NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*, LUCKNOW* VOL. 18 NO.

125

Friday, May 24, 2024

Think Ahead. Think Growth.

mint primer QUICK EDIT

Power crisis: Are Who owns

we in for another LinkedIn?
sizzling summer?
BY N. MADHAVAN
A sizzling heat wave is stretching India’s power infrastructure. In fact,
the power deficit in June is projected to be the highest in 14 years.
Mint looks at the factors causing it, steps the government has taken,
and whether a crisis can be avoided this time around.
The power mix
While share of renewable energy has risen in recent years,
India's flexibility to meet sudden spikes in demand has not
Total installed
capacity - 441 GW
Hydro
Renewable
energy
As of March 2024
Is India heading for a
1 power crisis?
It appears so, if electricity demand
and supply projections are to be
believed. It is estimated that the
power deficit—that’s the gap
between electricity demand and
availability—at night-time in June
is likely to be the widest since June
2010. The demand is pegged at
235 Giga Watts (GW) while the
supply is projected at 221 GW,
leaving a gap of 14 GW. On 18 May,
the peak power demand for this
summer season touched
229.60 GW and this is expected to
increase further—indeed, the
India Meteorological Department
expects the severe heat wave
conditions to continue for a few
more weeks.
MINT
Who would one associate Mic-
rosoft’s ownership with? Nine
people out of 10 would think of
Bill Gates. He founded the com-
pany, after all, though he owns
only a tiny slice of it today, with
over two-thirds held by institu-
tions. In 2016, Microsoft bought
LinkedIn. Imagine Microsoft
chief Satya Nadella’s surprise,
then, when India’s registrar of
companies (RoC) under the
ministry of corporate affairs
chose to fine him, LinkedIn’s
Gas Nuclear global CEO Ryan Roslansky and
seven other executives ₹27.1
6 2 lakh for failing to disclose their
11 names as significant beneficial
Coal
owners (SBOs) of LinkedIn
Share
(in %) 48 Technology Information Pvt
Ltd under Indian rules. The
33 company is said to be pleading
not guilty. These individuals, it
avers, are doing professional
Source: Central Electricity Authority of India jobs at the board’s pleasure that
SATISH KUMAR/MINT can be terminated. The RoC’s
Why isn’t supply logic is that SBOs are those who
2 keeping up?
The reasons are familiar—delayed
wield significant control and
LinkedIn’s management hier-
projects and poor storage levels in archy qualifies. If Microsoft’s
reservoirs. Coal-fired power top brass is baffled, it’s because
projects with a capacity to produce “controlled companies” (a US
3.6 GW of power, which were term) are not only the norm in
scheduled to go onstream in India, who holds this control is
March this year, have been
important data. This muddle
delayed. Hydro power generation
has fallen steeply to the lowest over SBOs and the irony of
level in four decades due to low Gates escaping the label should
water levels in reservoirs. That remind us how US and Indian
apart, renewable energy output capitalism differ.
has been flat and has not
compensated for the shortfall from
other sources of electricity. What
has made things worse is the above
-normal maximum temperature,
which will ease only after the onset
MINT METRIC
of the South-West monsoon. by Bibek Debroy

Rajesh Kapoor, the flying thief,

3 Isn’t this crisis an annual
affair?
India suffers from power shutdowns every
Made many passengers come to grief.
summer. What is new this time is the
Cabin baggage in his gaze,
night-time power shortage. In the past, the 200 flights in 110 days.
daytime power deficit was the norm due to
strong industrial demand. With the setting
Stealing valuables was his brief.
up of solar capacity, which grew 4x in the
past five years, daytime demand has been
met. In the absence of this power source,
the night-time deficit remains unbridged. QUOTE OF THE DAY
What steps has the Can power demand be
Supported by strong balance
4 government taken?
The Centre has deferred planned
5 better managed?
As a growing economy, India’s
sheets, a healthy banking system,
favourable corporate tax rates, a
maintenance of power plants, re- power demand will continue to thriving capex cycle and a robust
started five coal-fired units idling increase rapidly. Capacity
for inefficient operations, and additions have to be planned and public digital infrastructure,
invoked a 21-year-old emergency executed in a time-bound manner. India is poised to lead the
provision to allow imported coal- Having some buffer capacity will
fired and gas-based power plants help. As India focuses on next decade.
to operate at full capacity. It has renewable energy, especially solar,
asked all thermal power plants to it needs to look at battery storage
work at full capacity. Thankfully, options. That will help store solar
there is no shortage of coal stocks power for night-time use. The N. CHANDRASEKARAN
at power plants. All of them have country’s power-mix should also TATA CONSUMER
adequate stocks to ramp up power have a right balance of thermal, PRODUCTS CHAIRMAN
generation. The government has gas-based power and renewable
also fast-tracked completion of energy to manage sudden demand
delayed power projects. spikes better.

mint Election Bites

BEYOND COLLEGE: 1 IN 3 MPs

ELECTED IN 2019 HAD HIGHER EDUCATION
Share (%) of postgraduates and doctorates among Lok Sabha members elected in each election

1984 26.5
1989 29.5
1991 32.7
1996 34.4 For more
election-based charts
1998 and historical analysis,
32.7 visit the infographics
section on the
1999 32.3 Mint app.

2004 33.0
2009 51.5
2014 37.3
2019 33.0

Data: Manjul Paul, Design: Satish Kumar Source: PIB, Mint calculations
 PLAIN FACTS

Data recap: Silver rally,

travel index, Q4 results
CURATED BY PAYAL BHATTACHARYA
very Friday, Plain Facts publishes a compilation of data-based insights, complete with easy-to-read charts, to help you

E delve deeper into the stories reported by Mint in the week gone by. Silver is trading past the ₹90,000-mark, fuelled
by a parallel rise in gold and copper prices, but market watchers warn of a pullback. India Inc.’s corporate results have
been a mixed bag so far with banking and financial services firms dominating much of the top line growth and profits.

Rocketing Silver Divergent Exports

Silver in India (in tonnes) Total demand Total supply Performance of key sectors in India's export basket in FY24
Year-on-year Share in India's
12,000
growth (in %) total exports (in %)
10,000 Engineering goods 2.1 25.2
8,000 Petroleum products -11.8 18.6
6,000
Gems and jewellery -13.8 7.6
Organic and inorganic chemicals -2.8 6.8
4,000
Electronic goods 23.5 6.7
2,000
Drugs and pharmaceuticals 9.7 6.4
0 Iron-ore 0.9
2018 2019 2020 2021 2022 2023 117.2
Source: Metals Focus Source: Ministry of commerce and industry

SILVER’S RALLY past ₹90,000 per kg on MCX,
India’s commodity exchange, has led to speculation
among market stakeholders that if the price rises above
₹1 lakh, it may lead to profit-booking, Mint reported.
The price of silver has risen 26% from ₹73,501 a kg to a
record ₹92,475 in the year so far, MCX’s spot price index
shows. India relies on imports to meet domestic silver
demand. For most years since 2018, India has
maintained a net import position for the white metal.
SOME SECTORS have stayed immune to a slowdown in
India’s exports in 2023-24. Engineering goods, with a
25% share in the export basket, saw a modest 2.1%
increase in value terms, commerce ministry data showed.
With a combined share of 14% in exports, electronic
goods and pharmaceuticals saw annual growth of 23.5%
and 9.7%, respectively, in FY24. But exports of petroleum
products (18.6% share) and gems and jewellery (7.6%
share) fell by 11.8% and 13.8%, respectively.

Clean-up Effort

2 trillion
THAT’S THE value of stressed assets that India’s “bad
bank” aims to take over by the end of September, a Mint


report said. The National Asset Reconstruction Company
Ltd (NARCL) had acquired 18 accounts with outstanding
loans of ₹92,500 crore as of March 2024. This target was
set by the government when NARCL was launched in 2021,
aiming to clean up bank finances by offering cash (around
15%) and government-backed securities (roughly 85%).

Travel Score Corporate Report

How India scored vis-à-vis emerging market peers in 2024 (out of 7) Year-on-year change in aggregate results (%)
4.94 Revenue Net profits
4.46 4.41 4.39 4.28 4.26 4.25
4.12 Q4FY23 14.7 15.6
3.84
Q1FY24 8.7 52.2
Q2FY24 5.8 58.7
Q3FY24 9.7 31.5
China Brazil Malaysia India The Q4FY24 10.6 10.1
Indonesia Turkey Mexico Thailand Philippines
Source: Travel & Tourism Development Index 2024, World Economic Forum Standalone data used Source: Capitaline, Mint calculations

INDIA HAS dropped 10 ranks from its position in 2019
to 39 in the World Economic Forum’s latest Travel and
Tourism Development Index. Despite an impressive
comeback in travel after the pandemic, India’s score was
lower than not just the leading economies but also
among emerging economies. The index ranks countries
on various factors and policies that enable sustainable
and resilient development of travel and tourism. Richer
countries, such as the US, dominated the list.
THE COMBINED revenue of 1,109 BSE-listed
companies that had declared their March-quarter
financial results by last week has seen a year-on-year
increase of 10.6%, a Mint analysis showed. The
aggregate net profit for these firms also surged 10.1%.
However, the performance was mainly driven by the
banking, financial services and insurance (BFSI) sector.
Excluding the 189 BFSI companies, the overall revenue
grew 4.5%, while profits were down 11.8%.

Relief for Telcos

₹3,000 THAT’S THE sum telcos such as Bharti Airtel will save with
the Supreme Court’s order to waive interest on taxes levied
on annual licence fees. While the tax due stays, experts say

crore
the waived interest could have surpassed actual tax, as the
calculations date back to 1999, when the new telecom policy
came into effect. The interest due had arisen from an apex
court ruling last October that telecom licence fee must be
treated as capital expenditure, which is not tax-deductible.

Luxury Boom Chart of the Week: Booth Strain

Share in total sales (in %) Average number of electors per polling station in 2019 elections,
Affordable housing sales Luxury housing sales state-wise

38 39 Highest burden Least burden

37
Kerala 1,049 Manipur 685
26 25
20 21 Bihar 979 Mizoram 666
18 19
9 Rajasthan 942 Meghalaya 605
7 6
Haryana 929 Nagaland 545
2019 2020 2021 2022 2023 2024
2024 data available for January-March. 7 cities are: Delhi-NCR, MMR,
Maharashtra 908 Arunachal Pradesh 365
Bengaluru, Chennai, Hyderabad, Kolkata and Pune; affordable homes: less
Union territories excluded from analysis.
than 40 lakh; luxury homes: more than 1.5 crore.
Source: Anarock Research Source: Election Commission of India, Mint calculations

INDIA’S HOUSING market is witnessing an unusual THOUGH POLLING booth numbers in India have
trend. Overall, the sector is booming, but affordable risen, some states have been struggling to handle the
housing has taken a hit. Sales of houses priced below number of voters per booth. A Mint analysis has
₹40 lakh have been falling for the past five years in revealed that in the 2019 polls, Kerala
major cities, a Mint Primer explains. The share of and Bihar had the highest number of
affordable housing sales has shrunk sharply, from 38% registered voters per polling station.
in 2019 to 19% in 2023. Meanwhile, the share of luxury Follow our data stories on the “In
home sales has rocketed from 7% to 25%. The segment Charts” and “Plain Facts” pages on the
has seen a surge in supply and sales since the pandemic. Mint website.
PARAS JAIN/MINT

TOP FIVE FANTASY FILMS TOP FIVE MARATHI FILMS

1 WONKA 3 THE LITTLE MERMAID 1 SATYASHODHAK 3 SCHOOL COLLEGE ANI LIFE
Platform: Disney+ Hotstar Platform: ZEE5
Language: English Cast: Tejasswi Prakash, Karan Parab

4 BARBIE 4 VED
Platform: JioCinema
Platform: Amazon Prime Video Platform: Disney+ Hotstar
Platform: JioCinema Language: English
Cast: Sandeep Kulkarni, Rajshri Deshpande Cast: Riteish Deshmukh, Genelia D'Souza
Language: English

2 DAMSEL 5 DUNGEONS & DRAGONS: ALIBABA AANI

HONOUR AMONG THIEVES 2 CHALISHITALE CHOR 5 BAIPAN BHARI DEVA
Platform: Netflix Platform: Amazon Prime Video Platform: Amazon Prime Video Platform: Disney+ Hotstar
Language: English Language: English Cast: Mukta Barve, Subodh Bhave Cast: Rohini Hattangadi, Vandana Gupte
 New Delhi, mumbai, bengaluru, kolkata, chennai, Ahmedabad, Hyderabad, chaNdiGarh*, pune*, lucknow* VOL. 18 NO. 125 Rs. 10.00 . Price with Hindustan Times Rs. 15.50 16 pages

Friday, May 24, 2024

What Zomato’s pot of profit Thierry Delaporte Indian IT’s

livemint.com can teach VC funds uP10 highest paid boss in FY24 uP5

SENSEX 75,418.06 1,197 NIFTY 22,967.65 369.85 DOLLAR ₹83.28 ₹0.00 EURO ₹90.32 ₹0.00 OIL $82.06 $0.39 POUND ₹105.97 ₹0.03

Dividend fuel sparks $5 tn win

DON’T MISS
MINT

Stocks close at record as hopes of lower fiscal deficit, reduced govt borrowing and falling interest rates lift banks, autos
Dipti Sharma & Ram Sahgal 2024-25, reduce borrowing, cool bond
mumbai race to the top yields and bring down interest rates. The
dividend also gives the government RBI dividend boost to help in

S
tock markets raised a toast to
the central bank’s dividend
bonanza on Thursday as hopes
of lower interest rates calmed
election jitters, lifting stocks to
new highs and making investors wealth-
ier by ₹4.2 trillion overnight.
Foreign investors trooped in after sell-
ing for two months, lifting India’s stock
market—the world’s fifth-largest and
snapping at the heels of Hong Kong—to
a closing high of $5.05 trillion. Foreign
portfolio investors (FPIs) bought shares
worth a provisional ₹4,670.95 crore on
Thursday, while domestic institutions
settled for ₹146.51 crore.
The last trillion-dollar addition in the
market value from 5 December was led
by blue chips, including Reliance Indus-
tries Ltd, ICICI Bank Ltd, State Bank of
India Ltd, Mahindra & Mahindra Ltd,
and Bharti Airtel Ltd.
This is the second consecutive year
where the actual dividend is more than
twice the initial budgeted number,
which may lower government borrow-
ings, lift capital expenditure and bolster
economic growth. Market experts now
believe the rally could continue over the
two weeks, until the Lok Sabha election
results on 4 June.
In an interview with Mint earlier this
week, veteran investor Jim Rogers said he
regretted passing up the chance to invest
in India. However, he said, he will enter
the market when the perfect opportunity
The $1 trillion gain, climb in global rank, and support from broad markets and local investors: Explained in charts by Niti Kiran more headroom to spend on its ambi- improving budget math
tious capex plans. The Centre is likely to use a portion of the
Half a year: The time it took Indian equities to add the last $1 tn The billion-dollar m-cap club On Wednesday, the bond market was unprecedented dividend payout from the
Market capitalization milestones over the years (BSE-listed companies, total) has grown impressively quick to take note of the dividend RBI to narrow the fiscal deficit target for
$3 tn $4 tn
$2 tn Number of companies with $1 billion or announcement, with yield on the bench- FY25 from 5.14% of gross domestic product
$1 tn $5 more in market capitalization (GDP) to around 4.9-5%, a person aware of
tn mark 10-year government bond drop-
511 539 ping 5 basis points to 6.99%, the lowest the matter said. >P2
May May May Dec May 409 384 in nearly a year. The market was closed
2007 2017 2021 2023 2024 312 on Thursday. India’s peak power demand hits
272 Of the five top Nifty movers, which 235 GW, generation up 10% in Apr
Shares defy FPI outflows as A run-up in mid- and small-cap contributed to over half of Thursday’s
domestic investors flex muscles counters supported the rally India’s power generation rose 9.69% to
rally of 369.85 points, three were 153.77 billion units (BU) in April but fell short
Monthly inflows into equities by foreign Change (%) in index values since banks—HDFC Bank, which contributed
portfolio investors (in ₹ crore) 5 Dec 2023 2019 2020 2021 2022 2023 2024 of target amid highest temperatures in over
2024 data as of 22 May; year-end rupee-dollar
57 points to the Nifty rally, ICICI Bank a century. Thermal power generation rose
80,000
exchange rate considered for conversion (37 points) and Axis Bank (25.29 points). 10.87% on-year to 123.50BU. Peak demand
60,000
Indeed, sectoral index Bank Nifty out- hit a record 235 GW on Wednesday. >P2
40,000 8.8 23.9 17 India rises through the ranks
20,000
performed the benchmarks, rising
in global pecking order 2.06% to 48,768.60. The other top sec-
0 BSE Market capitalization of top equity ITC March quarter profit down
Sensex BSE BSE toral index performer was another rate-
-20,000
MidCap SmallCap markets globally (in $ trillion)
sensitive, Nifty Auto, which rallied 2.25%
1.3% on subdued demand
-40,000
Oct 2023 May 2024 On 5 Dec the total market capitalization of
US 55.8 to 23,849.25. ITC Ltd on Thursday reported a 1.3% drop in
Latest data as of 22 May 2024 BSE-listed companies hit $4 trillion. China 9.4 The hefty dividend will reduce gov- its standalone net profit to ₹5,020.20 crore
ernment borrowing, and consequently, in the three months ended March amid weak
Reliance, Airtel biggest contributors to the last $1-tn addition Japan 6.3 demand during the quarter. Net profit for
Hong Kong 5.4 lower fiscal deficit, said Nilesh Shah, the firm undershot ₹5,150 crore estimated
Absolute change in mcap (in $ billion) since 5 Dec 2023
managing director and chief executive, by a Bloomberg poll of 20 analysts. >P6
43.6 India 5.1
24 21.1 Kotak Mahindra AMC. “The lower defi-
Reliance 25.6 24.2 For India, the data is for 23 May 2024;
Industries Bharti Airtel LIC
State Bank Hindustan for others, it is for 22 May 2024. cit would result in a decline in cost of
of India Zinc
borrowing for corporates over time Services drive biz growth in May
Source: Bloomberg, Capitaline, Mint analysis
which will be reflected in higher price- even as mfg cools: HSBC survey
PARAS JAIN/MINT
earnings multiples. If the money is used Indian business growth maintained its pace
arises, biding his time till then. of 22,993.60. The Sensex kissed a fresh Bank stocks lifted off, following the for infrastructure spending, it will create in May, driven by robust expansion in the
Both the Nifty and the Sensex rallied intraday high of 75,499.91. The Nifty central bank’s blowout dividend transfer a multiplier effect with wider benefit,” services sector, even as manufacturing
1.6% each to fresh closing highs of Midcap150 hit a fresh high of 19,575.25 of ₹2.1 trillion, which is twice what was Shah added. activities cooled due to a slowdown in new
22,967.65 and 75,418.06. The Nifty fell and the Nifty Smallcap 250 surged to expected by the market. Investors expect For now, financial stocks, which enjoy orders and production, according to a flash
short of the 23,000-mark by just over six 15,972.85, as the broader markets joined the record payout to help the govern- survey by HSBC Holdings Plc. >P9
points intraday, clocking a new life-high the party. ment meet the fiscal deficit target in TURN TO PAGE 6

IndiGo eyes premium Bourse deal off in

class after its best year blow to Gift City
Naman Suri Ram Sahgal
naman.suri@livemint.com ram.sahgal@livemint.com
Falling out
NSE IX dominates the market
new delhi mumbai
in Gift City with a 95% share.
India INX NSE IX

F T
lying high after announc- wo international 4,000
ing record fiscal numbers exchanges led by BSE Turnover (in $ billion)

for 2023-24, India’s top Ltd and National Stock 3,000

budget airline announced it
would introduce a ‘tailor-made
business product’—or pre-
mium class—for busy routes
before the end of the year.
Pieter Elbers, the chief
executive of IndiGo, said the
needs of the Indian consumer
have been changing rapidly
over the past few years.
“Against that backdrop and
seeing IndiGo’s network with
a couple of routes with high
frequency and a lot of business
travel, we thought it was the
right time to move into that
space,” Elbers said in a confer-
ence call after the announce-
ment of results.
On Thursday, IndiGo’s par-
Pieter Elbers, the chief
executive of IndiGo. REUTERS
ent InterGlobe Aviation
reported record consolidated
total income of ₹71,231.16
crore, up 27.5% year-on-year
(y-o-y), and record net profit of
₹8,172.46 crore during the fis-
cal, against a net loss of
₹305.78 crore a year earlier.
FY24 Ebitdar (earnings
TURN TO PAGE 6
Exchange (NSE) of India Ltd in
Gujarat’s Gift City have called
2,000
off their much-anticipated
merger, according to two per- 1,795.1
sons aware of the develop- 1,000 116.08
ment. This is a major setback 7.24
57.13
to Gift City’s goal of becoming 0
FY21 FY25
a global financial hub.
Note: FY25 data till 22 May 2024
The plan was dropped by Source: India INX and NSE IX
BSE because the discussions,
SARVESH KUMAR SHARMA/MINT
which were on since late 2022,
had failed to make any head- City, where the average
way, one of the two persons daily turnover on interna-
cited above said on the condi- tional exchanges runs into bil-
tion of anonymity. lions of dollars.
The merger between BSE A BSE spokesperson con-
subsidiary India INX and NSE firmed that the merger talks
IX was expected to enhance are “off the table” but declined
trading volumes and attract
international investors to Gift TURN TO PAGE 6

Audit watchdog to cast its net wider

Gireesh Chandra Prasad Deloitte, SRBC, BSR and
gireesh.p@livemint.com Walker Chandiok, audit files of
new delhi five clients each were exam-
ined as part of the inspection.

I
ndia’s top eight auditors will
be inspected and the finan-
cial statements of up to 60 of
their clients vetted this year, as
the national audit watchdog
widens efforts to enhance
audit quality countrywide.
The National Financial
Reporting Authority (NFRA),
which last year inspected five
auditors, involving audit
reports of 24 clients, is plan-
ning to expand the exercise, a
person close to the develop-
ment said.
“This year, inspections
would be done on eight audit
firms and in the case of audit
firms inspected last year, audit
documentation of a different
set of audit clients will be
examined. The reports would
be brought out by the end of
December,” the person said on
the condition of anonymity.
The NFRA, which last year inspected five auditors, involving audit
reports of 24 clients, is planning to expand the exercise. ISTOCKPHOTO
Covering the clients of top
audit firms is expected to cap-
ture the areas where accounts
and audits may need specific
attention of the management,
audit committees and audit
professionals for making
improvements.
An email sent to the NFRA
on Wednesday seeking com-
ments remained unanswered
at the time of publishing.
The audit regulator had
conducted inspections at five
top auditors—Deloitte Has-
kins & Sells Llp, SRBC & Co.
Llp, Price Waterhouse Char-
tered Accountants Llp, BSR &
Co—last year. The reports
were released in December.
In the case of Price Water-
house, audit files of four of its
clients were reviewed by the
regulator, while in the case of
Inspecting audit firms to
check their compliance with
audit quality norms under the
Companies Act and the Insti-
tute of Chartered Accountants
of India’s (ICAI) norms is part of
the regulator’s efforts to ensure
that financial statements are
prepared by businesses as per
prescribed rules, their audit is
compliant with quality norms
and the service of audit profes-
sionals gets improved.
The reports are made public
to give the audit firm as well as
the industry in general a per-
spective on areas of deficiency
in the way financial statements
are made and how they are
audited. Though it is not a dis-
ciplinary proceeding, the reg-
ulator’s report has a strong per-
suasive power on audit firms
TURN TO PAGE 6
02 FRIDAY, 24 MAY 2024
NEW DELHI ECONOMY & POLICY LIVEMINT.COM

Aggressive bids for

road projects lead
to stress build-up
Subhash Narayan
subhash.narayan@livemint.com
NEW DELHI
A
ggressive new entrants
for highway projects
have built up stress-like
conditions in the sector, driv-
ing down bids with the result
that several projects have failed
to get financial closure, an anal-
ysis by India Ratings and
Research (Ind-Ra) has found.
The development comes just
ahead of the government’s plan
to revive private sector interest
in the sector through awards of
BoT (build operate transfer)
projects where investment
risks are entirely borne by the
developer. The plan could
require further calibration to
salvage new projects, says the
report.
According to Infrastructure
Outlook 2025 by Ind-Ra, the
New entrants and relaxed
bidding norms have resulted
in such bidding. MINT
jects getting awarded over the
last couple of years. The spon-
sors of some of these entries
face pressure to financially
close projects resulting in the
National Highway Authority of
India triggering project substi-
tution to bring in new investors
to salvage projects.
“In the last couple of years,
RBI dividend boost to help
in improving budget math
Fiscal deficit will also depend on economic growth, inflation and adjustments to spending
Rhik Kundu & Subhash Narayan
NEW DELHI
T
he Centre is likely to utilize a
portion of the unprecedented
dividend payout from the
Reserve Bank of India (RBI) to
narrow the fiscal deficit target
for FY25 from 5.14% of gross domestic
product (GDP) to around 4.9-5%, a per-
son aware of the matter said.
Though a decision on the deploy-
ment of the additional payout is yet to be
taken, a part of it is likely to be utilized to
reduce the fiscal deficit, the person said
requesting anonymity.
In absolute terms, the fiscal deficit for
FY25 was estimated at ₹16.85 trillion in
the interim budget presented in Febru- The government may utilize a part of dividend payout from the central bank to
ary.
Fewer such voyages in May will
compel Indian refiners to shift
man Sanjay Kumar Agarwal recently diesel sales back to Asia. REUTERS
said.
Excise duty receipts came down from
India’s use
₹3.39 trillion for FY24 to ₹3.04 trillion in
the revised estimates for the fiscal.
For FY25, the budget estimates for
excise duty receipts stand at ₹3.19 tril-
of crude
lion. Lower global oil prices could
reduce the government’s windfall tax
collection on crude oil and the export of
tankers to
petroleum products, which is accounted
for in the overall excise duty collection. export
Another factor is the Centre's divest-
ment target. Having missed it for the
past few years, the Centre set an ambi-
diesel slows
tious divestment target of ₹50,000
crore for FY25, about 67% higher than Reuters
the revised target for FY24. feedback@livemint.com
“The record high dividend has given SINGAPORE
narrow the fiscal deficit target for FY25 to 4.9-5% of GDP. HT reasonable degrees of freedom to the

new developers, many of
whom had transitioned from
EPC (engineering, procure-
ment and construction) to
HAM (hybrid annuity model)
for the first time post the relax-
ation in the technical and
financial norms, have subse-
quently struggled to secure
funding, as banks have tight-
ened capital requirements.
At the same time, new
entrants and relaxed bidding
norms have resulted in aggres-
sive bidding for road projects
with even financially weaker
players getting projects on
lower bid premiums.
Aggressive bids have also
come on account of fewer pro-
about 8-10 awarded highway
projects faced substitution as
original sponsors could not get
financial closure. But most of
the projects facing stress have
been bid on HAM model where
risks are lower for developers as
payment is guaranteed over a
period in the form of annuity.
This should not impact bids for
BoT projects as reasonable traf-
fic projections and toll earnings
would decide interest from
developers,” said Rishabh Jain,
associate director at Ind-Ra.
NHAI has identified 53 BOT
(Toll) projects for a length of
5,200 km worth ₹. 2.1 trillion
for bidding over the next few
years starting FY25.
I
The Centre narrowed its fiscal deficit government to manage their finances. ndian refiners’ use of crude
target for FY24 to 5.8%of GDP in the ing for any slippages in tax revenue or interest rates decline in FY25, GST While fiscal consolidation has become oil vessels to ship refined
revised estimates (RE), lower than the increased public spending in FY25, and (goods and services tax) collections may easier, we need to remain cautious fuels such as diesel to key
budgeted fiscal deficit estimate of 5.9%, ensure fiscal deficit reduction is in sync witness a scale-down. The dividend about the likely shortfall from the European markets has dimin-
on the back of robust tax collection and with the committed glide path of 4.5% windfall can come in handy and comple- divestment and telecom proceeds,” said ished in May after volumes
higher dividend payouts. by FY26, experts said. ment sagging tax revenues,” he Upasna Bhardwaj, chief econo- neared two-year high levels last
On Wednesday, the RBI “The Centre is pursuing an added. mist at Kotak Mahindra Bank. month, trade sources and ana-
approved a dividend pay- aggressive fiscal deficit tar- Both direct and indirect A finance ministry lysts said.
out of ₹2.11 trillion for the
central government for ₹16.85 get at 5.1% of GDP in FY25. taxes reported buoyancy
tn High tax buoyancy is seen in FY24.
Fiscal deficit for
tn
Dividend approved
spokesperson didn’t
respond to an emailed₹2.11 That is because rising inven-
tories in the Antwerp-Rotter-
FY24—a massive 141% as a major enabler to Direct tax revenue query. Finance secretary dam-Amsterdam region and
higher than in FY23. FY25 estimated in attain this goal. However, reported a 17.7% growth by RBI for the T.V. Somanathan and shaky east-west diesel price
To be sure, the fiscal interim budget slippages cannot be ruled in FY24 after adjusting for Centre for FY24 Ajay Seth, the secretary in spreads undermine the case for
deficit as a share of GDP out, particularly in GST,” refunds. Indirect tax collec- the department of eco- sellers to ship large volumes of
would also depend on the eco- said Debopam Chaudhuri, tion exceeded the revised esti- nomic affairs, did not respond the industrial fuel to the West.
nomic growth rate and the infla- chief economist at Piramal Enter- mates of ₹14.84 trillion. The gross to emailed queries. While more April shipments
tion trend, in addition to adjustments to prises Ltd. GST mop-up for the financial year stood The government’s chief economic from India to Europe provided
spending and changes in receipts. “Factors like inflation, high interest at ₹20.18 trillion, exceeding the previous adviser, V. Anantha Nageswaran, didn’t a floor for Asian margins, fewer
The latest dividend payout from the rates and better compliance also con- year's collection by 11.7%, Central Board offer comments. such voyages in May will likely
RBI will be instrumental in compensat- tributed to collections. As inflation and of Indirect Taxes and Customs chair- rhik.kundu@livemint.com compel Indian refiners to shift
diesel sales back to Asia, exac-
erbating a supply glut in the
region, analysts and traders

Indian ready-to-eats storming palates India’s peak demand at 235GW, said.

Diesel exports using Suez-
max and Aframax vessels
Dhirendra Kumar
dhirendra.kumar@livemint.com
time.
Experts said the surge in
power generation up 10% in Apr Mesta, Pertamina Halmahera
and Marlin Santorini—mostly
from Reliance Industries’
NEW DELHI demand can be attributed to Jamnagar refinery -- reached a
the convenience, diverse fla- Rituraj Baruah large hydro projects. near two-year high of around

E
ven as Indian spices face vours and high-quality ingredi- rituraj.baruah@livemint.com Peak demand is likely to 380,000 metric tonnes (2.831
the heat from regulatory ents that Indian products offer, NEW DELHI keep surging. In its daily bulle- million barrels) in April, Kpler,
authorities in Singapore, which is aligned with the fast- tin on Thursday, IMD said: Vortexa and LSEG shiptrack-

Hong Kong and Europe over
unsavoury chemicals in their
composition, another category
of Indian foods is quietly but
steadily finding its place on the
plates and palates of the devel-
oped world.
Over the past few years,
Indian ready-to-eat (RTE) food
items have experienced
remarkable growth in exports,
especially to developed econo-
mies such as the US, the UK,
Canada, Australia, etc. RTE
food exports include breakfast
cereals, sweets and snacks, bis-
cuits and confectioneries, cane
jaggery, wafers, paan masala,
and betel nuts, among others.
India’s exports of RTE foods
have more than doubled from
$739.64 million in FY2019 to
$1.52 billion in FY2024,
according to data from the
commerce ministry. “The data
suggests a positive trend in
India’s export capabilities and
competitiveness in the global
market for ready-to-eat foods,”
said Ajay Srivastava, founder of
Global Trade Research Initia-
tive (GTRI), an independent
I
paced lifestyle of Western con- ndia’s power generation “Heat wave to severe heatwave ing data showed.
sumers. In particular, Indian increased 9.69% to 153.77 bil- conditions most likely to con- Reliance did not respond to a
breakfast cereals, sweets and lion units (BU) in April but tinue over plains of Northwest Reuters email for comment.
snacks have become popular fell short of target as tempera- India and heatwave conditions Shiptracker Kpler in Febru-
choices in Western markets. tures soared to their highest in over Madhya Pradesh and Guj- ary estimated a switch by 35
According to commerce more than a century. arat state during next 5 days.” Aframax crude tankers to carry
ministry data, the export of Although the generation was The CEA estimates peak refined products instead of
breakfast cereals shot up by higher on year, it fell short of demand to hit a record of crude.
Over the past few years, Indian ready-to-eat food items have 53.9% year-on-year (y-o-y) to the target of 161.71 million units, 260GW this year. In the Traders switched to using
experienced remarkable growth in exports. MINT touch $106 million in FY24, fol- showed a monthly report by national capital, peak demand Suezmax and Aframax tankers
lowing a 38.2% y-o-y rise in the Central Electricity Author- India’s peak power demand is hit a record 8GW on Wednes- —that typically load so-called
non-profit that conducts by attracting new customers FY23 to $68.88 million. Like- ity (CEA). A likely reason could expected to hit a record day. “dirty” crude oil and residue
research and analysis on global beyond the NRI community.” wise, the export of Indian be that thermal capacity addi- 260GW this year. MINT Prices of power on the fuel—for carrying “clean”
trade policies and practices. Meanwhile, RTE imports sweets and snacks rose 30.7% tion failed to reach a targeted exchanges, however, have refined products after freight
“The global prospects of have grown marginally, from y-o-y in FY24 to touch $694.83 800MW. of the overall generation in the largely remained at similar lev- rates for long-range (LR) tank-
Indian RTE food are very $304.96 million in FY2019 to million. In FY23, it had risen Thermal power generation country, nuclear and renewa- els as last year. Rohit Bajaj, ers spiked following Houthi
attractive,” said Anand Rama- $360.37 million in FY24. The 8.5% y-o-y. The major export rose 10.87% on-year to 123.50 ble power witnessed a rise in executive director, business attacks on ships in the Red Sea
nathan, partner FY24 figure destinations for Indian RTE BU as peak demand hit 235GW April. Renewable power gener- development, strategy and reg- that forced longer voyages and
and consumer Experts attribute marks a fall in foods items are the US, the UK, on Wednesday—the highest so ation rose 8.93% to 17.99 BU ulatory affairs, Indian Energy tightened vessel availability.
products & retail surge in demand imports of 13.6% UAE, Canada, Australia, Saudi far this year. and generation from nuclear Exchange, attributed the check “At the time it was a reflec-
leader at Deloitte to convenience, from the previous Arabia, Singapore, Germany, According to the India Mete- power plants was at 4.21 BU, in prices to improved sell-side tion of how tight the LR1 and
India. “There is a diverse flavours fiscal year. Japan and Netherlands, among orological Department (IMD), higher by 21.09% on a year-on- liquidity or higher availability LR2 clean product tanker mar-
lot of interest in “Reduction in others. temperatures in April were the year basis. of power. “The country’s power ket was given the additional
and high-quality
Indian cuisine. imports indicates “The awareness and appreci- highest over eastern and north- A decline in hydropower consumption has increased tonne miles vessels were hav-
Many RTE/RTC ingredients of changing domes- ation of Indian products are eastern India, and the second generation (from large hydro almost 14% this year. Given the ing to do to avoid the Red Sea,
(ready to con- Indian products tic consumption deeply ingraining themselves highest over South India since projects) continued in April high-power demand, the gov- and the lack of available
sume) companies patterns, and into the minds of people 1901. Power consumption last 2024 with only 7.99 BU gener- ernment and regulators under- prompt tonnage to book
have grown increased local abroad,” said Jigish Devta, month was at 144.25 BU, ated, which was 7.71% lower took a string of favourable pol- because ships were massively
exports much faster than production,” Srivastava said. managing director of Deep- 10.49% higher than 130.55 BU than in April last year. Low icy and regulatory measures displaced given the additional
domestic sales, and creating Queries emailed to the com- kiran Foods, an Ahmedabad- in the same period of FY23. rains and a fall in reservoir lev- which improved the sell sce- sail times,” said Wood Macken-
efficient channels of supply merce ministry spokesperson based exporter of ready-to-eat Apart from thermal power, els are key factors behind the nario and increased sell liquid- zie’s research analyst Emma
have helped grow the market remained unanswered till press food items. which constituted about 80% fall in generation from these ity on the exchanges,” he said. Howsham.

India, Egypt top destinations

m MINT SHORTS Council for Leather Exports (CLE) has asked the govern-
ment with a view to formulate a national policy for the sec-
tor to attract investments, boost India’s shipments and
Google to produce Pixel
smartphone in TN, says CM for Russian seaborne fuel oil
BLOOMBERG
CORRECTIONS AND
CLARIFICATIONS
create jobs. In a letter to Niti Aayog CEO B.V.R. Subrah- PTI Moscow: India and Egypt Mint welcomes comments,
Maharashtra seeks World Bank manyam, the CLE said that there is a need for holistic were the top destinations for suggestions or complaints
development of the entire sector. The elements of the Russian seaborne fuel oil and about errors.
finance for water grid project proposed policy, it said, can include incentives for setting vacuum gasoil (VGO) exports
Readers can alert the
Chhatrapati Sambhajinagar: The Maharashtra gov- up of manufacturing units, training of workers, support in April, as per traders and
newsroom to any errors in the
ernment is seeking finance from the World Bank for the measures for adoption of sustainable technologies and LSEG data. Russian fuel oil paper by emailing us, with your
PTI Marathwada water grid innovative products. PTI and VGO seaborne exports fell full name and address to
project and is also pursuing in April by 10% month-on- feedback@livemint.com.
the matter with Prime Minis- month to 3.32 million tonnes, as refining capacity idled
ter Narendra Modi, chief ‘India needs lower tax on due to maintenance, technical outages and drone attacks, It is our policy to promptly
respond to all complaints.
minister Eknath Shinde said. increased last month by 13.6% from March.
He met the divisional admin-
recruitment services’ REUTERS
Readers dissatisfied with the
response or concerned about
istration, collectors and a New Delhi: India should consider lowering the 18% tax Chennai: Google will partner with Foxconn to pro- Mint’s journalistic integrity may
few ministers over the water ISTOCKPHOTO imposed on recruitment duce its Pixel smartphones for the first time in Maldives to launch India’s write directly to the editor by
situation. agencies for providing out- Tamil Nadu, chief minister M.K. Stalin said on sending an email to
PTI
sourced staff to big companies Thursday. The decision to start its production unit
RuPay service soon asktheeditor@livemint.com
that could boost employment was a result of negotiations initiated by the state Male: Notwithstanding the turbulence in their bilateral Mint’s journalistic Code of
Leather exporters seek policy and wages of contract work- government with Google management, he said and ties, the Maldives will soon launch India’s RuPay service, Conduct that governs our
ers, industry body the Indian informed that the officials from Google would soon which a senior minister has said “will bolster the Maldiv-
to get investment, create jobs Staffing Federation said on come to Chennai to meet him in this regard. PTI ian Rufiyaa”. RuPay is a product of the National Payments
newsroom is available at
www.livemint.com
New Delhi: Apex body for leather and footwear exporters Thursday. REUTERS Corporation of India. PTI

FOR ANY QUERIES/DELIVERY ISSUES

CALL: 60004242, Monday-Saturday, 10am-6pm (Delhi, Mumbai, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, Chandigarh, Pune and Lucknow) MAIL: delivery@livemint.com TO SUBSCRIBE: Give a missed call on 7039035039 or visit www.mintreaders.com or write to us at subscription@livemint.com

First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
RAVI KRISHNAN (EDITOR); PUBLISHED/PRINTED BY MANHAR KAPOOR ON BEHALF OF HT MEDIA LTD, 18-20 Kasturba Gandhi Marg, New Delhi 110001
Printed at HT Media Ltd presses at •Plot No. 8, Udyog Vihar, Greater Noida, Distt Gautam Budh Nagar, Uttar Pradesh 201306; •MNSPrinters Pvt. Ltd, 345/4, Bhatrahalli, Near KR Puram RTO, Old Madras Road, Bangalore 560049; •Saraswati Print Factory Pvt. Ltd, 789, Chowbhaga (W), Near China Mandir, Kolkata 700 105; •MNSPrinters Pvt. Ltd, 76/1, Poonamallee High Road, Velappanchavadi, Chennai 600077; •
Bhaskar Print Planet, Survey No. 148P, Changodar Bavla Highway, Sanand (Tal), Distt Ahmedabad, Gujarat. •Jagati Publications Ltd, Plot No. D75 & E52, APIE Industrial Estate, Balanagar, Rangareddy Distt. Hyderabad 500037 *Also available in Chandigarh, Pune and Lucknow.
RNI Registration DELENG/2007/22485; Mint welcomes readers’ responses to all articles and editorials. Please include your full name, address and telephone number. Send in your views to the editor at letters@livemint.com. ©2024 HT Media Ltd All Rights Reserved
LIVEMINT.COM DEALS, TECH & STARTUPS FRIDAY, 24 MAY 2024
NEW DELHI 03

m MINT SHORTS WhatsApp to focus on Beauty blitz: Nykaa

Portl gets pre-Series A funds from moves to conquer
Bharat Innovation Fund, others
Bengaluru: Hyderabad-based Portl has raised $3 million (₹25
crore) in a pre-Series A funding round led by early-stage venture
capital firm Bharat Innovation Fund. The round also saw partici-
chat-based commerce the Gulf markets
pation from T-Hub Foundation and existing investor Kalaari Sowmya Ramasubramanian
Capital. The newly infused capital will be used by the startup for sowmya.r@livemint.com
product development, market expansion and improvement of BENGALURU
its artificial intelligence (AI) systems. Founded in March 2021 by Meta aims to empower businesses drive online shopping, says India head
B
Indraneel Gupta, Vishal Chandapeta and Armaan Kandhari, eauty retailer Nykaa is
Portl’s flagship offering, the Portl Studio, along with its digital looking to widen its pres-
platform, integrates AI to provide personalized fitness and well- Gulveen Aulakh ence in the Gulf Cooper-
ness experiences in users’ homes, luxury hotels and gymnasiums. gulveen.aulakh@livemint.com ation Council (GCC) through a
NEW DELHI mix of offline and online multi-
brand retail outlets, replicating

C
Beenext, All In Capital, others onversational commerce, or its domestic omnichannel play-
chat-based e-commerce, will book for the beauty segment.
back fintech startup ProsParity be a key priority area for In October 2022, the Mum-
WhatsApp in India for the bai-based firm had entered into
medium term, said Sandhya a strategic partnership with
Devanathan, head and vice president, Meta Apparel Group, one of the Falguni Nayar, founder and
India. This strategic initiative aims to ena- UAE’s largest retail conglomer- CEO, Nykaa. MINT
ble businesses leverage the platform more ates. In January, it launched an
effectively in converting users into online e-commerce website, Nysaa, region. Last year, the Tata
shoppers. and in March it opened its first group’s Titan said it will expand
Conversational commerce essentially brick-and-mortar retail store in its jewellery brand Tanishq
facilitates seamless interaction and shop- Dubai. It was also Nykaa’s first aggressively in the GCC, as part
ping experiences on chat platforms such as international outlet. of its plans to expand its pres-
WhatsApp and Instagram. For instance, “We believe Nysaa could be a ence in overseas markets.
users can effortlessly order products, say, a significant business over time In 2017, Kishore Biyani’s
soundbar from JioMart Shop, directly via as there is a clear market oppor- Future Group, too, had forayed
Bengaluru: E-mobility financing platform ProsParity WhatsApp. By accessing the product cata- tunity,” Falguni Nayar, founder into the region to expand its
has raised $2 million (₹16.6 crore) in a pre-seed funding logue within the chat app, users can navi- and chief executive of Nykaa, fashion vertical FBB.
round from a host of investors including Beenext, Spar- gate options, complete the purchase on the Sandhya Devanathan, head and vice president, Meta India. said during the fourth-quarter According to Nykaa’s Nayar,
row Capital, All In Capital, DeVC and Huddle Ventures. JioMart webpage using a variety of pay- analysts call on Wednesday. the Gulf region offers a range of
The round also saw participation from angel investors ment methods, such as cash-on-delivery, platform. Meta also suggests that there’s support, voice-enabled in-chat ordering The e-commerce company opportunities for the beauty
such as Ashish Gupta, the co-founder of Junglee and and track delivery status—all within the potential for further adoption of chat- and interactive menus on conversational has plans to pump market.
Helion Ventures), Raj Dugar, formerly of Eight Roads chat interface. based shopping, supported by its findings, platforms over the next 3-4 years. About sizeable capital Nykaa will invest The beauty and
Ventures, and Dhyanesh Shah, co-founder of Mosaic About 650 million Indian digital users that many users were reluctant to down- 80% of the enterprises were planning to into the venture. $1.9 million more personal care
Wellness. The funds raised will be used for building proof are on social media and messaging plat- load apps due to concerns like limited invest in generative AI within 1-2 years. In February, FSN into Nysaa via market in GCC is
of concept, technology and expanding origination net- forms, of which 450 million are not adept phone storage, with 40% of respondents Some of the early adopters of GenAI are E-Commerce’s its overseas estimated at $30
works, starting with Central India. The company founded at online shopping, Devanathan said, shar- even opting out of purchases when Zomato, Flipkart, Myntra and Plum, which board approved
subsidiary Nessa billion, recording
by Anirudh Dhakar and Saurabh Khodke, which tar- ing the findings of a report by Meta India prompted to install apps. Therefore, busi- have developed their own chatbots serving investment of $2.5 the world’s high-
gets the two-wheeler and three-wheeler segments, aims and Bain & Co. The survey involved 7,800 ness-specific apps may struggle to expand as personalized food assistants, shopping million in Nysaa. International est per capita
to reach ₹100 crore in assets under management in the participants, including 25 sen- assistants, apparel discovery It announced on Holdings spending. More-
next two years, according to its statement. ior executives from large and CHITCHAT TO CHECKOUT guides and insurance resolu- Wednesday that it over, nearly 40%
mid-market enterprises span- tion tools, respectively. will be investing of the population
ning retail, auto, consumer THE initiative aims META believes users SOME 80% of firms “With business messaging an additional $1.9 million in the is women, which is Nykaa’s
Freshleaf raises seed funding from products, banking, finance, to help businesses
leverage WhatsApp
unwilling to install
new apps on their
surveyed plan to
invest in GenAI over
becoming much more popu- venture via its overseas subsidi- largest target user base, and
insurance and travel, and rep- to convert users into phones may take to lar, we are investing in ways by ary Nessa International Hold- about 40% of the GCC market is
Inflection Point Ventures resenting 150 businesses in online shoppers
1-2 years for voice-,
chat-based shopping chat-based support which businesses can build on ings Ltd. under the age of 25 years.
Bengaluru: Freshleaf has raised $120,135 (₹1 crore) in a seed India. the platform (WhatsApp), can Nykaa follows in the foot- “The region’s affinity for
funding round from early-stage investor Inflection Point Ven- Enterprises can tap into the reach their audience and can steps of several Indian brands beauty, high per capita con-
tures. The funds raised will be used to expand marketing efforts, user pool through conversational plat- beyond the delta of the top 50 million to build experiences for (enhancing) cus- that have ventured into the sumption, potential for rapid
increase production capacity and improve research and develop- forms using GenAI tools, especially target- 100 million customers. tomer service. There’s a lot of effort from GCC region, aiming to capture growth and profile of the con-
ment for new products. Founded in 2022 by Balkirat Singh and ing the 350 million subset familiar with Around 70% of small and large enter- outside because we see this both as an a tech-driven and wealthy cus- sumer are clear opportunities,”
Muneet Arora, Freshleaf is a home-grown tea brand that offers Unified Payments Interface (UPI)-based prises covered in the report were increas- organic behaviour that’s happening on our tomer base. Nayar said during the analyst
a mix of traditional and sparkling teas at affordable prices. It has transactions. These users, who are com- ing investments in these solutions, while platform, which is people reaching out to Adventure gear maker Wild- call. She added that Nysaa has
an offline presence in 550 stores across 40 cities in India. It is fortable making online payments, present 60% of surveyed large enterprises were businesses, but we also see it as a key craft India signed an agreement the capability to materialize
expanding to modern retail and quick commerce, and in the UAE. an opportunity for conversions, as they planning to increase spending, primarily growth driver,” she told Mint, highlighting on Wednesday with Apparel revenue and profit there much
COMPILED BY K. AMOGHAVARSHA may prefer the ease of shopping on a chat on in-chat payment tools, local language the findings of the report. Group to sell products in GCC faster than in other markets.

Year ended
31.03.2023
04 FRIDAY, 24 MAY 2024
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

75,418.04 1.61 22,967.65 1.64 21,489.55 1.19 68,819.80 0.72 23,982.35 1.47 43,419.93 0.58 48,091.43 0.27
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

74,221.06 74,253.53 22,597.80 22,614.10 21,237.75 21,280.05 68,328.25 68,546.00 23,633.90 23,662.90 43,170.41 43,328.84 47,961.77 48,151.36
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

75,499.91 74,158.35 22,993.60 22,577.45 21,505.25 21,249.15 68,858.00 68,226.55 24,004.85 23,632.45 43,442.47 43,116.86 48,229.33 47,950.49

m MINT SHORTS
Bonds’ lead over gold wanes
Paytm must focus on lending biz
as debt worries grow Manish Joshi
Bogged down tives, quarterly payment processing by 90% sequentially to ₹720 crore in
For much of the past half a century, the US treasuries feedback@livemint.com margins, without UPI incentives, are Q4FY24, the firm will have to double
have handily outpaced gold as a buy-and-hold invest- Paytm's profitability was expectedly expected to be over 3 basis points. down on merchant and personal loans

ment. Now, bonds’ status as the ultimate haven is facing
one of its biggest challenges yet. Investors traditionally
flocked to US debt as a super-safe investment paying
steady income, and backed by the world’s economic
powerhouse. For buyers ranging from individual savers
to sovereign nations, these attributes made it a superior
investment to gold, which doesn’t generate cash flows as
bonds do, though it is still coveted as a scarce commodity
and inflation hedge. This relationship has been shifting
lately, with recent trends moving in gold’s favour. The
benchmark Bloomberg Treasury Total Return Index is
on track for its third annual decline in four years, extend-
ing its loss from a peak in 2020 to 11%. In comparison,
gold set a fresh record this week to clock in a 15% return
so far this year alone. BLOOMBERG
P
aytm parent One 97 Commu-
nications Ltd, felt the impact
of business disruptions due
to the Reserve Bank of India’s
(RBI) restrictions on its pay-
ment banking unit. The March quarter
(Q4FY24) results were disappointing,
and the outlook for the current quarter,
Q1FY25, could be even worse. Prima
facie, it appears that the management
suggests reversal of a positive Ebitda
(earnings before interest, taxes, depre-
ciation and amortization) before Esop,
(employee stock option plan) for the
fourth quarter of FY24 to negative in
Q1FY25.
Paytm’s Ebitda before Esop stood at
₹100 crore in Q4FY24. However, these
figures need adjustment to account for
unified payments interface (UPI)
incentives from the government for
payments made directly from a bank
account. The adjustment is necessary
because payment for the entire year is
reflected in Q4, despite being catego-
rized as operating income.
Adjusting for this, Paytm reported a
loss of ₹186 crore in Q4 at the Ebitda
before Esop level. This loss, according
RBI restrictions impacted Paytm
business.
to the management, is likely to widen
to ₹500-600 crore in Q1FY25.
Revenue guidance for Q1FY25 is at
₹ 1,500-1,600 crore, down from nearly
₹2,000 crore in the preceding quarter,
excluding UPI incentives. A significant
chunk of incremental loss in Q1 may be
attributed to the fall in payment service
weak in Q4FY24, and may get worse To be sure, Paytm’s payment servi- to make up for the shortfall. There is a
in Q1FY25
ces business is not the primary focus for lot of scope to do that in view of the very
300 investors given the wafer-thin margins low penetration levels, with merchant
Ebitda before ESOP (in  crore) and new competitors, such as Jio Pay- loans at 5.5% of total devices and per-
200 ments Bank and PB Fintech, testing the sonal loans at 1.1% of monthly transact-
waters. The cross- selling opportunity ing users (MTU).
to develop a lucrative busi- Revenue from marketing
100
52 ness of loan distribution or ROUGH services, including adver-
Q4FY24 financial services caught PATCH tising, credit card distribu-
0 everyone’s attention. tion and ticketing for travel,
Q4FY23 Paytm earns 4-5% take REVENUE guidance movies, and events etc. was
-100 rates (fee charged on trans- for Q1FY25 is at
₹ 1,500-1,600 cr, from
down 23% sequentially in
actions), including collec- ₹2,000 cr in the Q4FY24 to ₹395 crore. The
-185 tion fees of 1-2% in certain preceding quarter management attributed the
-200
cases on loans disbursed by fall to lower MTUs.
Note: Ebitda is earnings before interest, tax, lending partners, with no INVESTORS are Investors are sitting on
depreciation and amortization; for better sitting on losses with
comparison, UPI incentives of 182 crore and first loss default guarantee the stock falling as losses with the stock falling
288 crore are deducted from Q4FY23 and (FLDG), which is effective much as 44% so far 44% so far in 2024. Its cur-
Q4FY24 figures, respectively.
when a borrower defaults, in 2024 rent market capitalization
Source: Company
MINT as the lending partner has of ₹23,000 crore, adjusted
PRANAY BHARDWAJ/MINT
the right to force Paytm to for cash in hand, excluding
income with National Payments Council share a part of the loss. After media customer funds of ₹8,300 crore, leaves
of India data showing a sequential drop reports about a potential loss to Paytm net enterprise value (EV) of ₹14,700
of nearly 8% in UPI transaction value due to FLDG, jittery investors took the crore. Sure, the worst may be behind in
on the Paytm app in April. stock through a series of lower circuits terms of regulatory uncertainties, but
While overall payment processing in May. However, the firm has denied the case for an upside rests on scaling
margin for the fiscal is expected to be extending any such guarantee. up its loan distribution business. Can
5-6 basis points (bps) of gross merchan- Meanwhile, as lending under the the business hold fort for Paytm is the
dise value (GMV) including UPI incen- buy now, pay later (BNPL) scheme fell question investors need to answer.

With solid results from Nvidia, investors are returning to

the AI theme. REUTERS Q4 gains not enough, Ramco Cements faces revival challenges
Asian chip stocks hit 3-yr high Harsha Jethmalani the Nomura report. the amount stood at ₹1,922 crore. desh to 6.30 mtpa and double its
Bright spot
on Nvidia’s bullish AI forecast harsha.j@htlive.com Ramco’s management said
The Ramco Cements Ltd saw higher-than-expected sales volume
According to Centrum, Ramco cement capacity to 3 mtpa with a
An index of Asian chip-related stocks rose to the highest demand is expected to be robust in Q4FY24 has overspent on capex over the 15 MW of waste heat recovery

T
level in over three years as the latest bullish sales forecast he Ramco Cements Ltd
from Nvidia Corp. provided a fresh tailwind for the artifi- exceeded expectations
cial intelligence trade. The Bloomberg Asia Pacific Semi- with volume of 5.5 million
conductors Index climbed as much as 1.7% to its highest tonnes in the March quarter
level since February 2021, erasing an April pullback. (Q4FY24), up 17% year-on-year.
Among major Nvidia suppliers, Taiwan Semiconductor This growth surpassed the
Manufacturing Co. gained as much as 1.5% to a record industry average of 12%, accord-
high. Global chip shares retreated last month amid low- ing to Nomura, indicating mar-
ered expectations for US interest-rate cuts, and as con- ket share gains for the company.
cerns grew over the sustainability of an AI-driven rally But the good news ends here.
that sent the Bloomberg Asian chip measure up 90% Akin to peers, Ramco’s realiza-
since late 2022. With renewed hopes for Federal Reserve tions took a hit during Q4 due to
easing and solid results from Nvidia, investors are return- muted prices in core markets of
ing to the AI theme. Nvidia’s shares jumped more than 7% south and east India. Blended
in late US trading after the company reported results and realization declined 8% sequen-
a revenue outlook that beat analyst expectations, while tially versus a 5% sequential drop
also announcing a 10-for-1 stock split. BLOOMBERG recorded by the industry, said
after the general elections, but
prices remain under pressure in
its key markets, barring Odisha.
Consequently, earnings esti-
mates for FY25 and FY26 have
been revised downwards by sev-
eral brokerages.
Centrum Broking tweaked its
estimate for FY25 and FY26. Its
Ebitda estimates were revised
downwards by 15%/12%, respec-
tively. True, the cement sector is
grappling with muted realiza-
tions as prices fail to recover. But
Ramco’s investors have to deal
with additional issues, apart
from the weak profitability out-
Volume (in million tonnes)
last four years resulting in lower
Year-on-year growth (in %) (right-hand scale)
return ratios. For FY25, the com-
6 60
pany management revised its
capex guidance from ₹1,700
4 40 crore announced in Q3FY24 to
₹1,200 crore. However, it is still
2 20
at elevated levels. Further, net
debt increased to ₹4,822 crore at
March-end and the average cost
0
Q1FY23 Q4FY24
0 of debt for FY24 rose to 7.70%
compared to 6.35% in FY23.
Source: Motilal Oswal Financial Services, Company
In this backdrop, with contin-
PRANAY BHARDWAJ/MINT
uing capacity additions, mean-
look, making its earnings growth Ramco had guided for capex of ingful deleveraging is unlikely
trajectory bleaker. ₹800-₹850 crore, increasing it for the near term. The firm pro-
Take, for instance, the capital later to₹1,650 crore. Eventually, posed to double clinker capacity
expenditure (capex). For FY24, including maintenance capex, at Kolimigundla in Andhra Pra-
system. This expansion is sched-
uled to be commissioned in
FY26. The company’s aggregate
installed capacity would reach 19
mtpa for clinker and 26 mtpa for
cement by FY26.
Considering various compa-
ny-specific challenges and weak
prices in core markets, a turn-
around in its fortunes seems dis-
tant. The stock has fallen 22% in
2024, and trades at an FY25 EV/
Ebitda multiple of around 12
times, shows Bloomberg data.
This a discount to some of its
south-focused, pan-India peers,
but is not encouraging enough.

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

Sebi moots relaxation in valuation norms for AIFs Options traders pile into big
PTI
feedback@livemint.com
appointed by AIFs .
These relaxations are also
below investment grade, valua- regulations.
tion norms under mutual fund It further said that the valua-
damental valuation based on
cash flows pertinent to the
short on India volatility
new delhi related to the timeline for (MF) regulations should not tion norms under the MF regu- underwriting thesis, which
reporting valuation of invest- apply and these securities lations cannot be applied to pri- mutual fund guidelines do not Bloomberg

C
apital markets regulator ment portfolio by AIFs to per- should be valued vate instruments cover. feedback@livemint.com
Sebi on Thursday pro- formance benchmarking agen- as per the Inter- Sebi has sought held by AIFs, since In addition, Sebi has sug-

posed providing relaxa-
tion on the framework pertain-
ing to valuation of investment
portfolio of alternative invest-
ment fund (AIF).
These relaxations are related
to computing valuation of
investment portfolio of AIFs,
change in valuation methodol-
ogy regarding ‘material
change’, eligibility criteria of
independent valuers to be
cies, Sebi said in its consulta-
tion paper.
The Securities and Exchange
Board of India (Sebi) has sought
comments from the public till
13 June on the proposals sug-
gested by it.
In its consultation paper, the
regulator has suggested that
the valuation of securities such
as unlisted securities, non-
traded, thinly-traded and those
I
national Private comments the mutual fund gested that a change in valua- n a market that’s captured
Equity and Ven- from the public valuation process tion methodology or approach the attention of global
ture Capital Valu- till 13 June is a rule based should not be construed as a finance for allegedly making
ation Guidelines. framework that ‘material change’, which can $1 billion for Jane Street Group,
on the
For valuation follows a series of significantly influence the many trading firms are
of securities, proposals processes around decision of the investor to con- employing a relatively simple
other than suggested by it pricing for invest- tinue to be invested in the strategy: short volatility.
unlisted securi- ments in open- scheme of the AIF. The trade, or variations of it,
ties, it has been ended vehicles. Consequently, AIFs should revolves around a bet that
proposed that valuation norms AIFs mostly hold private not be required to follow the Indian stock indices will move
should be carried out as per the investments where one needs process of providing an exit within relatively small ranges,
norms prescribed under MF to delve into and present a fun- option to dissenting investors. according to five participants
familiar with the strategy, who The trade, or variations of it, revolves around a bet that Indian
asked not to be identified dis- stock indices will move within relatively small ranges. MINT
cussing private information.

Apis Growth, Roc Star, Mio IV Star exit Star Health
Mayur Bhalerao & their highest levels since Feb-
Ranjani Raghavan ruary 2023.
This divestment follows
mumbai Apis Growth’s previous sale of
10 million shares of Star Health
Significant amounts of capital asset managers away from lennium Management, spark-
are deployed to scale the deriv- China has steadily lifted the ing interest in how they might
atives bets in the world’s largest South Asian nation’s equities. have amassed the profits. Risky
market by number of options The country’s stock bench- bets around the derivatives also
₹4,570 crore, compared to contracts traded, the people mark has moved 2% or more in led to a pair of traders in Hong
₹3,993 crore during the said. only nine out of the previous Kong exiting Societe Generale
period. While the high-speed trad- 500 trading sessions, data SA, people familiar with the
Star Health maintained a ers sell options, long-only compiled by Bloomberg shows. matter have said.
33% market share in the retail funds and retail investors buy Still, the strategies can be While none of the trading

A
pis Growth and Roc
Star Investment Trust,
and Mio IV Star have
offloaded their entire stakes in
Star Health and Allied Insur-
ance, while another investor
Mio Star has divested part of its
holdings in the company.
The sale, representing 7.06%
stake of Star Health and Allied
Insurance Co., was executed
through a block deal on the
National Stock Exchange at
₹535 per share on Thursday,
fetching ₹2,210.5 crore.
Apis Growth sold its 2.61%
holdings, Roc Star Investment
Trust divested 1.01%, and Mio
IV Star exited its 2.39% stake.
Notably, Mio Star, sold off a
1.05% stake, reducing its hold-
ing in Star Health to 1.16%.
for ₹553 crore in March.
As of 31 March, Apis Growth
held a 2.61% stake, while Mio
Star and Mio IV Star (both
linked to Madison Capital)
held 2.21% and 2.39% stakes
respectively in Star Health.
The positive investor senti-
ment surrounding Star Health
can be partly attributed to its
Star Health’s shares rose as much as 6.3% intraday on Thursday, strong financial performance.
hitting their highest levels since February 2023. AP The company reported 40%
rise in net profit in the fourth
Insurance giants and asset Capital Master Fund acquired quarter ended March, at ₹142
management firms bought the 0.94% for ₹294 crore, and Plu- crore, up from ₹102 crore a
shares. tus Wealth Management snag- year earlier.
ICICI Prudential Life Insur- ged 0.51% for ₹160.5 crore, all The company’s gross writ-
ance Co. picked up a 2% stake at ₹535 per share. ten premium also witnessed a
for ₹626 crore, showing confi- ICICI Securities managed significant rise, reaching
dence in Star Health’s future. the sale process. Star Health’s ₹4,968 crore against ₹4,199
HDFC Mutual Fund got 0.96% shares rose as much as 6.3% crore in the year-ago period.
for ₹300 crore, East Bridge intraday on Thursday, hitting Its net premium increased to
health insurance sector in
FY24, while its market share,
among general insurance
companies, grew by 22 basis
points to 5.26%.
The insurer improved its
cashless claims payout ratio
to 87% of total claims in
FY24, compared to 80% in
FY23. It added over 75,000
agents during the fiscal, tak-
ing its agents count to over
700,000.
Star Health stock has been
on a downward trend since its
December 2021 debut, failing
to recapture the IPO price of
₹900. It closed at ₹539.30 on
May 22, down over 40% from
the initial offering price.
mayur.bhalerao@live-
mint.com
contracts to make speculative risky, leaving firms open to firms have disclosed their strat-
bets or protect massive losses in egies, Optiver, Citadel Securi-
themselves India’s options the event of sud- ties LLC, IMC Trading BV and
against sudden market entered den, large moves. Jump Trading have all been
market drops and the spotlight after In the US, such expanding in India, alongside a
are often on the Jane Street filed trades contrib- bevy of hedge funds and other
other side of the u t e d t o t h e players. A common strategy
a lawsuit
trade, the people so-called Volma- has been to sell puts and calls,
said. against two geddon of Febru- either at the same strike or at
There is no ex-employees ary 2018, when different strikes. In both cases,
indication that investors who had the sellers of these so-called
Jane Street’s bil- piled into low-vol- straddles and strangles bet that
lion-dollar strategy, which it atility strategies were caught the premium they pocket more
has been ordered to detail to a flat-footed by a sudden spike than offsets any loss from a
US District Judge by 23 May, after years of calm. move in the index.
employed any of these trades. India’s options market Aside from shorting volatil-
An external spokesperson for entered the spotlight last ity, trading firms also profit
Jane Street declined to com- month after Jane Street filed a from continuously offering to
ment. lawsuit against two former buy and sell on a range of
The wager has been lucra- employees alleging they took a options, hoping to profit on the
tive so far as India’s rising secret strategy involving Indian spread between bid and ask,
wealth and a shift by global options to their new jobs at Mil- one of the people said.
LIVEMINT.COM CORPORATE FRIDAY, 24 MAY 2024
NEW DELHI 05

Zee seeks $90 mn

fee from Sony for Delaporte is top dollar IT boss
cancelled merger The ex-Wipro CEO was IT sector’s highest-paid boss in FY24 with earnings of $20.1 million, or about ₹167 crore
Lata Jha
lata.j@htlive.com
NEW DELHI Jas Bardia after the company allowed acceler- annual reports for the current finan-
jas.bardia@livemint.com ated vesting of shares awarded to cial year, as of the 12 months ended

Z
ee Entertainment Enter- BENGALURU him, taking his total earnings since March 2023, HCLTech CEO C.
prises Ltd has asked he resigned from the company on 6 Vijayakumar and Infosys CEO Salil

W
Sony Group Corp.’s ipro Ltd’s former April, to about $8.5 million. Parekh earned $10.6 million and
India unit to pay a termination chief executive Delaporte, who joined the Benga- $6.8 million, respectively.
fee of $90 million for calling off officer (CEO) Thi- luru-based IT company on 6 July Delaporte’s doubling of remuner-
a merger deal that would have erry Delaporte 2020, resigned as Wipro’s CEO on 6 ation comes even as Wipro’s execu-
created a $10 billion media became the Indian April, a year before his five-year ten- tive chairman Rishad Premji did not
behemoth in the country. (information technology) IT sector’s ure was to end. His abrupt exit get a commission for a second suc-
“This is with respect to the highest-paid top boss for the finan- prompted the company to put Srini- cessive year.
termination of the Merger Sony Group Corp. announced cial year ended March, earning $20.1 vas Pallia in his place. Pallia is As per company filings, Premji
Cooperation Agreement (MCA) the termination of the deal million (₹167 crore) during the expected to earn $7 million in his was entitled to receive a commission
dated 22 December 2021 with Zee on 22 January. REUTERS period, the company’s filings with first year as CEO, according to a that was 0.35% of the company’s
between Zee Entertainment the US Securities and Exchange company filing. In contrast, Thierry incremental net profit over the pre-
Enterprises Ltd and Culver On 22 January, Sony Group Commission showed. earned $8.8 million as remuneration vious financial year. However, since
Max Entertainment Pvt. Ltd Corp., the Japanese parent Frenchman Delaporte’s remuner- in his first year in the role, in Wipro’s net profit did not
and Bangla Entertainment Pvt. company of Sony Pictures Net- ation doubled from FY23, when he the year ended March grow in this time, he did
Ltd…and the Company’s appli- works India (SPNI), which is earned about $10 million in annual 2021, according to not receive the commis-
cation before the National now called Culver Max Enter-
Company Law Tribunal, Mum- tainment, and Bangla Enter-
compensation. His salary increase in
FY24 was primarily driven by a cash
another filing.
Delaporte’s salary, 3.8%
The percentage
sion.
Premji earned less in
bai seeking direc- tainment Pvt. Ltd severance payment of $4.33 million, Former Wipro CEO Thierry Delaporte. PTI while highest among FY24 compared with
tions to imple- Zee had initiated (BEPL), had and the cost of accelerated vesting of his Indian IT peers, is a decline in Wipro’s FY23. He pocketed
ment the Com- legal action to announced the 989,130 unvested stock options. US-based HFS Research, an outsour- licitation, non-disparagement, and tad lower than the Nas- revenue for FY24 $0.77 million in FY24,
posite Scheme of contest Sony's termination of the Additionally, while his base salary cing research firm. other obligations), his compensation daq-listed Cognizant down from $0.95 million
Arrangement and claims of $90 mn $10 billion merger and other payouts more than dou- The Wipro stock settled at for the year ended 31 March 2024 Technology Solutions CEO that he had earned in the 12
the withdrawal of ₹465.85 on Thursday on the includes, inter alia, cost of acceler- Ravi Kumar Singisetti, who months through March 2023.
termination fee, agreement with bled from FY23, his commission
National Stock Exchange, up 1% ated vesting of 9,89,130 unvested earned $22.6 million in the year Wipro reported a consolidated net
the said applica- ZEEL, while seek- increased four-fold in FY24.
tion. We hereby for which Sony ing $90 million for “The accelerated vesting of Dela- from the previous close. It has stock options and cash compensa- ended December 2023. Cognizant profit of $1.3 billion for the 12 months
wish to inform moved Siac breach of condi- porte's stock options added a signifi- gained nearly 17% over the past year. tion in the amount of US $4.33 mil- follows a January-December ended 31 March, which is 3.6% lower
you that the Com- tions besides initi- cant amount to his FY24 remunera- “In recognition of Delaporte’s lion and applicable social security accounting year, whereas Indian than in FY23.
pany has, on ating arbitration. tion. Wipro’s stock has been in the contributions in driving significant contributions, subject to appropri- software exporters follow an April- Delaporte’s salary also doubled at
account of Culver Max’s and Zee Entertainment had then ascendancy over the last year so Del- transformation at the company dur- ate deductions. Delaporte’s payment March financial calendar. a time India’s fourth-largest IT com-
BEPL’s breaches under the initiated legal action to contest aporte profited nicely from that. ing his tenure as chief executive offi- in the form of cash compensation Tata Consultancy Services Ltd, pany is struggling to grow.
MCA, terminated the MCA and Sony's claims of $90 million This is a problem with many CEO's cer and managing director, and with shall be subject to shareholders’ India’s largest IT company and Wipro is the only company among
sought a termination fee from (around ₹748.5 crore) as a ter- compensation where they are too a view to enable a smooth transition, approval,” read the company’s fil- thrice the size of Wipro, paid $3.1 India’s top four IT firms to report a
Culver Max and BEPL in mination fee, for which the focused on stock price over other ensure business continuity and to ing. million to CEO K. Krithivasan for the yearly revenue decline. The firm
accordance with the provisions Japanese firm moved the Sing- key performance areas. This is not ensure adherence to post-engage- Mint had reported on 16 May that financial year ended March 2024. reported $10.8 billion in revenue for
of the MCA,” Zee has said in a apore International Arbitration restricted to Wipro,” said Phil ment obligations (including, but not Delaporte sold shares to the tune of While HCL Technologies Ltd and FY24, which was 3.8% lower than in
letter to the exchanges. Centre (Siac). Fersht, chief executive officer of limited to, confidentiality, non-so- $4.1 million over the past month Infosys Ltd are yet to disclose their the previous year.

Air India Jio Fin looks to up

announces foreign investment
incentives, Shayan Ghosh &

salary hikes Dhanya Nagasundaram

PTI MUMBAI
feedback@livemint.com

J
NEW DELHI io Financial Services on
Thursday said it has sought

A
ir India on Thursday
announced annual sal-
ary increments for its
staff, and also introduced an
annual target performance
bonus for pilots, according to
the people aware of the matter.
This is the first appraisal pro-
cess after Tata Group took
over the loss-making airline a
little over two years ago.
On Thursday, Air India
CHRO Ravindra Kumar GP
announced salary increments
for employees, with effect
from 1 April 2024, as well as
performance bonus payouts
for FY23-24 based on com-
pany and individual perform-
ance, the people mentioned
above said.
They said that Air India,
which is in the process of
revamping itself under a five-
year transformation plan, is
providing competitive salary
increments to attract and
retain talent as part of larger
efforts to have a performance-
driven and meritocratic cul-
ture among the employees.
Air India has around 18,000
employees.
The airline has rolled out
annual appraisals for all
employees, who joined before
31 December 2023, including
ground staff, cabin crew and
pilots.
shareholder approval to
increase the share of for-
eign investments in its equity
capital to up to 49% post-con- As of 31 March, foreign
version into a core investment investors held a 19.45% stake
company (CIC). in the company. BLOOMBERG
This comes after the board
on 27 December approved for- Rules and the Foreign Direct
eign investments—including Investment (FDI) policy, for-
foreign portfolio investments— eign investment in a CIC is per-
of up to 49%. As of 31 March, mitted under the government
foreign investors held a 19.45% approval route,” it said in a
stake in the company. Core postal ballot notice available on
investment companies are the stock exchanges.
non-banking financial compa- The Reserve Bank of India
nies (NBFCs) holding not less (RBI) had, while granting its
than 90% of their net assets in approval for change in the
the form of investment in shareholding pattern of the
equity shares, company under
preference On 27 Dec, the the scheme for
shares, bonds, board approved demerger from
debentures, debt up to 49% foreign Reliance Indus-
or loans in group investments, tries Ltd, asked
companies. the company to
including
According to meet eligibility
the company, portfolio criteria for a core
under the Foreign investments investment com-
Exchange Man- pany and apply for
agement (non- conversion to
debt instruments) Rules, rais- NBFC-CIC (non-banking
ing the limit of foreign invest- financial company-core invest-
ments to up to 49% requires ment company). This, the RBI
approval by way of a special res- had said, must happen within
olution. Such resolutions need six months of the date of the
at least 75% shareholder votes scheme becoming effective or
in favour to sail through. three months of the date of list-
“As per the provisions of the ing of the equity shares, which-
Foreign Exchange Manage- ever is earlier.
ment (Non-debt Instruments) shayan.g@livemint.com
06 FRIDAY, 24 MAY 2024
NEW DELHI CORPORATE LIVEMINT.COM

India’s audit
watchdog ITC Q4 profit shrinks 1.3% to m

MOVES
set to widen
inspections
₹5,020 crore on low demand A weekly list of C-Suiters who have moved up
the corporate ladder either within or outside
their companies.

Anil Appointed as Chief AI Officer at

FROM PAGE 1 Pawar Yotta Data Services

and their clients to take cor-
rective action where deficien-
cies are detected. The inspec-
tion reports do not name the
business client of the auditor,
but explains what is wrong
with its accounts and audit.
It sees a recovery in rural markets on improving macroeconomic indicators, good monsoon Annapurna Appointed as General Manager
Das India Operations at Takeda
Suneera Tandon stood at ₹616.42 crore. Anuj Appointed as Chief Executive
suneera.t@livemint.com In the FMCG segment, the company Rathi Officer at Cleartrip
mumbai reported a sequential uptick in certain
commodity prices. Competitive inten- Bharat Appointed as Group CFO & Head

“Identifying audit files of
six-seven audit clients of audit
firms for quality review,
selected based on appropriate
criteria, would be a good sam-
ple size for an audit regulator
for making an assessment of
audit quality firm-wide and
quality of audit performed,”
said Ashok Haldia, an expert in
accounting and auditing.
Haldia explained the regula-
tor’s recent inspection reports
have sensitized audit firms and
audit teams to take a deep look
at their existing quality control
systems and processes and
application of those while car-
rying out audits. “This helps
them in strengthening quality
control systems, build capacity
and increase use of technol-
A
fter reporting flat March-
quarter numbers for
2023-24, FMCG major
ITC Ltd said it expects a
recovery in rural demand
in line with forecasts by market
researcher Nielsen IQ (NIQ). Rural
markets had outpaced urban markets
for the first time in 15 months, NIQ had
said earlier this month.
“While consumption demand
remained subdued in Q4FY24,
improving macro-economic indica-
tors, prospects of a normal monsoon
and green shoots witnessed in rural
demand recovery after several quar-
ters, augur well for revival in consump- Net profit for the maker of Gold Flake cigarettes and Bingo chips was slightly
tion demand in the near-term,” the below the ₹5,150 crore estimated by a Bloomberg poll.
company said in its earnings statement
released on Thursday.
sity remained high, including from Kalsi Strategy at Nuvama Group
local or regional players in certain cate-
gories, the company said. Deepayan Appointed as HR Director Business
Meanwhile, segment revenue for Sensharma Services at Haleon
cigarettes rose 7% to ₹7,924.84 crore,
sharply ahead of Street estimates. Seg- G R Arun Appointed as Group CFO at
ment PBIT or profit before interest and Kumar Welspun World
tax was up 5% y-o-y. “Sharp cost escala-
tion in leaf tobacco and certain other Indranil Appointed as Chief Business Officer
inputs and increase in taxes was largely Dutta - Bancassurance at Bandhan Life
mitigated through improved mix, stra-
tegic cost management and calibrated Kalpana Appointed as Chief Human
pricing,” the company said. Devnani Resources Officer at Smartworks
On Thursday, its board recom-
nues in agriculture and paperboards, Supreme Court received during the

ity, purposeful innovation, agility and during the quarter.

HT
mended a final dividend of ₹7.50 per
share. ITC shares closed at ₹441.20 a
piece, up 0.33% on National Stock
Exchange. Earnings per share for the
year stood at ₹16.39 against ₹15.15.
Meanwhile, revenue for the com-
“With its focus on consumer centric- and paper and packaging businesses year which resulted in a credit of pany’s agriculture business was down
₹468.44 crore in the current tax 13.3% y-o-y to ₹3,101 crore in Q4.
Mahesh
Rajaraman
Namit
Sharma
Neelesh
Talathi
m Appointed as Chief Risk Officer at
Mahindra Finance

Appointed as CEO Studio Business

at Arře

Appointed as Group CFO at

Cardekho

ogy,” said Haldia.
The watchdog has repeat-
edly raised the point of audi-
tors in several cases not being
sceptical about the assertions
of the management. Some of
the key areas where the regu-
lator takes a long hard look
include whether the audit firm
has complied with independ-
ence norms, whether or not
auditor disqualification provi-
sions in the Companies Act are
attracted and the integrity of
the audit documentation.
The regulator also takes
note of any specific step taken
by audit firms to enhance the
confidence of the stakeholders
in the audit.
MOVES
execution excellence, the company The company’s expenses jumped expense for the year,” the company said. “Operating environment remained
remains confident of navigating the 2.4% to ₹12,017.71 crore year-on-year FMCG revenue (excluding ciga- challenging due to various policy inter- Neha Jolly Appointed as Head of Advertising
short-term challenges and creating (y-o-y) during January-March. rettes) rose 7.1% to ₹5,300.17 crore in ventions of the Government of India to Sawhney Solutions, India at Snap
sustained value for all stakeholders.” For the full year, the company’s gross the three months ended 31 March, ensure food security and control infla-
ITC on Thursday reported a 1.3% tion,” the company said. ITC wit- Neha Saxena Appointed as Executive VP HR at
drop in its standalone net profit to in slow lane nessed steep increase in green leaf Shenoy Info Edge India
₹5,020.20 crore in the three prices that exerted pressure on
months ended 31 March 2024, the company revenue from the firm saw a its expenses margins. Ranjeeka Appointed as Chief Human
amid weak demand during the remains confident
of navigating the
operations grew 1.4% decline in revenues
to ₹17,752.87 crore in agriculture and
jumped 2.4% to
₹12,017.71 crore
“Agri business segment was Sachdev Resources Officer at Jaquar India
quarter. Net profit for the maker of short-term from ₹17,506.08 paperboards, and year-on-year during impacted by trade restrictions on
Gold Flake cigarettes and Bingo challenges agri commodities. Strategic portfo- Appointed as Chief Digital and
crore a year earlier packaging business January-March Sanjay Information Officer at
chips was slightly below the ₹5,150 lio (comprising value-added agri Mishra
crore estimated by a Bloomberg products) and leaf tobacco revenues Jindal Stainless
poll of 20 analysts. revenue remained flat at ₹69,446.20 driven by staples, biscuits, snacks, up 18% y-o-y in Q4. Geopolitical ten- Santanu Appointed as President and Chief
Revenue from operations grew 1.4% crore, while profit was up 8.9% to dairy, homecare and incense sticks. For sions and climate emergencies have led
Sengupta Growth & Strategy Officer at Zeron
to ₹17,752.87 crore from ₹17,506.08 ₹20,422 crore. the full year, the business grew 9.6% to concerns over food security and food
crore a year earlier. The revenue “During the year, the company reas- y-o-y to ₹20,966.83 crore. inflation; trade restrictions imposed by Shilpa Appointed as Chief Executive
figure exceeded Street estimates of sessed its provisions relating to uncer- For FMCG-others segment, earnings the government on agri commodities
Urhekar Officer at Gensol Engineering
₹17,191 crore. tain tax positions for earlier years based before interest, taxes, depreciation and limit business opportunities for the
The company saw a decline in reve- on a favourable order of the Honourable amortization or Ebitda for the quarter segment,” the company said. Appointed as Chief Marketing and
Shweta Sales Officer at The Leela Palaces,
Jain Hotels & Resorts

Bourse deal off in Premium flights soon on IndiGo Vaibhav

Mehrotra
Appointed as President Operations
& Supply Chain at Hamilton
Housewares

blow to Gift City FROM PAGE 1

The turnaround
During the March quarter, the airline more than doubled its
including free and restricted
cash, have increased ₹34,737
Source: Accord India, executive search worldwide

before interest, tax, deprecia- December quarter net profit of ₹919.2 crore to ₹1,894.8 crore.
crore at the end of March
FROM PAGE 1 India INX was the first tion, amortization and rent) 2024, an increase of 48.3%
IndiGo's earnings (in ₹ crore)

to comment on the reasons for

the decision. Attempts to
international stock exchange
to start operations at the
Gift City in January 2017.
grew 140% y-o-y to ₹17,544.7
crore, with margins of 25.5%.
Driven by a 24.7% surge in
Revenue
80,000
68,904
Profit/Loss
12,000
over the corresponding year
when it was ₹23,424 crore.
Kaul said no other Indian
Kirloskar Industries
8,172
reach a spokesperson of NSE
were unsuccessful.
“The merger was driven by
NSE IX followed soon after, in
June 2017.
The boards of BSE and
its traffic in 2023-24 to 106.7
million, IndiGo’s market share
rose from 56.8% in March
60,000
8,000

the IFSCA’s objective of mak-
ing Gift City a global financial
centre rivalling the likes of
Singapore, Hong Kong, Lux-
NSE had approved the
merger in the latter half
of 2022, following key
executive changes. Ashish-
4,000
1,659
airline is likely to report record
profits. “Exceptional results
and sets up a new benchmark.
can sell its shares of
2023 to 60.5% in March 2024. 40,000 Indian market is fundamen-
Market share data is sourced
from the DGCA (directorate
general of civil aviation).
20,000
0

embourg and Dubai. To that
end, the talks having ended are
a setback,” the person cited
earlier said.
kumar Chauhan moved to
NSE as its managing director
and chief executive from BSE,
while Sundararaman Rama-
-4,000
tally very strong, but overall
don’t see industry profitability
changing in the near term
Kirloskar Bros: NCLT
18,580 Nehal Chaliawala
On Thursday, InterGlobe except for IndiGo,” he added.
0 -8,000
shares closed almost 1% up on 2016-17 2023-24 2016-17 2023-24 The company’s record per- nehal.chaliawala@livemint.com
BSE at ₹4,400.55. Source: Company
formance during the full year new delhi
IndiGo said the premium was in sync with financial

The IFSCA, India’s unified
regulator for international
financial services centres such
as the Gift City, aims to pro-
mote the country as a global
financial hub.
A second person said
despite their rivalry in India,
the regulator of Gift City was of
the view that the merger
would strengthen the coun-
try’s bid to become a global
financial hub. “The merger
talks failing are a disappoint-
ment,” he said.
NDTV Profit was the first to
report about merger talks fall-
ing through.
murthy, who previously
worked with Chauhan at NSE,
joined BSE as its MD and CEO
in January 2023.
V. Balasubramaniam, MD
and CEO of NSE IX, joined
from India INX in December
2022, where he held the same
position.
He had also closely worked
with Chauhan at BSE.
NSE IX dominates the mar-
ket in Gift City with a 95% share
and has recorded a turnover of
$116.08 billion from 1 April to
22 May of the current fiscal
year. The remaining market
share is held by India INX.
class will be available on the
“busiest and business routes”
of the country, and further
details would be shared by
August. While the airline did
not mention any specific
route, the Delhi-Mumbai
route, India’s busiest, appears
to be a no-brainer.
Industry analysts have
termed this move significant.
“A very significant step, but
once the details are known
about the product and service
model, a more qualified
assessment can be made,” said
Kapil Kaul, CEO, Centre for
Asia Pacific Aviation in India.
The announcement comes
after IndiGo announced last
month that it would purchase
30 long-haul Airbus A350 air-
craft. That announcement sur-
prised the industry, as there is
no global precedent of low-
cost airlines successfully oper-
ating wide-body planes. That's
because the economics of
wide-bodied planes do not
work without premium class
seats, a product that low-cost
airlines do not offer.
Industry insiders, however,
said it may work in the case of
IndiGo. “There is no success-
SARVESH KUMAR SHARMA/MINT
ful example of a low-cost, long-
haul airline in the world, but it
may work for IndiGo since
India is a unique market
because of its sheer size, aspi-
rations and also its geographic
location,” an executive with an
aircraft manufacturer said on
the condition of anonymity.
During the fourth quarter
ended 31 March 2024, the air-
line more than doubled its
Q3FY23 net profit of ₹919.2
crore to ₹1,894.8 crore. Total
income rose 26.7% in the fourth
quarter to ₹18,505.1 crore.
IndiGo’s cash reserves,
numbers reported by its global
peers such as Emirates and
Singapore International Air-
lines, who have also reported
record numbers.
While Emirates reported
record profits of $5.1 billion for
the fiscal, Singapore Interna-
tional Airlines reported a
record profit of $2 billion.
In India, the airline is seeing
a rise in the competitive
landscape from new entrant
Akasa Air, and the Tata group,
which is in the process of
merging its four airlines into
two, one low-cost and another
full-service.
I
n a new turn of events in the
ongoing dispute between
two factions of the Kirloskar
Group, the National Company
Law Tribunal (NCLT) on
Tuesday allowed Kirloskar
Industries Ltd (KIL) and its
promoters Atul Kirloskar and
Rahul Kirloskar to sell their
stakes in Kirloskar Brothers
Ltd (KBL). Atul Kirloskar, chairman,
The Mumbai bench of the Kirloskar Industries.
tribunal agreed that petition-
ers KIL and Atul and Rahul pletely transparent and inde-
Kirloskar have been able to pendent manner”. The com-
make out a case of oppression pany’s actions were “definitely
and mismanagement at KBL. influenced and coloured by
The tribunal also directed the aspirations” of Sanjay Kir-
the petitioners to first make an loskar and his family mem-
offer for sale of their shares to bers, the tribunal said.
KBL chairman Sanjay Kirlos- KIL and other petitioners

Dividend boost fuels rise to $5 trillion; bank stocks lead rally
FROM PAGE 1
a third of the Nifty’s weight-
age, are expected to drive the
rally into the elections.
“Banks, which have been
laggards, could drive the rally
further, given expectations of
lower fiscal deficit, thanks to
the RBI dividend, and a rise in
their treasury income as inter-
est rates are expected to
decline, going forward,” said
Andrew Holland, CEO at
Avendus Capital Alternate
Strategies. Lower interest spell
good times for rate-sensitive
sectors like banks and autos.
Traders covered bearish
bets in Bank Nifty futures con-
tracts that expire on 29 May,
and added fresh bullish posi-
tions to Nifty futures contracts
expiring on 30 May. The Bank
Nifty contract’s open interest
(outstanding buy-sell con-
tracts) fell 3.39% as the index
rose, signalling short-cover-
ing, while the Nifty contract’s
OI rose 5.16%, indicating fresh
long creation.
The Bharatiya Janata Party
(BJP) will score a record num-
ber of seats in the Lok Sabha
elections, and the markets will
hit a record on 4 June, Prime
Minister Narendra Modi
stated in an interview with The
Economic Times.
Looking ahead, the first 100
days of the new government
and the upcoming budget will
be crucial events, Holland of
Avendus Capital said.
Typically, the fear gauge
India Vix drops when the mar-
ket rises and vice-versa; how-
ever, on Thursday, even as the
market scaled fresh highs Vix
fell a mere 0.4% to 21.38. Vix
has almost doubled this month
as investors stay glued to the
results of the Lok Sabha elec-
tions. However, analysts are
said. It expects sectors such as
consumer and IT to lag and
small and midcaps to do better
than large caps for a few days.
Adding $1 trillion in less
than six months shows India’s
economic resilience and
strong growth outlook, which
has attracted significant retail
inflows into equities and
boosted the markets, said
Gaurav Dua, senior vice-presi-
dent and head of capital mar-
ket strategy, Sharekhan by
BNP Paribas.
Both the Nifty and the Sensex rallied 1.6% each to fresh closing Said Jiten Doshi, co-founder
highs of 22,967.65 and 75,418.06. REUTERS and chief investment officer,
ENAM AMC, “During this jour-
confident the rally will con- -booking as the reality of exe- ney, once we crossed $1 trillion,
tinue past the 23,000 mark in cution and valuations for every trillion, we have taken
Nifty before the election emerge,” Venugopal Garre about half the previous time to
results are out. and Nikhil Arela of Bernstein clock the next trillion.” Over
“We expect a short-term said in a note dated 21 May. the last three decades, in US
rally either leading into elec- The sectors that will lead are dollar terms, India’s GDP has
tions or the week after results, infrastructure, manufactur- grown 10 times, while its mar-
potentially breaching our 23K ing, domestic cyclicals and ket cap has grown almost 25
Nifty target and then a profit some financials, the report times, he added.
On Thursday, India’s mar-
ket capitalization stood at
144.7% of 2023-24 GDP, a mul-
ti-year high.
“The surge in the market
capitalization of Indian equi-
ties was primarily driven by a
surge in broader market indi-
ces (midcap and smallcap)
including the PSU indices,”
said Dhiraj Relli, MD & CEO,
HDFC Securities.
March quarter earnings have
been largely in line with expec-
tations, keeping the earnings
trajectory intact for FY25/26,
with an implied 13-15% earnings
CAGR (compound annual
growth rate) for Nifty compa-
nies, pointed out Naveen Kulk-
arni, CIO of Axis Securities PMS.
“In FY24, earnings grew by
20%, indicating strong market
returns driven by fundamental
factors. Thus, it was a matter of
time that India could touch the
record of $5 trillion,” he said.
kar and his kin, in keeping collectively hold 24.92% stake
with the spirit of a deed of fam- in KBL. Sanjay Kirloskar and
ily settlement (DFS) entered by his family own 39.5%.
members of the family in KIL, along with Atul and
2009. If the second party fails Rahul Kirloskar, had moved
to make a binding offer within NCLT alleging oppression and
30 days, the shares can be sold mismanagement of operations
to a third party. at KBL, and
If the second KIL and other alleged that it had
party buys the petitioners rejected pre-
shares, it would collectively hold clearance appli-
be considered an 24.92% stake in cations filed by
inter-se transfer, them for buying
KBL. Sanjay
not triggering the or selling of
requirement to Kirloskar and his shares of KBL.
make an open family own 39.5% The respon-
offer, the tribunal dents argued that
further observed. the DFS granted
The fourth generation of the Sanjay Kirloskar and his family
Kirloskar family has multiple exclusive control over KBL
ongoing legal disputes. On one and so the other family faction
side are brothers Atul Kirlos- cannot buy more shares of the
kar and Rahul Kirloskar, along firm. The tribunal observed
with multiple members of the that the DFS has no such men-
industrialist family; on the tion of exclusive ownership,
other end is estranged brother ruling that the rejection of
Sanjay Kirloskar. such pre-clearances by KBL’s
The tribunal also pulled up compliance officer and board
KBL, observing that the affairs of directors was contrary to the
of the listed company were not rights of the petitioners as the
being conducted in a “com- company’s shareholders.
LIVEMINT.COM CORPORATE FRIDAY, 24 MAY 2024
NEW DELHI 07

Paytm executives seek GIFT POWER COMPANY LIMITED

NOTICE INVITING TENDER
GIFT Power Company Limited (GIFT PCL) invites Tenders as per the following details:

new job opportunities Tender Enquiry No.

Work Description
Estimated
Cost/EMD (Rs.)
Availability
of Bid
Document
Last Date & Time of Bid
Submission/ Date and
Time of Opening of Bid

GIFT Power Company Limited/

Medium/Lumpsum As per the Guidelines
Tariff/24-25/ET/43 of Medium-Term 24.06.2024 ;
Regulatory squeeze on group spurs senior executives to look elsewhere Procurement of 5 MW RTC
Procurement of from 12:00 Hrs
Power Notified by the 23.05.2024
Power under Medium-Term Ministry of Power and 24.06.2024 ;
Shayan Ghosh & Devina Sengupta Arrangement for the period as amended from Up to 15:00 Hrs
MUMBAI starting from 01-09-2024 time to time.
to 31-08-2027

A
clutch of senior and mid-level
Complete Tender Documents is available on our website www.giftgujarat.in.
executives at Paytm and its
associate company Paytm Home Page  Downloads  Others
Payments Bank are seeking For, GIFT Power Company Limited
roles elsewhere amid regula- Sd/-
tory restrictions on the group and top-level
churn. According to two senior recruiters, Director
there are a lot of resumes from Paytm in the
Registered Office: GIFT Power Company Limited, EPS - Building no. 49A, Block 49, Zone 04,
market, spanning corporate, business, and
Gyan Marg, GIFT City, Gandhinagar – 382355 (GUJARAT) India.
technology roles.
The recruiters, who spoke on condition Tel. No. : +91 7930018332, Fax No. : +91 7930018321
of anonymity, said the resumes started
coming in after RBI imposed restrictions
on Paytm Payments Bank, with the flow
increasing lately.
On 31 January, the Reserve Bank of India
(RBI) barred the payments bank from
accepting customer deposits after the end
of February, which was later extended to 15
March. This strictures crimped the com- On 31 January, RBI barred Paytm Payments Bank from accepting customer deposits
pany’s ability to do business. after the end of February, which was later extended to 15 March. HT
“Many of them (employees) had joined
the company when things looked much take a 20% pay cut as the value of ESOPs A Paytm spokesperson said the company
different. Now they believe their growth (employee stock ownership plan)— has expanded the leadership team to
aspirations will be curtailed if they do not included in the overall cost to company or strengthen succession planning and work
look for other opportunities,” said one of CTC—eroded over time. Paytm has lost directly with the senior management.
the recruiters who specialises in senior- more than half of its market value since RBI “We will also be looking at promoting
level hires. “We also have a bunch of CVs clamped down on its payments bank in our high-performing employees to senior
(curriculum vitae) with us from Paytm job- January, showed data from Bloomberg. leadership. This commitment positions us
seekers.” Meanwhile, a senior banking recruiter as an employer of choice amongst our
The recruiter cited above peers,” the spokesperson said
said that moving out of Paytm READY TO BOLT in an emailed statement. “We
might not be easy for these continue to appreciate the
employees since their salaries THE resumes THE executives EXPERTS say resilience of our employees
are 20-30% above the levels started coming in
after RBI imposed
fear their growth
aspirations will be
moving out of Paytm during these times. As we look
might not be easy for
seen in the market. curbs on Paytm curtailed if they do the staff since their to recover fully in terms of
“Their salaries are much Payments Bank not look for jobs salaries are high business, we will also be look-
higher than what other com- ing to add new talent, espe-
panies pay since they were cially at senior levels.”
hired from good organizations in the from one of the leading search firms said, On Wednesday, Paytm's parent One 97
e-commerce space and other well-paying “Many are moving from fintech space to Communications reported a net loss of
sectors,” said the recruiter. core banking but recruitments in BFSI are ₹550 crore for the March quarter, more
This was seconded by the chief executive no more at a frenzied pace. For CXOs, than tripling from a loss of ₹168 crore in the
of a bank who said that Paytm employees interviews are tougher since approval from same period last year, with the company
are difficult to absorb because of their sala- RBI—a requirement for banks before taking an impairment of ₹227 crore on its
ries. Another senior recruiter said that appointing a director—will become a con- investment in the payments bank.
Paytm employees are often being forced to cern.” shayan.g@livemint.com

Canara HSBC Life Insurance Company Limited

139, Sector – 44, Gurugram-122003, Haryana (India)
Tel: 0124-4535500, Email: procurement@canarahsbclife.in
NOTICE INVITING BIDS/OFFERS
Open Tender is invited against RFP for Empanelment of Regional Agencies for MICE Services
dtd 24-May-24.
Above tender has been uploaded on https://www.canarahsbclife.com/tenders-notices.html,
website of Canara HSBC Life Insurance Company Ltd. All prospective bidders are advised to
visit the aforesaid website for downloading the RFP.

the Power to
Think Ahead. Think Growth.

Explore powerful narratives

and expert analysis with
Mint Specials

Scan Now To
Download The App

HAVE FUN
WITH FACTS ON SUNDAYS
Catch the latest column of
A A quiz on the week’s development.

hindustantimes htTweets www.hindustantimes.com

08 FRIDAY, 24 MAY 2024
NEW DELHI GLOBAL LIVEMINT.COM

CFOs lock in savings with interest-rate

swaps amid uncertainty about Fed cuts
Some companies are locking in fixed rates now, saving millions of dollars in interest costs
Kristin Broughton rowing rate of one-month Term Or conversely, if rates fall by more line of credit. The swap carries a
feedback@livemint.com Secured Overnight Financing Rate, than expected, swaps could end up rate of 3.9725%.
or SOFR, of 5.35%, according to the being more costly than keeping Returning cash to shareholders

S
ome companies are
saving millions of dollars
by entering into interest-
rate swaps as they con-
front the possibility it
could be a while before the Federal
Reserve cuts rates.
The Fed said recently it is
prepared to keep rates high for a
long period, following a string of
higher-than-expected inflation
readings. That was a shift from
just months earlier, when the
central bank signaled it had shifted
its focus to potential rate cuts as
inflation eased.
Uncertainty about when the Fed
will cut rates, and by how much, has
created oppor-
tunities for
some compa-
nies to save
money by entering into interest-
rate swaps. Companies use these
swaps to convert floating interest
rates to fixed, or vice versa, depend-
ing on their financial objectives.
Some companies have recently
picked up savings by locking in
fixed rates on their floating-rate
debt, such as term loans or revolv-
ing lines of credit.
Timing the transactions just
right can be a boon. Swap rates
reflect what investors have priced
in for interest rates over a period. At
the start of the year when investors
expected several cuts from the Fed,
a three-year swap rate was 3.77%,
compared with a short-term bor-
advisory firm Chatham Financial.
After a run up during the first
several months of the year, swap
rates have declined again in recent
weeks, amid renewed optimism
about Fed rate cuts, stemming in
part from a more favorable inflation
report. Rates on a three-year swap
were 4.4% as of May 20, down 0.24
percentage point since the end of
April, according to Chatham. Term
SOFR, meanwhile, remains at
about 5.3%.
“We will see a pick up in activity
as we have a pullback in rates, like
we’ve just had,” said John Wahr,
managing director in the derivative
products group at U.S. Bank, dis-
cussing what
typically hap-
pens when swap
rates fall. The
bank has seen an uptick in demand
for swaps in recent weeks, he said.
Canadian bus manufacturer NFI
Group in January entered into an
interest-rate swap that has a value
of $500 million through October,
after which the value declines to
$450 million until the swap expires
in April 2025. The company
wanted to reduce variability in its
interest expenses, as it can take as
long as two years for the company
to manufacture its vehicles under
contracts with customers, accord-
ing to Brian Dewsnup , the com-
pany’s finance chief.
NFI, whose business has strug-
gled with supply-chain disruptions,
The Fed recently said it is prepared to keep rates high for a long period, a shift from just months earlier.
has $761 million in floating-rate
credit facilities, made up of a term
loan and a revolving facility, tied to
SOFR. Through a swap, NFI locked
in a rate of 4.6%. The swap so far has
saved NFI several million dollars in
interest costs, according to the
company.
“We’re not in the business of tim-
ing interest-rate swaps perfectly,
and so we’re going to do it when it’s
convenient for us,” Dewsnup said.
If interest rates stay higher for
longer, the company could see sav-
ings over the length of the swap
contract, though that could change
depending on potential interest
rate cuts, he said.
CFOs have grown more comfort-
able with hedging interest-rate risk
in recent years, particularly in light
of aggressive rate hikes from the
Fed to tame inflation, according to
corporate bankers, who said
demand for swaps has increased.
Interest-rate swaps are one of sev-
eral products that companies use to
manage interest-rate risk and mini-
REUTERS
mize debt costs.
Swap rates reflect a rough
average of where investors expect
rates to go in the future. Because
the market is pricing in future rate
cuts, companies that swap their
floating rates for fixed swap rates
can pick up immediate savings, a
welcome boost after a period of
high inflation.
If market projections play out as
expected when a company enters
into a swap, a swap in theory would
be a wash in terms of interest costs.
floating rates in place. is a priority for USA Compression
However, companies that locked Partners, and fixing the rate
in swap rates months ago—when through a swap gives investors the
investors were overly optimistic certainty that those returns will be
about Fed rate cuts—are expected protected, said Eric Long , the com-
to pick up significant savings over pany’s president and chief execu-
time. “There’s been a fair amount of tive. Extending the swap through
folks regretting not having taken the end of next year also coincided
action earlier,” said Amol Dhar- with when the company expects to
galkar, managing partner and refinance the loan.
chairman at Chatham Financial. Additionally, at the time of the
Floating-to-fixed swaps work extension, USA Compression Part-
like this: Borrowers pay their lender ners expected that interest rates
the interest rate on the likely wouldn’t come
underlying loan, made After a run up down as quickly as
up of SOFR plus a during the first investors expected,
credit spread, which is several months of and that inflation
the additional amount the year, swap might stick around for
lenders charge above a a while. So it made
rates have
benchmark rate. sense to lock in
Under a separate con- declined again in attractive swap rates
tract, the company recent weeks while they were avail-
pays a financial insti- able, Long said. As of
tution, which could be March 31, USA Com-
its lender, a fixed rate, and the pression Partners saved $8.7 mil-
financial institution pays the com- lion in interest expenses through
pany SOFR. The net result: The the swap, according to the com-
borrower effectively pays a fixed pany. The company estimated as of
interest rate. March 31 it would save $7.5 million
USA Compression Partners, a over the remaining tenor of the
natural gas compression company swap contract, though that amount
based in Austin, Texas, last fall would change based on what hap-
extended its $700 million floating- pens to SOFR.
to-fixed interest-rate swap, which “We don’t like risk. We like sta-
was set to expire next April, to bility. And what better way—we’re
December 2025. The swap, which coming into the election year.
the company entered into in April We’ve got two wars going on,” he
2023, was designed to lock in the said, discussing the swap extension.
interest rate on a portion of the “We were very opportunistic.”
company’s $1.6 billion floating-rate ©2024 DOW JONES & CO. INC.

Nvidia’s business is booming. This could slow it down. Eurozone rebound continues
Asa Fitch
feedback@livemint.com
apace as Germany leads Nvidia chip, that doesn’t mean
demand will necessarily wane,
said Jared Quincy Davis, chief

N
vidia is riding high
after another quarter
of blockbuster sales
recovery, surveys show executive of AI startup Foun-
dry Technologies.
“I think their belief is very
and earnings, even as threats much like ours, that when you Joshua Kirby
are emerging that could make things 100 times more feedback@livemint.com
weaken the company’s posi- efficient, you grow the market

tion at the center of the artifi-
cial intelligence boom.
Rivals and key customers
are looking to produce chips
that can close the gap with
Nvidia’s products. Meanwhile,
the AI market, which has
proven tricky for some start-
ups, is shifting in ways that
could diminish the popularity
of Nvidia’s chips.
Despite the power and
promise of AI, startups are
struggling to come up with a
business model that can
recoup the massive invest-
ment in hardware the technol-
ogy requires. Sequoia Capital
estimated in March that the
industry put $50 billion into
Nvidia’s chips to train large
language models, but genera-
tive AI startups had only made
$3 billion in revenue.
Some AI startups that built
products using Nvidia’s AI
chips have run into turmoil,
including Inflection AI, a
Nvidia-backed company that
had its co-founder and other
employees decamp for Micro-
soft in March. The chief execu-
tive of Stability AI, which built
the popular image-generation
AI tool Stable Diffusion, left
abruptly in March.
AI companies big and small
also are increasingly looking
for ways to build and deploy
smaller models that can be
effective for specific tasks but
don’t require as much of the
computational firepower that
depends on Nvidia’s chips.
Depending on how they
play out, those factors could
help take some of the gusto out
of a yearlong bonanza for
Nvidia, whose sales tripled in
the latest quarter and are pro-
jected to double in the second
quarter. The success has
pushed Nvidia’s stock price to
record highs and led the com-
pany to more than double its
dividend and announce a
10-for-1 stock split.
In an interview, Chief Exec-
utive Jensen Huang laid out
ways the company is position-
ing itself to grow despite chal-
lenges. He described an
expanding role for Nvidia,
G
by much more than 100 ermany led a contin-
times,” Davis said. “The better ued recovery in euro-
the economics of doing things zone economic activity
with chips is, the bigger the in May, according to business
markets will be.” surveys, adding to signs that
Huang said some regions of global growth is becoming less
the world could produce a lim- reliant on the U.S.
Nvidia sales tripled in the latest quarter and are projected to double in the second quarter. REUTERS ited amount of power, and for The eurozone economy
them, the important thing was contracted in the second half
moving beyond making chips its customer choice and can spending on the effort. to get the best chips to maxi- of 2023 following a surge in
into crafting the data centers hinder innovation,” said Rod- Microsoft also recently said mize what they could do. But energy and food prices trig-
that he sees as modern digital rigo Liang , the chief executive it would offer cloud-comput- in some countries, there was gered by Russia’s invasion of
factories that churn out artifi- of SambaNova Systems, an AI ing customers access to AMD’s excess energy that could be Ukraine, and the subsequent
cial intelligence. In addition to chip startup that is competing AI chips, giving them an alter- harnessed for AI, he said. rise in interest rates intended
its AI chips, Nvidia makes cen- with Nvidia. native to Nvidia. “It’s not being exported, to tame that inflation.
tral processing chips, net- Advanced Micro Devices Hans Mosesman, an analyst there’s no available power grids By contrast, the U.S. econ- Eurozone manufacturing hit a 15-month peak in May. REUTERS
working chips and software, CEO Lisa Su said last month at Rosenblatt Securities, said to take it to different places, so omy expanded strongly over
among other components that that her company expected in a note that Nvidia was it’s a great place to build data the same period, opening up opinion polls. at a steady pace in May. A
are critical in AI. about $4 billion in revenue expected to lose market share centers,” he said. “AI doesn’t an unusually wide growth gap Similar surveys pointed to a narrowing in the growth gap
“This is not a chip business,” from AI chips this year. Intel in the percentage of the care where it’s trained.” with the eurozone. That gap further acceleration in India’s between the U.S. and the
he said. “You’re building data launched a new generation of world’s AI chips that it makes Nvidia has responded to its narrowed as the eurozone rapidly-expanding economy, eurozone also suggests that
centers, and if anybody’s ever its AI chips in April, and CEO because of the competitive growing challenges by push- returned to growth in the first and to a rebound in Japan, any divergence between
seen a data center, go take a look Pat Gelsinger said in a call with pressure. But he said it was ing ahead with new genera- three months of the year, and where the economy con- their respective central
and imagine the unbelievable analysts that the company likely to maintain and even tions of chips. The company is the surveys suggest the pro- tracted in the first three banks is unlikely to be
amount of technology that goes expected $500 million in reve- increase its overall share of the expecting to release later this cess will continue after a short- months of the year. In Austra- lengthy.
into building these things.” nue from those chips in the AI computing landscape year the next versions of its lived widening. lia, the surveys pointed to a The ECB has signaled it
Louis Miscioscia, an analyst second half of the year. because of moves it was mak- most advanced AI chips, Eurozone business activity slight slowdown in growth will lower its key interest
at Daiwa Capital Markets, Big tech companies like ing to grow its presence in known as Blackwell, with fur- increased for a third straight during May. rate in early June, while the
said in a note that Nvidia was in Amazon , Google, Meta and other areas of computing and ther updates annually. month in May, and at the fast- “The eurozone’s economy is Fed is waiting for evidence
the right place at the right Microsoft are opening another in software. T h e est pace in a gathering further strength,” that a slowdown in inflation
time, acting as the leading front against Nvidia by design- Beyond the direct challen- company year, the Hamburg Commercial Bank will resume after setbacks
supplier to a boom that could ing their own chips and having ges in chip-making, Nvidia will also is surveys chief economist Cyrus de la this year.
rival the introduction of per- them made by contract manu- have to adapt to a changing AI expanding suggest. Rubia said. “Manufacturing Nevertheless, eurozone
sonal computers, facturers. market to stay ahead. For the reach of its business in data The composite Purchasing acts less and less as a stumbling businesses and households
mobile phones Nvidia faces Google, which much of the first year of the AI centers where AI computation Managers Index—a measure of block for the economy and shouldn’t bank on successive
and the internet. challenges from has been making boom, the focus of investment happens. It is offering a grow- activity in the services and optimism about future output cuts to borrowing costs, ECB
“AI is big, but new competition its own AI chips has been on building, or train- ing menu of networking chips manufacturing sectors—rose has increased further.” Vice President Luis de Guin-
could be even and a shifting for years through ing, generative AI models, and other infrastructure cus- to 52.3 from 51.7. A reading Businesses dos said. “There is
bigger than these a partnership requiring enormous comput- tomers need to build big AI above 50.0 points to an reported that ECB has signaled a huge degree of
artificial
world-changing with chip maker ing ability that is well suited to computation systems, what increase in activity. they were rais- it will lower its key uncertainty,” he
events,” he said. intelligence Broadcom , Nvidia’s chips. Huang often refers to as “AI The uptick was led by pow- ing their prices said. “We have
market interest rate in
A big question unveiled a new Those expensive chips are factories.” erhouse economy Germany, at the slowest June, while the made no deci-
for investors is generation of its less critical in the deployment “We’re producing some- where continued strength in pace since
Fed is waiting for sions on the num-
whether Nvidia AI chips this phase, known as inference, thing that most people at the services and improvement in November, ber of interest
can keep up the momentum or month. Amazon announced when models are asked to pro- moment don’t understand. industry drove activity to its which should proof of inflation rate cuts or on
if the market will drop off amid new AI chips in November, the cess new information and There will be new factories highest level in a year. That reassure the slowdown their size,” he said
a confluence of market and same month Microsoft said it respond. Chief Financial Offi- created, and we’re going to helped the manufacturing sec- ECB. However, in an interview
competitive challenges. too would start making cus- cer Colette Kress said Wednes- produce intelligence at scale,” tor in the bloc as a whole grow the eurozone published Thurs-
Nvidia’s chip-making com- tom AI chips. day that more than 40% of the he said at a conference this closer to recovery, reaching a continued to add jobs in May, day. “We will see how eco-
petitors are increasing their Industry analysis firm company’s sales of data center month in Santa Clara. 15-month peak. suggesting that wages may nomic data evolve.”
game, releasing their own AI TechInsights estimated this chips in the past year were Huang’s wide-ranging By contrast, surveys of pur- not cool as rapidly as the ECB Continued resilience in the
chips that they have claimed week that Google became the already for that purpose. ambition to shape the future of chasing managers pointed to had hoped. eurozone economy would
are better, at least at some AI third-largest designer of chips There are also broader computing should help Nvidia a slowdown in the U.K. econ- The ECB released figures likely make the ECB more
computing tasks. They are also for data centers in 2023, after threats to the AI boom, such as battle competitors looking to omy following a stronger- Thursday that showed wages cautious about lowering bor-
aiming to displace Nvidia’s Nvidia and Intel. Broadcom the ability to build data centers encroach on its AI dominance, than-expected start to the negotiated by labor unions in rowing costs after its first
dominance in software used to CEO Hock Tan said in an inter- to house the AI chips and pro- said Stacy Rasgon , an analyst year that saw it outpace the the eurozone were 4.7% higher move, economist Franziska
access its GPUs, responding to nal address this year that his duce enough electricity . at Bernstein Research. U.S. The survey was released in the first quarter than a year Palmas at Capital Economics
demand from customers who company’s custom chip divi- In addition, companies are “It’s on them to make sure a day after Prime Minister earlier, a faster increase than wrote in a note. “If the econ-
want alternatives. Nvidia’s sion, which mostly helped Goo- focusing on how to build and that they can keep the moat Rishi Sunak called a surprise the 4.5% recorded in the final omy continues to hold up
market share in AI chips is esti- gle make AI chips, was bringing deploy powerful AI systems wide, and right now I’d say election for early July, bank- three months of 2023 well, cuts further ahead may
mated at above 80%. in over $1 billion in operating more efficiently. Still, as com- they are doing a pretty good ing on signs of an improved A survey to be published be slower than we had antici-
“The current reliance on a profit a quarter, underlining panies look to squeeze more job,” Rasgon said. economic outlook to turn later Thursday is expected to pated,” she said.
single chip manufacturer lim- how much money Google is computation out of each ©2024 DOW JONES & CO. INC. around a large deficit in the show U.S. activity increased ©2024 DOW JONES & CO. INC.
LIVEMINT.COM NEWS WRAP FRIDAY, 24 MAY 2024
NEW DELHI 09

NEWS
100,000
THE MONTHLY capacity, in number of
₹71,231 cr
THE REVENUE reported by InterGlobe
₹1,218 cr
THE REVENUES reported by Tata
$15.6 bn
THE VALUE of smartphones exported
23
THE NUMBER of prior charges, including
IN units, that Dixon Technologies plans to Aviation, which runs IndiGo, in FY24, up Starbucks in FY24, up 12% from the from India in FY24, up 42% from the cheque fraud, faced by Bhavesh Bhinde,
NUMBERS have for manufacturing Google Pixel 8
smartphones locally, says a report
27.5% from ₹55,881.41 crore in FY23,
as air travel demand soared
previous year, helped by the opening of
95 new stores during the fiscal
previous year, making it the fourth-largest
export item from the country
the prime accused in the 13 May Mumbai
billboard collapse that killed 17 people

HOWINDIALIVES.COM

Sterlite Power gets FIRE TRAGEDY RIL and Disney seek

nod for demerger India antitrust nod

S R
terlite Power Transmission Ltd (SPTL) has eliance Industries Ltd (RIL) and Walt
received the approval of its shareholders Disney have sought antitrust clearance for
and creditors for the demerger of its their $8.5 billion India media merger by
transmission business from the company. In arguing their combined power, especially on
November last year, the firm had announced the cricket broadcasting, will not hit advertisers,
demerger of its transmission business into a two people with direct knowledge told Reuters.
separate entity. After the demerger, SPTL would The deal, announced in February, has been
only retain its manufacturing business. expected by experts to face intense scrutiny as it
“The vote on the demerger proposal received will create India’s biggest entertainment player
100% approval from secured creditors, 99.26% with 120 TV channels and two streaming
approval from unsecured creditors, 99.99% services. It will also own lucrative rights for
from equity shareholders present and voting, cricket, India’s top sport. Reliance and Disney
and 100% by the non-fund-based lenders. The have told the Competition Commission of India
proposed demerger will empower both its (CCI) the cricket rights were obtained separately
businesses—the demerged transmission under a bidding process which was competitive,
infrastructure (to be housed under Sterlite Grid said the two sources, who declined to be named
5 Limited) and global products & specialized as the approval process is confidential.
EPC services (that will continue to remain under The firms argue other competitors won’t be
SPTL)—to pursue independent growth harmed as they can bid when those rights expire
strategies with greater agility and focus,” said a in 2027 and 2028, the sources added. REUTERS
company statement. RITURAJ BARUAH

Firefighters try to extinguish a fire that broke out due to a boiler blast at a chemicals factory at Dombivli in Maharashtra’s Thane district on Thursday.
At least seven persons were killed and more than 40 injured in the incident. PTI

IIHL sought an extension of the 27 May deadline

Services sector drives India’s As part of this deal, about 1,500 employees, 700
contractors will be transferred to HCLTech. MINT
to pay lenders ₹8,000 cr for acquiring RCap. MINT

Hinduja gets more biz activity expansion in May HCLTech to acquire

some assets of CTG
time to pay lenders
I
T company HCLTech on Thursday said it will

T
he National Company Law Tribunal
(NCLT) has allowed more time for the
Hinduja Group’s IndusInd International
Holdings (IIHL) to seek the remaining
regulatory approvals necessary for the
completion of the resolution of bankrupt
Reliance Capital (RCap), according to two
people aware of the matter.
acquire certain assets of Hewlett Packard
The composite PMI has now remained above 50 for 34 straight months Enterprise’s Communications Technology
Group (CTG) for $225 million, about ₹1,874
crore, in an all-cash deal.
Rhik Kundu This index is based on a survey of 400 manufac- ahead increased to its highest in over 11 years, As part of this agreement, approximately
rhik.kundu@livemint.com turers and 400 service providers. A reading above resulting in firms increasing their staffing levels. 1,500 employees and 700 contractors with
New Delhi 50 shows expansion in economic activity, while a However, higher input costs in both sectors led to experience of engineering services for telecom
print below that signals contraction. further margin squeezes, particularly for service industry in various countries—including Spain,

I
The order came in response to an application
moved by IIHL on Wednesday, seeking an
extension of the 27 May deadline for paying
lenders ₹8,000 crore for acquiring RCap. The
group cited pending regulatory approvals and
compliances as reasons for the extension of the
deadline. “The order passed by the court further
directed that no coercive action can be taken by
the CoC, including no encashment of any bank
guarantee of ₹483 crore submitted by IIHL, as
demanded by some of the CoC members,” said
the people cited earlier.
On 18 May, Mint had reported that the
Mauritius-based entity IIHL had informed
lenders last week that it is awaiting a few more
regulatory and legal clearances before making
the full payment. GOPIKA GOPAKUMAR
ndia’s business activity continued to grow at a
solid pace in May, driven by expansion in the ser-
vices sector, even as manufacturing cooled due
to a slowdown in new orders and production,
according to a flash survey by HSBC.
Services firms recorded their sharpest increase
in business activity in four months, the HSBC Flash
India PMI—which is a forecast—compiled by S&P
Global, reported. The services purchasing manag-
ers’ index (PMI) climbed to 61.4 from 60.8 last
month, while the manufacturing purchasing man-
agers’ index eased to 58.4 from 58.8 in April.
The composite index, which is seasonally
adjusted and measures the month-on-month
change in the combined output of a country’s man-
ufacturing and service sectors, rose to 61.7 in May
from 61.5 in April.
The composite PMI has now remained above 50 providers,” Bhandari added. Italy, India, Japan, China, Americas and APAC
for 34 straight months. The final data will be The data underscores India’s position as one of region—will be transferred to HCLTech, the
released next the fastest-growing companies said in a note.
month. major economies. HCLTech in a regulatory filing mentioned
“The composite Services PMI climbed to 61.4 from The Reserve Bank of that the deal is for “purchase of certain assets
PMI ticked up fur- 60.8 last month, while manufacturing India (RBI) expects (CSS) of Communications Technology Group, a
ther in May, record- the economy to grow business division of Hewlett Packard Enterprise
ing the third strong- purchasing managers’ index eased to at 7% in FY25, while Company. CSS delivers engineering services to
est reading in close 58.4 from 58.8 in April the government’s leading global Communications Service
to 14 years, sup- second advance esti- Providers (CSPs) leveraging its intellectual
ported by a sharp mate pegs economic properties in a global delivery model.” PTI
acceleration in the service sector,” said Pranjul growth at 7.6% in FY24, up from 7.3% in FY23.
Bhandari, chief India economist at HSBC. “The Future Output Index rose by nearly seven
“Additionally, the latest data showed strength in points in May, showing a considerable improve-
new export orders for both sectors, which rose at ment in confidence surrounding near-term output
the fastest pace since the series started in Septem- prospects among Indian private sector firms,” the
Taro shareholders
ber 2014. The level of optimism about the year survey said.
approve merger

S
hareholders of Taro have approved
Mamaearth parent the company’s merger agreement with
Goldman gets Saudi HQ licence Sun Pharma, the Mumbai-based drug
posts ₹30.4 cr profit major said on Thursday.
The merger agreement between Israel-
investment to set up its regional based Taro and Sun Pharma was approved by

H
onasa Consumer, the parent of
consumer brands Mamaearth,
Aqualogica, and Bblunt, recorded a
profit of ₹30.4 crore in the quarter ended
March, swinging from a loss of nearly ₹160
crore in the same quarter last year.
Revenue from operations rose 21% to ₹450.8
crore amid slowing retail demand.
In FY24, the direct-to-consumer brand
made a profit of ₹111.7 crore, against a loss of
₹142.8 crore in the previous year. Operating
revenue rose 28% to ₹1,919.9 crore for the year
ended 31 March.
Honasa acquired 65.49% in Fusion
Cosmeceutics Pvt. Ltd which sells skin care and
Goldman Sachs becomes the first Wall Street
bank to get the licence.
headquarters in Riyadh, according to
people familiar with the matter. It wasn’t
immediately clear how many staffers will
move to Saudi Arabia and how much of
Goldman’s regional operations will
ultimately be based in the kingdom.
A spokesperson for Goldman
declined to comment.
Saudi Arabia announced new
regulations for state contracts in 2021,
saying it wanted to limit “economic
leakage”—a term used by the government
for state spending that can benefit
REUTERS firms that don’t have a substantial
presence in the country.
The deal is estimated to be valued at more than
$250 million over five years.
News Corp, OpenAI
the affirmative vote of Taro shareholders at an
extraordinary general meeting and an
ordinary class meeting on 22 May 2024, the
drug major said in a statement.
“We are pleased with the approval by Taro’s
shareholders, which, subject to the remaining
closing conditions, will enable Taro to merge
with Sun,” Sun Pharma managing director
Dilip Shanghvi said.
Upon completion of the merger, currently
expected to close in around 35 days, Taro will
REUTERS become a privately held company, wholly-
owned by Sun Pharma and soon after its
shares will be de-listed from the NYSE. PTI

G sign content deal

beauty products under the brand Dr. Sheth’s in
the last financial year. It acquired the
remaining stake of 34.51% for a consideration
of ₹30 crore, according to exchange filings on
Thursday. The company announced the
acquisition of Cosmogenesis Laboratories on
Thursday. It said the deal will close over the
oldman Sachs Group Inc. has
become the first Wall Street bank to
take a step toward complying with
Saudi Arabia’s ultimatum for foreign firms
to set up their Middle Eastern base there.
The investment bank received a licence
recently from the kingdom’s ministry of
Under the rules that came into force
this year, firms must have a regional base
in Saudi Arabia with at least 15 employees,
LinkedIn reviewing
N
including executives overseeing other ews Corp on Wednesday announced a
countries or risk losing business with
the kingdom’s vast network of
deal to let ChatGPT-maker OpenAI use
content from its publications in artificial order post RoC fine
government entities. BLOOMBERG intelligence products. OpenAI will get access to

next 4-6 weeks. SOWMYA RAMASUBRAMANIAN current and archived content from News Corp
properties including The Wall Street Journal,
Barron’s, MarketWatch, and The New York Post,
according to a joint release.
JPMorgan hunts for private credit firm for asset mgmt arm Financial terms of the deal were not
disclosed, but the Wall Street Journal cited
people close to the company as saying it was
M
icrosoft-owned LinkedIin said on
Thursday it is in compliance with
Indian laws after the Registrar of
Companies (RoC) for Delhi and Haryana fined
its Indian arm and various officials for allegedly
violating significant beneficial ownership rules
under the Companies Act, 2013.

J
PMorgan Chase & Co. is on the hunt to buy a private credit firm to valued at more than $250 million over five In an order published on Wednesday
augment its $3.6 trillion asset management arm, as the biggest US bank years and included credits for News Corp using evening, the RoC fined LinkedIn Technology
makes more inroads into Wall Street’s buzziest sector. OpenAI technology. Information Pvt Ltd (the Indian arm), LinkedIn
The JPMorgan unit is seeking a private credit shop that could bolster its Authors, artists, and news groups have been Technology Unlimited Co (one of its registered
private capital business, according to people familiar with the matter. As part accusing OpenAI and its rivals in the shareholders), LinkedIn Ireland Unlimited Co
of the effort, the company held talks to buy Chicago-based Monroe Capital generative AI market of using copyrighted (the beneficial owner), Microsoft chairman and
this year, but the two firms ultimately decided not to pursue a deal, the people content for training models without asking chief executive Satya Nadella, and LinkedIn
said, asking not to be named describing private discussions. permission or paying. Generative AI models Corp chief executive Ryan Roslansky.
Spokespeople for JPMorgan and Monroe declined to comment. are trained on mountains of data in the effort to A spokesperson for LinkedIn told Mint in an
Interest in the $1.7 trillion private credit industry has exploded in recent get software to think the way people do. emailed statement, “We comply with the laws of
years. Alternative-asset titans such as Ares Management Corp. and Apollo “This landmark accord is not an end, but the the countries we operate in. We are reviewing
Global Management Inc. have poured money into ever-larger deals for their beginning of a beautiful friendship in which we the order to determine next steps.”
portfolios. Other investors, as well as banks themselves, are also keen to make are jointly committed to creating and delivering Many large corporations operating in
more wagers. JPMorgan’s investment bank has already earmarked more than JPMorgan’s asset management arm is seeking a private credit shop insight and integrity instantaneously,” News India may face a similar fate, said a partner at a
$10 billion of the firm’s balance sheet for direct lending. BLOOMBERG that could bolster its private capital business. BLOOMBERG Corp chief executive Robert Thomson said. AFP law firm. GIREESH CHANDRA PRASAD
10 FRIDAY, 24 MAY 2024
NEW DELHI LONG STORY LIVEMINT.COM

WHAT ZOMATO’S POT OF

PROFIT CAN TEACH VCs
The startup stayed focused on evolving customer preferences and execution. But that’s not the whole story

T.N. Hari
feedback@livemint.com
BENGALURU

2
024 could well be the most hap-
pening year for the startup eco-
system in recent memory. A
new cohort of start-ups are get-
ting ready for the big show on
the exchanges.
But what about the earlier wave of con-
sumer internet firms that hit the bourses?
Zomato Ltd, who in its current avatar is
both a food delivery and a quick com-
merce company, stands out. The com-
pany’s financials for the fourth quarter of
2023-24 are interesting and mark a turn-
ing point in its journey. It reported a con-
solidated net profit of ₹175 crore for the
quarter ending March, which was a 27%
sequential growth over the previous quar-
ter. The revenue growth of 8.3% was less
than a third of the growth in profitability,
which means that the levers of profitabil-
ity are being unlocked.
These are important indicators not just
for Zomato but for the entire venture capi-
tal (VC) funded start-up ecosystem.
The year 2021 was seen as the coming
of age of startups that were part of a new
wave of India’s consumer internet era.
A small cohort of these startups, that
had broken out into the big league, filed
for initial public offerings (IPOs), and
listed on the exchanges. Built and
scaled with unprecedented amounts of
capital, the series of back-to-back IPOs
that were enthusiastically received by
the markets were proof that this fund-
ing model had worked, despite being
viewed by the purists with some degree
of scepticism.
However, as shareholders began losing
money in the aftermath of the listing, the
debate on whether startups without a sta-
ble revenue model and profits should have
been allowed to even list in the first place
came up from time to time.
Cut to this year, the gap between the win-
ners and the laggards is now evident and has
begun to resemble the last lap of a marathon.
There are some lessons that emerge from
the post-IPO journeys of some of these
startups, as well as from IPOs that were
planned but put off in the eleventh hour.

BIG MARKETS + BIG CAPITAL

A ll the startups that listed in 2021, A file photo of Deepinder Goyal, founder, managing director and chief executive officer of Zomato.
without exception, were playing in
the kind of markets that the VCs love—
HT

large total addressable market (TAM).

While a large TAM is a prerequisite for distracted or losing interest. THE TECH BOGEY has created niche competitors that are
mint SHARP TURNAROUND
building a big company, it isn’t a sufficient
condition. Many other factors—like some THE LESSONS I n the early years of my professional life,
the information technology (IT) revolu-
SHORT
STORY Zomato turned PAT positive in FY24
nibbling away at the market share by
offering better products and services. For
form of a real network effect or just simply
the extent of superiority of the proposed C ompanies that are struggling to make tion (which was really a catch-all phrase for
money with their core product or ser- the surge in outsourcing application main-
solution over the current way of address- vice but claim, and sometimes even tenance and development) had just begun, WHAT
Profit after tax (in  cr)
FY20 FY21 FY22 FY23
351
instance, BluSmart, Namma Yatri, and
informal communities of well-organized
customer centric drivers are relentlessly
FY24
ing the problem—are all equally essential. believe, that their large user base will, and it was common for companies unre- eating into the market share of Ola.
And even these are not enough. Without someday in the future, buy other products lated to IT to add the words ‘information Among the cohort of consumer -816 -971 This correction can become painful not
a near perfect combination of ‘Clarity, and services from them is largely a myth. technology’ to their names to increase internet companies that hit the -1,223 just for the late-stage investors, but even
Focus and Execution’ at every stage in the Why would anyone who uses a platform investor interest. In the last decade, the bourses, Zomato stands out. for the early-stage investors because of the
The company’s March quarter -2,386
journey, trip-ups and even total collapse for payments, or a platform for tracking word ‘tech’ has been suffixed to entire protection that liquidity preference
are real possibilities. and paying credit card bills, be interested in domains like financial services, education, results show that the levers of Accelerating profits clauses offer late stage investors.
The assumption that a large problem using that platform to buy other products? food delivery, and property, among others. profitability are being unlocked. Profits have sharply grown every quarter A rapid change in customer preferences
and an ambitious founder backed by big And what expertise does a payments Over-indexing on the tech element of the Profit after tax (in  cr) can also result in recalibrating the compet-
capital equals a big and profitable com- platform have in creating insurance prod- business has often led to inadequate and itive landscape in an industry, and hence
pany turned out to be a fallacy. Some ucts? The platform could at best distrib- hasty thinking on the value proposition WHY -188 Q4 FY23
the relative valuations of well entrenched
investors were aware of this fallacy but ute third party insurance products. And around the core offering. Fintech startups Q1 FY24 2 incumbents and late entrants, as is hap-
saying ‘no’ to large-TAM opportunities there isn’t a dearth of platforms with high were taking pride in the use of technology Zomato made smart pivots and pening in the quick commerce space.
acquisitions. It made relevant
Q2FY24 36
is seen as suicidal in a game where the ‘daily active user’ bases like Amazon, to cut down the time it took to evaluate Building a highly profitable company
human psychology is driven by the fear Facebook, Google, Flipkart, and Zomato, creditworthiness of borrowers to a few sec- strategic choices in terms of Q3 FY24 138 can take a long time. Quick commerce at
of missing out (FOMO) on the big among others, that could take advantage onds or even a fraction of a second. This is so new offerings while keeping a this point of time seems to be a case of too
Q4 FY24 175
opportunities. of their user bases to distribute third party counter-intuitive when it comes to lending. hawk-eye on the execution much capital, and too many players,
To add to the difficulty, it is not easy to products. None of them have been able to Sometime early this year, a VC fund I engine without being distracted. Zomato zooms chasing a business that is inherently diffi-
predict early in the game really do this. Distribu- was advising requested me to assess the The company’s shares have gained over cult with capital being the only entry bar-
as to which of the large tion and discovery are founders and leadership team of a fintech 48% since 2021 rier, without any semblance of a network
problems are amenable Correction in valuations now commodities with startup they were seriously evaluating to NOW 300
Zomato Nifty 50 246.25
effect. And, in all likelihood, the compa-
to building large and can become painful for very limited leverage, fund. It was clear that this startup was nies in this space may eventually become
There are lessons to be learnt. 200
profitable companies and value can be cap- much ahead of the pack when it came to profitable but will probably operate at
and which are the ones early-stage investors because tured only in a full stack key metrics like customer acquisition cost The true test of strength is not 100 144.27 low margins and may never be able to
that are not. This is of the protection that liquidity model where the plat- and delinquency rates. Quite obviously, about a few quarters of good justify the return on capital employed.
0
partly because many of form takes ownership there was something right they were performance, but about being 22 Jul 2021 23 May 2024 It won’t be surprising if some of the
these businesses preference clauses offer for quality and delivery doing. When I probed for the secret sauce, able to defend a valuation in Values rebased to 100
start-ups preparing for a listing this year
the long term. Source: Company disclosures, Bloomberg
required behavioural of the service or product. everyone seemed to attribute their success go through a haircut in valuation. And the
changes on the part of late-stage investors. One would recall the on these metrics to their analytics prowess. SATISH KUMAR/MINT true test of strength is not about a few
the customers and it’s pivot MakeMyTrip had to When I dug deeper and asked about the quarters of good performance, but about
not easy to predict what percentage of make from distributing airline tickets to underlying logic and algorithms, I didn’t nesses is not uncommon in the world of reality they had worked so hard to hide. being able to justify and defend a valua-
them would stay hooked to a service or distributing hotel rooms. Airline tickets find a particularly mind-blowing response. VC investing especially when a perceived Similarly, the Reserve Bank of India (RBI) tion in the long-term and giving good
product after the early inducements are had little or no margin because the number Suddenly, the dots connected, and I had mega trend, or runaway success of an idea strictures that led to the shutdown of Paytm returns to shareholders at every stage.
withdrawn. of airlines were few and didn’t have any my kung-fu panda moment: There was no in a different market, creates FOMO and Bank, and a collapse in the share price of
Turns out, Zomato is a winner on all trouble distributing tickets through their secret sauce. The secret sauce, if there was drives investing decisions. This is further One 97 Communications Ltd, Paytm’s par- AND FINALLY
counts. It started off as a ratings platform websites. On the other hand, the small any, was a strong belief among the entire exacerbated when excess capital chases a
for restaurants, but quickly pivoted to hotels that no one knew about, valued Mak- team around a few fundamentals, namely, limited number of ideas. These mis-
delivering food, and caught up with rival eMyTrip’s distribution strength. the importance of building the business matches can prevail for long periods of
ent, was again a culmination of defending
an unrealistic valuation. I am not inclined to
believe that the Paytm team did not appre-
I t could take decades to build a large and
profitable company. And the path is not
linear but is littered with many unknowns
Swiggy which had a head start in the food Claims of extensive data mining, using slowly and sustainably, the thoughtful time and tend to get corrected only when ciate the seriousness of prior warnings by and uncertainties that could trip up a
delivery business. And food delivery had sophisticated analytical tools, that would choice of the target customer group (with it becomes obvious, and the ability to raise RBI or the consequences of not fixing the smooth journey. And as low hanging
a strong tailwind of network effect which help upsell and cross-sell products, is an income that was high enough to make further capital at unrealistic valuations issues highlighted. I recall a statement opportunities start getting scarce and
is more than helpful for scaling a business largely a myth. Your core product or ser- them credit-worthy but not high enough diminishes significantly. made by Ramalinga Raju, after the Satyam startups begin to address the more difficult
rapidly. The decision to acquire Blinkit to vice needs to make money. Some months for the banks to go after) and their steadfast Some startups suffered from this syn- scandal had come to light, describing how problems of customer segments that are
catch-up with Swiggy-Instamart on the ago, I had written a piece in which I had refusal to stray and move to a lower income drome. For those that didn’t have a great an initial cover-up for a poor quarterly per- money-poor and time-rich, the challenges
growing quick-commerce market was an compared two different grocery formats, group to keep growth rates high. product or service, poor execution was formance escalated: It was like riding a of building large and profitable companies
extremely smart move, and Blinkit’s exe- one offline and one online. DMart (Ave- As I was heading out, I asked them why like the last nail in the coffin. To me, the tiger, not knowing how to get off without would keep multiplying.
cution under the Zomato umbrella has nue Supermarts Ltd), the offline chain, they kept saying that the secret sauce was collapse of Byju’s wasn’t about poor gov- being eaten. Paytm’s predicament is more However, ‘slow and steady’ has never
been quite exemplary. continues to make money hand over fist cutting-edge analytics, when in reality it ernance. Poor governance was a conse- likely reflected in this statement than any been the operating motto of the VC model
Zomato stayed maniacally focused on simply because of a few smart strategic wasn’t. Their response was interesting: quence of something more fundamental, kind of brazenness in ignoring the warn- and all these ups and downs are par for the
the evolving customer preferences by choices that reflected a deep understand- This is what VCs love to hear! namely a product that didn’t solve any real ings. Defending an unrealistic value is akin course. And in the meanwhile, Zomato
making timely and relevant strategic choi- ing of what customers really cared about, problem. And this was compounded by an to riding this proverbial tiger. can take a bow, and bask in the glory of
ces in terms of new offerings, capabilities, whereas all online grocery chains that VALUATIONS AND EXECUTION infusion of big capital that put them on the Corrections in valuation can be steep if being the first to reach the finish line.
and markets. And above all, keeping a have access to probably terabytes of cus-
hawk-eye on the execution without being tomer data are struggling to make money. M ismatch of startup valuations with treadmill, where almost everyone loses
the underlying value of the busi- sanity and can go to any length to avoid a
poor execution or lack of focus and cus-
tomer centricity around the core business
T.N. Hari is an author and the executive
chairman of STEER World.
LIVEMINT.COM MINT MONEY FRIDAY, 24 MAY 2024
NEW DELHI 11

How to transfer or withdraw WHAT'S THE FOREX RATE?

Whether you are planning
overseas travel or want to

pension plans from UK, US

send money abroad, it is
always a good idea to shop
around for the best forex
exchange rate. From banks,
travel aggregators to money
changers, various small and
big players sell foreign
exchange. To simplify your
work, here is a list of INR to
USD forex rates offered by
UK Pension funds can’t be accessed before retirement age; the US doesn’t allow transfers some of the major banks
and travel aggregators. We
recommend that you also
check the commission being
Aprajita Sharma
charged by these players to
aprajita.sharma@livemint.com
What to do when you return to India ensure that you are getting
the best deal.

S
everal Indians working abroad
contribute to private pension
plans provided by employers
such as the 401(k) in the US.
But what happens when they
decide to return to India? They have a
choice whether to hold it in the same
country till retirement, transfer it to
their home country or simply withdraw
it prematurely. But the rules vary by
country. Mint takes a closer look at what
they are in the UK and the US.
The UK scenario
One cannot access pension funds in
the UK before retirement age. It has to
be either transferred to a qualifying
recognized overseas pension scheme
(QROPS) in India or one can continue
holding it till retirement in the UK.
After retirement, Indians can receive
this in a specified bank account in India.
In case of transfer, it is important to
choose a QROPS approved by His Maj-
esty’s Revenue & Customs (HMRC), the
national taxing authority of the UK. The
list of approved schemes can be readily
found on their website.
Akshara Roongta, 28, who worked in
the UK for two years before returning to
Mumbai in December, decided to trans-
fer her pension funds to India. She dis-
covered she could apply for the transfer
only after receiving her last paycheque.
She did that before coming to India, but
four months on, the transfer is yet to
happen. “Their document verification
process is quite stringent. I was told to
certify all documents by a lawyer. They
shared a list of lawyers whom they trust.
I spoke to almost all the lawyers, but they
are quite senior and don’t notarize the
documents,” Roongta said.
“It is hard to explain to the UK insurer
that inexperienced lawyers who do it in
India may not appear convincing on a
call due to the language barrier, but they
are very much credible,” she says.
Strangely, her husband, who worked
with one of the group companies of the
UK pension provider, could transfer his
pension following the same procedure.
Deepak Kumar, an independent con-
sultant on overseas pension transfers,
says UK-based pension providers try to
discourage transfers.
“Delays are quite common. When,
despite multiple follow-ups, we don’t
get an answer, I tell my clients to file a
complaint. One of my clients had to
write to the legal team of the pension
provider before his funds could get
transferred,” says Kumar.
When one holds the fund in the UK
itself till retirement, the pension is cred-
ited to the Indian bank account. But
people usually don’t want to wait that
long. “One never knows what may hap-
pen in the future. I do not want to take a
currency or country risk. Moreover, in
the UK, they invest retirement money in
all sorts of securities including private
equity. I want to park my pension funds
in stable instruments,” says 32-year-old
Dhavnish Shukla.
The US scenario
The US has primarily three types of
private pension plans: (1) 401(k), an
employer-sponsored retirement plan;
(2) an individual retirement account
(IRA); and (3) Roth IRA in which contri-
butions happen after deducting taxes.
Funds from 401(k), IRA or Roth IRA
cannot be transferred. They have to be
withdrawn or held until retirement age.
Most people prefer withdrawal.
The UK allows you to transfer your pensions funds to Indian pension plans, while FOREX RATES (/$)
only withdrawal or holding on till retirement age is possible in the US. Bank/travel Wire transfer* Buy forex
aggregator inward Outward Forex/travel card Cash
SBI 82.91 83.76 83.93 84.20
Bank of Baroda 82.89 83.71 84.15 84.55
Canara Bank 82.91 83.67 83.87 NA
IndusInd Bank 81.79 84.79 85.58 85.88
DHAVNISH SHUKLA (32) AKSHARA ROONGTA (28) VAMSIDHAR ATYAM (46) PALAK CHAUHAN (36) Kotak Bank 81.83 84.74 85.14 85.71
Country: UK Country: UK Country: US Country: US
HDFC 81.99 84.61 84.86 85.44
Duration: 4.5 years Duration: 2 years Duration: 18 years Duration: 10 years
ICICI 81.43 84.87 84.88 86.47
I transferred funds Still trying to I rolled over 401(k) Keeping 401(k) as
transfer my is because it is for Axis Bank 81.35 85.82 85.05 86.25
to avoid country to IRA before
and currency specific pension due to stringent withdrawing it in the retirement goal and Yes Bank 81.82 84.71 85.63 85.63
risks. verification process. tranches. I seek diversification.
Thomas Cook 81.45 84.90 83.74 85.16
What happens in the UK What happens in the US Note: Data collected from website of respective entities as on 22 May 2024; Rate mentioned in the table denotes INR/USD.
Withdrawal not possible until the Transfer not allowed; withdraw it
The rate is as mentioned on the website of the Bank/FI and it may vary according to different amount slab; *Wire Transfer/TT
Buying is Inward Rem to receive Forex & Wire Transfer/TT Selling is Outward Rem to send forex
retirement age or hold it till the retirement age of Compiled by BankBazaar.com
59.5 years
Option 1 Option 2
Hold it as is till the Transfer it to one Option 1 Option 2 Option 3
retirement age in the UK of QROPS in India Lumpsum Withdrawal in Lumpsum
How to transfer pension funds to India
Identify HMRC-approved QROPS in India
withdrawal
before the
retirement age
instalments
before
retirement
or periodic
withdrawal
after retirement
Can a tenant buy separate home
Insurers such as HDFC LIfe, ICICI Pru Life, Max Life,
etc., have it
Fill up overseas transfer application form
Option 1 and 2 come with 30% tax on the
withdrawal amount along with 10% penalty*
*Barring a few exceptions where US federal tax brackets
insurance for the overall flat?
ISTOCKPHOTO
may apply in RNOR period Abhishek Bondia
decide the sum assured for
Documents to be submitted Option 3 is more tax efficient health insurance holistically.
Application form I am tenant in a multisto- I recommend buying a base
HMRC letter containing QROPS Pros Cons ried apartment. My resi- sum assured of at least equal to
number dents’ welfare association one’s annual income. Further,
GLOBAL diversification INHERITANCE tax to be
Two identification documents (RWA) buys insurance for the health plan should allow
CHILDREN'S foreign levied at up to 40% in
A letter of acceptance from the QROPS provider case of death the structure of the build- you to accumulate substantial
education goals
(insurer) ing. Should I look at buying no-claim bonus—100% or
DOLLAR tends to INHERITANCE tax-free a separate insurance policy more. Over a few years, the
All documents must be signed and certified by a lawyer appreciate against rupee threshold is just
for the contents for my flat? aggregate coverage for you
NO premature $60,000
Can a tenant buy insurance would be equal to twice your
Tax treatment* withdrawal penalty of
for the overall flat? annual income. This should be
10%
TRANSFER to QROPS is tax free —Name withheld on request. sufficient to cover an average
TAX in India only on
ANNUITIES after retirement to be taxed individual. The base sum
withdrawal if you opt for
as per the slab rate in India Rule 21AAA and Form Insurance can be bought ASK MINT assured should be enhanced if
10EE only if you have an insurable m INSURANCE the person suffers from a
*According to subject matter experts; consult your tax advisor before taking
CLAIM tax credit on US interest. This means that you chronic illness such as blood
any action should suffer a loss should the pressure or diabetes. The level
tax in India
HMRC: His Majesty's Revenue & Customs
property be damaged. As a ten- tially short. Aside from the of cover should be re-evaluated
QROPS: Qualifying Recognised Overseas Pension Scheme Source: CA Abhinav Gulechha ant, you have an insurable feeling of loss, I am worried every 3 to 4 years, based on
interest in the contents of the about having the right increased income, health con-
house but not on the structure. amount of health insurance dition and medical costs.
Vamsidhar Atyam, 46, first rolled over could be withheld in the US, one can that requires overseas investment, you The structure is owned by the coverage. I am 40 years old Apart from regular health
his 401(k) funds into IRA because the lat- claim the tax credit. will be better off leaving the funds as is. landlord. Only the owner of the with no chronic illness. insurance, I strongly recom-
ter gives more flexibility in choosing If one has to withdraw the funds, tax “If one does not need money on an property can buy insurance for How should I approach my mend considering a critical ill-
funds. He withdrew the amount in tran- experts advise doing it while RNOR sta- immediate basis and the corpus is not a the structure. RWAs represent health insurance? ness insurance. Such plans are
ches. “401(k) levies administration char- tus is active. “Keep a US bank account big chunk of their investment portfolio, a group of owners, so they can —Name withheld on request. fixed-benefit plans, so they pay
ges which were borne by my employer active after returning from the US and they could let it remain that way till their buy insurance for the property. over and above the regular
when I was working in the US. After I receive the withdrawal in that account. expected retirement year,” Abhishek However, a tenant can buy Medical costs have increased health insurance plan. When a
resigned, I had a choice to continue with Remit it later to the Indian bank Kumar, a registered investment advisor standalone home insurance to substantially over the years. person gets diagnosed with a
my 401(k) plan as it is but account,” says chartered and founder of Sahaj Money, says. cover only the contents. Additionally, there is an specified critical illness, the
pay those charges out of accountant Abhinav This is exactly what Palak Chauhan, increased incidence of ill- sum assured is paid out in a
my pocket or roll it over One risk for Gulechha. “In case of a who worked in the US for 10 years, did. Recently, one of my pro- nesses, both minor and critical. lumpsum. Commonly covered
into an IRA which didn’t keeping money lumpsum withdrawal after “My investments in 401(k) and Roth IRA fessors who was less than 55 It is now more common to hear critical illnesses include stroke,
have that overhead,” he abroad is returning from the US and are for servicing my long-term retire- years old passed away. He cases of extended hospitaliza- cancer and heart attack.
says. inheritance tax, becoming a non-resident ment goals. Moreover, I want to con- had some chronic condi- tion due to complications A right combination of
However, withdrawal health insurance and a critical
which can be up alien for US tax purposes, tinue my exposure to the US market,” tions. A few months ago, he driven by multiorgan issues
before retirement attracts there will be a flat 30% tax she says. suffered a brain stroke. with unclear diagnosis and illness plan would cover exi-
a 10% penalty except in sit- to 40% in the US deduction along with 10% If you keep the 401(k) or traditional Later, he underwent an prognosis. gencies like the one you
uations such as medical and 55% in the UK early withdrawal penalty (if IRA funds as is and withdraw after age angioplasty, some treat- Often, people just look at the described.
expenses or first home withdrawing before age 59.5, they will still be taxed in the US at a ment for lungs infection absolute amount of coverage in Abhishek Bondia is principal
purchase. The tax liability 59.5 years). In certain lim- flat 30% rate but there will be no penalty. and management of bed isolation and assess its ade- officer and managing director at
depends on the person’s residency sta- ited cases pertaining to 401(k), periodic One risk, however, for keeping sores. He was in the hospital quacy. This amount is driven by SecureNow.in.
tus in India—whether they are ‘resident monthly payments may be opted money abroad is inheritance tax. Inher- for a continuous period of heuristics and could vary from
but not ordinarily resident’ (RNOR) or whereby the payments are taxable only itance tax is up to 40% in the US with 80-plus days including a ₹5 lakh to ₹20 lakh. Medical Do you have a personal
‘resident and ordinarily resident’ (ROR). in India (and not the US) as per Article a threshold of $60,000 for non-resi- few days on the ventilator. costs, however, are linked a lot finance query? Send in your
No tax is levied in India while the per- 20(1) of India-US DTAA (double taxation dents. It can go as high as 55% in the UK His total hospital bill to lifestyle. The incidence rate queries at
son has RNOR status. This status can last avoidance agreement),” he says. in some scenarios. crossed ₹1 crore, and his of chronic illness and the cost of mintmoney@livemint.com
and get them answered by
up to three years after returning to India. Looking at it from the financial plan- Read the full version of this story at health insurance coverage treatment vary substantially by
industry experts.
In case of ROR status, while the tax ning angle, if you have a financial goal livemint.com. of ₹20 lakh fell substan- lifestyle. That’s why one should

HOW ESTATE PLANNING CAN HELP YOU PROTECT YOUR LEGACY

ISTOCKPHOTO

everyone should consider. different for Hindu, Muslims and Christians. If you don’t make a
Will: A will is a legal document that lays out how you want your will, intestate laws apply. These rules vary by gender and religion.
POWER assets to be divided after you pass away. It’s your chance to specify
who should receive what, appoint guardians for your kids and
For a Hindu married woman, for example, her parents are not tier-I
heirs, and it is highly probable that they will not receive anything.
POINT choose someone trusted to handle the distribution of your estate. Areas for which you need smooth transmission of assets are:
Trusts: Trusts are legal entities that hold assets on behalf of ben- financial assets, non-financial assets, immovable assets, creditors,
DILSHAD BILLIMORIA eficiaries. They can be pretty handy in avoiding probate, minimiz- debtors, memberships, real assets, retirement benefits and invest-
ing estate taxes and ensuring ongoing care for your loved ones. ments.
We welcome your views and comments at There are different types of trusts to consider, such as revocable Conclusion
mintmoney@livemint.com trusts, irrevocable trusts and special needs trusts. Each comes with Estate planning Estate planning isn’t just for the rich.
its own needs, objectives and special purpose requirements. ensures loved It’s important for anyone who owns

M
ost people fear the idea of estate planning or laugh it off
thinking they are immortal. Estate planning is about
ensuring your loved ones or a third party get access to your
assets in a manner that you would want them to. At its core, it is
about putting arrangements in place for how your assets and estate
will be managed and disposed of in case you die or are incapacitated.
Importance of estate planning
Startling statistics reveal that unclaimed assets worth ₹1.5 trillion
are lying scattered across the country because families are not
aware of them. Of this, ₹35,000 crore comprises unclaimed depos-
its of investors relating to 102.4 million accounts, which was trans-
ferred to the Depositors Education and Awareness Fund.
By writing a will and keeping it updated, one can keep their leg-
acy secure and provide for future generations in their family line.
Key aspects
There are several essential components of estate planning that
Power of attorney: A power of attorney is a legal document
that gives someone else the power to make financial or medical
decisions on your behalf if you’re unable to do so. It’s super impor-
tant to choose someone you trust to act as your power of attorney,
ensuring that your affairs are handled the way you want them to be.
Healthcare directive: You might also hear this referred to as
a living will or advance directive. This document lets you express
your preferences for medical treatment in case you’re unable to
communicate your wishes. You can spell out the kind of care you
want or don’t want, including any life-sustaining measures.
One needs to appoint an executor of a will. Beneficiaries can also
be executors. Where a bequest is made to a person by a particular
description, and there is no person in existence at the testator’s
death who answers the description, the bequest is void.
However, an exception is made in case of lineal descendants, i.e.
if the legatee dies before the death of the testator, the bequest will
pass on the lineal descendant of such legatee and not lapse. If an
unmarried person makes a will and thereafter marries, the said will
would be considered as cancelled or revoked.
When you don’t have a will
Where a person makes a will for some of the properties only and
leaves a balance, or where will is not found valid for whatever rea-
son, such balance property shall devolve in accordance with the
principles of intestate succession. Laws of intestate succession are
assets and wants to ensure they’re dis-
ones receive tributed properly. It ensures your loved
their rightful ones receive their rightful share accord-
share according ing to your wishes. Effective estate
to your wishes planning goes beyond safeguarding
your financial legacy; it can also pro-
mote peace and harmony among your
family members after you’re no longer around.
By taking proactive steps to create a comprehensive estate plan,
you can safeguard your legacy, minimize taxes and provide for your
loved ones’ future. Whether you are an experienced investor or a
first-time homeowner, estate planning is an essential aspect of
securing your financial future and bringing peace of mind to you
and your family.
Dilshad Billimoria is founder of Dilzer Consultants, a Sebi- regis-
tered investment adviser.
12 FRIDAY, 24 MAY 2024
NEW DELHI VIEWS LIVEMINT.COM

OUR VIEW MY VIEW | TECH WHISPERS

AFP

A week is all it took for us to see

leaps in AI technology evolution
This field saw a flurry of action at OpenAI and Google as their models race to become more like us

trend. It is a profound shift in the way
humans and machines interact.” Bill
Gates followed it up with, “AI is the new
UI.” User interface, that is.
With GPT4 and others, with its text
interface and lagged voice interface,
you could sense you are talking to a
machine. With GPT4o, if you didn’t
know it is an AI bot, you would believe
JASPREET BINDRA it’s a human you are conversing with,
is a technology expert, author of ‘The Tech seeing the same things you see, feeling
Whisperer’, and a Masters in AI and Ethics the same emotions you feel and also
from Cambridge University. cracking the same jokes your friends do.
With GPT4o, the Sound Turing Test
Google product which is not going to be
baptized with AI. Google Search, with 2
billion plus users and 6 million searches
a minute, gets a GenAI makeover. Gmail
with 1.8 billion users gets a strong dose
of Vitamin AI. YouTube’s 1.8 billion
users can have AI-generated text sum-
maries of the nearly 4 billion videos that
the site hosts. Another 4 billion Android
users get AI on tap. The list goes on.
Ironically, however, it seems that
Google is following the Microsoft play-
book here. Microsoft famously had an
EEE strategy of ‘Embrace, Extend and

RBI surplus: Largesse in

has been passed. The model has moved Extinguish’: First it created a product
beyond voice to sound. using open standards, then created a

V
ladimir Lenin is cited as having The next day, Google picked up the proprietary extension which quickly
said, “There are decades where gauntlet OpenAI had thrown. It made a gained dominance through its brute
nothing happens. And then there plethora of impressive announcements, distribution and ownership of the PC

need of an explanation are weeks, where decades happen.”

The previous week was one such in the
world of AI, even by the standards set by
OpenAI’s 2022 launch of ChatGPT. It
though a lot were prototypes. Ask Pho-
tos allows intuitive search through Goo-
gle Photos. It announced a more power-
ful and advanced version of its LLM
market, and it finally used this exten-
sion to swamp the market and extin-
guish its competitor. Latest example:
MS 365 has 345 million users, 320 mil-
started with a bang on Monday, 13 May, Gemini, an intriguing AI agent that can lion of them get Teams free; rival Slack
when OpenAI unveiled its new flagship return products you have shopped, and languishes at 39 million.
A brief statement on the main sources of the ₹2.1-trillion-plus surplus that the central bank product GPT4o. Tuesday was Google’s another that alerts you right away to So, OpenAI the plucky innovator can
turn, with 121 mentions of AI over 110 scam phone calls. Project Astra launch eye-popping products galore
will transfer to the government’s coffers would have gone a long way to quell speculation minutes at its I/O conference. The impressed onlookers with its ability to like ChatGPT, Sora and GPT4o, but
same day, Ilya Sutskever, OpenAI’s recognize code and cities, and even say what it lacks is distribution reach. The
co-founder and chief scientist who had where you have forgotten your glasses. ChatGPT needle is stuck at 100 million
raised safety warning flags, left the com- It displayed better text-to-image, text- plus. Impressive, but small potatoes

T
here’s a bonanza awaiting the next
government even before it is sworn
in: A record surplus transferred by
the Reserve Bank of India (RBI) to
the Union government from its
operations in 2023-24. At just
above ₹2.1 trillion, the surplus (note, not divi-
dend, since RBI is not a commercial entity) is
the highest-ever payout by the central bank,
and more than double the previous year’s
₹86,416 crore. This is good news. Especially
since the transfer has been done after beefing
up RBI’s contingency risk buffer (CRB) to the
upper end of the band (5.5-6.5% of its balance
sheet) suggested by the 2019 Bimal Jalan com-
mittee. This panel, tasked with setting out an
‘economic capital framework’ for the central
bank, had laid down clear guidelines on how
RBI’s surplus should be apportioned between
transfers to its reserves and to its owner, the
government.
To the extent that the latest transfer is in line
with the Jalan panel’s recommendations, this
should ordinarily be reason to cheer. Except
approved the ₹2.1 trillion plus transfer to the pany. The ripples created by each can to-music and text-to-video conversions compared to Google’s sway over the
Centre’s coffers has no details beyond this have a profound impact on AI’s future. done by its AI tools. internet with billions of users every-
Let’s start with the GPT4o announce- The subtext: Basically, there is no where. Thus, Google does not need to
terse statement: “As the economy remains ment, for which OpenAI built effortless out-innovate OpenAI. It just needs to
robust and resilient, the Board has decided to multimodality into its existing flagship out-distribute it, and that is precisely
increase the CRB to 6.50 per cent for FY product. The model has its expected what its I/O huddle demonstrated.
2023-24. The Board thereafter approved the share of gee-whiz features: fluid simul- QUICK READ While all this was exciting, the canary
transfer of ₹2,10,874 crore as surplus to the taneous translation, an ability to detect in the coal-mine could be Ilya’s exit
human emotion beyond just voice and OpenAI’s GPT4o kicked off a from OpenAI. With him went other
Central Government for the accounting year an enhanced ability to write code, wonder week with a demo of prominent researchers, and the super-
2023-24.” Presumably, the rest is for us to among others. Quickly, people started how human-like it is, while alignment team that was responsible for
guess. At least until the central bank’s annual discovering even more impressive use Google took up the gauntlet with building safe artificial general intelli-
report and financial statements with detailed cases, like two GPT4o AI’s talking to Gemini and Project Astra. The gence (AGI) has been disbanded. This
‘notes to the accounts’ are published. In the each other, personalized step-by-step future of AI now looks different. signals OpenAI’s transition from an ide-
trigonometry tutoring, and helping a alistic research lab to a capitalist entity
interim, we have a host of reasons being sightless man hail a cab in London. The departure from OpenAI driven by shareholder returns. This is
advanced to explain the dramatic leap. But Many people had expected a new of Ilya Sutskever and other where OpenAI and Google are similar.
nothing concrete to go by. GPT5 or GPT 4.5 model, but to me, this safety-focused researchers, When it started, Google flaunted its
The best we can do is assume the bulk of is bigger. The reason is simple. Gartner however, signals its open pursuit “Don’t be evil” motto. But over the
RBI’s surplus came from where it did the previ- made an insightful statement on GenAI, of capitalist goals after it moved years, that got a quiet burial in the
saying that “It is not a technology or a away from its original orientation. graveyard of capitalism.
ous year: Income from foreign sources as well
as domestic sources, mainly on account of a
drop in net outgo of interest under its Liquidity
Adjustment Facility—which includes its mar-
ginal standing and standing deposit windows—
due to lower surplus liquidity, and interest
income on loans to Central and state govern- www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Saturday, May 24, 2014 Vol.8 No.123 `10.00 in Delhi-NCR/`11.00 outside Delhi-NCR 12
16 PAGES
+ 20 PAGES LOUNGE

that there is a fine line between a central bank’s ments. But this is not enough. What RBI earns Q&A: Anjali Gopalan on the
fight against Section 377 >4
CORPORATE: MCX appoints Parveen Singhal
as interim chief executive >3

surplus and that of a corporate entity. It is and spends has macro-economic ramifications, CONTENT PARTNER
INTERNATIONAL: Ousted Thailand leaders
summoned by ruling military >12
DÉJÀ VIEW: The forecaster’s graveyard >11

important to keep this in mind for any analysis as its operations are—or should be—carried out
SENSEX 24,693.35 Æ 318.95 NIFTY 7,367.10 Æ 90.70 DOLLAR `58.51 Æ `0.05 EURO `79.75 æ `0.17 GOLD `27,590æ `100 OIL $110.39 Æ $0.03

HOSHANG HASHIMI/AP
NEW GOVERNMENT SBI profit falls QUICK EDIT

Sleepless in
7.8% in March The idea of
quarter on higher

of RBI’s numbers. The very use of terms such entirely in pursuit of monetary stability and New Delhi
provisioning
Europe
I ndia has completed a

The idea that machines

B Y M ANISH B ASU & landmark election that
A NUP R OY swept Narendra Modi to
························· power. Europe is in the
KOLKATA/MUMBAI
midst of a very important

S tate Bank of India (SBI), election as well.

as ‘surplus’ rather than ‘profit’ and ‘income and economic growth, as per its mandate, and not
SAM PANTHAKY/AFP the nation’s largest lender, Millions of Europeans
With the Union cabinet on Friday reported a better- have begun to vote to
formation just days than-expected fourth quarter
net profit and an improvement
select the next European
Parliament. There seems
away, restless aspirants in asset quality from the pre- to be a growing tide of
are wondering ceding three months, cheering support across Europe for
investors who drove its share political outsiders who

can’t do things humans

where they stand price to a three-year high. have been critical of

expenditure’ instead of ‘profit and loss’ (for a profits. If its ‘super-normal’ surplus is mainly
Profit for the three months multiculturalism, the
B Y A NIL P ADMANABHAN ended 31 March fell 7.8% to common market, the
anil.p@livemint.com `3,040.74 crore from `3,299.22 euro and unchecked
························· crore a year ago, but still sur- immigration.
NEW DELHI passed expectations that the The actual voting

O n Thursday, the entire

who’s who of the
Bharatiya Janata Party
(BJP) were in Ahmedabad, os-
bank would post a profit of
`2,807 crore, based on a
Bloomberg poll of analysts.
For the full year, SBI’s net
pattern will only be
known after the votes are
counted, but it appears
that some of the populist

statement) in the context of the central bank, from large foreign currency holdings or trans-
tensibly to witness the swear- profit fell 22.78% to `10,891 parties of the Far Right

can is a pure myth.

ing-in of Anandiben Patel as
the first woman chief minister
of Gujarat.
It may well be that everyone
wanted to be part of a moment,
but what can’t be ignored was
that this was an occasion to
catch the eye of Narendra
crore from the previous year. have tapped into the
Gross bad loans, or non-per- deepest anxieties of a
forming assets (NPAs), as a per- continent hit hard by
Holding the cards: Narendra Modi. centage of total advances fell to recession.
4.95% in the March quarter The European project
na of Modi is proving to be a from 5.73% in the three months has been a truly visionary
deterrent. ended 31 December, although one, part of a grand plan
If the Gujarat experience is up from 4.75% a year ago. to bring lasting peace to

in contrast with commercial banks, reflects actions driven by a profit motive, as some have
Modi, the Prime Minister-des-
ignate.
Ever since he won the man-
date on 16 May, Modi has re-
mained elusive, except for
public interactions such as the
20 May event in Parliament’s
central hall where he was
elected the BJP’s parliamenta-
any pointer, then it is clear
that lobbying is a sure guaran-
tee of being excluded from the
cabinet. The buzz is that one of
the aspirants has actually lost
a key portfolio for precisely
such an infraction.
The only knowledge in the
public domain is that Gujarat
Shares of SBI, valued at a continent cursed by
more than $32 billion (around bloody wars. Important
Terror strike: A house burns at the site of a clash between militants and `1.9 trillion), closed 9.7% parts of that project are
security forces at the Indian Consulate in Herat, Afghanistan. Four higher on BSE after hitting now being questioned,
heavily armed insurgents, including suicide bombers, launched a their highest level since May immigration
rocket-propelled grenade and gun attack on the consulate hours before 2011. The benchmark Sensex complicating matters
dawn on Friday, the latest in a long line of attacks against Indian further.
targets in Afghanistan. See Page 3 TURN TO PAGE 12®

this difference. It is precisely for this reason hinted, it would need to disclose the nature of
ry party leader.
With the formation of the
government and the Union
cabinet just days away, aspir-
Bhawan in Delhi, the tempo-
rary residence of the Prime
Minister-designate, has ac-
quired the aura of 10, Janpath
ITC’s ‘smaller RESEARCH PAPER

smokes’ move Why rice-eaters are from Venus

ants are restless, and are
spending sleepless nights won-
dering where they stand.
That made Patel’s swearing-
in all the more attractive an
that we must not rest content with only the these dealings. Were they speculative? Clearly,
event.
If feedback from those
present on the occasion is to
be believed, the desired inter-
action was not to be. Sure,
those who made the trip were
noticed, but there was little
more they gained.
Meanwhile, Modi has raised
MA RV I N MI N SKY
(the official residence of Con-
gress chief Sonia Gandhi), and
also that Arun Jaitley, leader of
the opposition in the Rajya pays off, profit
Sabha, and BJP president Ra-
jumps 18% and others from Mars
jnath Singh are vetting candi-
dates to assess their eligibility
to be part of the Union cabi- B Y N ANDITA B OSE & MINT
net—likely to be a mid-sized M ANISH B ASU B Y P RAMIT B HATTACHARYA
one. ························· pramit.b@livemint.com
About portfolios, the only MUMBAI/KOLKATA ·························
person who knows who will get
what is Modi. And he is keep-
ing his cards close to his chest.
I ndia’s biggest tobacco firm
ITC Ltd’s move to shorten
low-priced cigarettes by 5 mil-
MUMBAI

A recent research paper pub-

lished in the prestigious

headline number, but look for factors that a big no-no for any central bank. A brief state-
the profile of his inauguration
by surprising everyone with his
invitation to the leaders of In-
dia’s immediate neighbours,
some of whom, like Pakistan,
have had a hostile relationship
with the country.
The implicit signal is that
this will be a government
Of course, this has not held
back speculation. If you collate
all that has been aired in the
electronic media and pub-
lished in dailies, then you al-
most have a full cabinet.
There has also been a lot of
speculation about Modi’s pref-
erence for technocrats. It is
limetres (mm) helped fourth
quarter profit jump 18% as
customers snapped up smokes
small enough to qualify for a
lower government tax rate.
ITC also said its non-ciga-
rette consumer goods business
had in the March quarter post-
ed the highest ever pre-tax
Science journal seems to have
created a stir by suggesting that
people from rice-growing re-
gions tend to be more interde-
pendent and less individualistic
compared with others.
The study, co-authored by so-
cial psychologist T. Talhelm of
the University of Virginia, with

contributed to the sharp rise in RBI’s surplus. ment explaining its largesse, a windfall for the
which means business from
the first day and is unafraid of
tackling contentious issues.
Not surprisingly, everyone
wants a piece of the action.
That is easier said than
done. As an outsider to Delhi’s
Machiavellian methods, Modi
is charting his own path. As a
unlikely any technocrat will
land a plum portfolio. For key
portfolios, Modi will in all like-
lihood settle for politicians;
technocrats will be welcomed
as advisers to key ministries
such as infrastructure.
Within 72 hours, we will
know who has been inducted
profit of `43.09 crore against
`11.87 crore a year ago, result-
ing in the segment turning in
an operating profit for the full
year for the first time.
Fourth quarter net profit
rose 18.15% year-on-year (y-
o-y) to `2,278 crore, helped
partly by curbing operating
colleagues from the University
of Michigan, the Beijing Normal
University and the South China
Normal University, found that
“rice-growing southern China is The divide: A history of cultivating rice, which requires farmers to
more interdependent and holis- cooperate with each other, makes people from rice-growing regions less
tic-thinking than the wheat- individualistic and self-centred, according to the researchers.
growing north”
(mintne.ws/1k14qwS). A history themselves about 6mm bigger

Unfortunately, we are up against a blank wall Centre, would have gone a long way to quell
result, unlike in the run-up to
the previous BJP-led National
Democratic Alliance, this time,
there is virtually no lobbying.
Or, as insiders claim, no
room is being provided for lob-
bying. An overwhelming man-
date—the BJP managed a sim-
ple majority on its own by win-
to the high table in Modi’s gov-
ernment.
And it shouldn’t surprise an-
yone if those lucky few get to
know about it around the same
time as the rest of the world
does.
NOTE TO READERS
costs. Against the same period
a year ago, ITC’s expenses in
the March quarter went up
only 9%, mitigating the effects
of slow revenue growth.
Net revenue for the quarter
at `9,238.52 crore was 11.9%
higher than the same period a
year ago, and 5.9% higher
of cultivating rice, which re-
quires farmers to pool resources
and cooperate with each other
to improvise irrigation chan-
nels, makes people from the
rice-growing regions less indi-
vidualistic and self-centred, the
researchers contend. People
from wheat-growing regions are
ECONOMICS EXPRESS
PRAMIT BHATTACHARYA
logical tests to measure at-
tributes such as individualism
and loyalty to friends. For in-
stance, one test of individual-
ism involved asking the people
sampled to draw a diagram of
than they draw others, Europe-
ans draw themselves 3.5mm
bigger and Japanese draw
themselves slightly smaller. In
this study, people from rice-
growing regions drew them-
selves smaller than those from
wheat-growing regions. Tal-
helm and his co-researchers

on this. RBI’s Wednesday press release on speculation over it. Hopefully, RBI will act on
ning 282 seats—and the perso-
Mint is also available for R14.50 with
Hindustan Times in Delhi-NCR only
sequentially. less culturally attuned to coop- their social networks, including also examined divorce rates to
There is no Mint Markets with A pickup in low-cost ciga- erate with others and hence them and their friends, repre- find that rice-growing regions
today’s edition. tend to be more individualistic. sented by circles. A prior study
TURN TO PAGE 2® The researchers used psycho- found that Americans draw TURN TO PAGE 2®

the 608th meeting of its central board that our suggestion next year.

GUEST VIEW

Marital rape is antithetical to equality and autonomy

replace the Indian Penal Code (IPC) from
SHARAD SHARMA July, hasn’t addressed the issue of marital
rape, thereby allowing it to remain legal.
In 2021, the Chhattisgarh high court in
Dilip Pandey & others vs State of Chhattisgarh
observed that “sexual intercourse or any sex-
ital union does not take away a woman’s liberty, which encompasses her right to pro- ment has shown reluctance in criminaliz-
right over her body. tect her physical and mental being.” ing marital rape, saying that it would desta-
In 2022, a two-judge bench of the Delhi Justice C. Hari Shankar, however, while bilize the institution of marriage. The idea
high court in RIT Foundation vs Union of upholding the constitutionality of the mari- of marriage in today’s world is changing,
India missed an opportunity to protect the tal-rape exception, held that the court is nei- with the focus now on equality and individ-
rights of married women. The court deliv- ther empowered to prescribe punishment ual rights. The gendered lens through

is an advocate based in Jammu
and Kashmir.
O
n 1 May 2024, the Madhya Pradesh
high court in Manish Sahu vs State of
Madhya Pradesh held that “any sex-
ual intercourse or sexual act by the husband
with his wife not below the age of 15 years is
not a rape, then under these circumstances,
absence of consent of wife for unnatural act
loses its importance.”
This ruling has reignited the debate on
criminalization of marital rape in India. As
per Exception 2 of Section 375 of the Indian
Penal Code, 1860 (which defines the offence
of rape), sexual intercourse or sexual acts by
a man with his own wife, the latter not being
under 15 years of age, is not rape. The age
was raised to 18 for this exception by a deci-
sion of the Supreme Court in Independent
Thought vs Union of India (2017). In other
words, the law gives immunity to husbands
from the offence of rape in non-consensual
sexual acts with their wives. Countries like
the UK, US, Australia and South Africa have
criminalized marital rape. However, the
Bharatiya Nyaya Sanhita, 2023, which will
ual act with wife by the husband would not
constitute an offence of rape, even if it was by
force or against her wish.”
On the contrary, the Gujarat high court in
Nimeshbhai Bharatbhai Desai vs State of Guj-
arat (2018) observed that “a woman is no
longer the chattel [that] antiquated practices
labelled her to be. A husband who has sexual
intercourse with his wife is not merely using
a property, he is fulfilling a marital consor-
tium with a fellow human being with dignity
equal to that he accords himself. He cannot
be permitted to violate this dignity by coerc-
ing her to engage in a sexual act without her
full and free consent.”
Exception 2 of the IPC’s Section 375,
based on the archaic notion that men have
control over women’s bodies, presupposes
that a woman has provided irrevocable con-
sent to her husband for sexual activity. In
doing so, it disregards the individual agency
of women, which is inconsistent with the
constitutional guarantee of right to life and
non-discrimination based on gender. A mar-
ered a split verdict on the constitutionality of nor create a new offence. Essentially, Justice which it was seen is fast being abandoned.
India’s marital-rape exception. Shankar shifted the onus to the legislature. Clearly, the institution can be protected
While striking down the provision, Jus- The Justice Verma panel, constituted in while also upholding the bodily autonomy
tice Rajiv Shakdher observed that “modern- 2012 to suggest reforms in rape and sexual of married women.
day marriage is a relationship of equals.” He assault laws, had recommended the deletion The Supreme Court’s observations in X vs
asserted, “The woman by entering into mat- of the marital rape exception. It was of the The Principal Secretary, Health and Family
rimony does not subjugate or subordinate view that the relationship between the vic- Welfare Department, Government of NCT of
herself to her spouse or tim and the accused is Delhi (2022) have helped highlight the flaw
give irrevocable consent irrelevant and consent in in the IPC’s marital-rape exception. The
to sexual intercourse in QUICK READ sexual acts should not be court disregarded the view that “only stran-
all circumstances. Con- presumed in a marriage. gers are guilty of gender-based violence”
sensual sex is at the heart A Madhya Pradesh high court The recommendations and acknowledged that “intimate partner
of a healthy and joyful ruling has reignited India’s debate were not accepted by violence is a reality and can take the form of
marital relationship. on the need to criminalize marital Parliament. rape.” Importantly, it held that rape includes
Non-consensual sex in rape. Sadly, the Bharatiya Nyay In 2018, Member of marital rape for the purpose of the Medical
marriage is an antithesis Sanhita doesn’t reform the IPC’s Parliament Shashi Tha- Termination of Pregnancy Act, 1971.
of what matrimony exception that keeps it legal. roor introduced a private A constitutional challenge to the marital-
stands for in modern bill, ‘The Women’s Sex- rape exception is pending before the
times i.e., the relation- Marital rape being legitimate ual, Reproductive and Supreme Court. We await the day when
ship of equals. The right not only presupposes a woman’s Menstrual Rights Bill,’ women do not suffer discrimination because
to withdraw consent at consent but denies her agency which aimed to criminal- of their marital status. We must ask ourselves
any given point in time and autonomy over her own ize marital rape. How- whether we want a rights-based society
forms the core of the body. It’s time for equality to ever, the bill lapsed. whose laws apply equally to all, or a country
woman’s right to life and override patriarchal norms. The Union govern- that upholds outmoded patriarchal norms.
LIVEMINT.COM VIEWS FRIDAY, 24 MAY 2024
NEW DELHI 13

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

India insured by 2047: Insurers Scarlett Johansson vs OpenAI

comes down to human rights
need profitability to achieve this She’s reminding the firm it’s dealing with a woman, not a chatbot

The insurance regulator must help the industry craft a business model that offers enough returns to meet lofty growth goals

ISTOCKPHOTO

BETH KOWITT
is a Bloomberg Opinion columnist covering
corporate America.

G.N. BAJPAI
is former chairman, Life Insurance Corporation
of India and Securities and Exchange Board of
India.

W
hen OpenAI demoed its new
artificial intelligence assistant
Sky last week, the company’s

I
n synchrony with the broader national intent
of India becoming a developed nation, the
Insurance Regulatory and Development
Authority of India (IRDA) has embraced the
laudable goal of “India Insured by 2047.” The
objective is to ensure that “every citizen has
appropriate life, health and property cover and
every enterprise is supported by an appropriate
solution” and to make India’s insurance sector
“globally competitive,” as elaborated in a press
release. Enthusiasm within the IRDA is palpable.
Coordinated attempts are afoot to usher in regula-
tory changes and push insurance companies to
reach out wider, especially to the rural uninsured,
and diversify their product baskets to make insur-
ance more accessible, affordable and relatable.
Meeting such ambitious aspirations would war-
rant building capacity, elevating competencies and
ushering in creativity.
The government think-tank Niti Aayog projects
India’s GDP at about $30 trillion in 2047. The
global average premium (on both life and non-life
policies) as a proportion of GDP, a measure of the
concept’s penetration, is 6.8%. This would trans-
late into an Indian insurance industry worth $2.04
trillion in annual premium payments in 2047. If we
attain the penetration level of South Korea (11.1%)
or Taiwan (11.4%), the market’s size would be
larger. India’s insurance penetration was at 4.1% in
2023 and the industry was placed at $92 billion. To
reach $2.04 trillion in 23 years would require a
compounded annual growth rate (CAGR) of 14.2%.
Can it be achieved? Near stagnant penetration
even after this sector’s liberalization more than
two decades ago does not inspire confidence.
The edifice of the insurance industry stands on
three pillars: Insurance companies, distribution
networks and the regulatory framework. For pre-
mium income to multiply, all three must perform
well. Insurers are the prime movers. Currently,
India has 67 insurance companies, 24 offering life
covers, 26 providing non-life coverage, five spe-
cialized in health insurance and 12 offering servi-
ces of reinsurance (including branches of foreign
companies). In the US , in contrast, there were
2,456 insurers in 2022, while China (with 3.9%
penetration) had 237 and the UK, 402.
If the size of India’s industry is to grow 22 times
in the next 23 years, the current capacity would be
wholly inadequate. Given advances in technology,
productivity enhancement tools and growth in our
GDP per capita, our capacity would need a 10-fold
increase. There are few applications for insurance
licences that await IRDA approval and foreign
players like New York Life, Aegon, etc, have either
exited the market or are trying to exit. Indian pro-
moters are not very enthusiastic either.
It is essential to understand and assess the causes
for low enthusiasm among both Indian and foreign
engineers made sure to showcase the OpenAI is accused of stealing the actor’s
attributes that they thought made it seem voice as if her consent is irrelevant AP
uncannily life-like.
The female-sounding voice they con- the world’s highest paid actresses, is not
versed with was ego-stroking (“Wow, going to put together anyone’s shopping
that’s quite the outfit you’ve got on!”); list. Her anger and willingness to fight for
accommodating and subservient (“How what she’s owed is refreshingly at odds
can I brighten your day today?”); flirty and with the kind of stereotypes that OpenAI
giggly (“Oh, stop it, you’re making me and its brethren perpetuate.
blush!”). The company had even added a It’s not the first time Johansson has
feature that allowed users to interrupt the taken on a company that has defied her. In
model (“You can just butt in whenever you 2021, she sued Walt Disney Company,
want,” noted one of the presenters). alleging that the company had breached
If this is OpenAI’s idea of how an actual her Black Widow contract by releasing the
human woman should behave, it’s no won- action movie on its streaming platform
der the company thought it could get away while it still played in theatres. Johansson,
with using a voice that sounded alarmingly who was supposed to get a cut of box office
close to that of actress Scarlett Johansson ticket sales, argued that the move
—without her permission. deprived her of potential earnings. She
In a statement released Monday, took legal action after the company basi-
Johansson said that OpenAI CEO Sam Alt- cally ignored her, reportedly failing to
man had twice tried to hire her to voice this respond to her initial offer or return calls
latest version of ChatGPT. The first time and emails from her team.
she said ‘no’; the second time, she didn’t Disney and Johansson settled, but not
even have time to respond before the com- before the entertainment giant put out a
aspirants; as our insurance industry holds bottom in pricing, particularly in the case of non- pany released the demo. statement saying that the suit was “espe-
immense potential, this should not be the case. life coverage, including health and pure life term “I was shocked, angered and in disbelief cially sad and distressing in its callous dis-
A broad analysis of the balance sheets of insur- policies; and two, high customer acquisition costs. that Mr. Altman would pursue a voice that regard for the horrific and prolonged
ance companies shows that it usually takes more Large policy distributors like banks and non-bank sounded so eerily similar to mine,” global effects” of the pandemic.
than a decade for a life-insurance company to be financial companies have gained in profitability Johansson wrote. Altman too tried to shame Johansson,
profitable; non-life and health insurers face more while inflicting long-lasting pain on the balance Johansson got herself a lawyer, and telling her that hearing her voice would
uncertain profitability. The ‘combined cost ratio’ sheets of insurers. The regulator has been liberal OpenAI has since taken down the Sky “help consumers feel comfortable” with
of insurance companies, except a few honourable and amended regulations to prevent sideways voice. The company said it “was never AI. Both Disney and OpenAI ignored her
exceptions, is more than 100%. compensation payments to distributors. An intended to resemble” Johansson’s, but and made the case that she should buck up
The Nifty, a barometer of acceptable level of ‘total man- Altman had already shown his hand. On and be a team player—it’s hard to imagine
India’s equity market, has deliv- agement expenses,’ inclusive of the day the demo was released, he tweeted them giving the same treatment to one of
ered an annual return (the QUICK READ acquisition costs, has been speci- “her,” the title of a movie in which Johans- Hollywood’s leading men (to say nothing
index’s CAGR, i.e.) of 17.6% in fied. Unfortunately, even that is son voices an intelligent chatbot. And dur- of the companies’ own “for the greater
the last five years, 11.8% in 15 For the insurance sector to being breached often. Yet, in a ing the event, one of the engineers asked good” bona fides).
years and 28.4% in one year. attract more investor interest liberalized market, it is neither ChatGPT to tell a bedtime story about love Johansson now has a track record of
Returns-on-equity north of 15% and expand coverage, its returns desirable nor appropriate to and robots (weird, but okay), which is fighting for what’s rightfully hers, and her
are being notched up by well- need to be impressive, but control and marshal pricing. The pretty much the plot of the film. willingness to do it so publicly and unapol-
managed companies in other insurers need to fix what looks tariff-heavy environment was It seems that even chatbots can’t escape ogetically is helping check a powerful tech
sectors. Relative to the Nifty and like a muddled business model. dismantled for that very reason. gender bias. OpenAI’s Sky is just the latest company in a way those with less money
Bank Nifty, star private insurers Insurers have a hierarchical example in a long history of female-voiced and agency cannot. It’s a move that puts
HDFC Life, ICICI Pru Life and Re-engineering the insurance organization design with three- assistants—including Amazon’s Alexa, Johansson in the same camp as Taylor
SBI Life have delivered signifi- model is a matter of urgency and four layers, must bear inelastic Apple’s Siri and Microsoft’s Cortana. They Swift, who withheld her music from Apple
cantly negative returns in the a delay would make it harder to fixed costs and have a muddled reliably and politely put together shopping and Spotify when she felt that their terms
last 18 months. enhance the industry’s capacity revenue model that seems to lists, set alarms to make sure you get where hurt artists, especially those who had not
Indian or foreign, any entre- and achieve IRDA’s stated dream have outlived its utility in the you need to be on time, make your phone reached her level of stardom.
preneur, company or individual of universal coverage by 2047. contemporary setting. For this calls, and even entertain your children. In trying to humanize its artificial intel-
is prompted to invest by the industry to improve profitability, They’re doing the kind of labour we expect ligence chatbots, OpenAI [may have]
expected rate of return. If higher returns can be attract investors and fulfil the IRDA’s ambitions, women to take on both at work and at made the mistake of dehumanizing a
garnered by directly investing in the Indian equity this model needs to be re-engineered. Ignoring home, all while teaching the next genera- woman by stealing her voice—and an even
market or another line of business, the narrative or delaying this will make capacity enhancement tion that this is what women do. bigger error in crossing one who could
that draws investors to invest in the country’s elusive and the distant dream of 2047 harder to Altman treated Johansson as he would actually do something about it. Johansson
insurance industry needs to be more compelling. realize. The sector needs urgent attention. The his AI assistant, assuming she would hap- is reminding this tech company of what it
The causes of the insurance industry’s low prof- regulator must seize the moment and propose pily do his bidding without pushback. He looks like to deal with a powerful woman,
itability, inter alia, seem to be: One, a race to the alternatives in consultation with industry leaders. sorely miscalculated; Johansson, one of not a deferential chatbot. ©BLOOMBERG

MY VIEW | PEN DRIVE

Get real on promoter power in controlled companies

them and governmental authorities. As
SRINATH SRIDHARAN businesses were often portrayed in negative
terms in socialist times, capitalists sought to
protect their interests by maintaining sub-
stantial ownership, often obscured through
friends and trusts holding larger stakes than
exemption to avoid meeting some stan- aimed at enhancing shareholder democracy the governance framework would risk mar-
dards, including the need for its board to and participation. We could mandate mini- ginalizing the interests of external investors
have a majority of independent directors. mum thresholds for minority representa- who may hold significant equity but lack the
Now, ‘independent director’ appointments tion on boards to grant minority owners a weight to influence corporate decisions.
in India rarely happen without the approval voice in key decisions. Moreover, imple- Such an imbalance would undermine the
of promoters; in fact, they are often hand- menting proxy-access provisions would democratic principles of corporate govern-

is a policy researcher and
corporate advisor.
@ssmumbai
O
ften, I am asked by promoters why
they are being asked to explain
everything to shareholders, despite
owning a majority of the company’s equity
and having built it from scratch to scale. I
have worked most of my professional life
with Indian promoters, and I find that their
ability to take investment decisions on a
long-term view of a business or industry
cycle is unparalleled. But then, does that
give them a licence to run their entities,
even after listing, like personal fiefdoms?
Isn’t it time for the Securities and Exchange
Board of India (Sebi) to regulate firms with
high promoter stakes a little differently ?
What’s the role of a company’s promoter?
Is this person expected to work primarily for
the benefit of other shareholders? Just as I
am often posed this question, I am sure
other advisors are also asked: How do pro-
moters protect their own interests too?
In India, promoters retaining large stakes
goes back to historical trust deficits between
reflected in official records. This helped
secure companies from takeover attempts
and keep disruptive dissent at bay.
Compounding this scenario is the evolu-
tion of corporate governance rules in India,
at least in the decades since economic liber-
alization, largely influenced by industrial-
ists who chaired regulatory advice panels
set up by regulators. Consequently, there
exists palpable reluctance within industry
to subject itself to more scrutiny. This resist-
ance is evident in the reluctance to separate
the roles of chairperson and CEO, a move
viewed as diluting the authority and influ-
ence traditionally wielded by promoters.
While promoters will want to safeguard
their autonomy and control, regulators
must balance it with minority-shareholder
rights. Sebi could contemplate a regulatory
threshold similar to that of the US. A com-
pany whose promoter has more than half its
voting power and is listed on the NYSE or
Nasdaq may invoke a ‘controlled company’
picked. Rather than maintaining a pretence enable minority shareholders to nominate ance, where shareholder rights should be
on this norm, why not have a realistic carve- candidates for board positions directly, pro- aligned with their ownership stakes to
out for firms with large promoter stakes? viding them with a more active role in shap- ensure that decision-making processes are
The audit committee reports its findings ing corporate governance practices. fair and transparent.
to the board, which may have a view of its We must not, however, deviate from the To address this challenge, regulators
own; it can even overrule the audit panel fundamental tenet of voting rights accorded should revisit the criteria for appointing
findings. It’s all about in proportion to owner- independent directors and ensure that their
board composition. But ship stakes. This is why roles are clearly defined and aligned with
in the US, under the Sar- QUICK READ some of the ideas that are the principles of shareholder democracy.
banes-Oxley Act, the floating around, such as For equitable governance, we need safe-
audit committee reports Promoters often ask why they endowing independent guards to prevent concentration of power
directly to the regulator, are being asked to explain directors with control- among independent directors and also need
rather than the board. If everything to shareholders ling powers even when to promote greater shareholder participa-
India adopts a category despite owning a majority of the external investors hold tion in the selection process.
of ‘controlled entities,’ company’s equity and having less than 20%, need to be It wouldn’t surprise me if regulators and
financial reporting rules built it from scratch to scale. rejected. We must not executive search firms still have a list of 250
would have to tighten. weaken the foundational independent director candidates who are
Empowering minor- While minority shareholder principles of corporate already on multiple boards and in demand
ity shareholders and rights must be protected, US-like ownership or disrupt the for their ability to ‘balance’ the interests of
strengthening their regulatory carve-outs for basic governance struc- promoters and other shareholders. Sebi too
board representation promoter controlled firms could ture. By granting dispro- should aim for a value-enhancing balance
can be achieved through minimize false compliance and portionate control to between investor protection and the auton-
regulatory reforms enhance financial scrutiny. independent directors, omy of promoters with large stakes.
 BE AT THE FOREFRONT OF WITNESSING THE
AI, GEN AI-LED DIGITAL TRANSFORMATION

24th May,
2024

Mumbai

Summit 2024
How to reap dividends from an AI, Gen AI-powered
digital transformation
Discover the exciting possibilities of advanced technologies as top experts and innovators
gather to discuss the changing digital landscape of India at this year's most-awaited event.

EMINENT SPEAKERS

Andrew Feldman Dilipkumar Sigal Atzmon Pranav Mistry Sajid Malik Keshav Reddy Mohit Kapoor
Co-Founder & CEO Khandelwal Founder & CEO Founder & CEO Chairman & MD Founder Group CTO
Cerebras Systems CEO, Deutsche India, Medix Global Two Platforms Inc Genesys International Equal Mahindra Group
MD & Global CIO Corporation
Corporate Functions,
Deutsche Bank

Utkarsh Desai Jayashree Dileep Mangsuli Prof. Satyanarayanan B. G. Mahesh Dr. Roopa Basrur Deepak Sharma
Corporate Center Head Satagopan Executive Director & Chakravarthy CEO VP, Global Safety Tech Entrepreneur &
- TI IC, L&T Construction President - Corporate Head of Founder & Director DigiSahamati Medical Writing, CXO Advisor,
& CFO, Coromandel Development Centre, The ePlane Company Foundation Parexel Independent Director,
International Limited Siemens Healthineers Suryoday Small
Finance Bank

Abhishek Ravi Sushil Ostwal Aarav Singhal Dr. Pavan Duggal Suresh K.K Jayanth N Kolla Gagandeep Reehal
CIO VP- Project Head Data MD & Partner Advocate, Supreme VP & Head - Platform Partner & Founder Co-Founder & CEO
Dream Sports Science, Motilal Oswal BCG Court of India & Deployment & Convergence Catalyst Minus Zero
Financial Services Ltd Chairman, International Applications, Indian
Commission on Cyber Institute of
Security Law Science(IISc)

Sudip Mazumder Rrahul Sethi Pranav Anam Kumaar Bagrodia Mihir Mehta Sushil Kurri
Global Chief Digital & Metaverse Expert Founder & CEO Neuroscientist & Founder Co-Founder & CEO Co-Founder & CTO
Information Officer & Founder The Gene Box NeuroLeap PocketATM PocketATM Are you
PGP Glass Metaverse911 meta-curious?
Experience the
magic of the
metaverse. Scan
#MintDIS2024 the QR code now!