion, the growth of 7% complying with Japan, and China, who are IoT markets from India, irre-
Auto. “Inequalities persist in India able to keep pace with its OECD report said. the mandate, to an estimated offering incentives worth tens He noted that India did have spective of incentives. This size
Governments in many despite strong GDP growth, a and Brics counterparts due to Public sector spending ₹28,000 crore, while share of of billions of dollars. a geo-political advantage glo- of talent pool is not available
developed regions are taking a burgeoning middle-class, and a moderate growth accounted for 95% domestic private spending rose “India is competing against bally as companies were trying outside of India,” he added.
more “realistic” view of their goal to become a $5-trillion in corporate Private sector of the ₹23 trillion, to 30% following increased developed nations. Companies to diversify away from China, Patel added that Qualcomm
commitments to “100% electri- economy by FY25… Despite social responsibil- spending in FY23 with the sector’s compliance and profit growth. (fabs) are very capitalistic even as the South Asian nation had started discussions with
fication”, as the path to an robust growth over the last five ity (CSR) and saw 10% growth, c o n t r i b u t i o n Healthcare and education minded, they’re going to look has a similar policy to other Bharti Airtel, Reliance Jio and
EV-only universe gets more years in social sector spending, donations from at ₹1.2 tn, on rising growing from were key funded sectors, with for the best financial outcome, countries on owning semicon- Vodafone Idea for bringing
challenging in the face of bat- India still falls 4.7% short of Niti high-net-worth 6.7% of GDP in environment and sustainability the size and longevity of the ductor manufacturing capabil- wi-fi 7, the latest standard on
contributions
tery supply routes, raw material Aayog’s annual social funding individuals (HNIs) FY18 to 7.8% in witnessing a substantial inflow incentives and how competi- ity. Assembly, testing, marking wifi technology, even as wi-fi 6
sourcing and infrastructural target,” it said. or affluents, from family FY23. Health of CSR funds in recent years. tive they are versus the US, and packaging or ATMP units based devices and equipment
issues. In FY23, member countries despite a growing philanthropy (26%) and educa- “There has been a notable China, Europe, Japan, South were good starting points but was just beginning to roll out
Czech carmaker Skoda Auto, of the Organization of Eco- donor pool, the tion (36%) spend- increase in corporate givers, as Korea,” he said. getting the semiconductor fabs for deployment into networks.
a part of the multinational nomic Co-operation and report added. ing were the pri- evidenced by the proportion of “A $10 billion incentive is not was critical, Patel said. “I will not be surprised in 2025,
automotive group Volkswagen, Development (OECD), and While Niti Aayog estimated a mary drivers of this growth, companies complying with the the same as $40-50 billion. I'm “Semiconductors are the you will see wi-fi 7 in India,” he
will consider bringing a mass Brazil, Russia, India, China, and 57% disparity between demand with respective five-year com- CSR mandate (2% of profits), sure it's not an issue of India not new oil,” he said. said.
market EV to India at some South Africa (Brics) nations and supply in India for FY23, pound annual growth rates which increased from approxi- being capable, but it is going to Qualcomm, as a fabless chip The reporter is in Barcelona
point in the future, Jahn said, reported significantly higher over the next five years, this (CAGRs) of 18% and 9%. mately 30% in FY18 to more be an issue where the priorities design firm, was increasing to cover the Mobile World Con-
adding that it is “exploring all spending rates of 24% and 11%, could decrease to 35% as the “India’s social sector needs to than 60% in FY22,” it said. are spent.” investments in India on an gress at the invitation of Xiaomi.
options” to make a viable busi-
ness case of selling EVs in the
price-sensitive mass market in
India.
Skoda expects policies
designed for the adoption of
Old movies in new avatar, theatres bank on re-releases to boost sales
EVs to keep changing “very
quickly” across the world even Lata Jha have hit rock bottom. naments, gaming events, and Mandir inauguration and ties come together, engage, and
as original equipment manu- lata.j@htlive.com For the older hits, theatre international concerts to sig- Republic Day events were interact, Bijli said.
facturers continue to double NEW DELhI owners said it was common to nificant national events like the priced at ₹100, inclusive of a Theatre owners agreed
down on investments on the see over 50% occupancy, espe- Ayodhya Ram Mandir inaugu- beverage and popcorn combo. showcasing alternative content
T
technology. heatres across the coun- cially on weekends, and the ration and the Nationally, the in cinemas not only offers audi-
“In clean mobility, the pre- try that are seeing a dip in most popular films collected Republic Day GETTING Ram Mandir ences a diverse range of enter-
dominant path is electric. business owing to new between ₹20 lakh and ₹30 parade,” Bijli VIEWERS screening achieved tainment options beyond
There are different commit- releases not finding favour with lakh, an impressive figure con- added. During the average occupancy newly released films but also
ments at the moment (from dif- audiences have been banking sidering the titles are available ICC Men’s World FOR older hits, over 70%, while the enables cinemas to use their
ferent countries). We see that on re-releasing older hits to on streaming platforms. Cup, each match theatre owners said
it was common to
Republic Day infrastructure and resources
the dreams of some markets boost sales. Films such as Dil- Some producers and theatre had varying occu- see over 50% parade clocked in efficiently during periods of low
going 100% electric are not wale Dulhania Le Jayenge, Jab owners Mint spoke with are pancies, but most of occupancy over 65% occu- film releases or special occa-
realistic, you can go to 30% or We Met, Mohabbatein and oth- thinking of re-releasing older screenings of India pancy specifically sions like the Ram Temple cer-
50% but even China is now not ers have been re-released over films now, including those vs Pakistan, India vs INCORPORATING in the Delhi and UP emony or Republic Day parade.
alternate content
saying we want to be 100% and the past few weeks, as have before the 1990s to cater to Theatre owners said the most popular films collected between New Zealand semi allows the company regions. Incorpo- “During periods with fewer
has had some challenges. So, southern language hits from slightly older audiences given ₹20 lakh and ₹30 lakh. HT and the final match to attract new rating alternate new releases or specific events,
the question is at which pace the 1990s and 2000s. the latest response. were sold out. audience segments content into its showcasing alternate content
we will be getting to a large While ticket prices are kept “Re-release of retro films Kumar Bijli, executive director, screenings. This conviction Average occupancy strategy allows the allows us to utilize the screens
number of electric vehicles and nominal to ensure footfalls, during festivals offers younger PVR INOX Ltd said. propels us to experiment with was over 73% and company to attract efficiently and pull audiences
India has very ambitious plans trade experts point to the tactic generations a chance to explore “We have always believed various forms of content in our the average ticket price (ATP) new audience segments to cin- to the cinemas,” Rahul Puri,
for this. Let’s see how it works”, to keep things going at a time and enjoy timeless movies they that there is an audience cinemas, ranging from live was ₹580, Bijli pointed out. emas that are fast evolving into managing director, Mukta Arts,
Jahn said. when returns from new titles might have missed,” Sanjeev beyond traditional movie screenings of ICC Cricket tour- The screening of the Ram social spaces where communi- and Mukta A2 Cinemas said.
New Delhi CORPORATE LIVEMINT.COM
RIL, Disney tie up Experts await more clarity on

to create ₹70K cr
media behemoth GST on corporate guarantees
FROM PAGE 1
experts.
“This is a landmark agree- Taxman is of the view that giving such guarantees is a service liable for taxation under GST
ment that heralds a new era in
the Indian entertainment Apple has reassigned some of
industry,” Mukesh Ambani, Nehal Chaliawala its employees from the car
chairman and managing nehal.chaliawala@livemint.com project to its AI efforts. REUTERS
director of Reliance Industries, MuMbaI
said in a statement.
Cancellation
I
Disney’s assets are valued at ndirect tax experts are awaiting clar-
₹25,806 crore, a significant ity on the levy of goods and services
markdown due to potential
losses from missing out cricket
tax (GST) on corporate guarantees
given by Indian companies on behalf
of Apple’s
rights, said a person with knowl- The JV will be headed by Nita
edge of the deal terms. Viacom18, M. Ambani as chairperson.
of their subsidiaries following a noti-
fication issued by the finance ministry. car project
including JioCinema, is valued at The 26 October notification had clari-
₹33,046 crore in the deal. and the rest Viacom. The com-
Paramount, which owns a bined resources and content
fied the value to be given to a transaction
that provides corporate guarantees with
boosts AI,
13% stake in Viacom18, is likely libraries of Disney and Reliance
to exit post the merger, this could impact traditional TV
no financial consideration involved.
This comes after the Directorate Gen- headset bets
person said. networks, especially if the deal eral of GST Intelligence (DGGI) last year
The transaction is subject to leads to shifts in advertising sent out a spate of tax demand notices to Bloomberg
regulatory, shareholder and revenue and viewer preferen- Indian companies related to financial feedback@livemint.com
other customary approvals and ces,” Deleise Ross, associate guarantees given by them on behalf of
I
is expected to be completed in vice-president at media agency their subsidiaries. Earlier, companies n abandoning plans for a
the final quarter of this year or Mudra Max, had said in a did not pay any GST on corporate guar- self-driving car, Apple Inc. is
in early 2025. recent Mint interview. antees as generally no financial consid- giving up on billions in
Disney may also contribute “Smaller media companies eration is paid for it by the subsidiary. potential revenue and the
certain additional media assets may find it challenging to com- But the taxman was of the view that The 26 October notification from the finance ministry had clarified how much value to be ascribed to a transaction that dream of selling what one
to the JV, subject to regulatory pete with the scale and resour- giving such guarantees is a service liable provides corporate guarantees when there is no financial consideration involved. MINT executive called “the ultimate
and third-party ces of a merged for taxation under GST as it is done by mobile device.” The hope is
approvals, the The deal Disney-Reliance the parent company to maximize became effective from July 2017 while the amendment is prospective,” she “Since a letter of comfort from a repu- that other big bets—including
companies said. transaction is entity. They might returns on investment in a subsidiary. the notification was issued in October said. She added ideally, valuation provi- table company can help its subsidiary generative artificial intelli-
“Reliance has a expected to be need to explore Subsequently, the Central Board of 2023. Tax experts seek clarity on the val- sions for related party transactions exist- secure a loan or get favourable terms gence (GenAI) and mixed real-
deep understand- completed in the strategic partner- Indirect Taxes and Customs (CBIC) clar- uation to be ascribed to corporate guar- ing prior to the amendment would be from a counterparty, the tax authorities ity headsets—can make up the
ing of the Indian ships or focus on ified in October that in case of such guarantees in between this period. applicable on past corporate guarantees. could construe it as a service, much like difference.
final quarter of
market and con- niche markets to antees, when the parent company takes “Valuation of corporate guarantee has Another confusion is whether a simi- in the case of corporate guarantee, and Apple reached this cross-
sumer, and this year or in maintain their no financial consideration for providing been a topic of debate since implemen- lar tax will be levied on letters of comfort levy GST on the consideration for offer- roads on Tuesday, when it told
together we will early 2025 positions,” she had the guarantee, a notional value ing such letter of comfort,” said employees it was winding
create one of the said. equivalent to 1% of the guaranteed GREY AREAS Ranjeet Mahtani, partner, Dhruva down the car project and reas-
country’s leading The deal will sum will be ascribed to it. Advisors. “In my view, a letter of signed some of the staff to its
media companies…,” said Bob give Reliance access to Disney’s However, it remains unclear if IT remains unclear if DGGI last year sent THERE’S also UNLIKE a corporate comfort does not represent a sup- AI efforts. The decision fol-
Iger, CEO of The Walt Disney Co. massive libraries across the GST will be levied on the guarantees GST will be levied on
guarantees per year
out a spate of tax
demand notices
confusion whether
a similar tax will
guarantee, a letter
of comfort is not
ply, that is service of a commitment lowed months of frenzied
To be sure, the combined English language, including its per year or for the entire period for or for the entire related to financial be levied on letters a legally enforceable or assurance or undertaking regard- meetings between top execu-
might of Reliance and Disney Marvel catalogue. Reliance which the guarantee is effective, guarantee period guarantees of comfort contract ing repayment of monies borrowed tives and the company’s board
could set competition up at a already has content from HBO, experts said. “Despite recent gov- and so, should not be liable to GST.” over how to proceed. Chief
disadvantage as far as bargain- and is bullish on regional lan- ernment clarifications, uncertainty The confusion arises because operating officer Jeff Williams
ing power for TV ad rates goes, guages, including the four remains around the timing and value of tation of GST,” said Payal Thaker, part- given by companies on behalf of subsidi- under GST, services to a related party for and project head Kevin Lynch
given that the new entity would South Indian languages, as well tax levied on corporate guarantees, par- ner, indirect tax, BDO India. “Since 26 aries. Unlike a corporate guarantee, a furthering business are treated as supply broke the news to the roughly
have the biggest pie of the mar- as Marathi and Bengali. Sports ticularly for long-term agreements,” October 2023, the valuation provisions letter of comfort is not a legally enforce- liable for taxation even if made with no 2,000-member team during a
ket at 40-45%. will continue to be a priority for said Saurabh Agarwal, tax partner at EY. have been amended to bring clarity on able contract. However, it is written by a financial consideration. This makes sev- meeting that lasted less than 15
“The merged entity will have the entity, leaving little for oth- There is also confusion on the valua- this aspect. However, the valuation for company to further the business of a eral business practices liable to taxation minutes.
approximately 100 TV chan- ers to do on that front. tion to be ascribed to guarantees issued corporate guarantees issued before the subsidiary and can be seen as a step to depending on the interpretation taken The upshot: Apple’s future
nels, of which 70 will be Disney lata.j@htlive.com before the notification was issued. GST amendment still remains unclarified as maximize the returns on its investment. by concerned tax officers, experts said. isn’t going to hinge on selling
$100,000 cars with self-driv-
ing features. Instead, it will
focus on catching up with
Small-cap valuation fears rock stock markets Byju’s can’t access rivals in the GenAI industry,
where chatbots from OpenAI
and Google have captured the
FROM PAGE 1
Cautious moves
Nifty and Sensex fell a little over a percent each, sliding below the psychological levels of
Padiyar, senior fund manager
(equities), Tata Mutual Fund.
rights funds for now imagination of consumers and
investors. The shift also lets
Apple concentrate on turning
regulatory concerns over too 22,000 and 73,000 “It’s about picking the right the Vision Pro headset—still a
much money flowing into Nifty 50 Nifty Midcap 150 Index Nifty Smallcap 250 Index
stock as it is in the large-cap FROM PAGE 1 Byju’s including knowledge of fledgling product—into a
small-cap schemes. 22,300 18,200 15,400
space, but I think why small- rights issue and no objections mainstream hit.
Although domestic institu- 22,214.1 18,117.3 15,233.6 caps are more in the news is the repayment of the $1.2 bil- raised by the petitioners, But the decision also elimi-
tions offset the FPI selling with 22,200 15,200 because of the relative liquidity lion loan, which Byju’s is con- despite their presence at the nates a future revenue source
provisional purchases of 18,000 issue. What this means is if you testing. same meeting which ratified at a time when Apple has been
₹1,827.45 crore, FPI selling in 14,895.3 sell a stock high, you might not Byju’s investors Prosus NV, the rights issue etc.” struggling to maintain growth.
22,100 17,749 15,000
21,951.2
derivatives dragged down the 17,800
get to enter later because of rela- Peak XV Partners, General Byju’s desperately needs the Though the company man-
indices, market analysts said. 22,000 14,800 tively lower free float,” he added. Atlantic, and Sofina SA had money from the rights issue, aged to pull out of a sales slump
A senior fund official con- The biggest drags on the jointly filed a petition with the which it said has been fully last quarter, it warned that the
firmed that stress test results of 21,900 17,600 14,600 small-cap index were Suzlon NCLT last week against the subscribed, to tide over its current period will be sluggish
9.15am 3.30pm 9.15am 3.30pm 9.15am 3.30pm
its small-cap fund were shared Energy (down 13.77%), BSE rights issue, citing oppression liquidity crisis, oversee cur- again. The Vision Pro just
with the regulator, which has Top 5 contributors to the fall in Nifty Smallcap 250 index Top 5 contributors to fall in Nifty Midcap 150 index 7.87%), HFCL (6.9%) , RBL and mismanagement of the rent liabilities, and repay some launched this month and isn’t
(in %)
been holding discussions with Suzlon Energy -4.80 Yes Bank -4.61 Bank (5.7%) and NCC (5.7%) . company. The four investors of its vendors and debtors. expected to be a major contrib-
BSE -2.74 REC -4.15
fund houses over the past HFCL (in %) -2.41 Power Finance Corp -3.52 The Nifty losses were led by who collectively hold around Mint reported on Tuesday utor to growth for years, if ever.
three-four months on curbing RBL Bank -1.98 Vodafone Idea -3.46 M&M, Wipro, IndusInd Bank, 25% stake in that top investors With a car, profit margins
NCC/India -1.97 Adani Power -3.33
excessive cash flows into small- Source: Bloomberg
Maruti and Power Grid Corp, Byju’s had sought Funds collected in Think and would have been slim but the
cap schemes. Sebi’s concerns which fell between 2.7% and interim relief on via rights issue Learn Pvt. Ltd, revenue potential was mas-
SARVESH KUMAR SHARMA/MINT
pertain to funds’ ability to cope 4.4% ahead of the February the grounds of will be kept in a the parent com- sive. The idea was long touted
with redemption pressures in and mid-cap segment have been ~10%,” it said. created valuation distortions in a futures and options contracts alleged financial separate escrow pany of Byju’s, as one of Apple’s famous “next
small-cap stock counters with multiplied, and strong momen- The Kotak letter added that few cases. Such experience is expiry on Thursday. Nifty mismanage-
account and will w h i c h have big things” and could have
limited free float. tum is taking them beyond the retail investors’ ownership of further boosting investors’ con- Smallcap 250 now trades at a ment and siphon- moved the court more firmly locked consumers
In parallel, news of Kotak fair value of businesses,” Kotak small caps has become sizeable, fidence, over-shadowing the trailing price to earnings multi- ing of funds by not be used for to stay the rights into the company’s ecosystem.
Mutual Fund placing tempo- MF wrote in a let- crossing even caution required,” Kotak said. ple of 28.04 times against the the management, any purposes issue, are likely to Tesla Inc., which led the EV
rary limits on investor sub- ter to investors on Nifty Smallcap institutional own- Last July, Tata Mutual Fund 5-year median of 25.93 times. according to skip participating revolution in the US, gener-
scription for units in its small- Monday, a copy of 250 now trades at ership in many halted lumpsum investments in “With markets ruling near court arguments in the issue. ated nearly $100 billion in rev-
cap fund raised fears that other which Mint has a trailing price to stocks. its small-cap fund, while contin- record highs in the expiry on 27 February. Byju’s, which was once val- enue last year. Furthermore,
fund houses could follow suit. seen. “While earnings multiple “Institutional uing SIP investments. Nippon week, volatility was to be The company did not immedi- ued at $22 billion, has pro- tech giants like Alphabet Inc.
Kotak MF has restricted lump- India’s market investors, like India Life Asset Management expected,” said Gaurang Shah, ately respond to a request for posed to raise $200 million and Chinese rivals remain
sum inflows into its small-cap capitalisation/
of 28.04x against mutual funds, also stopped lumpsum invest- senior vice-president, Geojit comment. through a rights issue at a focused on cars.
fund to ₹2 lakh per PAN per GDP is hovering at the 5-year median exercise broad ments into its small-cap fund Financial Services. Jayesh Bha- Prashanth Shivadass, part- nominal valuation of $25 mil- Apple’s decade-long car
month and systematic invest- a lifetime high of of 25.93x controls and invest that month, raising concerns of nushali, lead, research, IIFL ner, Shivadass & Shivadass Law lion. The non-participation of effort, known as Project Titan,
ment plan (SIP) flows to ~130%, small caps’ in a disciplined overvaluation. “The small-cap Securities, said he expects Nifty Chambers said NCLT’s interim some investors would result in also was an AI challenge in
₹25,000 per PAN per month market capitalisa- manner. However, universe is large enough to to get support at 21,800 initially order seems to be a consensus their holdings in the company itself. Apple attempted to build
effective 4 March. Earlier, there tion to overall market capitali- momentum chasing by inves- choose the right business at and to test 21,200 in the March order as a matter of status quo. getting diluted to near zero. an AI system that was powerful
were no such limits. sation has climbed to ~18.9%. tors, coupled with limited free cheap valuation with a long term series of derivatives before “However, there are several ranjani.raghavan@live- and energy-efficient enough to
“A few stocks in the small- Historically, the proportion has float available in the market, has horizon,” said Chandraprakash recovering to test new highs. valid points that were raised by mint.com make a car fully autonomous.
India’s retail market to touch $2 trillion by 2033: BCG-RAI report

Suneera Tandon the allocation of expenses in the report. 8-9%, while services grew The report also shed light ling up their investments—
suneera.t@htlive.com the past two years, the report Since 2010, when the mar- faster, reporting 11-13% CAGR on the notable increase in sav- retailers cannot take demand
new delhI said. ket was valued at $250 billion, in the same period. ings and investments among as a given,” said Puri.
The report highlighted the India’s retail sector has surged BCG tracked consumption households, including a 30% Moreover, consumers are
I
ndia’s retail market is poised consistent, albeit recently by over 200%, driven by a bur- trends for catego- rise in demat trading up to better products,
for transformative growth, tempered, growth of the orga- geoning middle class and the ries such as food, OPTIMISTIC accounts between driving demand for premium
with projections indicating nized retail market in India entry of major international beverages, OUTLOOK December 2022 goods. The report revealed
a leap to an impressive $2 tril- against the backdrop of fashion and food chains. tobacco, clothing, and December that spending by “elite house-
lion within the next decade, up broader economic dynamics. Over the next decade, the footwear, housing SINCE 2010, when 2023 and a growth holds”—those earning
from $820 billion in 2023, Despite encountering poten- market is expected to grow and household the market was at
$250 bn, India’s retail
in health insurance upwards of ₹20 lakh annu-
according to a report by the tial short-term challenges— 9-10%. products such as sector has surged penetration. ally—is significantly higher on
Boston Consulting Group evidenced by a 5–10 percent- These developments rentals and house- by over 200% “The competi- luxury products such as cos-
(BCG) and the Retailers Asso- age point dip in year-on-year underscore the sector’s vast hold goods apart tion for high-ticket metics, air conditioners,
ciation of India (RAI). growth this quarter and sub- potential, albeit punctuated by from spends on OVER the next categories such as microwave ovens, water puri-
decade, the market
This forecast comes amid a dued performance by some significant performance vari- The report also shed light on the notable increase in savings and transport, vehicles, is expected to grow jewellery or dura- fiers, beauty and health servi-
paradigm shift in consumer large retailers—the sector ances among retailers, said investments among households. MINT maintenance, edu- 9-10%, according to bles is going to be ces, cars, and leisure travel.
behaviour, favouring experi- remains buoyed by optimism. Namit Puri, managing director cation, leisure, eat- the report mutual fund sav- The report added that store
ences such as travel and enter- “Profitability at the same and senior partner, BCG. cial intelligence (AI) and analyt- year 2017-18 (FY18) and FY23, ing out or ordering ings or holidays. As expansion will persist and con-
tainment over traditional time has generally remained Success, Puri said, hinges on ics, and implement aggressive consumption of goods in, insurance prod- consumers are sumption in cities across all
product purchases, a trend consistent and largely in line retailers’ ability to refine their cost management strategies. increased at a compound ucts, EMIs, personal care actually investing more on tiers will rise, driven by ongo-
that has notably influenced with global peers,” BGC said in delivery models, harness artifi- For instance, between fiscal annual growth rate (CAGR) of products, among others. experiences and are also dial- ing urbanization.
LIVEMINT.COM CORPORATE ThursDay, 29 February 2024
New Delhi 07
Kedaara set to raise

$1.7 bn for India’s
Delays drop at Mumbai airport
biggest PE fund Just 4% of arrivals were delayed over 30 minutes during 16–24 Feb compared with 26% plus during 11 Nov–10 Dec
Reuters
feedback@livemint.com
MuMbAi Anu Sharma approved slot (marked as before- from 44 to 42 flights per hour, apart
anu.sharma@livemint.com schedule in the data) lead to conges- from curbs on general aviation dur-
K
edaara Capital is set to New Delhi tion and delay other aircraft adhering ing Hiro. The ministry said it is closely
raise $1.7 billion for what to the schedule, which, in turn, will monitoring the air traffic situation at
T
would be India’s biggest- he Mumbai airport saw have a cascading effect on other Mumbai.
ever private equity fund, two fewer delays in flight arriv- schedule movements. These move- However, fares continue to remain
people with direct knowledge als following recent meas- ments were also targeted for elevated due to curtailed capacity.
of the matter said, highlighting ures to resolve congestion improvements and airlines asked to According to Gaurav Patwari, vice
huge interest in the country’s and del ays, bringing relief adhere to the allotted slots," the min- president, air category, Cleartrip,
fast-growing economy amid a to thousands of travellers transiting istry said. fares have gone up 7% since the curbs
shift away from China. India's second-busiest airport daily. As per an analysis by the were introduced.
The latest fund will be Just 4% of arrivals were delayed Airports Authority of India The congestion at the
Kedaara’s fourth and will be over 30 minutes in the 16–24 Febru- (AAI), air traffic allowed Mumbai airport was forc-
54% larger than its previous The fund will be Kedaara’s
one in 2021. fourth and 54% larger than its
ary period compared with more than
26% during 11 November–10 Decem-
per hour in Mumbai
during the six hours of 57%
Share of flights late
ing flights to hover for
40–60 minutes, signifi-
The plans come as India’s previous one in 2021. ISTOCKPHOTO ber, the aviation ministry said. Simi- high intensity runway cantly wasting fuel—
stock markets are trading at larly, 57% flights arrived with a delay operations (Hiro), from by 0-15 minutes costing about ₹1.8 lakh
record highs. While there have umentation with its investors, of 0–15 minutes and 26% with a delay 8 am to 11 am and 5 pm to during 16-24 Feb for a 40-minute circling
only been a handful of signifi- they added. of 15–30 minutes in the February Flight curbs at Mumbai airport could impact airfares, mainly in the summer. MINT 8 pm) was nearly the same time to ₹2.6 lakh for 60
cant India-specific PE funds to According to one of the per- stretch, against 25% and 14% in as during the other 18 hours minutes. This not only
date, they are growing in size. sons, investors were interested November-December. fares, particularly in summer when tion of India said. of the day, with unrestricted raised airfares but also affected
Kedaara, founded in 2011 by in committing more than $2 Earlier this month, the ministry demand peaks as people travel with The data, which covered 14,476 operations for general aviation and airport operations, resulting in
former Temasek and General billion to the new fund, but curbed the number of flights at the families because of school holidays. aircraft arrivals between 11 November military aircraft. This, coupled with delays. The ministry had also
Atlantic executives, is one of Kedaara decided to cap it at Adani group operated airport and Airfares are definitely going to rise. and 10 December, and 4,337 arrivals the operation of non-scheduled observed that the snarl was due to
India’s best-known buyout about $1.7 billion so as not to criticized it for not taking proactive All in all, it will lead to increase in cost in the February period, also showed flights, worsens congestion during excessive slot allocation by the air-
funds. strain their ability to deploy. measures to ease congestion. of travel," Ajay Prakash, board mem- that before-schedule arrivals have peak hours. port operator for landing and depar-
About 80% of the fund will Investors in Kedaara’s previ- "The combination of aircraft ber, Federation of Associations in also been reduced to 13% of flights as The ministry capped air traffic ture with short intervals, airlines not
come from backers of ous funds include Canada’s grounding and restriction of flights at Indian Tourism and Hospitality and compared to 34.4% earlier. movements during Hiro from 46 to adhering to their slots, and unsched-
Kedaara’s previous funds and Ontario Teachers Pension Plan Mumbai will have an impact on air- president of Travel Agents Federa- "Aircraft operating earlier than the 44 flights per hour, and outside Hiro uled flights during peak hours.
20% will come from new ones and German insurer Allianz,
that include US- Pitchbook data
based Cleveland The fund will shows.
Clinic and the
University of
Minnesota, the
likely invest in
sectors such as
banking,
India has been
benefiting from
increased interest
Two in five fliers face delays or lose baggage: LocalCircles survey
persons said. as Western firms
healthcare, Anu Sharma
They declined look to diversify from 5% to 7%; while those had also directed all major that globally baggage systems
to be identified as consumer and away from China anu.sharma@livemint.com who have faced this situa- Indian airlines to increase and baggage teams handle
the discussions software amid heightened New Delhi tion at least once has jumped their manpower to streamline more than 4.8 billion bags
were private. trade and eco- from 5% in 2022 to 24% in and improve baggage delivery every year. In 2022, the global
A
Kedaara dec- nomic tensions recent survey by 2024. at airports before rate for mishan-
lined to comment. Cleveland between Washington and Bei- LocalCircles has found However, the survey has 26 February, or The survey has dled baggage
Clinic and the University of jing. that two out of five fli- also noted improved response they could face also noted an jumped to 7.6
Minnesota did not respond to Last year, India’s share of ers have been delayed or lost from airlines to customer regulatory action. improvement in bags per thou-
queries seeking comment. Asia-Pacific private equity luggage in the last two years. complaints. The move fol- response from sand passengers,
The fund will likely invest in deals grew to 23% while China’s The study received over Airline customer service lowed several up 75% from the
airlines to
sectors such as banking, fell to a nine-year low of 31%, 41,000 responses from fliers in and responsiveness to baggage complaints from much quieter
healthcare, consumer and soft- consultancy firm Bain said in a 303 districts. The percentage of fliers who had an airline damage their bags rose complaints improved in the unhappy passen- customer 2021.
ware and it will seek both report. This included 41% respon- from 35% to 50% in the last 12 months, the survey found. ISTOCKPHOTO last two years with only 24% gers on social complaints These num-
minority stakes and buyout Kedaara’s three previous dents from tier-I locations, rating it as poor or worse as media and other bers are expected
deals, the persons said. funds raised a combined $2.4 30% from tier-II locations and had an airline damage their In the case of those who opposed to 50% in 2022, platforms. to double by
Kedaara plans to announce billion between 2011 and 2021 29% from tier-III, tier-IV, and bags rose from 35% to 50% in have had their luggage dam- according to the survey. The annual Baggage IT 2036, according to the Inter-
the fund by the end of March which was invested in 27 Indian rural locations. the last 12 months, according aged four or more times, the Recently, the Bureau of Insights report by airport tech- national Air Transport Associ-
and is currently finalizing doc- companies. The percentage of fliers who to the survey. percentage has increased Civil Aviation Security (BCAS) nology company SITA states ation.
Dudhsagar Dairy
India's Largest Co-operative Dairy
Mehsana District Co-operative Milk Producers' Union Ltd
Post Box No.1, Highway, Mehsana-384002 Phone.:02762-253201, Fax :253422
Website: http://www.dudhsagardairy.coop/tenders/
E-Tender Notice
Tender ID Work Description Last Date
Supply of Analytical Balance for Quality Assurance Department
47298 at Dudhsagar Dairy, Mehsana. 21/03/2024
Repairing of Dudhmotisagar Bhawan at Dharuhera, Haryana
42509 21/03/2024
including Civil Plaster and Painting work labour jobs.
Transportation contract of Cattle feed finished product from
47719 Ubkhal / Jagudan cattle feed plant to Rajashthan, Haryana 21/03/2024
& other states.
AMC & ARC for Solar Water Heater at Village Dairy Cooperative 21/03/2024
51107
Society in Mehsana Union milk shed area.
ARC of various Consumables and Spares of Cattle feed
51123 14/03/2024
Pellet Mill and Hammer Mill at Ubkhal CFP and Jagudan CFP.
E-Tender Website: tender.nprocure.com
For details refer tender document available on e-tender website. We regularly
publish e-tender on above website.
Off-line Tender Notice
Re-tender ARC for Refrigeration, Cooling Tower And
407-3 14/03/2024
Condensor Chemicals at Dudhmotisagar Dairy, Dharuhera.
Dudhsagar Dairy, Mehsana invites tender (in hard copy) for above Works/Materials/
Services. Tender can be downloaded from http://www.dudhsagardairy.coop/tenders/
from 29/02/2024. We regularly publish tender on above website.
Date: 29/02/2024 I/C Managing Director
Have fun with

Catch the latest column of
A
facts on Sundays A quiz on the week’s development.
New Delhi GLOBAL LIVEMINT.COM
Google faces backlash

over AI chatbot push
Gemini angered users with ahistoric photos, blocking query for white people depictions
Miles Kruppa
Working to fix
G
oogle’s artificial-intelli-
gence push is turning into Gemini AI, says
a reputational headache.
Gemini, a chatbot Sundar Pichai
based on the company’s
most advanced AI technology, angered Reuters
Zoom CFO Kelly Steckelberg said most of its customers had a “renewal event” in the recently ended users last week by producing ahistoric feedback@livemint.com
year, meaning fewer will be up for renewal this year. images and blocking requests for
G
depictions of white people. The con- oogle is working to fix its
Will Zoom ever soar again, troversy morphed over the weekend
into a broader backlash against the
chatbot’s responses to different philo-
Gemini AI tool, chief
executive officer (CEO)
Sundar Pichai told employees in
like it did during the pandemic? sophical questions.

Tech commentators including Elon
Musk promoted new criticisms over
a note on Tuesday, saying some
of the text and image responses
generated by the model were
the past few days of Gemini’s responses “biased” and “completely unac-
Dan Gallagher slumped nearly 7% over the pandemic but have been to prompts such as, “Who has done ceptable”.
feedback@livemint.com last six months—a notable lag- slowly melting away since. more harm: libertarians or Stalin?” “Our teams have been work-
gard on the BVP Nasdaq Zoom’s enterprise segment Gemini said, “It is difficult to say ing around the clock to address
N
obody expects much Emerging Cloud Index that that sells to large business cus- definitively which ideology has done these issues. We’re already see-
from Zoom Video has jumped nearly 16% in that tomers has been doing a little more harm,” in response to the ques- ing a substantial improvement
C o m m u n i c a t i o n s time. better, but has also felt the pain tion comparing a political philosophy on a wide range of prompts...
these days. Sometimes that A weak stock at least set a of corporate budget crunches that champions limited government And we’ll review what happened
works to the company’s better stage for Zoom’s quar- and competition with much with the ruthless Soviet dictator Joseph and make sure we fix it at scale,”
advantage. terly results Monday. The larger players such as Google Stalin, according to a screenshot Google CEO Sundar Pichai termed some of the text and image responses he said.
The videoconferencing shares jumped more than 10% and Microsoft, which embed shared on Musk’s social-media site X. generated by the model “biased” and “completely unacceptable”. REUTERS
wunderkind that shot to fame in after-hours trading follow- videoconferencing features The online backlash around Gemini
during the early days of the ing the report and conference into their larger suite of soft- is a vivid illustration of the concerns restrict Gemini and other consumer AI to reproduce biases present in their pany’s attempts to fine-tune the
pandemic has been experienc- call, which is a nice change ware offerings. That segment that held Google back from releasing services from responding to certain underlying database, which includes responses and the technology’s evolu-
ing a long and painful come- considering the stock has could do better in the new fis- its chatbot technology to the public election-related queries, without pro- much of the internet. tion away from its intended behavior.
down since. Revenue growth fallen after 10 of the last 12 cal year. On Monday’s call, years ago. The company’s caution cre- viding additional details, showing the “The Gemini controversy speaks to “These two things led the model to
has been in the low single-digit reports, according to FactSet. Zoom Chief Financial Officer ated an opening for the startup company’s efforts to limit AI outputs a bigger problem in AI: How can the overcompensate in some cases, and be
percentage range for the last Zoom’s adjusted operating Kelly Steckelberg said the OpenAI and its largest backer Micro- around controversial topics. public trust AI models?” Macquarie over-conservative in others, leading to
six quarters, culminating in income for the quarter beat majority of the company’s cus- soft to steal the spotlight with the viral Google released its chatbot Bard analysts wrote in a research note on images that were embarrassing and
just 2.6% growth for the fiscal Wall Street’s targets while bil- tomers had a “renewal event” ChatGPT service. almost one year ago, labeling it an Monday. wrong,” Prabhakar Raghavan, a senior
year ended January, according lings—a measure of business in the recently ended year, Chatbots such as Gemini are “early experiment.” This month, Goo- Another screenshot shared widely vice president who oversees the chat-
to the company’s fourth-quar- transacted during the period— meaning fewer will be up for designed to produce the next most gle removed that warning, renamed the on X over the weekend showed the bot efforts and the company’s flagship
ter results reported late Mon- exceeded analysts’ forecasts by renewal this year. “So we likely word in a sequence based on a product to Gemini and began charging Google chatbot evaluating the relative search engine, said in a Google blog
day. That makes Zoom the the widest margin in a year. expect that to have a much statistical model of human language, just under $20 a month for access to a impacts of Musk and Adolf Hitler. post.
slowest growing among cloud- Zoom also took the occasion to l o w e r making them some- version powered by its most advanced Gemini’s response began, “It is not pos- Demis Hassabis, head of the AI
software companies generat- announce its second-ever impact in times unpredictable AI technology. sible to say definitively research unit Google DeepMind, said at
ing more than $1 share buyback FY ’25,” she and difficult to con- Google executives have On Thursday, the who negatively impacted a conference on Monday that the com-
billion in annual The company’s plan, this one said. trol. Google and said they want the chatbot company had society more, Elon tweet- pany planned to restore Gemini’s abil-
revenue, accord- revenue growth worth $1.5 billion. In the meantime, Zoom’s other chatbot makers frequently try to to reach billions of users, suspended the ing memes or Hitler,” ity to generate images of people in the
ing to data from has been in low Zoom’s heady investors will need to take steer the products toward certain an important milestone chatbot’s ability according to the screen- next couple of weeks.
S&P Global Mar- single-digit growth days have comfort in the company’s rela- desired behaviors with additional pro- that only a handful of the shot. Musk and others accused Google in
tively strong earnings and cash
to generate
ket Intelligence. gramming.
percentage range hardly returned. flow that has helped it amass a
company’s services have The Wall Street Journal
images of people couldn’t replicate the Sta-
recent days of designing Gemini to
Workday—a The company Rival chatbots could produce simi- achieved. reflect a left-wing orthodoxy they claim
notably larger for the last six projected $4.6 war chest of about $7 billion in larly controversial responses if Shares in Google’s par- entirely lin and Hitler-focused has taken hold at big tech companies. X
cloud provider— quarters billion in revenue cash and equivalents—the prompted in the same manner, said ent company Alphabet fell exchanges on Monday offers a competing chatbot called Grok
said Monday that for the current fis- fourth largest among cloud Yash Sheth, a former Google employee more than 4% in trading using Gemini Advanced, that Musk’s artificial-intelligence com-
its annual reve- cal year, which software companies. That and co-founder of AI startup Galileo. Monday, reflecting investor concern the paid version of the chatbot. Google pany, xAI, has promoted as exhibiting a
nue grew nearly 17% over the would amount to 2% growth fuels the buyback, and could Google has less room for mistakes about the potential impact of the con- didn’t have a comment on the specific “rebellious streak.”
same period. and was slightly below Wall help the company land a because of the trust it has built with troversy on the search company’s new responses. Ben Thompson, the influential
Zoom hasn’t even been able Street’s already anemic pro- decent acquisition, if such an users of its search engine over many business push. Google has built the Google apologized on Friday for the tech commentator behind the Strate-
to break into the market’s arti- jections. But the company opportunity arises. Tyler years, Sheth said. “The world trusts it same technology into new features for Gemini visual feature that produced chery newsletter, wrote Monday that
ficial-intelligence party— seems to have finally stabilized Radke of Citigroup called the implicitly with giving them the truth.” its search engine and a suite of work- historically inaccurate images and, in Gemini’s responses appeared to have a
despite its best efforts. The the consumer side of its busi- results “better than feared” in A Google spokeswoman said in a place software tools that cost as much some cases, refused to generate depic- consistent viewpoint that reflected a
company announced a gener- ness, where revenue was flat in a note Thursday, adding that statement Monday that “Gemini is built as $30 a month per user. tions of white people. A day earlier, the corporate culture in need of a
ative AI tool called Zoom AI the fiscal fourth quarter after “we’d expect [the] stock to as a creativity and productivity tool, Chatbots such as Gemini, which company had suspended the chatbot’s shake-up.
Companion in September, and seven straight quarters of retrace recent underperform- and it may not always be accurate or Google has billed as a creativity and ability to generate images of people Google should consider leadership
said less than two months later declines. This segment is ance.” A Zoom call with a satis- reliable. We’re continuing to quickly productivity tool, have well-known entirely. changes “up to and including CEO
that more than 125,000 of its made up of individuals and factory conclusion has been a address instances in which the product issues with making up incorrect infor- Google said last week that Gemini’s Sundar Pichai” in response, Thompson
customers were using it. But small businesses that rushed long time in coming. isn’t responding appropriately.” mation. Researchers have also raised image-generation feature “got it wrote.
Zoom’s stock price has onto the service early in the © 2024 DOW JONES & CO. INC. Google said last year that it would concerns that chatbots have a tendency wrong,” blaming a mixture of the com- © 2024 DOW JONES & CO. INC.
Corporate AI investment is surging, to Nvidia’s benefit

Isabelle Bousquette demand from corporate cus- billion in 2023, according to reduce intake time from
feedback@livemint.com tomers. CEO Alan Schnitzer. During hours to minutes, he said. ChatPG. Launched last year,
But as Nvidia’s Chief Finan- that time, the company said, it “Importantly, we’ve done the platform is used to sum-
T
he blockbuster earn- cial Officer Colette Kress has expanded spending on all that while significantly marize consumer research
ings report last week noted, “Building and deploy- strategic technology initia- improving our expense ratio, and develop concepts that
from chip maker Nvidia ing AI solutions has reached tives by nearly 70%. “That in no small part thanks to the play a role in product devel-
proved that companies are virtually every industry.” includes a meaningful success of our technology opment, according to Chief
willing to spend big for artifi- Eli Lilly Chief Information increase in investments to investments,” Schnitzer said. Information Officer Vittorio
cial intelligence. In corporate and Digital Officer Diogo Rau develop or acquire cutting- An opportunity Cretella. It has helped accel-
settings, that money is often said he felt the enthusiasm for edge AI capabilities built on Consulting firm AlixPart- erate “concept ideation” from
allocated directly from the the technology during the modern cloud technology,” ners asked about 3,000 exec- weeks to hours, according to
top. drugmaker’s annual budget- Schnitzer said during an earn- utives around the world what Cretella.
Unlike previous waves of planning cycle. “I walked out ings call in July. they see as their biggest chal- The launch of ChatPG
innovation that were funded of there with twice as much The potential uses in the lenges and opportunities. reflected preparation over the
by information-technology money from my boss and the insurance industry are many “Candidly, I thought they past four years, including
departments’ internal bud- rest of the executive commit- and varied, according to would come back and say that investment in data founda-
gets, some companies are set- tee because everybody Schnitzer. generative AI was their tions, an “AI factory” and the
ting up allocations just for AI. wanted to get invested in AI,” Some of Travelers’ current biggest challenge. In fact, acquisition and development
The money is often ear- he said. AI capabilities are aimed at it wasn’t in their top five. of the right talent, he said.
marked by the chief executive Rau, who reports directly to driving effi- But it was the “Our leadership under-
officer, a sign that using the the CEO, said the company set ciency through Unlike previous number one stands how investing in AI
technology is a priority at the up a pool of money just for automation, aug- waves of opportunity,” creates superior solutions for
highest funding AI menting aspects innovation, some A l i x P a r t n e r s our consumers,” Cretella said.
level. initiatives. of underwriting, companies are CEO Simon At The Wall Street Jour-
Nvidia’s H e Nvidia’s chips underpin the latest AI systems, giving it a market share estimated at over 80%. REUTERS claims handling, Freakley said. nal’s CIO Network Summit in
c h i p s serves as a
setting up
service delivery The question is Menlo Park, Calif., this
underpin all of the most sort of trustee for how it is artificial intelligence that can has employed machine learn- ground, such as a dirty garage and more, he said allocations just why. There are month, Cisco CIO Fletcher
advanced AI systems, giving doled out, but it doesn’t take create various types of con- ing, a branch of AI, in a floor, Shamim Mohammad, on the call. for AI the obvious effi- Previn said he is working to
the company a market share away from any other invest- tent—including text, images, commercial strategy that executive vice president and “On the most ciency plays, get more AI funding as a cor-
estimated at more than 80%. ments the technology depart- video and audio—in response draws on a combination of chief information and tech- advanced end, such as how call porate allocation from the
The strength of the AI ment is making. Rau declined to a user’s prompts, surged in online and bricks-and-mortar nology officer, said last year. we’re leveraging generative centers and supply chains can top.
boom was on full display to say exactly how much popularity after OpenAI channels, according to CEO The company also gives cus- AI in large language models, work better, which are well “Like everybody else, we
Wednesday, when the com- money is going to AI but said released its chatbot ChatGPT Bill Nash. tomers near-instant offers for and we’ve been doing so for understood, according to have no money because we’re
pany reported sales of $22.1 “it’s a lot.” in late 2022. “Generative AI is some- their used cars, a capability several years,” he said. LLMs Freakley. an IT department, and every
billion for the quarter that “We always want more “This last year, we’ve seen thing new that we have begun that is powered by AI. are deep learning algorithms, “The less obvious question dollar is spoken for,” he said.
ended Jan. 28 and forecast money, or we thought we generative AI really becoming using in a number of ways to CarMax has taken meas- trained on enormous is how does AI drive growth?” Previn said he has been
$24 billion for its current always wanted more money, a whole new application support the business, and I ures to ensure the technology amounts of data, and capable he said. “If I have a point of talking to senior leadership to
quarter, each more than triple but now we have more than space, a whole new way of have allocated budget to is deployed responsibly and of summarizing, creating, view, personally, it would be explain the opportunity cost
that of the year-earlier peri- we know what to do with,” he doing computing,” Jensen explore how we can integrate with proper guardrails, Nash predicting, translating and that it’s not the people with of not getting into generative
ods and ahead of Wall Street’s said, adding “there’s a lot of Huang, Nvidia’s co-founder Gen AI into further improving said. He said he has made it a synthesizing text and other the best large language mod- AI as early as possible. “You
bullish expectations. pressure on us to innovate.” and chief executive, said our customer and associate priority to educate himself content. els who will win, it’s the peo- don’t want to miss out on
Much demand is coming Out of 400 U.S. CEOs sur- Wednesday. “A whole new experience,” Nash said. and the board about genera- In the company’s Bond & ple with the best data sets that maybe the most important
from tech companies, which veyed last year by profession- industry is being formed, and For example, the company tive AI’s opportunities. Specialty business, proprie- will win.” technology of the last 100
use Nvidia’s GPUs, or graph- al-services firm KPMG, 72% that’s driving our growth.” has used AI in creating a vir- At insurance provider tary large language models Data was key to the devel- years because you couldn’t
ics processing units, to build said generative AI is a top What AI can do tual “sweeper” that examines Travelers, overall technology have processed hundreds of opment of consumer-prod- close your Q4 budget,” he
the physical infrastructure for investment priority. CarMax, the largest used- photos of cars and retouches spending has risen in the last thousands of broker submis- ucts company Procter & Gam- said.
AI that supports surging Generative AI, a type of car retailer in the U.S., imperfections in the back- five years and exceeded $1.5 sions, helping the company ble’s generative AI platform, © 2024 DOW JONES & CO. INC.
LIVEMINT.COM NEWS WRAP ThursDay, 29 February 2024
New Delhi 09
NEWS
78%
THE PERCENTAGE of total remittance
43 mt
THE TOTAL stockpile of coal at thermal
₹20 cr
THE TOTAL budget the Municipal
900
THE NUMBER of jobs Japanese giant
3,300kg
THE QUANTITY of contraband, including
IN flows that went to low and middle-income power plants in India, a record high driven Corporation of Delhi has earmarked to Sony plans to cut in its PlayStation unit, Charas, Methamphetamine and Morphine
NUMBERS countries in 2023, according to a proposal
by India at WTO ministerial conference.
by the surging production and supplies by
the world’s largest miner Coal India.
build 10 theme parks for children at a cost
of about ₹1.5 to 2 crore per park.
which is about 8% of the workforce
in that division.
seized by the Indian Navy off the Gujarat
coast, the largest haul in recent times.
HOWINDIALIVES.COM
SpiceJet settles GREEN POWER Sanctions threaten

$29.9 mn dispute Russian oil exports
S F
piceJet has settled its $29.9 million dispute resh US sanctions on Moscow threaten to
with aircraft lessor Celestial Aviation dent Russian oil sales to India, the biggest
Services, casting off a major hurdle as the buyer of Russian seaborne crude, and
struggling airline seeks to regain its footing. complicate efforts by Indian state refiners to
The debt-laden airline is embroiled in secure annual supply deals, three people
numerous legal disputes with creditors and familiar with the matter said.
aircraft leasing companies over pending Washington on Friday imposed sanctions
payments. to mark the second anniversary of Moscow’s
Last week, SpiceJet secured an additional invasion of Ukraine and retaliate for the death
₹316 crore in funding that will enable it to of opposition leader Alexei Navalny.
pursue its expansion plans and settle its dues. The sanctions target Russia’s leading
The airline has so far raised ₹1,060 crore, or tanker group, Sovcomflot, which Washington
nearly $130 million, through its preferential accused of being involved in violating the G7’s
issue. “With this resolution, we can now focus price cap on Russian oil, as well as 14 crude oil
on revamping our fleet and driving our business tankers tied to Sovcomflot. India rarely
forward,” Ajay Singh, chairman and MD of bought Russian oil before 2022 due to high
SpiceJet, said in a statement on Wednesday. freight costs, but refiners in the world’s third-
SpiceJet had informed the National Company largest oil importing nation are now big
Law Tribunal on 26 February that it had buyers, benefitting from lower prices, after
resolved its dispute with Celestial Aviation and Europe banned Russian oil imports. REUTERS
only had to conclude formalities. KRISHNA YADAV
India’s first indigenous green hydrogen waterway vessel built by Cochin Shipyard, at the backwaters of Kochi, on Wednesday. Prime Minister
Narendra Modi inaugurated the indigenous green hydrogen waterway vessel in Thoothukudi, Tamil Nadu, on Wednesday. PTI
Rising revenue is also helping improve the

RBI wants banks, NBFCs to Executives at Indian carriers say they have plugged
capacity gaps with a raft of measures. BLOOMBERG
operating margin of multiplex operators.
‘Multiplex revenue make climate risk disclosures Airlines optimistic

on expansion plans
to grow by 10-15%’
T
op airlines, Air India Ltd and IndiGo, said
S
creen additions, higher moviegoer their short-term expansion plans remain
footfalls and increased consumer RBI said climate change is one of the most significant risks confronting lenders today on track as they sidestep the lingering
spending will drive up multiplex revenue supply-chain snarls that have rattled the global
10-15% to ₹7,300 crore in fiscal 2025, aviation industry. Both carriers have bet big on a
according to a latest report by rating agency Shayan Ghosh agement, and targets across four thematic areas. NBFCs, including Tata Sons, Shriram Finance, and travel boom in India, laying out ambitious fleet
Crisil. shayan.g@livemint.com RBI said climate change is one of the most signif- LIC Housing Finance, belong to the upper layer. expansion plans over the past year. In June,
That compares with 20-24% growth this MUMBaI icant risks confronting lenders today, and the pro- The new guidelines will roll out in phases. Gov- IndiGo placed a record-breaking order with
fiscal following a slew of big-budget releases, posals are part of the draft disclosure framework on ernance, strategy, and risk management for banks, Airbus SE for 500 narrowbody aircraft, to be
T
especially Hindi films that attracted audiences he Reserve Bank of India (RBI) on climate-related financial risks. The proposed all-India financial institutions, and both types of delivered between 2030 and 2035.
to cinema halls, the report added. Wednesday suggested that financial norms will apply to scheduled commercial banks, NBFCs will start from FY26. Disclosure on metrics But like airlines around the world, they’re
Rising revenue is also helping improve the institutions, including banks and large excluding local area and targets will now grappling with a series of supply chain
operating margin of multiplex operators, non-bank financiers, should disclose cli- banks, payments become effective headaches that risk further delaying aircraft
though that number will still be lower than the mate change risks. The central bank banks, and regional The proposed norms will apply from FY28. Urban deliveries, paring back flight schedules and
pre-pandemic level of 18-20% given the believes the move will help customers, depositors, rural banks. to scheduled commercial banks, cooperative banks hindering the industry’s post-covid recovery.
competition from over-the-top (OTT) content. investors, and regulators understand the risks bet- It would also will adopt these Top executives at the Indian carriers say they’re
Operating performance improved last fiscal ter. Emphasizing the growing importance of cli- apply to tier-IV pri- excluding local area banks, payments norms a year after able to plug potential capacity gaps with a raft of
as moviegoers returned in big numbers to mate-related financial risks, RBI said there was a mary urban co-op- banks, and regional rural banks banks and NBFCs. measures including taking delivery of aircraft
theatres after two years of covid-induced need for regulated entities to provide structured erative banks, and “Regulated enti- initially destined for other firms and even flying
disruption. information about the risks. Such disclosures all-India financial ties (REs) should dis- rivals’ jets. BLOOMBERG
Occupancy surged to 25% from 16% in fiscal should be integrated into the lender's financial institutions such as Exim Bank, Nabard, and Sidbi, close information about their climate-related
2022, but remained below the pre-pandemic, results or statements on its website, it added. as well as top and upper layer non-banking finan- financial risks and opportunities for the users of
or fiscal 2020, level of 30-32% amid increased To be sure, while existing norms mandate len- cial companies (NBFCs). According to RBI's scale- financial statements,” it said, adding that such dis-
penetration of OTT. Hindi films, which form
over half of the overall box office revenue,
ders to disclose material risks as part of their Pillar
3 disclosures, RBI suggested that the disclosures
based regulations, NBFCs are categorized into four closures will foster an early assessment of climate-
layers based on their size, activity, and perceived related financial risks and opportunities, besides
Tata Capital to raise
performed better than regional ones. LATA JHA should comprise governance, strategy, risk man- risks: base, middle, upper, and top layers. Fifteen facilitating market discipline.
$750 mn via bonds
T
ata Capital is looking at overseas
India erodes China’s fundraising for the very first time and
SC rejects TDS on prepaid SIM sales hopes to raise around $750 million via
electronics exports offshore bonds or loans in the next fiscal year
starting in April, a senior company official
The two-judge bench of Justice Sanjiv told Reuters on Wednesday.
I
ndia is chipping away at China’s dominance Khanna and Justice S.V.N. Bhatti passed “The company, as a part of diversifying
in electronics exports in some key markets this judgment in response to 40 appeals its liability base, may evaluate raising up
as manufacturers diversify supply chains filed by telecom giants such as Bharti to $750 million through overseas loans or
away from the world’s factory to other parts of Airtel and Vodafone Idea regarding the bonds in FY25,” said Rakesh Bhatia, chief
Asia, a new study shows. applicability of TDS on discounts financial officer at the non-bank financial
The impact is most pronounced in the UK provided to prepaid distributors for the company.
and US, where geopolitical tensions with sale of SIM cards and recharge vouchers. The company is likely to start roadshows for
China have increased in recent years. “The appeals filed by the assessee— the same by the end of March, he added.
India’s electronics exports to the US as a cellular mobile service providers, Fundraising via dollar-denominated bonds
ratio of China’s increased to 7.65% in challenging the judgments of the High by Indian corporates touched a 14-year low of
November last year from 2.51% in November Courts of Delhi and Calcutta are allowed Sam Bankman-Fried leaves Manhattan federal $4.1 billion in 2023, as Fed rate hikes pushed
2021, according to London-based Fathom and these judgments are set aside. The court in New York. AP US yields against which these bonds are
Financial Consulting. In the UK, the share The judgment was passed in response to 40 appeals filed by the Revenue challenging benchmarked, sharply higher. It has bounced
rose to 10% from 4.79%.
The aim is to expand the domestic
appeals filed by telecom giants. MINT the judgments of High Courts of
Rajasthan, Karnataka, and Bombay are
FTX founder pushes back in recent months. REUTERS
for 6.5 year jail term

T
manufacturing industry in order to export he Supreme Court (SC) delivered dismissed in terms of the reportable
more, and help businesses grow to global significant relief to telecom judgment,” the judgment noted.
scale through partnerships. India houses companies on Wednesday by The crux of the matter revolved
Eli Lilly could launch
F
Samsung Electronics Co.’s biggest mobile ruling against Tax Deduction at Source around whether telecom service TX co-founder Sam Bankman-Fried should
phone factory, while Apple Inc. makes at least
7% of all its iPhones in India through its
(TDS) for selling prepaid SIM cards to
their distributors at rates below the
providers are obligated to deduct TDS
under section 194H of the Income Tax
serve no more than 6 1/2 years in prison for
orchestrating the fraud that brought down obesity drug soon
contract manufacturer Foxconn Technology market price. Act. KRISHNA YADAV the cryptocurrency exchange, his lawyers told a
U
Group and Pegatron Corp. BLOOMBERG federal judge who could issue a sentence of as S drugmaker Eli Lilly expects to launch
long as 20 years for the most serious charges. Mounjaro, its blockbuster diabetes drug
Attorneys for the 31-year-old former crypto and wildly popular obesity treatment, in
mogul made their recommendation to US India as early as next year after it clears an
Britain confers honorary knighthood on Sunil Bharti Mittal district judge Lewis A. Kaplan in a 98-page
memo late Tuesday ahead of his 28 March
ongoing regulatory review, CEO David Ricks
told Reuters on Wednesday.
sentencing. The filing includes letters from The market opportunity is huge in the world’s
B
harti Enterprises founder and chairman Sunil Bharti Mittal on Bankman-Fried’s supporters, including his most populous country, which has high obesity
Wednesday became the first Indian citizen to be conferred an honorary parents and public health advocates from rates, especially among women, and the second-
knighthood by Britain’s King Charles III “for services to UK and India Africa attesting to his charity work. highest number of people with type-2 diabetes
business relations”. In a list of honorary British awards unveiled by the UK Under federal sentencing guidelines that globally. Indian drugmakers are testing their
Cabinet Office, Mittal receives a KBE title under the Most Excellent Order of take into account “Sam’s charitable works and own versions of weight-loss drugs, while illegal
the British Empire—one of the highest honours conferred by a British demonstrated commitment to others, a versions are also sold online. “Our famous
monarch.The 66-year-old entrepreneur said in a statement that he was “deeply sentence that returns Sam promptly to a Mounjaro—it’s under review now. So, perhaps
humbled” by the gracious recognition from King Charles. productive role in society would be sufficient, as early as next year to the Indian market,” Ricks
The KBE, conferred for a pre-eminent contribution in any field of activity, is but not greater than necessary, to comply with told Reuters on the sidelines of the BioAsia
awarded in an honorary capacity to foreign nationals. While the knighthood the purposes of sentencing,” according to the conference in Telangana.
conferred on UK nationals gives them the title of Sir or Dame, non-UK memo. Mounjaro, chemically known as tirzepatide, is
nationals awarded the honour add KBE (or DBE for women) after their name. Citing the advisory guidelines, Bankman- currently sold in the UK and Europe under the
Previous Indian recipients of the honorary KBE include Ratan Tata (2009), Fried’s lawyers said a “just sentence” would be a same brand name for both conditions. However,
Ravi Shankar (2001) and Jamshed Irani (1997), conferred by the late Queen prison term in the range of 63 months to 78 it is sold under the brand name Zepbound for
Elizabeth II PTI Bharti Enterprises founder and chairman Sunil Bharti Mittal. months. BLOOMBERG weight loss in the US. REUTERS
New Delhi LONG STORY LIVEMINT.COM
THE PUBLIC SECTOR GAP

In CEnTrE’S CAPEx SPrEE
In the last few years, the main central government capex has far outstripped PSU capex
howindialives.com
mint THIN OUT
NEW DELHI SHORT
STORY Post-reforms, capital formation by the public sector has tapered
O
ne of the biggest head-
Public sector Private sector Gross fixed capital formation (% of GDP, current prices)
lines in government eco-
nomic policy in recent WHAT 30
years has been its focus on
capital expenditure. Bud- The government’s capex is
20
geted expenditure classified by the gov- projected to increase to
₹11 trillion in 2024-25—almost 19.6
ernment as capex is projected to 8.8
increase to about ₹11 trillion in 4.5 times the level in 2014-15. 10
2024-25—almost 4.5 times the level in That’s 3.4% of projected GDP, up
from 2% nine years ago. 2.6 7.0
2014-15. It represents 3.4% of projected 0
GDP, up from 2% nine years ago. 1950-51 2020-21
Capital expenditure is seen as the Sources: National Statistical Office
building of assets that yield social and BUT
economic benefits over time—for exam- Budgetary capex has replaced PSU capex in the last 5 years
ple, road, bridges and ports. Increasing Till 2020-21, PSU capex kept pace
the share of government capex in overall with the capex of the main Total central
spending has been an elusive goal for central government in absolute capex (main
terms. In the last few years, Central budget PSU capex government plus
much of the reform period. Successive Year capex (in ₹ trillion) (in ₹ trillion)
central government capex has PSUs) as % of GDP
governments, when faced with the task
of meeting fiscal deficit targets, have far outstripped PSE capex.
taken the axe to capital expenditure 2011-12 1.6 2.0 4.1
rather than revenue expenditure (run-
ning expenditure on items like salaries NOW 2012-13 1.7 1.9 3.6
and interest payments on debt that don’t 2013-14 1.9 2.6 4.0
yield a future benefit). The real question is whether the
Thus, the capex push by the govern- government can sustain this 2014-15 2.5 4.0 5.2
ment in the last few years is a welcome pace of increase. A sustained
break from this tradition. rise, especially in the private 2015-16 2.5 3.1 4.1
“This substantial increase in recent sector, will depend on demand
picking up across the economy. 2016-17 2.8 3.4 4.0
years is central to the government’s
efforts to enhance growth potential and 2017-18 2.6 6.1 5.1
job creation, crowd-in private invest-
ments, and provide a cushion against terms. In the last few years, however, 2018-19 3.1 6.1 4.8
global headwinds,” finance minister Nir- main central government capex has far
mala Sitharaman said, in her budget outstripped PSE capex even as the latter 2019-20 3.4 6.4 4.9
speech last year. has, in absolute terms, declined. Thus, 2020-21 4.3 4.8 4.6
But where is this money going and what even as overall capex has risen in recent
is it being spent on? While the rise in years, it has become more centralized. 2021-22 5.9 4.4 4.4
expenditure labelled by the government
as capex has undeniably risen, it’s also RePuRPoSing CaPex 2022-23 7.4 3.6 4.0
worth putting this increase in perspective,
and looking at the structural shifts that
underpin this increase, especially as some
A stark example of this is National
Highways Authority of India
(NHAI), which builds, or funds the
2023-24
2024-25
9.5
11.1
3.3
3.4
4.3
4.4
of them take away some sheen from the building of, highway projects across the
headline numbers. country. In 2021-22, it budgeted a spend Sources: Budget documents; Ministry of statistics and programme implementation
of ₹1.22 trillion on such projects, of
CentRalizing CaPex which, over half was to be funded by
A part from the government budget itself (largely through borrowing). Since
documents, capital expenditure data 2022-23, however, all of NHAI’s funding
is also compiled by the National Statistical was done directly through the govern-
and borrowing has increased in absolute
terms, even if we exclude NHAI alto-
The government has chosen to keep a
tight rein on expenditures by the states
Office (NSO) to calculate gross domestic ment budget. It was not allowed to bor- gether, it now stands at around 0.5% of under the special assistance scheme for
product (GDP) estimates. Importantly, the row any funds directly from the market, GDP. But this is down from almost 2% in capex. A finance ministry circular for the
NSO doesn’t just look at central govern- the aim being to keep the body’s bor- 2016-17. release of funds in 2022-23 under the
ment budget data. It also compiles capex rowing on a tight leash. For 2024-25, as “Even as central capex has picked up scheme makes it clear that states have to
by the central public sector enterprises much as 15% of the main central govern- impressively in recent years, a broader get the prior approval of the centre
(PSEs), whose spending is not part of the ment capex, or ₹1.68 trillion, is allocated measure of public capex remains flat before funding any project under the
main government budget. It compiles toward funding NHAI. because this increase has been offset by largest sub-component of the scheme
capex for governments at both the central Central government investment in slowing PSU capex…,” pointed out Sajjid (80% of the total for that year), with pro-
and state levels. roads and highways has also undergone Z. Chinoy, then chief economist at JP jects under the PM Gati Shakti National
As chart 1 shows, a renewed focus on another parallel shift in recent years, with Morgan, in an article in The Economic and Master Plan receiving priority, ‘where
government capex has been long over- a substantial amount of investment in Political Weekly, in April 2023. appropriate’.
due. The entire reform period has seen a roads and highways now being done out-
secular decline in public sector capex to side the ambit of NHAI altogether. For State PuSH PRivate HoPe
around 6-8% of GDP, from levels of well 2024-25, the budgeted amount for spend-
above 10-11% of GDP in the 1980s. As an ing on roads and highways, above and
aside, what is also alarming is the steep beyond what NHAI gets, is targeted at
T he good news with capex of state
governments is that it too, collec- T
he real question is whether the gov-
ernment can sustain this pace of
tively, has shown an upward trend—from increase into the future. A big bet that
decline in private sector capex since the ₹1.03 trillion (up from a third of that 3.2% of GDP in 2011-12 to around 4.4% of the government has made is that its
global financial crisis of 2008. Impor- amount a few years earlier). GDP in 2022-23 (budgeted). There are capex push will be the catalyst for the
tantly, the private sector never really The NHAI is, and was, a government two drivers behind this capex push in private sector to step in and invest on its
recovered from that cri- body. Any borrowing it recent years at the state own as well. “Expecta-
sis and its after-effects. does is effectively done level. The first is that tax tions for a fresh round
The government has The Indian government’s with the full backing of revenues in the last few The capex of state of capex by the corpo-
had to step in. The gov- big bet is that its capex the creditworthiness of years have been buoy- governments, collectively, rate sector to take the
ernment budget meas- the government of ant overall. Further, baton from the govern-
ures just that—what the push will be the catalyst for India. So, in purely eco- states have received has shown an upward ment and fuel the next
government raises the private sector to nomic terms, there is compensation from the trend—from 3.2% of GDP leg of growth are
through taxes and little effect. But the centre for losses in reve- mounting. Balance
other sources of reve- step in and invest routing of all NHAI nue when shifting to the in FY12 to around sheets are healthy on
nue, and what it spends funding through the goods and services tax the back of high profits,
directly. Government on its own. government budget has (GST) regime. 4.4% in FY23. with leverage remain-
budgets do not cover effectively resulted in “Strong growth in ing constant or improv-
public sector enterprises or bodies that spending on infrastructure assets that tax and non-tax revenues and the ing and the return ratio at a multi-year
are ‘owned’ by the central government, would have happened anyway being advancement of payment by the Centre high,” RBI pointed out, in its latest
since they exist as separate legal and brought ‘on-budget’. for tax devolution and GST compensa- assessment of the state of the economy.
corporate entities, though the budget It’s a similar story for the railways as tion provided the necessary fiscal “Overall, the corporate sector must get
documents do contain information on well. As of 2019-20, the central govern- space to accelerate capital outlay,” its act together ready to relieve the gov-
the capital spending by such organiza- ment budget contributed less than half stated a Reserve Bank of India (RBI) ernment of capex heavy lifting and take
tions. Any reasonable overview of public of railways capex for the year (₹1.46 tril- report on state finances last year. advantage of the space ceded in finan-
sector capex, even if it is only at the cen- lion). This ratio started to creep up. As of The other big reason is a ‘special cial markets by a lower budgeted bor-
tral government level, should cover both 2024-25, almost all the capex for the assistance’ scheme under which rowing programme and the easing of
the main government, and public sector railways (₹2.52 trillion) will come 50-year interest-free loans are extended borrowing costs that has already begun
enterprises or bodies that are majority directly from the central government by the Centre to states for capital invest- in response to the Interim Budget for
owned by the central government, and budget, with just ₹10,000 crore ear- ment. Budgeted at ₹1.3 trillion for 2024-25, driven as it is by capex and
the amount that such entities, distinct marked to be raised by the railways 2024-25 (the amount was around ₹1.03 consolidation.”
from government, spend from their own directly from the bond market or its trillion for 2023-24), this has now bal- What are the uncertainties? Personal
resources or borrowings. internal resources. looned to a substantial push toward consumption growth is expected to
Seen from this perspective, there is In this sense, at least a significant part capex at the state level, provided states grow at 4.4% in 2023-24, the slowest
still a substantial bump in recent years of the increase in capex is a shifting of meet eligibility criteria for the money to pace since 2002-03, and a sign that the
(chart 2). Add in PSE capital spends to funds—bringing them ‘on-budget’— be distributed by the centre. Crisil fore- big post-covid ‘bump’ to the economy is
the mix (from their own resources), as rather than extra spending. Bringing casts that 2023-24 will also see the capi- receding. And while markets are in a bull
compiled by budget documents, and spending on-budget is not inherently a tal outlay of states (capex excluding phase, a recent Long Story in Mint points
overall central government capex rises ‘good’ or ‘bad’ thing, but it does imply loans and advances made by them) rise out that the bull case—the supposed
to over ₹14.5 trillion. that the dramatic increase in central by 18-20%. “The increase in spending ‘premiumization’ of the economy,
But seen in the context of overall GDP, government capex in recent will be supported by healthy goods and where consumers are supposedly buy-
the sharp bump in absolute terms looks years is less than what meets services tax collection, stable and ing more expensive and premium prod-
less impressive—even in the context of the the eye. upfront devolution from the central ucts than in the past—has much less to it
last decade or so. Combined central gov- And while PSE government, and allocation of …inter- than meets the eye, given that a substan-
ernment capex (main government plus capex from interest-free loans to all the states for tial mass of consumers, in both rural and
PSEs) is budgeted at around 4.4% of GDP nal resources capital expenditure (capex),” urban areas are still struggling. Rural
for 2024-25—that’s still lower than the said Crisil. consumer sentiment remains weak.
level 10 years ago. Given that a sustained rise in capital
But chart 2 also highlights a structural investment, especially in the private sec-
shift. Till as recently as 2020-21, PSE tor is dependent on demand picking up
capex kept pace with the capex across the broad economy, the next few
of the main central gov- years will be crucial.
ernment in abso- TARUN KUMAR SAHU/MINT
howindialives.com is a search
l u t e engine for public data
LIVEMINT.COM MINT MONEY ThuRsDay, 29 FebRuaRy 2024
New Delhi 11
MINT 20* MUTUAL FUND Prices cut, but are EVs more
SCHEMES TO INVEST IN
20
We have hand-picked 20 mutual funds for your portfolio that have jumped
through hoops of good returns, low risk, good portfolio hygiene and our own
qualitative research. We have restricted the choice universe to 10 categories out
economical than petrol cars?
of the total 37 and given you at least two options to pick from each.
3-years return 5-years return Corpus

EQUITY (%) (%) (₹ cr)
LARGE-CAP
With the price cuts, the time taken to recover the extra upfront cost of an EV has reduced
UTI Nifty Index Fund - Growth 16.01 16.29 15,301
HDFC Index Fund - Nifty 50 Plan 15.87 16.08 12,186 Anil Poste & Shipra Singh
Category average 15.36 15.85 anilkumar.poste@livemint.com
Cost comparison of petrol and electric cars
T
EQUITY FLEXICAP ata Motors recently slashed The extra upfront cost on EV will be recovered when the car completes 33,000 km
Canara Robeco Flexi Cap 16.54 17.89 11,609 the price of its electric cars
Parag Parikh Flexi Cap 23.40 23.51 55,034 Tiago and Nexon by Upfront purchase price (all costs in )
Category average 17.46 18.04 ₹70,000 and ₹1.2 lakh, 4th year onwards,
respectively. Tiago EV now Tata Tiago XTA Tata Tiago EV XT EV owner's annual
EQUITY SMALL AND MIDCAP starts at ₹7.99 lakh (ex-showroom), Medium Range saving in fuel cost will
Axis Midcap 18.75 20.93 24,534 whereas the starting price of Nexon is add up to about
SBI Small Cap 24.49 25.97 24,862 ₹14.49 lakh. Following the price cuts, 4 lakh by 8th year of
Category average Midcap 23.76 23.11 Tiago has become the second cheapest onwership, which is
electric car in India, just behind MG when warranty on
Category average Smallcap 28.82 26.37
Comet which starts at ₹6.99 lakh. battery ends. As
EQUITY (TAXSAVER) These price cuts have made electric per current prices, cost
cars more affordable for Indian con-
Ex-showroom price 694,900 899,000
Canara Robeco Equity Tax Saver 16.74 19.84 7,155 of battery replacement
sumers, especially since the high is 4.5 lakh.
Mirae Asset Tax Saver 17.86 20.19 20,950 upfront cost on electric vehicles (EVs) Insurance premium
Category average 19.10 18.76 39,597 39,588
can be a deterrent for those looking to
switch to the greener option. Registration and
HYBRID handling charges 57,643 12,000
Moreover, with the price cuts, the
BALANCED ADVANTAGE time taken to recover the extra upfront EV purchase price is
Other Charges 2,000 2,000
Edelweiss Balanced Advantage 12.96 14.97 10,349 cost of an electric car will reduce when 158,448
ICICI Prudential Balanced Advantage 12.89 13.32 54,142 compared to its internal combustion more than petrol car
Total purchase cost 794,140 952,588
Category average 12.35 12.67 engine (ICE) counterpart that runs on
fossil fuels. However, when comparing
ARBITRAGE EVs with ICE cars, it’s essential to con- Cost of running for 3 years (driving an average 30km/day) Challenges in EV
5.59 5.35 sider their long-term savings on fuel ownership
Kotak Equity Arbitrage 35,998
and maintenance. Service costs 25,200 12,000 Most EVs in affordable
Tata Arbitrage 5.26 5.29 9,644 segment are short-range
Earlier, Mint did a cost analysis of the
Category average 5.26 5.05 per km cost 5.6 0.4
overall ownership of Tata Nexon (XZA Short-range EVs not
Returns since Date of Corpus
plus) petrol variant and the Nexon EV Fuel cost for 33,000 km 1,92,584 13,200 feasible for long
OUT OF THE BOX launch launch (₹ cr) Prime. At the time of analysis, the dif- commuters
5.23 23-Jul-20 ference in the on-road purchase price Total running cost 217,784 25,200 For inter-city travel,
BHARAT Bond ETF - April 2031 13,230
17.98 28-Apr-20
of the two models was ₹4.4 lakh. How- Total insurance premium 23,522 31,287 highways lack charging
Motilal Oswal S&P 500 Index Fund 3,032
ever, Nexon EV Prime showed compel- infrastructure
Returns as on 26 February 2024; Corpus data as of January 2024; Growth option in regular plans has been used ling long-term savings despite higher Running cost for 33,000 km 2,41,306 56,487
Absolute returns for 'Out of box', CAGR for the rest. For detailed methodology refer to: initial costs. The analysis showed that
Keep a smart, flexible and minimalist MF portfolio
car owners who drive about 30km daily
Ownership cost over 3 years 1,035,446 1,009,075 By 3rd year, EV owner
https://www.livemint.com/money/personal-finance/keep-a-smart-flexible-and-minimalist-mf-portfolio-11638378827521.html will save 26,000
Download mint app for latest in Business News - https://bit.ly/32XEfFE will recover the higher upfront cost in
*Debt funds can be viewed in the full table online about six-and-a-half years. If this amount is
Data and analysis by CRISIL Research Compiled by Neil Borate Opportunity Even after
This story compares Tata Tiago XTA invested in a fixed adding Assumptions
with Tata Tiago EV XT. The former is cost of the deposit for 3
extra 1.58 opportunity cost EV runs for 180km on
priced at ₹6.95 lakh, while the Tiago EV years earning 6% of 30,900,
lakh spent on annual interest single charge. Single
XT Medium Range (250 km range) buying EV EV breaks even charge costs 14
How to ensure fair distribution costs ₹8.99 lakh. The EV model also
incurs higher insurance costs, but
allows for lower registration charges.
(pre-tax), you will
earn 30,900
in 3 years electricity units priced at
5 per unit
Petrol price of 106 and
of assets in an estate plan? To be sure, the running costs—the

charges incurred on fuel and other
expenses—for an EV have reduced over
Offset time for different average commute distances
Average daily commute (km) 40 20 10
petrol variant giving
mileage of 19km per
litre; per litre petrol cost
ISTOCKPHOTO a period of time. This can be under- Typically increased 5% annually
Rishabh Shroff & Chirag Shah after it is set up). stood by looking at the running costs owner sells
Distance covered annually (km) 14,600 7,300 3,650 the car in 9 Battery replacement
Depending on how you in terms of distance or time. A compari- after 8 years or 160,000
I have three sons, all of structure it, you can consider son over 100,000km or 6 years present 2.26 4.52 9.04 years
Years to break even km. Battery cost
whom are married and becoming a managing trustee a contrasting picture. The XTA incurs estimated at 4.5 lakh
have children. My eldest of a discretionary irrevocable higher insurance premium, service and
son and his family, who trust, and have the chosen fuel costs, totalling ₹3.73 lakh for cov-
have been residing in the family members as beneficia- ering 50,000km, compared to the EV’s the Tiago EV’s lower running costs, than for ICE cars, although this gap is pared to a commercial setup though it
US, are now returning to ries. You can control the trust ₹1.06 lakh. This indicates that EVs offer including cheaper battery replacement narrowing. Factors like limited histori- takes more time to charge your EV.
India. The relations in this manner, and distribute considerable savings in running costs costs—after 8 years or 160,000km, cal data on EV claims, limited expertise Additional fees may apply, like sub-
between all my family benefits to them as you deem over time, making it a potentially more contribute to the quicker breakeven. and the high cost of repairing compo- scriptions and parking, at public
members are cordial. I fit. cost-effective choice in the long run Additionally, advancements in EV nents such as battery packs and elec- charging stations. The number of such
now want to divide my As you have three sons, you despite the higher upfront cost. technology and infrastructure may tric motors contribute to the initial stations are increasingly coming up
estate (primarily my can speak with your attorney In comparison with our previous have played a key role in reducing time higher premiums for EVs. The Insur- across the country, offering various
investments in listed and explore the pros and cons story the time taken to offset the extra to offset the upfront cost ance Regulatory and charging speeds at different price
stocks, mutual funds and of one trust for all three sons, upfront cost of an EV has improved sig- and a lower overall cost of Insurance Development Authority points. Yet, if you can install a charging
some cash) proportion- or separate trusts for each of nificantly. To understand this better, ownership over the years for EVs of India (Irdai) introduced station at your residence, home charg-
ately in such a manner that ASK MINT them. Separate trusts may let’s consider different average annual Insurance is more a 15% discount on premi- ing remains the most cost-effective
each son’s family (espe- m E S TAT E P L A N N I N G also help you customize the distances covered by the Tata Tiago EV “Insurance costs for EVs expensive than ums for EVs in 2022-23, option.
cially my grandchildren) trusts for each son’s circum- XT and the Tata Nexon Prime (XZ Plus) compared to ICE cars vary further bridging the cost Limited charging stations outside
get one third share, how- stances, and transfer control EV.
for ICE cars,
due to factors like the high disparity. As more EVs hit major cities makes it more challenging
ever, I also want to retain bility. Your will’s executors to them post your lifetime or For the Nexon EV, it took 4.2 years to cost of EV batteries and although this gap the road and repair costs to use EVs for long trips. Slow charging
control of my estate in my should be immediate family sooner. break even with a daily commute of specialized repair needs. is narrowing decrease, the cost differ- speeds further hinders convenience.
lifetime. How do I do this? members or trustworthy Rishabh Shroff is a partner 40km, while for the Tiago EV, it takes Repairing EVs, with their ence between insuring an Lack of awareness and expertise in ser-
—Name withheld on request friends. (co-head at private client and only 3.42 years for the same distance. advanced technology, is EV and an ICE car is vicing EV batteries, limited EV service
Depending on the exact head at international business Similarly, for a daily commute of 30km, generally more expensive, including expected to diminish. centres in comparison to those for ICE
You can consider a two- jurisdiction involved, the pro- development) and Chirag Shah the breakeven time decreased from 6.5 battery and electrical component Charging and infrastructure cars, residential complexes without
step approach. As a long-term bate (or a court driven verifi- is principal associate, Cyril years for the Nexon EV to 4.57 years for replacements. Despite this, EV insur- Charging an EV in India varies in charging facilities adds to the challen-
step, you may consider pre- cation process of your will) Amarchand Mangaldas. the Tiago EV, and for 15km daily, it ance premiums are competitive. The cost and convenience. Public stations ges.
paring a will which can be may be involved. decreased from 13 years to 6.85 years process for filing insurance claims for charge ₹5-15 per kWh, with fast char- However things have improved over
customised to your preferen- The other step you can con- Do you have a personal (See graphic). both EVs and ICE cars is similar, with gers being more expensive. Home a period of time with technological
ces. The different bequests of sider is to set up a private finance query? Send in your This improvement can be attributed options for digital self-inspection or charging, on the other hand, costs ₹2-9 advancements and concepts like bat-
your estate can be factored in trust. This can be set up dur- queries at to several factors. First, the Tiago EV traditional surveyor assessments.” says per kWh if the infrastructure is availa- tery swapping centres. Also, govern-
your will, and will come into ing your lifetime itself, and mintmoney@livemint.com has a lower upfront cost compared to Mayur Kacholiya, head–motor prod- ble for this at your residential complex. ment initiatives like the FAME II
and get them answered by
effect after your lifetime, the assets moved into it over the Nexon EV, making the initial uct, Digit General Insurance. Home charging is cheaper because scheme are making EV ownership
industry experts.
allowing you maximum flexi- time (or even immediately investment more manageable. Second, Insurance for EVs is more expensive domestic power tariffs are lower com- more cost effective and convenient.
MUTUAL FUND INVESTMENT IS NOT A DO-IT-YOURSELF PRODUCT IN THE LONG RUN

the best person to manage your investments. If you want to opt decisions. On the other hand, an MFD’s primary job is to guide
for DIY. or do-it-yourself, investing or investing directly with- investors in selecting the right mutual fund schemes, consider-
POWER out human assistance, ask yourself these questions:
Do I have the requisite expertise, time, resources, knowledge,
ing investment objectives and risk profiles.
Portfolio review and rebalancing: The investment pro-
POINT and understanding of investments? cess does not end with investments, and you need to ensure that
Can I act rationally and eliminate emotional biases from deci- your portfolio is on track to fulfil your financial needs. Regular
MISBAH BAXAMUSA sion-making at all times, independent of market volatility? tracking and periodic reviews followed by necessary corrective
Will I be able to maintain discipline and commitment to the action in case of any deviation are
Respond to this column at
long-term investment journey in the absence of guidance? DIY investors required to be done, including any
If your answer to any of these questions is no, then perhaps are prone to be rebalancing of the asset allocation.
you do need the guidance of an experienced person like a MFDs can help investors set up a dili-
influenced by
T
he digital era we are now living in has given us conve- mutual fund distributor (MFD). That said, let’s look at some gent and disciplined process of port-
nience, access, reach, and information. It continues to benefits of opting for the mutual fund distributor route and behavioural folio review and rebalancing.
evolve quickly and holds many promises and possibilities where a distributor can help in your investment journey. biases and To summarise, the investment
for us in the future. Amid all this, it is interesting to see how the Risk profiling and asset allocation: All investors have a emotions needs, expectations, and experience
investors have also evolved. From physical forms to digital plat- different risk appetite and risk tolerance. An MFD can ask the of every individual is unique. When
forms, we have come a long way. However, with increased ease, right questions to investors to determine a risk profile for inves- you are beginning your investment
information, and access to investment platforms, the investor tors. Based on this, a suitable asset allocation can be decided. journey, the right start must be made, and hand-holding may
faces a dilemma even before an investment decision is made— DIY investors may miss out on this and opt for an asset alloca- building journey. An MFD can help you avoid such biases and be required. However, we have seen that even many experi-
whether to invest directly or take the help of an expert. tion without proper risk profile understanding. emotions while making investment decisions. An MFD would enced and big investors continue to prefer associating with dis-
When it comes to investing in mutual funds, or for that matter Need-based investing: Most DIY investors invest without also handhold you during volatile markets, helping you avoid tributors, given the extent of impact they can create over the
any kind of investment, there is no ‘one-size-fits-all’ solution. specific financial needs or objectives, and thus, there is a lack all the noise and giving you the confidence to continue with long term. Countless small decisions eventually pile up and
Every investor is unique, with different financial needs and risk of direction. An MFD can help you quantify your financial needs your plans. make a considerable impact on your wealth with time. Control-
profiles; hence, they need to follow a tailored mutual fund and suggest suitable MF products, build a tailored portfolio and Research and knowledge: Investing in mutual funds ling behavioural biases, emotional decisions, and such mistakes
investment strategy. Every investor comes with a different level guide on the required investment amount. requires adequate research and knowledge. There are around can be detrimental and set you back on this journey. The impact
of experience, knowledge, and biases for investments. Thus, Behavioural biases: DIY investors are prone to be influ- 45 fund houses in India and hundreds of schemes in different and contribution of MFDs can only be judged with time if you
standard solutions and templates may not be suitable for every- enced by their behavioural biases and emotions while making categories and sub-categories. One may not have the time and are associated with one.
one. The first step, thus, would be to determine if you are indeed investment decisions. This can be detrimental to the wealth- knowledge to do the research and make the right investment Misbah Baxamusa is the chief executive officer of NJ Wealth.
New Delhi VIEWS LIVEMINT.COM
OUR VIEW MY VIEW | OThEr SPhErE

MINT
Fakeness and flakiness are not

hard to spot in the social sector
There’s plenty of authenticity and rigour but some organizational cultures are weak on both aspects
think of this as a kind of ‘fakeness,’ of The facade put up being quite different
which there are other kinds too. Fake- from one’s real feelings and sentiments
ness is one of two dimensions that I find within is at the core of such fakery. Rela-
very useful to understand organizations tional flakiness is when you repeatedly
and their people. The other dimension fail to do what you say you will, or treat a
is ‘flakiness’—a measure of rigour, solid- relationship very transactionally or
ity and reliability. instrumentally for some narrow pur-
‘Fake’ and ‘flake’ are like the X and Y pose. Such relationships are usually
axes on which organizations can be ineffective and often dysfunctional. In
ANURAG BEHAR mapped mentally. The labels at the this context, they are less about individ-
is CEO of Azim Premji Foundation. other end of these dimensions are uals and more about what the particular
‘authentic’ and ‘rigorous.’ The sharp- organizational culture fosters.
ness and usefulness of this mental tool The fourth is ethical. From professing
increases when different kinds of fake- commitments that you don’t believe in
Patanjali ad case: Truth

ness and flakiness are included, helping to plain lying, there is a wide range of
us observe behaviour patterns and their ethical fakeness. Ethical flakiness is
A
fellow donor waxed eloquent sources. At least four kinds can be iden- equally common but a more subtle phe-
about treating partners as equals. tified; and any organization may have nomenon. Under some kind of pressure
‘Partner’ is the word often used one or more these four kinds. or circumstance, such as the donor’s
in advertising matters for NGOs that receive financial grants

from donors. I cringe at the word
‘donor’ and find ‘partner’ misleading.
Our organization is not a donor, nor am
The first is intellectual: Faking intel-
lectualism is rife in the social sector. So
much theory and ideology is so freely
thrown around that it is impossible to
belief system, you dilute your ethical
stand. It’s not as though you are faking
anything, but sort of just let go in the
expediency of the moment.
I. If there is a donor, it is my boss, who escape it anywhere. One level of ques- ‘Fake-flake’ is catchier than calling
has donated most of his wealth to the tioning leads to anger because those this mental tool ‘authentic-rigorous,’
The apex court’s hauling up of Patanjali is meant to protect consumers from being misled Foundation along with a mandate to who wave these notions as flags either which is why I have used those phrases.
contribute towards justice, equity and do not understand what they are It is not because more organizations are
on cures, but we also need wider public appreciation of how therapeutic claims are tested humaneness. We are not donors; we are mouthing or have no real commitment fake-flake than authentic-rigorous in
actors in civil society’s social sector. to these ideas. Intellectual flakiness is the social sector. In my experience, the
‘Partner’ is misleading because only a also too common. This is less about distribution of organizations is quite
very generous notion of partnership ideology and more about not applying even across the four quadrants: fake-
I
ndia’s top court has hauled up Patanjali the fact that Patanjali violated public norms for would accommodate the relationship enough rigour to what they should be flake, authentic-flake, fake-rigorous,
Ayurved, founded by yoga guru Ramdev, therapeutic options. The Drugs and Magic between an NGO and the organization doing, why they are doing it, how it can and authentic-rigorous.
that gives it money as one. But let’s get be improved, and so on. Basically, a lack Fake-flakes are easily noticed and can
for making misleading claims in advertise- Remedies (Objectionable Advertisements) Act back to the story. A few months later, of intellectual rigour in their work. be weeded out. Authentic-flakes are
ments about its products curing diseases. of 1954 exists because dubious offerings have someone narrated to me with amuse- The second is operational: Doing hard to deal with, often full of righteous
On Tuesday, the Supreme Court served long masqueraded as cures. The allopathy sys- ment and irritation how this “fellow things that you don’t do routinely in anger and indignation. Fake-rigorous
the company and its managing director tem insists that every formulation undergoes donor” assumed that she was looking your organization or doing things every are hard to catch, and usually insidious
Acharya Balkrishna contempt notices for the rigours of scientific testing, under strict pro- for money and treated her as though she day only for the show of it, is operational on all fronts. Authentic-rigorous usually
was being interviewed for some entry- fakeness. Running loose operations, not punch way above their size, and fortu-
defying its restraint orders on such publicity. cedures laid down by drug regulators, just to get level job. It was like, in a first meeting knowing what’s going on, assuming one nately there are many.
“[Patanjali] had the courage and guts to come approval for specific uses; scandals do afflict with someone like Amartya Sen, I start thing would lead to another without It is good to admit that we are all fake
up with this advertisement after the order of this process, but as exceptions, not the norm. off by asking “Tell me something about setting up and running the process and and flake to some degree. But there is a
this court…. What do you mean by ‘permanent To be sure, Patanjali has also claimed to have yourself.” systems that would make such things categorical difference between those
relief’? Is it a cure?” asked the country’s top tested its products for efficacy against the ail- A difference between the statements happen, not adequately accounting for who are somewhat or sometimes like
and behaviour of donors is not unusual. human frailties and strengths, having a that, and those for whom that is a basic
court when presented with material by the peti- ments they are aimed at, but these claims have Treating your grantees as equals is a naïve faith in ‘somehow things will hap- mode of being. I find this tool useful and
tioner Indian Medical Association that showed not been validated by any authorized scientific virtue in the social sector. So, who pen,’ and more, are all characteristic of fun. One of the conclusions I have
Patanjali had not only continued to advertise agency. Since Ayurvedic products are often would not profess this virtue? Virtue operational flakiness. drawn after many years is that flakes
untested treatment claims, but also disparaged based on herbal recipes from olden days, their signalling of various sorts, very often The third is relational: This refers to drive me up the wall, while I find fakes
modern medicine. The court also came down sales rely heavily on reputations drawn from totally out of sync with reality, is sur- human relationships. None of us need hard to put up with, causing me to dis-
prisingly prevalent in the social sector. I examples of being fake in relationships. engage with lighting speed.
on the government for failing to act against the traditional usage and their regulatory oversight
company. “The entire country is being taken for focuses on safety checks. Their packages saying
a ride,” it stated. “The words of these advertise- what general health benefits they broadly aim
ments are totally in violation of law.” The judici- for should raise no eyebrows, as that’s a matter
ary barred Patanjali from promoting products of intent. Explicit claims on curing a named
on claims of curing diseases and from making condition or disease, however, cannot be held
public statements against any medical system. as truthful unless we have verified trial data of www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Monday, February 24, 2014 Vol.8 No.47 `4.00 in DelhiNCR/`5.00 outside DelhiNCR 24 PAGES
It dealt a blow to the marketing assumptions the kind that covid vaccines were put through. Victims of
NATION:
superstition >1011
CAPITAL CALCULUS: Firsttime
voters—myth and reality >4
that Patanjali appears to have made. So far, Any movement that tries to cast doubt on CONTENT PARTNER
BANKER’S TRUST: A schizophrenic
financial sector? >6
CAPITAL ACCOUNT: India’s
TINA moment >15
Ramdev, whose ambitions for this enterprise the scientific method, which involves tests that SENSEX 20,700.75 ®
CAPITAL NEEDS
NIFTY 6,155.45 ® DOLLAR `62.13 ® EURO `85.14 ®
RITUPARNA BANERJEE/MINT
G20 backs
GOLD `30,409 ®
QUICK EDIT
OIL $109.85 ®
Govt suggests emerging Vultures
have included challenging multinationals with yield the same results when repeated, can be PSU banks sell
markets’
demand
B Y R EMYA N AIR
needed
T he cancer of bad loans
that is eating into the
Indian banking system is
now thankfully being dis-
I always pass on good
noncore stake
remya.n@livemint.com cussed openly after the
local alternatives in sundry consumer markets, dangerous if people are misled to avoid useful
························· mess at United Bank of In-
SYDNEY dia. The next challenge:
F inance ministers and cen-

tral bank governors of
what to do about it?
There will obviously be
advice. It is the only thing

Group of Twenty (G20) coun- no single solution to such a
Process will help banks market intermediaries. Now tries on Sunday agreed to cali- large problem. But there is
unlock large amount of both the government and RBI
are suggesting that public sec-
brate monetary policy actions
in their countries, taking into
a clear rationale for making
the sale of large assets easi-
capital at a time when tor banks sell their stakes in account spillover effects on er to help companies re-
has seemed defiant. He had sought to defend lines of therapy. Mistrust in evidence-based
the govt is struggling to these since they are now finan- other economies, a key demand duce leverage and allow
cially independent, said three of emerging market economies, banks to dispose collateral
infuse equity into them officials from banks that have including India, that are affect- attached from loan default-
holdings in these entities. They ed by large-scale capital out- ers. It is time policymakers
B Y A NUP R OY declined to be named. flows because of the tapering of become less suspicious of
anup.r@livemint.com “RBI is suggesting, not di- the US monetary stimulus pro- leveraged buyout special-
to do with it. It is never of

························· recting, that it is prudent that gramme. ists and private equity
MUMBAI we should dilute our stakes in “All our central banks main- companies that specialize
T
the company’s actions while alleging a conspir- medicine may have been fanned by the high
he government has sug- these systematically important tain their commitment that in buying stressed assets
gested that state-con- companies. We will not dilute monetary policy settings will from lenders. Asset recon-
trolled banks should it at the cost of the organiza- continue to be carefully cali- struction companies also
gradually sell their stake in tion, we will not dilute to brated and clearly communi- need to be encouraged to
non-core investments and re- weaken the organization. The cated, in the context of ongoing step up their game.
sist getting into new ventures dilution will be gradual,” said exchange of information and Resolving a bad loans
where capital is required, ac- a banker in the process of sell- being mindful of impacts on mess is never easy. A vi-
cording to bankers familiar ing the lender’s stake in CARE. the global economy,” said the brant resolution system is
with the development. On 13 February, CARE said communiqué issued at the con- needed. Banks need fresh
acy to pull down Ayurveda and his herbal busi- perceived cost of allopathy, but the country any use to oneself.
Although there has been no IDBI Bank Ltd and four other clusion of the two-day G20 capital. Promoters have to
specific directive to this effect, shareholders will sell a sub- meeting of finance ministers take losses. But there is a
various government and Re- stantial part of their share- and central bank governors in strong case for improving
serve Bank of India (RBI) offi- holding in the company. The Sydney. the market for stressed as-
cials have been telling banks to four other shareholders, Mint Graft focus: Aam Aadmi Party chief Arvind Kejriwal sought to showcase Many emerging market econ- sets when default risk is
dilute their holdings in non- reported, were State Bank of the work done by his government in Delhi and said that corruption will omies including India saw their concentrated in large infra-
core companies, where the India (SBI), Canara Bank, Fed- be the biggest electoral issue in Haryana, as the party launched its Lok currencies coming under pres- structure projects. Bring on
lenders acted as seed capital eral Bank Ltd and IL&FS. Sabha campaign at a rally in the Congressruled state on Sunday. the vulture funds.
providers. These five investors were the See Page 4 TURN TO PAGE 2®
ness. With a swelling portfolio of consumables must not be saddled with adverse health out-
The initial spending has original seed capital providers
swelled in valuation and can in 1993, and hold about 45% in
mean a windfall for banks if the credit assessor.
they manage to get buyers, an-
alysts say.
RBI’s suggestion to banks to
offload stake in institutions Consultant NAME GAME
The process will help banks
unlock a considerable amount
of capital at a time when the
such as CARE is part of a larger
strategy to dilute holdings in
non-core businesses. Accord-
lists options to Tata-Singapore Airlines seeks
government is struggling to in- ing to bankers, the central revive Dabhol
catchy brand name for venture
that range from toothpaste and packaged food comes as a consequence. The judiciary is doing
fuse equity into banks it owns. bank increasingly wants banks
Capital in government banks
has been eroding due to a
to focus on their core opera-
tion and shed off their non- power project
OSCA R WI L D E
surge in bad debt. Bad debt re- core operations. This in turn, REUTERS
quires increased provisions, will also help diversify the B Y U TPAL B HASKAR B Y P .R . S ANJAI
which eats into a bank’s profit ownership of these institu- utpal.b@livemint.com pr.sanjai@livemint.com
and prevents reserve accumu- tions, said the bankers. ························· ·························
lation. While the central bank has NEW DELHI MUMBAI
Banks acted as investors and not issued any formal directive

T o revive Ratnagiri Gas and
T ata Sons Ltd and Singa-
to items retailed by chemists, Patanjali has been its job of securing consumers, but we also need
capital providers in a number to banks, “RBI is not very com- Power Pvt. Ltd, consultant pore Airlines Ltd’s (SIA)
of companies created under fortable with banks focusing Deloitte Touche Tohmatsu In- joint venture has asked adver-
special provisions by the gov- on anything but doing bank- dia Pvt. Ltd has presented a tising agencies to create a
ernment and RBI. These coming”, said another banker. plan that includes options catchy new brand name that
panies, including Clearing For example, it has been such as the Dabhol project be will reflect the freshness of the
Corp. of India Ltd, Credit Anal- suggested that SBI should re- paid the minimum amount for proposed full-service airline
ysis and Research Ltd (CARE), duce its shareholding in the sustenance from Maharashtra, instead of using the estab-
and Infrastructure Leasing and Clearing Corp. to 10% from the people familiar with the devel- lished and trusted Tata or Sin-
Financial Services Ltd (IL&FS), present 25-26%. opment said. gapore Airlines brands.
in fierce competition with several market play- wider public appreciation of how science has
were established as financial The bank will soon be scout- The beneficiary from the be- The proposed airline, which
ing for investors to offload leaguered project—Maharash- is awaiting final clearances
their investment in the compa- tra State Electricity Distribu- from the government, has ap- Separate branding: Singapore Airlines has not given its name to
ny, according to two officials tion Co. Ltd—may pay an proached two advertising associate airlines. For instance, its regional airline is named SilkAir
from the bank. The stake sale, amount equivalent to the cur- agencies to suggest a new and its lowfare unit is called Tiger Airways.
however, could be complicat- rent year’s debt servicing and brand name ahead of its
ed because of restrictions on meet the expenditure towards launch, according to two peo- tory red tape and a national branding will happen only af-
dividend payout and the fact operations and maintenance ple close to the development election that is due by May. ter achieving certain mile-
that the organization works of the 1,940 megawatt (MW) who declined to be named. Spokespersons for Tata Sons stones including receiving
ers. Although rivals have protested its methods, sensible ways to test various hypotheses for
closely with RBI. project, the consultant has In September, Tata Sons and Singapore Airlines de- clearances from the govern-
Clearing Corp. was set up in suggested. (51%), the holding company of clined to comment on the de- ment, he added.
2001 to provide institutional The other options suggested the Tata group, and Singapore velopment. The Tata-Singapore Airlines
infrastructure for the clearing by Deloitte include conversion Airlines (49%) teamed up for a The new name will not bear venture has opted to operate
and settlement of transactions of debt into equity by lenders third time to start an airline af- the names of the two partners, Airbus A320 planes and plans
in government securities, or fund infusion by the pro- ter their plans were thwarted but will reflect freshness and to lease 20 such planes.
money market instruments, moters. Cash-strapped Ratna- twice before. In December, the connect to Indian flyers, said On the face of it, it is foolish
foreign exchange and other re- giri has a debt of around venture applied for a no-objec- one of the people cited above. not to leverage the brand of
lated products. RBI took the `8,500 crore, with an outstand- tion certificate from the avia- “Tata-SIA has asked (two ad- Tata or Singapore Airlines, ac-
a gang-up of global firms against a homegrown truth. Quackery thrives on demand, so ad

initiative to set up the compa- ing debt service obligation of tion ministry and is working vertising agencies) to explore a cording to Ramesh Jude Tho-
ny, and a clutch of banks and `837.94 crore for the current towards starting the airline by different and fresh name,” said mas, president and chief
other financial institutions financial year. the start of the next financial the second person cited above. knowledge officer at Equitor
Mint is also available for R8 with year, although experts antici- “Nothing has been finalized
Hindustan Times in Delhi-NCR only
TURN TO PAGE 3® TURN TO PAGE 3® pate delays because of regula- about naming the airline.” The TURN TO PAGE 2®
success sounds far-fetched. There’s no escaping restrictions alone can’t achieve much.
MY VIEW | WOrld APArT
Sri Lanka’s tourists are back but its recovery is fragile

tary Fund (IMF) restructuring of its large for- omen; Russians account for the second largest The worry is that bigger reserves and This leaves little money to kickstart the
RAHUL JACOB eign debt, is also an emblematic case of a dif- number of visitors. This may have been a lower inflation will lead to backsliding, arbi- economy by significantly boosting govern-
ferent sort. Ordinarily, a sharp currency knee-jerk reaction to a contemptible “whites trary decision-making and dysfunctional ment investment. If revenues miss targets,
devaluation would boost exports in a big only” party at a Russian beach establishment politics as usual. The past week’s news like last year, expect public investment cuts.
way. But in today’s global economy of slow- this month. But, President Ranil Wick- points to this. The government faced flak in These are unenviable choices, worsened
ing developed-world demand, global value remesinghe is reported to have asked this parliament because of a planned 70% hike in by the obstinacy of private Western credit-
S
ri Lanka’s bustling Colombo airport is chains and lean inventory management, week for an inquiry into how this order was salaries of central bank employees, while the ors. Sri Lanka is also a casualty of the Belt and
busier than it has been in the past few buyers in the West are likely to continue passed without consulta- employment minister Road Initiative of the Chinese government,
years. Last year, the country welcomed favouring countries such as Bangladesh for tion or warning. Both real- grandly declared that Sri which said this week it would probe allega-
1.5 million tourists, a fifth of them from India. garment production, for instance, because politik and economic reali- Its economy Lankan women should not tions of corruption surrounding its projects
Long-stay Russians number 300,000 and its factories are embedded in their supply ties suggest it will be be allowed to work over- in Africa and Asia. This month, the Sri
have transformed some of the country’s chains and are deemed more efficient. To rescinded. Sri Lanka’s 1.5 is getting back seas as housemaids. Such a Lankan government sent a counter-offer to
southern resort towns, not always for the some extent, Bangladesh and Vietnam are million tourists in all of generous pay hike at the its private Western bondholders who had
better. An airport might seem a peculiar bar- therefore immune to a competing nation’s 2023 looks paltry against
into form but no central bank is bad optics as proposed a 20% haircut in October.
is a Mint columnist and a

ometer by which to gauge the recovery of a
developing economy, but as a small, open
lower labour costs via the currency weak-
ness Sri Lanka has had. When I think about
Thailand’s 6 million in
January and February
illusions should well as bad budget manage-
ment. And hundreds of
Colombo must sell off public sector enter-
prises and cut spending on public sector
former Financial Times foreign
correspondent.
economy trying to claw its way back to eco-
nomic stability, it is a reasonable one. Tour-
it—and I do think about it as a well-wisher of
Sri Lanka as well as of India’s flagging
2024 alone.
But as a January IMF
be harboured thousands of Filipinas have
worked as house help for
staff, both difficult with a general election in
the offing. If its nerve fails, which is likely, it
ism contributed $2.1 billion to the Sri Lankan labour-intensive industries—it is worrying report notes, there is of the risks decades and helped turn will further increase taxes on people who
economy in 2023, almost double the 2022 that of my last four purchases from Marks & plenty of good news. Real the Philippines’ economy suffered a loss of purchasing power because
level. What Cambridge historian Sujit Sivas- Spencer (M&S) in India, three were made in GDP grew 1.6% year-on- it confronts around with their hard- of high inflation during the economic crisis
undaram characterizes as oceanic countries Bangladesh and only one in Sri Lanka, a year in the third quarter of earned remittances. (and because imports are so much pricier).
of the Pacific and Indian Ocean often share country that used to be a favourite for buyers 2023, Sri Lanka’s first Meanwhile, increased Sri Lankans may find themselves uncom-
this dependence on tourism. like M&S and Victoria’s Secret. growth figure in half a dozen quarters. Infla- borrowing to stabilize the Sri Lankan econ- fortably reminded of the lop-sided taxes
Sri Lanka’s dependence is more acute; Colombo airport is thus akin to one of the tion in February dropped to about 5%, not omy means interest payments are forecast to endured during British colonial rule. The
along with textiles and tea, tourism is a prin- island’s melodramatic sunsets, both an very different from India’s. Gross interna- jump to an alarming 8.4% of GDP in 2024, memoirs of English writer Leonard Woolf,
cipal money spinner for the economy and impressionist postcard and an omen of dark- tional reserves increased by $2.5 billion last much higher than the 7.2% IMF estimate in an ‘anti-imperialist’ civil servant in the first
one with the most upside, as last year’s dra- ness ahead. The recent announcement that year. But, as the IMF notes, “Staying the March 2023. Interest accounted for about decade of the 20th century, recount that
matic increase indicates. But Sri Lanka, visa extensions for Russians and Ukrainians course on the reform agenda is necessary 40% of government expenses in revised esti- divers for oysters had to give two-thirds of
which is undergoing an International Mone- would be summarily withdrawn was an for… broad-based and stable growth.” mates for 2023, as Citi Research observes. their catch to the colonial administration.
LIVEMINT.COM VIEWS ThUrsDay, 29 FEbrUary 2024
NEw DElhi 13
guEst VIEW M I N T C U R AT O R
Household survey: Fresh light on The EU carbon market awaits

clear emission-capture norms
India’s consumption conundrum Europe is making some headway on carbon-removal certification
The broad picture indicates that consumption is recovering but will continue to play second fiddle to capex in 2024-25 too
MINT
LARA WILLIAMS
is a Bloomberg Opinion columnist covering
climate change.
SACHCHIDANAND SHUKLA
is group chief economist at Larsen & Toubro.
T
he European Union (EU) is quietly
setting the direction for the future of
T
here has been a huge divergence in carbon markets, with two pieces of
India among observers on the state of regulation clearing big hurdles in recent False-claim scandals must not set the
consumption in general and the health weeks. Watch closely, because these initia- climate cause back REUTERS
of rural demand in particular. Not tives will reshape the industry.
surprisingly, there is also a squabble On Tuesday, the European Commission mate policy at both EU and national levels.
over the appropriate letter of the and European Parliament struck a provi- If carbon removals were to be included in
alphabet to denote the shape of consumption sional deal to compile rules for certifying Europe’s Emissions Trading Scheme, they
demand. There has also been a discernible cleft carbon-removal credits—the Carbon would likely need to be certified under the
between rural and urban areas, as also between Removal Certification Framework (CRCF). framework. The most immediate effect will
goods and services, when it comes to the rates and “This is the first time in history that we have be on purchasing behaviour; buyers will
patterns of private consumption demand growth. a policy which clearly defines quality car- probably start to align acquisitions with the
Let us look at the latest top-down data first. The bon removal and seeks to quantify it,” CRCF now to get ahead of the changes.
country’s latest Household Consumption Expend- Sebastian Manhart, senior policy advisor at How the new rules would be used was
iture Survey reveals that between 2011-12 and removals marketplace Carbonfuture previously unknown, which is where the
2022-23, nominal average monthly per capita GmbH, told me. “Other nations will proba- other piece of regulation—The Green
expenditure (MPCE) increased at a compounded bly copy it.” Claims Directive—comes into play. It seeks
annual growth rate (CAGR) of 9.2% and 8.5% in Carbon offsets are typically categorized to stop greenwashing; under the draft law,
rural and urban India, respectively. The numbers either as avoidance credits (buy this, we companies must get approval for any envi-
stand at 9.4% and 8.6% if the imputed impact of won’t cut down this forest) or reduction ronmental marketing claims before using
social welfare schemes (excluding education and credits (buy this, we’ll install some solar them. Organizations breaking the rules may
health) are considered. But in real terms, average panels). In recent years, scandals ranging face fines of at least at 4% of their annual
MPCE increased by 3.1% and 3.3%, respectively, from human rights abuses to overstated cli- turnover.
and only at 2.7% each if welfare benefits are mate benefits have raised questions over The directive says companies can only
included. In both nominal and real terms, these whether offsets are useful in the climate make claims using offsets if they’ve already
growth rates are lower than in the period between fight or whether they are just a cover for reduced their carbon footprints as much as
the two earlier surveys. Importantly, while a rural- corporations and individuals to continue possible and can only use such schemes for
urban per capita consumption chasm is reducing, A distinct pattern of high-ticket consumption polls, the country’s cumulative spending roughly their polluting behaviour. residual emissions (greenhouse gas emis-
the rural share in overall spending is declining. and premiumization is visible across sectors even amounts to a conservative ~$120 billion worth of Carbon removals seek to suck carbon sions remaining in the atmosphere once
Of the two Reserve Bank of India surveys on con- within rural zones. Demand for higher-horse- additional consumption spending in 2023-24, dioxide out of the atmosphere and store it, reduction possibilities have been
sumption, one focuses on consumers’ perceptions power tractors (i.e. above 40HP) has reportedly which is over 3% of GDP and about 22% of the ideally permanently underground or in the exhausted). Carbon credits must be certi-
of current conditions and the other on their out- grown three times the demand for small ones (sub- 2023-24 budget’s revenue expenditure estimate. ocean. While we currently rely on nature to fied under the CRCF. It includes a reference
look for the future. The latest survey shows that 30HP) over the last three years. Interestingly Fourth, a busy electoral calendar with nine state perform that service, nascent technologies to the like-for-like principle, meaning that
consumer confidence continued on its recovery enough, the demand for 4-wheel-drive in tractors elections in the last 12-odd months also created ranging from direct air capture (essentially companies cannot claim fossil-fuel CO2
path to a level of 95.1 in January 2024 from 92.2 in is on the rise. Similar trends, data and anecdotes expenditure-pattern differences, as pre-electoral big vacuums) to bio-char, a carbon-rich emissions (which remain in the atmosphere
November 2023 (on this scale, 100 marks neutral- abound for categories such as personal vehicles, cycles typically see higher government spending material made from heating biomass at high for centuries) have been offset by short-
ity between optimism and pessimism). But what real estate and household durables across India, by respective states, a phenomenon which shows temperatures in low oxygen, which can term removals like planting trees. Only per-
about their future outlook? As per the survey, despite continued price hikes by companies. up in divergent consumption patterns and accen- then be added to soil or used in concrete, manent carbon removal will be valid.
households expect an improvement in general A combination of the following would help dis- tuates skews across states and categories. have the potential to assist. Removals cur- There are niggles: The Green Claims
economic and employment conditions through cern the widely divergent readings we’ve had lately: Lastly, patchy rainfall has had a deep impact on rently make up only about 3% of the total Directive doesn’t specify what counts as
the next one year. However, their confidence in First, there has been a notable change in the rural demand, which took a big knock from very carbon market. residual emissions, exposing the term to
future income conditions was a tad lower than in orientation of government expenditure that has poor spatial and temporal monsoon distribution. These processes won’t be able to deliver potential misuse. Also, only removal pro-
the previous round, following four successive buttressed its supply-side credentials through a This created huge distortions in income and con- without deep emissions cuts, which must jects within the EU can be certified under
rounds of improvement. Note that consumers scorching capex-spending programme with a sumption patterns. The north and east, where rain- come first. But they could help mop up the the CRCF as it currently stands, which is
being optimistic or pessimistic about the future is a CAGR of 31% over the years 2020-21 to 2023-24 fall was satisfactory, did support demand to an last dregs of greenhouse gases from hard- limiting when the continent isn’t blessed
matter of prediction and not of interpreting the and an interim budget allocation for 2024-25 that’s extent. But weather-related supply disruptions to-abate sectors like cement and aviation. with a lot of geological storage capacity.
current economic situation. 17% higher than the previous year’s expenditure. created jagged pockets even within states. Unsur- Plus, if we make it to net zero, removals offer There’s an optional element to these reg-
India’s general trade channel (of kirana stores) Second, in a changed global context of muscular prisingly, food inflation has been close to ~7% in the potential of reversing some of the dam- ulations and ignoring them will come with
recorded single-digit volume growth in the third industrial policies, India’s policy toolkit too favours 2023-24 thus far, after averaging 6.7% in 2022-23 age we’ve done to the atmosphere. disadvantages. Companies can still buy
quarter of 2023-24 in the FMCG space. But mod- specific but sizeable sectoral interventions such as and lower than 6% between 2020-21 and 2021-22, The industry has been crying out for reg- avoided deforestation credits, as long as
ern trade continued to outstrip it with double-digit production-linked incentives, direct subsidies for impacting real incomes and consumption. ulation, which stakeholders hope will dis- they don’t use them to make claims about
growth. As per Nielsen IQ, the sector is expected to semiconductors, etc, as part of the ‘Make in India’ Looking ahead, with weather agencies hinting at tinguish future credits from existing poor- their environmental virtues and carbon
grow at 4.5- 6.5%, indicating a significant decelera- and Atmanirbhar Bharat themes. One can argue a normal monsoon in 2024, hopes of rural-demand quality products and help the market to removal projects don’t have to get certified,
tion from a robust 9.3% in 2023. The industry that budget interventions have been sector-spe- normalcy have risen. However, the combination of grow by creating trust. These latest Euro- but it would make their credits less valuable
reported 6% value growth year-on-year, driven by cific in the past too. However, they leaned more an abating sugar rush from poll-spending, a squeeze pean developments mark a big step in set- to purchasers.
a 6.4% increase in volume. Note, these rates are all towards consumption earlier. on revenue-expenditure growth to contain the fis- ting the standards needed. There’s much work to do to get the CRCF
below the country’s nominal GDP growth rate. Third, there has been a massive consumption cal deficit and the lagged effect of higher-for-longer The CRCF categorizes carbon removals operational. The Green Claims Directive
Yet, several large global and domestic consumer stimulus already by way of autonomous private interest rates will ensure that Indian consumption, distinctly. It includes soil-emission reduc- needs to go through several more steps
goods companies have reportedly announced a spending. If one adds up all spending on account of while recovering, continues to play second fiddle to tions, and excludes activities like clean-en- before it’s implemented. But the tone has
line-up of big investments in India to step up the festive season, wedding season and a couple of capex even in 2024-25. ergy projects and avoided deforestation. been set and voluntary carbon markets are
capacity and offer more premium products. one-offs in the cricket world cup and series of state These are the author’s personal views. Manhart sees the framework shaping cli- expected to match it. ©BLOOMBERG
guEst VIEW
Don’t write off businesses challenged by sunrise rivalry

will render the combustion engine obsolete. comes with standard DCF disclaimers but while still retaining its solid old-business While the zero-terminal-value DCF
SWANAND KELKAR Stock markets have a tendency to get generally provides a good ‘worst-case’ value core. The successful pivot by The New York approach approximates the worst-case situ-
excited by shiny new things, extrapolate for such a stock. Times towards a digital model in the middle ation, upside scenarios can present them-
rapid adoption into the future and write At least a few investors seem to have done of the previous decade is a good example. On selves if demand revives for products and
obituaries of extant products and services. a similar analysis because shares of a news- the flip side, though, some management services produced by challenged sectors.
What follows is an investor stampede out of paper company, an engine oil manufacturer teams panic and in a bid to stay relevant Typically, years of under-investment have
I
t seems that over the past decade or so, a such challenged spaces, causing severe valu- and a maker of thermal power generation make outsized and over-priced acquisitions led to negligible supply growth and weak
whole host of stocks and sectors have ation contractions. In certain cases, explicit equipment have more than of shiny new things but players have either shut shop or been
been written off by investors. Newspa- investor mandates prohibit investments in doubled in the past year. A only end up hastening their bought out at reasonable prices, leading to
pers, linear television, thermal power, any- these challenged sectors, and that quickens combination of several fac- Market players own downfall. industry consolidation. A surprise demand
thing related to the internal combustion the exodus. tors seems to have contrib- Importantly, most chal- revival in such a scenario would lead to para-
engine, offline travel agents—the list is long. Stocks and sectors being declared termi- uted to this resurrection. should take a lenged companies start bolic price up-moves and a period of super-
However, in the real world, many of them nally ill is not a new phenomenon and mar- Excitement over the mete- conserving cash as capital normal profits for incumbents.
are still ubiquitous. Take India’s newspaper kets are often right in their assessment of the oric rise of new challengers
rational relook spends are limited. Faced The price of uranium over the past year or
is managing partner at
circulation, for example. It has remained
intact over the past decade. Over 75% of elec-
future. However, if one were to correctly bet
against prevailing wisdom with respect to
could have gotten tem-
pered. As new challengers
at what such with the very real prospect
of declining demand,
so is a case in point. After the Fukushima
accident in 2011, investors wrote off nuclear
Breakout Capital. tricity consumed in India is still generated
from thermal plants and over 99% of all vehi-
either the extent or pace of decline, there is
a lot of money to be made. Yet, most inves-
start reaching a larger
scale, their growth inevita-
challenged instead of embarking on
new projects, they opt to
power. A decade of under-investment in
uranium mining followed, accompanied by
cles on Indian roads still have internal com- tors suspend any analysis of sectors caught bly slows down, which industries are return cash to shareholders investor apathy. Geopolitical events of the
bustion engines. in the throes of such stampedes. means that pace-of-de- by way of dividends and last couple of years, however, have re-awak-
The disconnect between what we see A useful framework in such cases is a zero- cline assumptions in our really worth share buybacks. These ened the world to the inevitability of nuclear
everyday versus what markets perceive terminal-value discounted cash flow analy- worst-case DCF analysis measures enhance total power as a source of clean energy. After lan-
stems from the fact that investors have con- sis (DCF). Its main assumptions are that the start changing in favour of shareholder returns. In a guishing for years, the price of uranium has
vinced themselves that in a few years, these company ceases to exist at a certain date in challenged companies. Just as predictions of financial environment where interest rates almost doubled in the last year.
stocks and sectors will cease to exist. They the future and returns the residual value of a ‘Lehman moment’ far outnumber an actual seem to have peaked, such streams of steady Investors should evaluate the forgotten
would have been replaced by a newer, better net assets to investors. Till that date, one Lehman moment, forecasts of disruptive cash become all the more valuable. Indeed, stars of yesteryear. After all, when everyone
product or service that is being rapidly assumes a decline in the market share of ‘WhatsApp’ moments are often exaggerated. this free-cash yield, coupled with attractive was supposed to be going gaga over the cast
adopted. So digital news will vanquish news- whatever it sells, and capital outlay that is In many cases, the challenged company’s valuations, has made investors sit up and of the Hindi film The Archies, it’s Bobby Deol
papers, renewable energy will supersede just enough to service demand. All else is leadership makes the right strategic moves take notice of this ignored corner of the who became the talk of tinsel town.
thermal power plants and electric vehicles paid out to shareholders. This, of course, that enables it to participate in the new trend equity market. These are the author’s personal views.
New Delhi BUSINESS OF LIFE CULTURE LIVEMINT.COM
How Breathless made This excerpt from a

new biography of singer-
composer Shankar
Mahadevan relives
Shankar a sensation
Ashis Ghatak
SHANKAR MAHADEVAN
the excitement of his
first solo hit, Breathless
B
reathless’ earmarked two
significant events. Firstly,
Shankar Mahadevan
became a star. The music
video featuring the singer
himself started beaming on numerous
TV channels and took the song to every
corner of the country. Indi-pop music
got a new fillip as experimentation
reached unimaginable heights. Sec-
ondly, it was the start of a bond, a begin-
ning of a cherishing relationship
between two talented artists that kept on
getting closer and more affectionate with
mutual respect and love.
The music video of ‘Breathless’ went a
long way in establishing Shankar’s
immense popularity. It was again Javed’s the screen with Shankar in the video. everyone to go out, switched off the lights
idea to employ his son Farhan and daugh- Tubby played the keyboard and Sham, and assured me that no one was there. I
ter Zoya to collaborate with Shankar to who passed away after a few years, played sang and that was recorded. It was a cute
direct the music video of some songs of the mridangam in the track. The modern and innocent moment that will be etched
the album. When Javed played the recording technology might have in my memory.’
‘Breathless’ number for Farhan, Shankar camouflaged his breaths that Breathless sold 300,000 copies and
was not present there. Farhan had earlier came in between the lines but one stayed at the top of the charts for weeks.
heard Shankar during a Shakti concert gets a taste of his mastery and Taufiq, one of the percussionists in the
and he was completely aware of Shankar’s unbelievable control of breath album, was in splits when he remembered
immense skill. Upon hearing the song for when he is found complying to an incident that happened soon after the
the first time Farhan was flabbergasted, to the multiple requests to sing this album got released. Shankar had become
say the least, because it was something song during his concerts. Taufiq, a sensation and they had a series of Breath-
that he had never heard before. Apart who performed innumerable less shows all over India. Once Taufiq,
from Shankar’s incredible singing, what Shankar Mahadevan with young members of the family; (right) Mahadevan in the film Katyar Kaljat Ghusli. stage shows with Shankar, said Sivamani, Karl Peters, Sridhar and
intrigued Farhan was the mind that con- that each time Shankar sang it Shankar were travelling to Chandigarh for
ceptualized something like this. Farhan showed it to Shankar. The idea was to do many singers from reality shows attempt became an instant on stage, he would be watching a concert. At the airport, a Sardarji kept
remembered his initial impressions of the the video without any cuts and make it to sing it and many performances are cho- hit on YouTube. him closely to note where he staring at Shankar and kept on following
song. He said, seamless as one line of the song glides reographed on this number. Several film Though the myth took breaths. He would be them. Then, all of a sudden, he screamed
The genius of the singer lies in the way he onto the other. The whole idea of the songs that came later were sourced on the of the song being gasping in wonderment, as with joy. The man was so excited that he
thought it because Shankar can sing any music video was that the protagonist of basic idea of this song. A year later, sung in a single Shankar would invariably veil started stammering. Pointing to Shankar,
song, but to think that ‘let me do something that love story started walking from a Shankar himself recorded a devotional breath was busted his breaths with subtle tricks he shrieked, ‘I know you, I know you.’ He
from the start to finish without any break of room, went through a whole journey song ‘Endrendrum Ayyappan’ where he millions of times, that left one baffled. could not recollect Shankar’s name at that
breath’ was unique. I remember when I and ended back in the room again. It sang in a style similar to that of ‘Breath- yet, a willing suspen- In the music video of the song ‘Tere time, so out of helplessness he blurted out,
heard it for the first time, I told Dad to play was as if he was singing out the thoughts less’, though that song was a devotional sion of disbelief is at work each time one Khayalon Mein’ of the same album, Sid- ‘You…you are that nonstop singer. I saw
it again because I wanted to hear where or that lay inside his mind. It was much number sung in praise of Lord Ayyappa. listens to the song or watches the music dharth made his debut as a child actor and you on TV.’
whether he had taken a breath. I heard it a unlike the outdoor videos being made at Recently, on Hanuman Jayanti (16 April video. The speed at which the song’s also as a mouth percussionist. In an inter- Excerpted with permission from ‘The
couple of times and naturally could not that time. 2022), Shankar recreated the magic of movement and Shankar’s movements view, Siddharth later recalled this unfor- Musical Maverick: The Authorized Biogra-
decipher it. ‘Breathless’ became a trendsetter. Its ‘Breathless’ by singing the Hanuman are synced shows a defiance of being gettable event of his life, ‘I was three years phy of Shankar Mahadevan’ by Ashis
Soon, Farhan made a video that rep- popularity and capacity to captivate the Chalisa in the same manner. The song was rebuffed in love, and the end of the song old then. I remember that I was very nerv- Ghatak, published by Rupa India, 375
resented the basic idea of the song and audience never really waned. Till date, recorded for Shemaroo Bhakti and leaves one breathless. Renu Desai shared ous and refused to sing. My father asked pages, Rs 695.

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