CHENNAI, NEW DELHI, MuMBAI, BENGALuRu, KOLKATA, AHMEDABAD, HyDERABAD, CHANDIGARH*, PuNE*
VOL. 17 NO. 171
Thursday, July 20, 2023
Think Ahead. Think Growth.
mint primer
QUICK EDIT
What India’s top
exporting states
have done right
AI caution
for India
BY N MADHAVAN
Seven states account for 75% of India’s exports and they have
dominated the Niti Aayog’s Export Preparedness Index for the last
three years. What are they doing right? Mint looks at their policies and
how they are building the ecosystem.
Successful states
Export preparedness evaluated across four pillars — policy, business environment,
export ecosystem and export performance.
Rank on Niti Aayog’s Export
Preparedness Index
Exports (in $ billion)*
147
Gujarat
Tamil Nadu
3
28
22
Uttar Pradesh
Haryana
1
41
Karnataka
Andhra Pradesh
2
73
Maharashtra
4
20
All India
7
447
8
5
16
* Source: NIRYAT portal (merchandise export data for FY23)
SARVESH KUMAR SHARMA/MINT
1
Which is the most
competitive state?
Tamil Nadu has emerged as the
most export-competitive state in
the country. This is based on the
Export Preparedness Index that
Niti Aayog has released for 2022.
Maharashtra came second,
followed by Karnataka and Gujarat
(last year’s topper). Haryana takes
the fifth spot. Smaller and
Himalayan states are at the bottom
of the list. They include
Lakshadweep, Mizoram, Dadra &
Nagar Haveli, Daman & Diu,
Arunachal Pradesh and
Meghalaya. Tamil Nadu’s strong
show on its export-related policy
ecosystem, business environment,
infrastructure and export
performance got it to the top.
3
2
What’s common to the
top performers?
Coastal states have done well in
the ranking, grabbing the top four
places. In fact, they have taken five
of the top 10 ranks, with Andhra
Pradesh taking the ninth spot.
West Bengal (ranked 14th) and
Kerala (19th) are the only outliers
here. The top performers have put
in place export promotion policies,
not just at the state level but even
at district levels. Their global
footprint is wide with a larger
export basket. They have also
taken measures to promote
products that are unique to their
state. For instance, Tamil Nadu and
Karnataka export the highest
number of geographical indication
(GI) products.
How does the export
ranking work?
The Niti Aayog evaluates export
preparedness across four pillars — policy,
business environment, export ecosystem
and export performance. The index,
prepared in association with the Institute
for Competitiveness, uses 56 indicators to
capture export preparedness at the state
and district levels. The index seeks to
promote healthy competition.
are the top
exporting states?
4 Which
Gujarat is the top merchandise
exporter. In FY23, its goods
exports totalled $147 billion — a
third of India’s $447 billion and
twice that of nearest challenger
Maharashtra ($73 billion). Tamil
Nadu ($41 billion), Karnataka
($28 billion) and Uttar Pradesh
($22 billion) make up the rest of
India’s top five exporters. In fact,
75% of India’s exports come from
just seven states. Gujarat is the
largest exporter of petroleum
products and chemicals.
Maharashtra, Tamil Nadu top in
engineered goods.
5
How has India been
doing in exports?
Despite the pandemic and supplyside challenges, India’s goods
exports have remained robust.
They touched an all-time high of
$447 billion in FY23 after
registering a sharp growth in FY22
($418 billion) as against $292
billion in FY21. The government
refrained from announcing the
FY24 target after global headwinds
caused a slowdown. Media reports
suggest it may set a range of $450
billion to $500 billion for goods
exports. In FY23, services exports
were $323 billion, taking India’s
overall exports to $770 billion.
While fears of artificial intelligence (AI) eliminating jobs are
pervasive, India has reason to be
particularly worried, according
to Emad Mostaque, chief executive officer (CEO) of Stability AI,
a company known for text-toimage generator tool Stable Diffusion. Indian engineers working in the information technology sector would be badly hit as
AI deployment by multinationals would lessen work coming
their way, Mostaque said. That
labour protection remains weak
in India exposes them further to
job-loss risks. AI is rapidly
invading our lives and could
soon be powerful even without
the need for an internet link,
allowing tools to evade supervision. He isn’t the only tech
leader who has flagged AI perils.
Sam Altman, CEO of OpenAI,
has advocated quick regulation,
while Google and Microsoft
executives have expressed anxiety too. Some of it sounds like
the hype over AI capabilities or
put-downs of what humans do
at work, but the threat to jobs
means labour-market planning
no longer sounds like an idea
taken from the Soviet model of
a controlled economy. Instead,
it is something that economic
planners must pay attention to.
Jobless growth can spawn all
manner of crises.
MINT METRIC
by Bibek Debroy
In Kedarnath helipad, a mutt
Got a hefty kick on the butt.
In pursuit of a selfie,
He was silly and carefree.
Saved from the blades, the nut.
QUOTE OF THE DAY
I think India’s opportunity
currently is to cash in on the
‘China plus one’ opportunity.
This opportunity won’t stay
open for 10 years.
AJAY BANGA
WORLD BANK
PRESIDENT
MINT PODCASTS
TRANSFORMATIVE CARE
ON CYBER SECURITY
A POVERTY UPDATE
We talk to Girish Raghavan, vicepresident, engineering, GE HealthCare, to explore the
advancements in
the medtech sector
and gain insights
into precision care.
Don’t miss out on
this enlightening
conversation that delves into the
transformative potential of digital
health. Watch now!
Discover the hidden world of cyber
security insurance in this episode of
the Why Not Mint
Money podcast.
Join us as we speak
with Abhishek
Bondia, principal
officer and managing director at
SecureNow.in, about the growing
threat of online fraudsters armed
with AI tools.
Explore India’s progress in reducing
multidimensional poverty among 135
million citizens
between 2015-16
and 2019-21, as
revealed by the Niti
Aayog. Discover the
methodology
behind this calculation using the National Family Health
Survey. For a detailed explanation,
tune in to this insightful episode now!
PLAIN FACTS
Japan 2.0: Change is
afoot or flash-in-pan?
by DEEPA VASUDEVAN
T
he Nikkei 225 index hit an all-time high of 38,195 points in December 1989, a fitting finale to a decade of spectacular
boom in Japan. But as 1990 began, Japan’s asset bubble burst and the stock market went into a long slump. For the
next three decades, the country experienced low growth, low inflation, low interest rates, and a rapidly ageing society—a phenomenon so novel that it became known as ‘Japanification’. This staggering economic decline did not respond
to fiscal stimulus or monetary easing, and barely budged when the Bank of Japan (BoJ) experimented with yield curve
control. Metaphorically speaking, it seemed that the sun had set on the land of the rising sun.
Ironically, as the rest of the world struggles with a war and the aftermath of a pandemic, Japan may be on the cusp of
a growth renewal. A series of reforms are changing entrenched corporate cultures and attracting investor attention.
Between April and June 2023, net foreign purchases of cash equities jumped to 6.15 trillion yen, or $44.9 billion. In June,
two leading foreign funds—BlackRock and Berkshire Hathaway—endorsed Japan. The Japanese stock market has outperformed almost every other market in the first half of 2023: the Nikkei 225 crossed the key 33,000 milestone on 13 June,
33 years after its 1990 crash. But is this rally sustainable, or is Japan just the flavour of the month in a market deprived
of good news? That depends on whether policymakers and corporate chiefs are able to use current conditions to alter
economic fundamentals.
Japan‘s stocks are rising, reversing
decades of slump
Japanese equity markets have outshone
almost all others in 2023
Nikkei 225, monthly averages
Returns in first half of 2023 (%)
40,000
US
(Nasdaq)
Nikkei peak
Nikkei
crosses
33,000
35,000
31.7
Japan
(Nikkei 225)
27.2
Japan
(Topix)
30,000
21
US
(S&P 500)
25,000
Abenomics
The lost
decades
15.9
South Korea
(Kospi)
20,000
13.2
Europe
(Stoxx 600)
Covid-19
8.7
India
(Sensex)
15,000
6.4
Emerging markets
(MSCI EM)
10,000
UK
(FTSE 100)
Global
financial crisis
5,000
3.5
1.1
China
-0.8 (CSI 300)
0
Jan
1989
2000
2010
-4.4
Jun
2023
Source: St. Louis Fed
Hong Kong
(Hang Seng)
Source: Investing.com
Corporate Governance
Decades of cautious investment have
led to cash-rich balance sheets
DURING 1993-2003, Japan’s real gross domestic product (GDP)
grew at an average rate of 1%. As growth declined, firms became
risk-averse and reluctant to invest in new businesses. The gross
investment rate dropped from 32% to 26% in that period, while
corporate taxes fell and wages grew slowly. The result was that
corporate profits started accumulating as cash holdings. When
companies do not use capital efficiently, investors are pessimistic
about their future prospects. Not surprisingly, by March 2023, half
the companies listed in the “Prime” category of the Tokyo Stock
Exchange (TSE) traded at prices below their book values.
In March, TSE proposed that firms consciously work toward
increasing their return on equity; and indicated that failure to
comply may result in delisting. This suggestion has been a huge
success: Share buybacks and dividend payouts have shot up and
shareholder feedback is being heard. Corporate Japan is becoming
more investor-friendly, providing a strong boost to share prices.
Aggregate cash to total assets ratio of Japanese
companies, quarterly (%)
5 Year-on-year increases (%)
Wages in major
enterprises, annual
3
2
1
0
-1
-2
CPI, monthly
-3
Jan
1993
2000
May
2023
2010
13
12
11
10
9
8
Q2 2001
Q1 2023
Source: Policy Research Institute, Ministry of Finance, Japan
Inflation, Finally
Rising inflation has pushed up wage
hikes to a 30-year high
4
14
Source: Official websites
JAPAN HAS struggled with low inflation and deflation since
the 1990s, barring a few brief episodes of mild price increases.
The current spell of inflation could fizzle out too, since it
appears to be mainly driven by rising food prices. Yet, investors
and policymakers have welcomed it as a sign of a return to the
target 2% rate. Inflation has been above 3% since August 2022,
but BoJ is in no hurry to tighten monetary policy. It has opted
instead to support the country’s fragile growth.
Despite BoJ’s dovish stance, inflation has finally led to higher
wages. Nominal wage increases were languishing at around 2%
for many years, but the 2023 spring wage negotiations
between trade unions and employers resulted in a 3.8% agreed
hike, the highest in 30 years. This sets a new benchmark for
corporate wages. Higher wages are expected to boost
consumption and relieve households facing inflation after
many years.
Trade Linkages
THE NEWFOUND optimism owes much to recent
developments. Rising US-China tensions make Japan more
attractive to investors: Japan offers exposure to Asia while also
being a western ally. Japan is also sometimes seen as a safer play on
China: it benefits from China’s growth because China is its largest
trading partner, but is a less risky investment destination. Also, the
yen has depreciated by 9.4% this year, giving exports a competitive
boost, and making Japanese stocks cheaper. But each of these
themes could quickly turn unfavourable. Foreign capital is likely
to shift to China if it returns to pre-pandemic growth levels. The
yen’s export advantage will disappear once US monetary policy
normalizes. Meanwhile, a weaker yen makes imports dearer. Thus
how the Japan story plays out will depend on how much value can
be unlocked by the combination of favourable macroeconomic
conditions and corporate governance reforms.
The author is an independent writer on economics and finance.
Japan‘s trade exposure to high-growth
Asia makes it attractive
Figures for 2022 in $ bn
Top export partners
China
US
South Korea
Hong Kong
Thailand
Singapore
Germany
Vietnam
Australia
Malaysia
Asian economies
Top import partners
145
140
54
33
32
22
20
19
17
16
China
US
Australia
UAE
Saudi Arabia
South Korea
Indonesia
Thailand
Vietnam
Malaysia
189
91
88
46
42
34
29
27
26
26
Source: Trading Economics
PARAS JAIN/MINT
PEANUTS by Charles M. Schulz
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CHENNAI, NEW DELHI, mUmBAI, BENGALURU, KOLKATA, AHmEDABAD, HYDERABAD, cHANDIGARH*, PUNE*
VOL. 17 NO. 171
Rs. 15.00
16 PAGES
Thursday, July 20, 2023
The best of frenemies: Saudi
prince and UAE president uP10
livemint.com
SENSEX 67,097.44
302.3
NIFTY 19,833.15
83.9
DOLLAR ₹82.10
₹0.06
EURO ₹92.19
₹0.10
OIL $80.07
$0.58
Sensex scales fresh peak,
breaches the 67K mark
uP4
GOLD ₹59,633
₹421
Vedanta makes a fresh
bid to sell steel biz ESL
Go First may have
to sign new leases
before relaunch
After failed December attempt, Citigroup, JPMorgan mandated for sale
Anu Sharma & Anirudh Laskar
NEW DELHI/mUmBAI
Satish John & Anirudh Laskar
SECoNd ATTEmPT
mUmBAI
B
illionaire Anil Agarwal’s
Vedanta Ltd is seeking to sell
ESL Steel Ltd, formerly known
as Electrosteel Steels Ltd, after
acquiring the asset for ₹5,320
crore through a bankruptcy resolution
process five years ago, two people familiar
with the development said.
A previous attempt to sell the asset in
late December failed as certain approvals,
including environmental clearance and
expansion plan, were still pending, turning prospective buyers cautious.
The mandate for selling the asset in
Bokaro, Jharkhand, is with bankers
including Citigroup and JPMorgan’s India
offices, the people said, on condition of
anonymity. The mandate may also
include the iron ore mines in Goa and Karnataka, they said, adding that the details
and contours of the asset will be known by
mid-August. The price tag for ESL and the
ON THE BLOCK
iron ore assets would be between $2 bilTHE group may sell the
THE details and contours
THE price tag for the
lion and $3 billion, the people said on coniron ore mines in Goa and
of the iron ore assets will
assets would be between
dition of anonymity.
Karnataka
be known by mid-August
$2 billion and $3 billion
Although Agarwal, on numerous occasions, alluded to the focus of his group on
For Agarwal, who is in the middle of of $2.1 billion in FY24 and an additional $3
non-ferrous metals, such as aluminium,
zinc, and copper, the group entered the reorganizing the group’s zinc businesses billion in FY25. An analyst tracking the
ferrous metal sector when it aggressively and expanding its aluminium business, in group said the steel asset sale would probaaddition to harbouring ambitions of set- bly help repay its parent’s debt and allow
bid for stressed steel assets.
ting up a semiconductor for a fresh infusion of funds for capital
Since the change of
it’s lately realized expenditure. Agarwal has rarely sold a
ownership, ESL has been
E XC LU S I V E plant,
that it has to focus on core business, and that he has decided to sell the
in recovery mode, recordbusinesses and monetiz- steel business needs to be seen in that light.
ing its highest production
An email query to a spokesperson for
in FY23. ESL also increased its hot metal ing assets that are not core to his group.
Also, Vedanta Resources Plc, Vedanta Vedanta Ltd went unanswered. While a
capacity to 1.7 million tonnes and has
plans to expand to 3 million tonnes by Ltd’s parent and the holding company of
TURN TO PAGE 6
the group, is staring at a bond redemption
early FY25.
m
‘Announcements
on chip fabs soon’
Gulveen Aulakh
gulveen.aulakh@livemint.com
NEW DELHI
I
ndia will soon announce a 40
nanometre (nm) semiconductor fabrication unit and
multiple compound fab proposals under the modified
semiconductor investment
scheme, minister of state for
electronics and IT Rajeev
Chandrasekhar said.
“We will certainly have, very
soon, an announcement of a
40nm silicon fab. We will also
have multiple compound fab
proposals,” Chandrasekhar
said in an interview. Chips will
roll out from the fab within two
to three years of the announcement, he added.
“These are not decisions
running from election cycle to
election cycle. These are deci-
G
o First must sign fresh
lease agreements for
30-35 aircraft since
lessors have already terminated the previous ones following its insolvency filing,
two people aware of the development said, delaying the lowfare airline’s plans for a quick
return to skies.
“While the airline is making
sions for the next decade. We active efforts to relaunch flight
will be in a position this calen- operations, it will need to
dar year to take the decision on re-enter into fresh lease agreethe 40nm fab, and none of ments or get the termination
these decisions will be taken in revoked by the lessors in case
a hurry,” he added. The minis- it wants to operate these 30-35
ter did not spell out the identi- aircraft whose lease agreeties of the companies that have ments were terminated
around the time the airline
submitted proposals.
The new proposals come filed for insolvency,” one of the
two people
after the government
E XC LU S I V E said.
Go First
modified its
filed for insol$10 billion
financial incentive scheme to vency on 2 May and suspended
support the building of semi- operations with effect from 3
conductor, packaging, testing, May, leaving a void of 6.8% in
and allied fabrication units in the domestic civil aviation
India, accepting proposals for market. Following this, its lesmature nodes, or above 40nm, sors terminated leases and
sought to regain control of
without a deadline.
Vedanta Foxconn Pvt. Ltd planes. The airline was operathas also applied under the ing a fleet of 27 aircraft when it
filed for insolvency. The
TURN TO PAGE 6
Wadia Group, the airline’s
Rajeev Chandrasekhar, minister of state for electronics and IT.
m
PTI
Go First filed for insolvency on
2 May.
REUTERS
former promoters, has blamed
engine manufacturer Pratt &
Whitney for its predicament,
stating it had to ground
30-50% fleet on average since
2020 due to engine scarcity.
“Termination of an aircraft
lease is sacrosanct. If the airline has to restart operations, it
will have to get lessors on
board, as without a lease contract in place, even the insurance of the aircraft comes into
question. Lessors will need a
promise of payment of pending dues, and some comfort
will have to be provided for
cooperation in relaunch
efforts,” the second person
added.
DON’T MISS
Stainless steel policy planned
Tata plans UK battery factory
No market borrowings for NHAI
The Union steel ministry has started
industry consultations to frame India’s first
stainless steel policy, an official aware of
the matter said.
>P6
Tata Sons on Wednesday said the group
would invest £4 billion ($5.16 billion) to
establish a new 40GW battery cell
gigafactory in the UK.
>P6
The govt has decided to cut market access
for debt-laden NHAI even as the agency
races to meet stiff road-building goals,
people aware of the development said. >P2
Pristyn Care
suspends
founders of
Lybrate
Ranjani Raghavan
ranjani.raghavan@livemint.com
mUmBAI
H
ealthtech platform
Pristyn Care has suspended Rahul Narang
and Saurabh Arora, the
founders of Lybrate Inc., a day
after the duo served a default
notice demanding outstanding payment resulting from
Pristyn Care’s acquisition of
their company in June 2022,
two people aware of the development said on condition of
anonymity.
Tiger Global-backed Pristyn Care, which runs a net-
m
E XC LU S I V E
work of hospitals and clinics
through partners, had
acquired Lybrate to enter the
primary-care segment. While
the deal size was not disclosed,
it was said to be $20-30 million, including payments to
other investors of Lybrate,
such as Nexus Venture Partners, Tiger Global Management, and Ratan Tata’s RNT
Associates. Both founders
joined Pristyn Care following
the acquisition.
While the investors
received the proceeds from
the deal, the two founders
received only a part of their
share, with the rest to be paid
in two separate tranches. One
tranche was due on 1 June, one
TURN TO PAGE 6
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TURN TO PAGE 6
02
ECONOMY & POLICY
Thursday, 20 July 2023
Chennai
Action plan to fight
growing microbial
resistance on cards
LIVEMINT.COM
No market borrowing for
debt-laden NHAI till FY28
Priyanka Sharma
priyanka.sharma@livemint.com
NEW DELHI
Govt to provide entire capex from budget; borrowings from SPVs may be ended in FY25
T
he Union health ministry
is working on a national
plan to combat anti-microbial resistance (AMR) that is
becoming a public health
threat, a government official
aware of the matter said. The
ministry has formed a highlevel committee to develop a
National Action Plan Anti-Microbial Resistance 2.0 (NAP
AMR), the official said on condition of anonymity.
AMR occurs when bacteria,
viruses and fungi become
immune to medication over
time, making it harder to treat
ailments. Both humans and
animals can develop AMR.
“Addressing AMR in the
context of food safety requires
a comprehensive and multi-faceted approach that encompasses responsible antimicrobial use, good agricultural and
manufacturing practices, surveillance systems, research and
innovation, and international
cooperation,” the official cited
above said.
The committee, called the
Inter-Sectoral Coordination
Committee on AMR (ISCCAMR), includes officials from
the Indian Council of Medical
Research (ICMR), ministries of
animal husbandry and fisheries, food processing, forest and
climate change and the Central
Drugs Standard Control Organization to create the action
plan.
Subhash Narayan
The health ministry is working
on a national plan.
MINT
Queries sent to a health ministry spokesperson remained
answered.
Dr Soumya Swaminathan,
former chief scientist at the
World Health Organization,
said AMR has increased in the
last 2-3 years of the covid pandemic due to widespread and
irrational use of antibiotics.
“During every covid wave,
there was always a tendency to
use antibiotics, even though we
know that antibiotics do not
work on viral infections,” she
said. India carries one of the
largest burdens of drug-resistant pathogens worldwide
including the highest burden of
multidrug-resistant tuberculosis. A paper published in medical journal PudMed states that
around two million deaths are
projected to occur in India due
to AMR by 2050.
India is also known for widespread and indiscriminate use
of anti-biotics, which were routinely prescribed during the
covid-19 pandemic.
“The government aims to reduce
subhash.narayan@livemint.com
NHAI’s debt by ₹1 trillion by 2024-25
and so a moratorium has been put on
NEW DELHI
NHAI for market borrowings. Even if
this (no borrowings and budgetary allohe government has decided
cation) continues for the next few years,
to cut market access for debtNHAI would become a completely debtladen National Highway
free company only by FY42,” said the
Authority of India (NHAI)
official quoted above.
even as the government
Queries sent to the ministries of
agency races to meet stiff road-building
finance, and road transport and hightargets.
ways remained unanswered. NHAI, too,
According to two persons aware of
did not respond to queries.
the development, NHAI has, in any case,
The advantage with lending budgetbeen observing a moratorium on market
ary support is that the government borborrowings for the past two fiscals. The
rows at a much lower interest rate.
government, they said, has decided that
“High debt with NHAI is a concern,
the highway developer will continue on
but there are no issues on the solvency of
the same path for at least the next few
years while the government funds its It is expected that government funding for NHAI will rise in double digits in each of the highway developer,” said the other
person cited above.
the next four financial years before earnings from road tolls kick in.
MINT
entire capex.
“Debt has been taken only on bankaThe union budget for FY24 raised
NHAI’s allocation for building roads, NHAI may fall and work would largely from ₹24,188 crore. NHAI borrowed ble projects with regular revenue flows,
highways and bridges to a record ₹1.62 be on maintenance of developed infra- close to ₹65,000 crore each in FY22 and so, debt servicing is comfortable. Still,
structure,” said an official of ministry of FY21. Experts said if the same level of the entity will put checks on additional
trillion from ₹1.41 trillion in FY23.
It is expected that government fund- road transport and highways asking for borrowings had continued in FY23 and borrowings while meeting a large part of
capex through higher budgetary
anonymity.
FY24, its total debt would have
ing for NHAI will rise in double
support,” this person said.
The decision means the crossed ₹4 trillion.
digits in each of the next four
NHAI is estimated to be
While NHAI has stopped
Centre would allocate the
financial years before earnpaying over ₹30,000
entire capex of NHAI in fresh borrowings, it conings from road tolls kick
tn
tn
crore towards debt servicthe 2024-25 budget as tinues to undertake
in. These additional funds
budgetary
NHAI
ing in FY24. This will
well, so the developer will project-based financing
will go into maintaining
allocation for NHAI
debt by
peak to over ₹62,000
have no need to borrow of highways under the
more roads and paring
in FY24
end of FY23
crore in FY28 when NHAI
directly from the market. SPV (special purpose vehidebt, said one of the two
earnings of ₹69,000 crore
This, in turn, is expected to cle) route. Under this route,
persons quoted above.
would give it a surplus.
bring down the high debt lev- it aims to raise ₹60,000 crore
“The moratorium on NHAI
Construction of roads by NHAI
els on NHAI books that have fallen in FY24 by securitizing future toll
borrowings would continue till
FY28 by when its earnings are expected only marginally from ₹3.48 trillion in revenue. This debt will reflect on the has more than doubled since FY17 when
to generate surplus after meeting debt March 2022 to ₹3.43 trillion in March books of the SPV instead of NHAI. But it built just around 2,300 km of highservicing obligations. After FY28, the this year. Since 2014-15, the highway even this financing mode is proposed to ways. For FY24, the government wants
NHAI to build 6,000 km of roads.
pace of new highway construction by developer’s debt has increased 14 times be stopped after FY25.
T
₹1.62
₹3.43
Cabinet nod for press, mediation bills
Subhash Narayan,
Gulveen Aulakh &
Gireesh Chandra Prasad
NEW DELHI
T
he union cabinet on
Wednesday approved
two key bills to be introduced in the monsoon session
of Parliament, for which a
heavy legislative agenda of 30
bills has been drawn up.
Though a short one, the monsoon session is likely to be a
significant one given the bills
that are listed for discussions.
The union cabinet cleared
both the Press and Registration of Periodicals Bill, 2023
and the Mediation Bill, 2021,
which has now been reworked
to incorporate suggestions
from a Parliamentary panel,
said two persons informed
about the development.
There was no official briefing about the decisions.
Around 30 bills are being
readied for consideration during the session with 17 working
days that begins on 20 July
and ends on 11 August, one of
the persons cited above said.
The Mediation Bill includes
a framework for settling civil or
commercial disputes through
mediation before parties
approach a court or tribunal.
m
Proposed action
MDBs should partner private
cos for development: Report
Key bills likely to be tabled in Parliament during the monsoon session.
 BIOLOGICAL Diversity (Amendment) Bill, 2022
 NATIONAL Dental Commission Bill, 2023
 JAN Vishwas (Amendment of Provisions)
Bill, 2023
 NATIONAL Nursing and Midwifery Commission
Bill, 2023
 MULTI-STATE Cooperative Societies (Amendment) Bill, 2022
 DRUGS, Medical Devices and Cosmetics
Bill, 2023
 DNA Technology (Use and Application)
Regulation Bill, 2019
 REGISTRATION of Births and Deaths
(Amendment) Bill, 2023
 FOREST (Conservation) Amendment Bill, 2023
 JAMMU and Kashmir Reservation (Amendment)
Bill, 2023
 MEDIATION Bill, 2021
 GOVERNMENT of National Capital Territory
of Delhi (Amendment) Bill, 2023 (To replace
Ordinance)
 POSTAL Services Bill, 2023
 CINEMATOGRAPH (Amendment) Bill, 2023
 PRESS and Registration of Periodicals Bill, 2023
 ADVOCATES (Amendment) Bill, 2023
 NATIONAL Cooperative University Bill, 2023
 MINES and Mineral (Development and
Regulation) Amendment Bill, 2023
 DIGITAL Personal Data Protection Bill, 2023
 RAILWAYS (Amendment) Bill, 2023
 ANCIENT Monuments and Archaeological Sites
and Remains (Amendment) Bill, 2023
 NATIONAL Research Foundation Bill, 2023
Source: Lok Sabha Bullettin
Under this new legislation, par- vice providers and institutes. It
ticipation in pre-litigation is expected to suggest subjects
mediation is likely to be man- where mediation will be mandatory and other
datory. The idea is
areas where such
to find an efficient
The monsoon
a process cannot
way of dispute
session is
be initiated.
resolution and
likely to be a
The Press and
free up the judicisignificant one,
Registration of
ary of avoidable
given the bills that
Periodicals Bill,
litigation.
are listed for
2023 will replace
The bill also
discussions
the 155-year-old
proposes to set up
‘Press and Regisa Mediation
tration of Books
Council of India
that will register mediators Act’ with simplified legislation
and recognise mediation ser- that de-criminalises various
MINT SHORTS
Govt cuts price of subsidized
tomato to ₹70/kg
New Delhi: The Centre has reduced the price of subsidized tomatoes to ₹70 per kilogramme from Thursday
from ₹80 per kg. Tomatoes so
far are priced at ₹80 a kg in
Delhi-NCR and some other
cities, sold through the
National Cooperative Consumers’ Federation of India
and the National Agricultural
Cooperative Marketing Federation of India (NAFED). PTI
provisions and brings digital
media under its ambit. The new
law is expected to make the registration process for newspapers and periodicals simpler
and remove penal provisions
for not including the name of
the printer or operation of
printing presses by newspapers.
An email sent to the cabinet
secretariat and to the Prime
Minister’s Office on Wednesday seeking comments for the
story remained unanswered at
the time of publishing.
subhash.narayan@livemint.com
ecution for the offence of rape if he forces his wife, who
is not a minor, to have sex? A three-judge bench of the
Supreme Court will examine this after constitution
benches conclude hearing some listed pleas, said Chief
Justice DY Chandrachud when senior lawyer Indira Jaising mentioned the matter for urgent listing. The constitutional validity of an exception clause of Section 375
(rape) of the Indian Penal Code (IPC) is under challenge
as it exempts a husband from being prosecuted for rape
for having non-consensual sexual intercourse with the
spouse if she is an adult.
PTI
Gireesh Chandra Prasad
gireesh.p@livemint.com
NEW DELHI
D
evelopment banks
should change their
approach in order to
bring the private sector into
the centre of efforts to mobilise finance for sustainable
development strategies,
according to the independent panel that advise G20
nations on improving the
balance sheets of multilateral
institutions.
In the report titled
‘Strengthening multilateral
development banks-the triple
agenda’ presented to G20
finance ministers and central
bank governors, the ninemember committee argued
that development banks
should engage with the private
sector in a new way, including
by co-creating investment
opportunities and programmes.
Fifteenth Finance Commission Chairperson NK Singh
and former US Treasury Secretary Lawrence Summers
were co-convenors of the
panel.
Development banks should
N.K. Singh and Larry Summers
were panel’s co-convenors. AFP
also prioritize support for
helping governments reduce
policy and regulatory risks
that impede private investment, the report said.
Making a strong case for
development banks to partner
with the private sector, the
committee said that there is
considerable innovation and
energy behind new ways of
attracting private capital into
sustainable infrastructure, and
development banks must
complement, rather than
compete with, these efforts.
The panel noted that today,
multilateral development
Goyal to meet industry
leaders on 22 July
Coal ministry extends last
date for registration
SC to examine husbands’
immunity in marital rape cases
New Delhi: Does a husband enjoy immunity from pros-
New Delhi: The last date for
registration of coal and lignite
mines under the Star Rating
programme has been
extended until 25 July, an
official statement said.The
Star Rating policy aims to
evaluate mines .
PTI
New Delhi: Union commerce and industry minister Piyush Goyal will hold discussions with representatives of top 100 companies on 22 July in
Mumbai on ways to increase the share of domestic
manufacturing and boost the country’s exports, an
official said
PTI
banks only mobilise $0.6 in
private capital for each dollar
they lend on their own
account. “They should aim to
at least double this target,” the
report said.
Private sector capital mobilization requires a fundamentally different approach.
“We anticipate that private
financing amounting to $740
billion per year will be
required to reach overall goals
for additional climate and sustainable development goalsrelated finance, an increase of
$500 billion over the 2019
level of sovereign borrowing
and private participation in
infrastructure,” the report said.
Most of this additional private capital, perhaps $425 billion, would go toward sustainable infrastructure and other
investments where profitable
opportunities are already
available, the report said.
At the just concluded G20
deliberations in Gandhi Nagar,
Singh quoted the committee
report as recommending a ‘triple mandate’ for development
bank—eliminating extreme
poverty, inclusive growth and
financing of global public
goods.
Income tax officials visit
offices of upGrad
New Delhi: Tax officials have
visited the offices of ed-tech
startup upGrad for a routine
survey, the company said on
Wednesday. “It’s a routine
survey and we are fully compliant and cooperating with
the department,” Koell Hemdev, head of legal at upGrad
said in a statement.
Iranian deputy foreign
minister Ali Bagheri Kani.
‘India could
have played
more active
role in
West Asia’
Shashank Mattoo
shashank.mattoo@livemint.com
TEHERAN
I
ndia could have played a
more active role in West
Asia, said Iranian Deputy
Foreign Minister Ali Bagheri
Kani, just months after China
helped broker a key normalisation pact between Iran and
Saudi Arabia.
Speaking to a delegation of
Indian journalists in Tehran,
Kani said Indian diplomacy
had shown “passivity” in the
region in contrast to China.
“I believe,among the great
powers of the world, it is the
Chinese party that has
emerged victorious because it
did not allow the United
States’ illegal restrictions to
affect its bilateral relations
with different countries. I
believe the Chinese picked the
fruit of their policies because
they mediated the rapprochement between Iran and Saudi
Arabia in Beijing,” Kani said.
China has continued purchases of Iranian oil despite US
sanctions on Iran.
India, which was a key buyer
of Iranian oil in the past, ended
purchases in 2019 in an effort
to avoid US sanctions. This has
stunted the growth of the
bilateral economic relationship and Iranian officials have
publicly called on India to
resume oil sales.
“My question is why India is
not an importer of Iranian oil
at this moment? Because India
has been Iran’s partner in different fields and India has
been an old customer of Iranian oil. If our Indian friends
are serious, we can develop
and deploy a number of appropriate mechanisms so the US
could not injure the symbiotic
relationship between us,” Kani
stated. Kani also confirmed
that Iran had offered India a
25-year deal whereby Iran
would supply India energy.
“The empty seat of India has
been glaringly obvious and I
attribute this to the passivity of
Indian statesmen because
India could have played a
much more active role both
economically and politically at
the regional level,” said Kani.
Shashank Mattoo was in
Iran as a guest of Islamic
Republic of Iran Broadcasting
(IRIB), a public broadcaster
CORRECTIONS AND
CLARIFICATIONS
Mint welcomes comments,
suggestions or complaints
about errors.
Readers can alert the
newsroom to any errors in the
paper by emailing us, with your
full name and address to
feedback@livemint.com.
REUTERS
‘RBI likely to maintain status
quo in monetary policy’
New Delhi: State Bank of India (SBI) chairman Dinesh
Khara on Wednesday said the Reserve Bank of India is
likely to maintain status quo in the upcoming monetary
policy. “As a bank we don’t expect rate cut, status quo is
likely to be maintained by the RBI,” he said at an event
organized by industry body CII.
PTI
It is our policy to promptly
respond to all complaints.
Readers dissatisfied with the
response or concerned about
Mint’s journalistic integrity may
write directly to the editor by
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First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
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DEALS, TECH & STARTUPS
LIVEMINT.COM
m
MINT SHORTS
Bikaji Foods acquires 49% stake in
snack maker Bhujialalji
Bengaluru: Bikaji Foods International Ltd, a leading maker of
snacks and sweets, on Wednesday said it has bought a 49% stake
in snack maker Bhujialalji Pvt. Ltd. As part of the deal, 9,608
equity shares and 396 compulsorily convertible debentures
(CCDs) will be issued at ₹5,100 per share aggregating to ₹5.1 crore.
The face value is ₹10 per equity share, according to a BSE filing.
“With the company strategically headquartered in Bikaner, this
acquisition will help us leverage the learnings of this new brand
to enable growth and expand our presence. We aim to reach
every household in India,” said Deepak Agarwal, managing
director, Bikaji Foods.
K. AMOGHAVARSHA
Blitz raises $3 million in seed
funding led by India Quotient
ISTOCK
Bengaluru: Blitz, which was previously known as Grow
Simplee, has raised a total of $3 million in a seed funding
round led by India Quotient. The round also saw participation from Better Capital, First Cheque, and Titan Capital
along with angel investors such as Farid Ahsan, Abhinav
Jain, Rahul Dash, Kunal Shah, Prabhkirandeep Singh, Ishendra Agarwal, Kalpak Chhajed, Arjun Vaidya, Gaurav
Pushkar, Piyush Kedia, and Anshoo Sharma. The startup
plans to deploy the funds to improve its technology infrastructure and expand the network of dark stores. “With
simple-to-use products, we enable enterprises and medium-size brands with the ability to aid faster deliveries at
efficient costs - providing their management and logistics
team with visibility and improved controls,” said Mayank
Varshney, co-founder and CEO.
K. AMOGHAVARSHA
Meta, Microsoft, Qualcomm team
up on Llama 2 AI model
New Delhi: Facebook parent Meta on Wednesday released the
commercial version of its open-source artificial intelligence (AI)
model Llama. Dubbed as Llama 2, the new version of its AI model
will be distributed by Microsoft through its Azure cloud service
and will run on the Windows operating system. The tie-up
between Microsoft and Meta is targeted at enterprises, offering
them the capability to build apps using generative AI tools. In
addition, Meta is working with Qualcomm to integrate Llama 2
AI implementations into smartphones and personal computers
(PCs) starting next year.
SOHINI BAGCHI
Thursday, 20 July 2023
Chennai
‘Doubling data centre capacity’
Shouvik Das & Leslie D’Monte
New Delhi/BeNgaluru
N
TT Ltd, which merged its
data centre and information technology (IT) services divisions last October, is bullish on India,
having announced a five-year, $2.5 billion investment in January to build
data centres in Maharashtra. In a
recent interview, Abhijit Dubey, global
chief executive, NTT Ltd, and NTT
India CEO, Avinash Joshi, shared the
company’s roadmap while explaining
why India is NTT’s largest employee
base outside its home turf of Japan, and
how artificial intelligence (AI) will
influence demand for data centres,
among other things. Edited excerpts:
What is the extent of operations
for NTT in India?
Dubey: We have about 40,000
employees in India, and it’s the largest
outside NTT’s home base in Japan. Our
India operation has three aspects to it—
the first is the internet infrastructure
business which offers data centres,
marine cables, etc. This is pretty substantial—we’ve made a lot of investments in the past here, and will continue
to do so in the future. We have numerous Indian companies as clients here.
Our second business operation is IT
services where we provide services to
many Indian enterprises. The third is
our delivery and innovation hub which
(L-R) Abhijit Dubey, NTT Ltd Global CEO and NTT India CEO, Avinash Joshi.
we use to deliver services to clients glo- You hope to hit the $1 billion revebally, including North America and nue mark in India. How would this
Europe. These services include con- be divided among the businesses
sulting, digital transformation, digital that you mentioned?
operations in apps, infrastructure, busiDubey: We generate revenue from
our data centres and IT services— the
ness process outsourcing, and more.
Joshi: For IT services, we serve innovation hubs are cost centres that
don’t generate revenearly 3,000 clients in
nue. At present, the
India. In banking and
INTERVIEW
revenue split between
financial services (BFSI),
the two businesses is
we manage nearly 40%
of all branches of the banking industry in around 50:50, and in terms of revenue
the country. Our data centre presence is in the country, we’re somewhere
substantial, with about 16 of them between $500 million and $1 billion.
already operational. We will almost Would there be greater demand
double this capacity by March 2024. We for edge data centres, or will you
also offer on-cloud cyber security servi- invest more in hyperscale ones
given the craze around large lances, as part of our offerings in India.
m
guage models (LLMs)?
are certain regulatory needs. Because
Dubey: All our data centres are of this, even global banks intend to
hyperscalers (a data centre qualifies as start leveraging our data centre facilihyperscale when it exceeds 5,000 serv- ties here in India.
ers and 10,000 square feet, according to How do you strike a balance
International Data Corp.) Going for- between hyperscalers and edge
ward, we will, of course, continue to data centres?
invest in hyperscale data centres. But
Dubey: Certain loads will remain on
we’ll also invest in ‘edge’ data centres, hyperscalers, while for certain loads,
which would be in tier-II cities. These clients will prefer to be near the core,
would be slightly smaller in scale and in which is necessarily not through our
terms of their footprints, but both
hyperscale facilities. But, in both
would be equally
cases, clients won’t
important for a nation
build their own data
We have about
like India.
centres. Their data
Joshi: Given that
40,000 employees in deployments will be
hyperscalers ideally
on public clouds, but
India, and it’s the
need the subsea cable
will be through
largest outside
to connect to, for the
co-hosted, co-locaNTT’s home base
longest time, these
tion data centre facilifacilities have been in
ties like ours. We,
in Japan
Mumbai and Chennai.
therefore, see a need
Abhijit Dubey
Now, we have facilities
for both formats, and
NTT Ltd Global CEO
in Bengaluru, Noida,
we’re getting posiand are building one in
tioned very well in
Kolkata as well. This gives us four hyper- both scenarios. Extending beyond this,
scale facilities in the four metro cities. as clients migrate their data load from
But, within these cities, we will have mul- public cloud to private cloud, we also
tiple campuses. Some of these are hyper- help enterprises build their own priscale campuses, while some cater to vate cloud, and manage it for them too.
large- and medium-sized enterprises.
That’s where our IT services division
The BFSI sector is a large hyperscale comes into the picture, and presents an
consumer—as cloud migrations start end-to-end offering. This helps us offer
with greater pace, more clients will use clients the ingredients to meet them at
our data centres’ co-location facilities.
any point in their cloud journey. HavWith the advent of data sovereignty ing a decent data centre connectivity,
and localization requirements, there and ecosystem partnerships, also helps.
‘
Have
fun
with
facts on
Sundays
Catch the latest column of
A
A quiz on the week’s
development.
Chakri Gottemukkala, co-founder and chief executive at
o9 Solutions.
General Atlantic
leads o9 Solutions’
$116 mn fundraise
Malvika Maloo
malvika.maloo@livemint.com
BeNgaluru
o
9 Solutions Inc., an
enterprise software unicorn based in Dallas and
Bengaluru, has raised $116 million in a funding round led by
existing investor General
Atlantic’s climate-focused
growth equity venture
BeyondNetZero, at a markup to
its previous valuation, as investors continue to take selective
bets on startups despite the
ongoing funding winter.
Existing investors KKR and
Generation Investment Management also participated in
the round, o9 Solutions said in a statement on Wednesday.
The latest round
valued the startup at about $3.2
billion, an increase from its previous valuation of $2.7 billion in
January 2022 when it had
raised $295 million from General Atlantic, Generation
Investment Management and
KKR at the height of the funding boom.
“The investment by our
existing investors at a premium to our last funding
round and against a backdrop
of an overall pullback in market valuations is validation of
our performance and execution against our long-term
strategy,” said Chakri Gottemukkala, co-founder and chief
executive at o9 Solutions.
The company was founded
by Gottemukkala and Sanjiv
Sidhu. The company’s platform enables businesses to
plan and make decisions by
optimizing demand and supply. Its client base includes
food and beverage giant Pepsico, tech giant Google, and
brewer Anheuser-Busch InBev
who use its artificial intelligence-based solutions for
planning and analytics.
As a part of the transaction,
General Atlantic operating
partner Gary Reiner has joined
the board of directors of o9
Solutions.
“We continue to be thrilled
with o9’s customer
value proposition,
offering material and
measurable outcomes relative to traditional
planning software vendors and
thereby providing strong blue
chip client satisfaction,” said
Reiner.
o9 Solutions, which was
started in 2009, entered the
league of unicorn startups after
it raised $100 million from KKR
in its first external round in
2020.
The latest investment round
comes on the back of the company reporting a 55% year-onyear growth in its annual
recurring revenue in the June
quarter.
o9 Solutions didn’t disclose
the absolute numbers.
03
hindustantimes
htTweets
www.hindustantimes.com
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04
MARK TO MARKET
Thursday, 20 July 2023
Chennai
S&P BSE Sensex
Nifty 50
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Nifty Next 50
LIVEMINT.COM
Nifty 100
S&P BSE Mid-cap
S&P BSE Small Cap
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67,097.44
0.45
19,833.15
0.42
16,953.50
0.48
44,414.40
0.53
19,690.70
0.43
29,607.74
0.63
34,036.41
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66,795.14
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19,749.25
19,802.95
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33,860.30
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44,444.90 44,242.20
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LOW
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66,703.61
19,851.70
19,727.45
16,964.25
16,877.45
m
MINT SHORTS
UK bonds rally as aggressive
rate-hike bets unwind now
Investors cut bets on further Bank of England interestrate hikes, piling pressure on the pound and boosting UK
bonds, after data showed inflation slowed more than
expected in June. The market now sees the key rate peaking below 6%, a sharp reversal from earlier this month,
when traders were betting on 6.5%. They also cut wagers
on another half-point hike at the next decision in August,
with market-implied odds suggesting only a 50% probability now. UK bonds rallied with two-year yields dropping 21 basis points to 4.88%, set for their biggest slide
since March. The pound extended losses after the release,
falling as much as 0.8% to a one-week low of $1.2931 and
hitting its weakest since late May against the euro. “That’s
a pleasant number for the BOE,” said Rishi Mishra, an
analyst at Futures First Canada. “The direction of travel
is right and I think the market will shift the terminal rate
closer toward 5.75%.”
BLOOMBERG
Sovereign wealth funds spent a record $17.2 bn on coinvestments in the first half.
ISTOCK
PE fund titans tap sovereign
wealth to get deals done
Deep-pocketed sovereign funds are deploying billions of
dollars to get private equity takeovers across the line, helping grease the wheels of dealmaking in a year when other
funding sources are drying up. KKR & Co., EQT AB and
Brookfield all turned to wealthy Persian Gulf countries to
stump up a lot of the money for big-ticket deals in recent
weeks. Sovereign wealth funds spent a record $17.2 billion
on such co-investments in the first half, up 24% from the
same period last year, according to Global SWF. The
amount of equity these state-backed investors are providing has jumped as buyout firms find debt more expensive.
The Abu Dhabi Investment Authority is contributing at
least £1 billion ($1.3 billion) for EQT’s £4.5 billion takeover
of veterinary drugmaker Dechra Pharmaceuticals Plc.
Middle East investors like sovereign funds Mubadala
Investment Co. and ADQ are fronting about £1.2 billion for
Brookfield’s £2.2 billion takeover of payments processor
Network International Holdings Plc.
BLOOMBERG
Real estate firms on solid ground
Bavadharini KS & Harsha Jethmalani
Steady state
bavadharini.ks@livemint.com
L
isted real estate companies
showed resilience with stellar
pre-sales at a time when interest
rates were rising. The March
quarter of FY23 saw bumper
bookings in the residential segment
helping developers close the year on a
strong note.
The quarterly operational update
released by some key listed companies
shows that decent residential sales continued in the June quarter (Q1FY24),
too. For instance, Macrotech Developers Ltd saw bookings grow 17% year-onyear (y-o-y) to ₹3,353 crore, also the
highest Q1 number delivered by it. With
that, the company has achieved 23% of
its FY24 pre-sales guidance of ₹14,500
crore. Prestige Estates Projects Ltd saw
sales value growth of 30% y-o-y in Q1.
On an aggregate basis, Motilal Oswal
Financial Services Ltd expects realty
companies under its coverage to clock
9% y-o-y volume growth in Q1FY24. Of
course, given the high base, sequentially
volume could be soft.
Nonetheless, investors seem to be in
an upbeat mood. In this calendar year so
far, Nifty Realty Index has rallied by
Listed realty firms could see decent year-on-year growth in Q1FY24, but base
effect may hurt sequential performance.
Sales volume (in million square feet)
Sales value (in crore) (right-hand scale)
25
25,000
20
20,000
15
15,000
10
10,000
5
5,000
0
Q2FY22
Q4FY22
Q2FY23
Q4FY23
Note: Aggregate data for real estate companies
under Motilal Oswal's coverage universe
Q1FY24
estimated
0
Source: Company,
Motilal Oswal Financial Services
SATISH KUMAR/MINT
24.2%. Also, with interest rate hikes
largely out of the sector’s way, sales
could get a further fillip as home loan
rates could remain steady.
The premium and luxury segments
could continue to do well, however,
affordable housing, which is relatively
more sensitive to higher interest rates
could take time to revive. “Higher mortgage rates have hit affordable and midincome housing, but luxury demand
remains indifferent to the interest rate.
This is because luxury segment is driven
by wealth effect,” Parikshit Kandpal,
vice president, Ins-titutional Research,
HDFC Securities, said. And since most
listed real estate companies have mean- of the top eight listed developers fell to
ingful exposure to this segment, it over ₹23,000 crore in FY23 from
augurs well for their sales prospects.
₹40,500 crore in FY20, recording a
But to keep sales growth intact, the decline of 43% in the period, showed an
pace of new launches is crucial going analysis by Anarock Property Consultahead. “Considering a scenario where ants. On a yearly basis, net debt of develthe interest rate hikes are unlikely in the opers has remained almost stable in
medium-term, companies could have FY23 as compared to year ago period,
strong business for next two
showed the Anarock data.
years (FY24 and FY25). But
LAY OF THE However, a sustained pause
this depends on how fast
on interest rates and eventuLAND
they are able to launch projally rate cuts could lower
ects and new business UPDATES from key
cost of borrowings for the
firms show that sector, thus, aiding expandevelopments,” said Ronald listed
there were decent
Siyoni, associate vice presi- residential sales in
sion plans.Further, the
dent, Sharekhan by BNP Q1FY24 as well
ongoing consolidation espeParibas.
cially in select micro marSo, management comm- WHILE premium
kets should aid market share
segments would
entaries on new launches continue to do well,
gains for listed developers.
are crucial. Along with affordable housing
“The industry continues to
demand, supply trends are could lag
consolidate with residential
important for the sector’s
developments steadily shiftpricing outlook. “In line
ing into hands of stronger
with seasonal trends, new project developers who have been able to
launches across markets are likely to weather the economic storm created by
moderate in Q1FY24 post-strong the pandemic,” said Knight Frank India
Q4FY23. Further, the companies are in a recent report. Developers are also
likely to focus on churning inventories finding takers for their under-construcat existing projects,” said the Motilal tion inventory, it added. On the flip side,
Oswal report. Meanwhile, robust sales the ongoing slowdown in the IT sector,
aided cash flows of listed companies, leading to job losses, can hurt housing
helping them to pare debt. The net debt demand.
Wires and cables biz to do the heavy lifting for Polycab India
Vineetha Sampath
vineetha.s@livemint.com
P
olycab India Ltd began the
new fiscal year with robust
June quarter (Q1FY24)
results. Consolidated revenue
climbed 42% year-on-year
thanks to its robust wires and
cables business. This segment
clocked 50-60% volume growth
in Q1, translating into a 47% rise
in revenue to ₹3,534 crore.
Although a low base has helped
to some extent, the performance
bodes well for the company’s
overall growth outlook.
Shares of Polycab have risen
by 10% in the last two days with
the stock scaling a new 52-week
high of ₹4,325.15 apiece on
Wednesday. Along with a solid
Q1, the management commentary was also encouraging.
Given the healthy performance in the last few quarters, the
management said it will have to
recalibrate timeline of its earlier
guidance of achieving ₹20,000
crore in revenue by FY26.
“There is an increased possibility of Polycab meeting its revenue target much before FY26
on the back of robust execution
by the company especially in the
wires and cables business,” said
Harshit Kapadia, an analyst at
Elara Securities (India). Polycab’s wires and cables segment
formed about 90% of revenue in
On the other hand, Polycab’s
fast-moving electrical goods
(FMEG) segment saw muted revenue growth of 2% as it was
plagued by subdued demand.
Here, the Ebit (earnings before
interest and tax) margin
remained in the red as fixed costs
and advertising spends weighed
on the measure due to lack of
scale. Nonetheless, Polycab’s
consolidated Ebitda margin rose
by 274 basis points to 14% in Q1
led by price revisions, operating
leverage and favourable business mix. The company intends
to increase advertising spends in
FMEG and investors would do
well to follow margin trajectory.
Meanwhile, in the last one
Strong connection
Polycab India’s revenue saw robust year-on-year growth in Q1FY24
led by healthy volumes in wires and cables business.
5,000
Consolidated revenue (in ₹ crore)
4,000
3,900
3,000
2,000
1,900
1,000
0
Q1FY22
Q2FY22 Q3FY22 Q4FY22 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24
Source: Jefferies, Company data
SATISH KUMAR/MINT
Q1, and the company is looking
to capitalize on the strong
demand environment here. It
aims to introduce premium
products and expand its presence in the international markets, which has a relatively better
margin.
year, shares of Polycab have
soared 91%. This can be attributed to its consistent and strong
execution driven by better volumes and margins in the wires
and cables business. Analysts at
ICICI Securities expect Polycab
to maintain a strong earnings
CAGR of 24.3% over FY23-25 led
by healthy demand from business-to-business sectors and
correction in commodity prices.
It foresees the FMEG segment
reviving in H2FY24. That said,
the stock is trading at a valuation
multiple of 38x its FY25 estimated earnings, showed Bloomberg data. After the steep rally,
meaningful upsides could be
limited from hereon.
Mark to Market writers do not have positions in the companies they have discussed here
India’s sunflower oil Markets hit new record, Sensex closes above 67,000 mark
New peak
imports may decline
Ujjval Jauhari
ujjval.j@livemint.com
NEW DELHI
Reuters
I
feedback@livemint.com
I
ndia’s imports of sunflower
oil are likely to fall in the
coming months as it
becomes uncompetitive
against rival oils due to rising
prices after Russia withdrew
from the Black Sea grain deal,
industry officials told Reuters.
The drop in sunflower oil
imports would force the
world’s biggest buyer of vegetable oils to increase purchases
of palm oil and soyoil to compensate.
A year-long deal allowing
the safe Black Sea export of
Ukraine’s grain expired on
Monday after Russia quit and
warned it could not guarantee
the safety of ships, in a move
the United Nations said would
“strike a blow to people in
need everywhere”.
Sunflower oil shipments to
India could fall by around 30%
from current levels, said Pradeep Chowdhry, managing
director of Gemini Edibles and
Fats India Pvt. Ltd, a leading
Indian importer.
The Black Sea region
accounts for 60% of world
sunflower oil output and 76%
of exports.
Spot prices have risen from
$850 to $965 per tonne in the
past five weeks on expectations that the grains deal
would lapse and on a rally in
rival oils.
India typically imports
around 250,000 tonnes of
sunflower oil per month,
mainly from Russia, Ukraine,
Argentina and Turkey.
Earlier this year, Black Sea
Sunflower oil shipments could
fall by around 30%.
MINT
exporters were aggressively
selling sunflower oil at competitive prices, which helped
bring down inventories, said
Rajesh Patel, managing partner at GGN Research, an edible oil trader and broker.
India could import around
275,000 tonnes of sunflower
oil in July but from August
imports could fall to around
200,000 tonnes, Patel said.
Ukraine traditionally
accounted for more than half
of India’s sunflower oil
imports, but Russia has been
its biggest supplier in the
marketing year ending on 31
October, Solvent Extractors’
Association of India data
shows.
Loading of big vessels at
Ukrainian ports is not possible
without the grain deal, said
Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and consultancy.
“The deal’s expiry would
force Ukrainians to ship sunoil
from Romania, Bulgaria and
other European countries but
re-routing would bring down
the volume,” Bajoria said.
ndian stock markets continued their rally for the fifth
straight session as benchmark indices marked fresh
record highs on Wednesday.
The Sensex breached the
67000-mark and Nifty
crossed the 19800 level.
Sensex scaled a record high
of 67171.38, before closing at
67097.44, up 0.45%. Nifty also
rose to record highs of
19851.70 during the day and
closed at 19833.15, with gains
of 0.42%.
“Market’s record-breaking
spree continued on Dalal
Street, as we are in the midst of
a strong bull run backed by
robust foreign fund inflows,
strong growth prospects, even
monsoon spread out and stable corporate earnings so far,
which have increased the
appetite for local stocks,” said
Shrikant Chouhan, head of
research (retail) at Kotak Securities Ltd.
Banks and financial stocks
rose the most, driving the rally,
while consumer durable companies, too, were on a roll following a strong performance
by Polycab Ltd.
Energy, oil and gas, metals,
pharma and healthcare stocks
supported the rally. Most
other sectoral indices ended
higher along with gains in the
broader markets. Only the IT
sector saw some profit booking and the IT index ended
marginally down.
The rally in the domestic
markets remained supported
by advances in the Asian mar-
The BSE Sensex closed at a new
all-time high on Wednesday.
Sensex (closing)
68,000
67097.44
65,000
63284.19
62,000
59,000
56,000
01 Dec 2022
19 Jul 2023
Source: BSE
SATISH KUMAR/MINT
kets after a strong finish to
Wall Street stocks overnight.
“The market continues to be
resilient supported by favourable global setup and sustained FII inflows,” VK Vijaya-
kumar, chief investment strategist at Geojit Financial Services, said.
He added that the ongoing
global market rally is primarily
being driven by the strength of
the US economy, which is, so
far, showing no signs of recession that markets had feared
and discounted in 2022.
Retail sales in US rose less
than economists’ expectations. It adds to evidence that
domestic
consumption
remains strong despite pressure from high interest rates
and inflation, said analysts.
“That is good news for stock
market because it means economy is still growing, but not so
rapidly that Federal Reserve
has to tamp down runaway
inflation by continuing interest-rate hikes,” Devarsh Vakil,
deputy head of retail research,
data. In contrast, DIIs booked
HDFC Securities, said.
The recent corporate results profit selling ₹2,134.54 crore in
from the US too have been bet- the markets and DIIs have
ter-than-expected, enabling been sellers in nine out of the
continuation of the rally. The 13 trading sessions.
The benchmark 10-year
earnings of banks have beaten
expectations and a rally in yield remained flat at 3.8% and
is positive for FPI
equities linked to
companies develThough US retail flows. However,
the dollar index
oping and using
sales rose less
artificial intellithan economists’ saw some rise
from lows and
gence capabilities
view, it’s evident thus the rupee
is driving US marthat domestic
weakened by 5
kets.
consumption is
paise to 82.08 to
The extra supstill strong
a dollar. Analysts
port to Indian
are watching dolmarkets continlar index moveues to be provided
by sustained foreign fund ment going forward.
Meanwhile, earnings season
flows. Foreign portfolio investors have been buyers in 12 out is to pick pace in the coming
of 13 trading sessions in July as days and consensus earnings
they invested ₹1,165.47 crore estimates expect Nifty compain the Indian markets on nies to register a 25% year-onWednesday, as per provisional year growth.
Cautious outlook for specialty chemical manufacturers
Ujjval Jauhari
ujjval.j@livemint.com
NEW DELHI
M
ultiple specialty
chemical manufacturers are staring at
weak prospects in the near
term, led by weak global
demand and destocking of
inventory.
Declining chemical prices
and increased competition
from China post opening of
the Chinese economy are putting pressure on their margins.
The only solace for now comes
from some decline in raw
material prices. Nevertheless,
there are multiple factors that
led to a cautious near-term
outlook for many companies
even as analysts maintain a
structurally positive view on
the sector looking at longterm prospects.
Surya Patra, senior analyst
at PhillipCapital Institutional
Equity Research in a report,
said the Indian specialty
chemical industry is all set to
face one of the worst quarters
in Q1. This is primarily driven
by a broad based disruption in
global chemical demand
caused by visible economic
slowdown in the advanced
markets of Europe and the US,
ongoing inventory rationalisation and enhanced competi-
Increased competition from China is putting pressure on the
margins of chemical manufacturers.
tion from China.
The demand woes in the
global arena, especially in
developed markets such as
Europe and US, is impacting
HT
exports of Indian manufacturers even though domestic
demand continues to support
the downside for volumes.
The increased supplies of
chemicals from China post
easing of covid-related measures has been a key concern
for Indian manufacturers. The
production in China caught
pace while local demand failed
to impress, leading to more
export of chemicals out of
China, especially after the Chinese new year.
The increased competition
through higher Chinese
exports and declining global
prices of chemicals have further impacted the performance of the Indian manufacturers.
Many companies have
resorted to provisioning for
high-cost raw material inven-
tories, too, as prices continued
to decline further impacting
earnings.
ICICI Securities estimated
their specialty chemical coverage universe’s revenue to dip
7% y-o-y in Q1FY24 due to
destocking and weak demand.
Earnings before interest tax
depreciation and amortization
(Ebitda) is expected to decline
16.4% y-o-y on weaker spreads
and operating deleveraging,
they said.
The key decline in chemical
costs remains a positive, however, analysts say that they
may not be able to completely
mitigate the impact of sharp
dip in realisations.
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‘HDFC Bank’s focus is on
service, inclusion, digital’
THURSDAY, 20 JULY 2023
CHENNAI
05
Thursday, 20 July 2023
Chennai
Microsoft’s $69 bn
Activision purchase
deadline extended
Associated Press
feedback@livemint.com
CEO Jagdishan emphasizes importance of supportive culture in letter to shareholders
Shayan Ghosh
shayan.g@livemint.com
MuMBAI
I
ndia’s largest private sector lender HDFC
Bank Ltd is working on establishing a more
inclusive workplace, enhancing customer
service and strengthening digital infrastructure, chief executive officer Sashidhar Jagdishan said on Wednesday.
In his message to shareholders in the bank’s
annual report, Jagdishan emphasized the importance of fostering a supportive culture to effectively harness talent, potential and capabilities.
To achieve this goal, the bank has implemented
a managerial behaviour framework based on the
principles of nurture, care and collaboration. The
“nurture, care, collaborate” initiative, which covered 12,000 managers in FY22, was extended to
senior leadership and over 6,000 new managers
in FY23.
“I am fully aware of the fact that there may be
instances where some people managers might According to Sashidhar Jagdishan, HDFC Bank is undergoing a technology transformation focused on
transgress our defined way of working. But, we building the “bank of the future”.
have the resolve to nip it in the bud, both by way
of training and counselling and appropriate is the post-covid phenomenon that may have said, adding that the bank challenges people with
action, ensuring that the same is not attempted by prompted the young workforce to recalibrate continued job rotations and assignments outside
their career goals. This led to increased attrition their core areas, along with on-job and specialized
anyone else,” said Jagdishan.
training when required. “We will continue to take
He said HDFC Bank is yet to cover a fair dis- across sectors,” he added.
According to Jagdishan, the bank is undergo- more such initiatives,” he said.
tance and is taking steps to build an inclusive
On the HDFC merger, Jagdishan said investing a technology transformation focused on
organization that will help rein in attrition.
His remarks come in the wake of a recent inci- building the “bank of the future”. “For me, the ments in infrastructure are crucial for India’s
dent where an employee was suspended after a focus on technology upgrade and digital transfor- growth and the larger balance sheet will allow it
mation are central to achieving growth to take a larger exposure in infrastructure provideo of him berating his subordinates
jects, and participate meaningfully in India’s
and excellence in customer service.”
went viral on social media during an
Jagdishan said he travelled across growth story.
undated group video call related to
Reiterating the bank’s plans, Jagdishan said the
the country in private buses with
employee performance and their
colleagues across various levels, bank would look to add 1,500 to 2,000 additional
targets to sell products.
HDFC Bank’s
allowing him to meet employees as branches during the year. According to him,
The bank has seen an increase in
attrition rate
well as customers across multiple branch banking is the fulcrum of the bank’s cusattrition over last financial year and
in FY23
locations. These interactions, he tomer relationships, and he believes that a physia significant part of it was at the ‘nonsaid, have enriched his understanding cal branch is extremely important to customers,
supervisory staff’ level, including sales
and view of the locations visited and the especially in semi-urban and rural locations.
officers, he said. The bank saw attrition
In FY23, HDFC Bank added 1,479 branches, a
myriad opportunities that exist.
of 34.15% in FY23, according to the annual
“I am energized by the talent and passion our majority of which are in semi-urban and rural
report. In 2021-22, the attrition rate was at 19.1%.
It had also hired nearly 50% more employees than frontline colleagues display during the interac- (SURU) locations. “We plan to add another 675
FY22 and its total staff base stood at 173,222 as on tions and give us enough ideas to work on. This is this year in SURU locations that will take the total
number of branches in these locations to over
31 March.
something I will continue to do,” he said.
“A reason that can be attributed to this increase
Skilling is another important area, Jagdishan 5,000,” said Jagdishan.
34.15%
T
he deadline for Microsoft’s $69 billion acquisition of video game company Activision Blizzard has
been extended as the companies seek to close a deal that
has been challenged by regulators in the US as well as by
the UK’s Competition and
The Microsoft-Activision deal
Markets Authority (CMA).
Microsoft believes that was announced in January
REUTERS
pushing back the deadline to 2022.
October 18 will provide
enough time to work through of directors have authorized
the remaining regulatory the companies not to termiissues, said Brad Smith, the nate the deal until after Octocompany’s president. “We are ber 18,” an Activision Blizzard
confident about our prospects spokesperson said on
for getting this deal across the Wednesday. “We’re confident
in our next steps and that our
finish line,” Smith said.
The extension comes with a deal will quickly close.”
Microsoft spent the past
bigger termination fee, should
the deal be called off, and a week working to resolve longnumber of other new agree- standing legal challenges from
antitrust enforcers in the US
ments.
and UK who
T u e s d a y
argued
the
marked
an
merger would
important deadThe extension
harm competiline for the deal
comes with a
tion.
announced 18
bigger
The deal was
months earlier.
termination fee
effectively clear to
Both Microsoft
and a number of
go in the US this
and Activision
other new
week, especially
had agreed that
agreements
after the Supreme
either party
Court decided
could walk away
against hearing a
from the planned
merger if it hadn’t closed by last-ditch effort to block the
then, triggering Microsoft to takeover from gamers who
potentially have to pay a $3 bil- have described themselves as
lion breakup fee unless both fans of popular Activision titles
Call of Duty, World of Warsides decided to renegotiate.
That termination fee has craft, Overwatch and Diablo.
Justice Elena Kagan
been increased to $3.5 billion
rejected the emergency appeal
with the extension.
“Given global regulatory without comment on Tuesday.
approvals and the companies’ Kagan handles emergency
confidence that CMA now rec- matters from California and
ognizes there are remedies other western states.
But the UK remained an
available to meet their concerns in the UK, the Activision obstacle, though one that’s
Blizzard and Microsoft boards likely to be surmounted.
Apple developing NHPC weighs IPO, stake sale of clean energy arm
generative AI tools,
tests Apple GPT
Rituraj Baruah
rituraj.baruah@livemint.com
New DelHI
Bloomberg
feedback@livemint.com
A
pple Inc. is quietly
working on artificial
intelligence (AI) tools
that could challenge those of
OpenAI Inc., Alphabet Inc.’s
Google and others, but the
company has yet to devise a
clear strategy for releasing the
technology to consumers.
The iPhone maker has built
its own framework to create
large language models — the Apple CEO Tim Cook. REUTERS
AI-based systems at the heart
of new offerings like ChatGPT pany has made AI headway in
and Google’s Bard — accord- other areas, including
ing to people with knowledge improvements to photos and
of the efforts. With that foun- search on the iPhone. There’s
dation, known as “Ajax,” Apple also a smarter version of autoalso has created a chatbot ser- correct coming to its mobile
vice that some engineers call devices this year.
“Apple GPT.”
Publicly, Apple chief execuIn recent months, the AI tive officer Tim Cook has been
push has become a major circumspect about the flood of
effort for Apple, with several new AI services hitting the
teams collaborating on the market. Though the technolproject, said the people, who ogy has potential, there are
asked not to be identified still a “number of issues that
because the matter is private. need to be sorted,” he said durThe work includes trying to ing a conference call in May.
address potential
Apple will be
privacy concerns In recent months, adding AI to
related to the
more of its prodthe AI push has
technology.
ucts, he said, but
become a major
The company
on a “very
effort for Apple,
was caught flatwith several teams t h o u g h t f u l
footed in the past
basis.”
collaborating on
year with the
In an interview
the project
introduction of
with
Good
O p e n A I ’ s
Morning AmerChatGPT, Gooica, meanwhile,
gle Bard and Microsoft’s Bing Cook said he uses ChatGPT
AI. Though Apple has woven and that it’s something that the
AI features into products for company is “looking at
years, it’s now playing closely.”
catch-up in the buzzy market
Behind the scenes, Apple
for generative tools, which can has grown concerned about
create essays, images and even missing a potentially paravideo based on text prompts. mount shift in how devices
The technology has captured operate. Generative AI promthe imagination of consumers ises to transform how people
and businesses in recent interact with phones, computmonths, leading to a stampede ers and other technology. And
of related products.
Apple’s devices, which proApple has been conspicu- duced revenue of nearly $320
ously absent from the frenzy. billion in the last fiscal year,
Its main AI product, the Siri could suffer if the company
voice assistant, has stagnated doesn’t keep up with AI advanin recent years. But the com- ces.
S
tate-run NHPC Ltd plans to
take its clean energy subsidiary NHPC Renewable Energy
Ltd (NREL) public or sell its stake to
strategic investors through private
placements in two-three years,
Rajendra Prasad Goyal, director,
finance, NHPC, said in an interview.
The hydropower major is looking
to add solar capacity, and once the
projects in the pipeline are commissioned, they will be moved to NREL.
Currently, NHPC’s green energy
projects, primarily comprising solar
power, are under the parent company, though the green energy subsidiary was incorporated in February 2022 for developing its renewable, small hydro and green hydrogen
portfolio.“Our plan is to first develop
projects under NHPC, and then we
will demerge these projects and shift
them to NHPC Renewable and then
list the company, or bring in strategic investors to create more value. It
will take two-three years. We will
first add capacity and shift the projects,” said Goyal.
The three solar projects totalling
NHPC is looking to add solar capacity, and once the projects in the pipeline
are commissioned, they will be moved to NREL.
BLOOMBERG
1,000 megawatt (MW), under the
Central Public Sector Undertaking
scheme, will be commissioned by
FY25.
Under the scheme for setting up
of grid-connected solar photovoltaic
(PV) power projects by government
producers, the Centre provides viability gap funding support. Last year,
NHPC signed contracts for three
projects with cumulative capacity of
1,000 MW with engineering, procurement and construction (EPC)
players under the scheme, including
the 600 MW unit in Gujarat to
Adani Infra (India), 300 MW in
Rajasthan to Tata Power and 100
MW in Andhra Pradesh to the SSELASR joint venture.
“We contracted the 1,000 MW to
thhree contractors. Construction is
underway in the Bikaner project for
300 MW. In other two projects, construction is yet to start. This 1 GW
will be commissioned by FY25,”
Goyal said.
NHPC has another solar project of
65 MW in Bundelkhand, Uttar Pradesh, of which 26 MW capacity has
been completed. Goyal said NHPC is
in the process of selecting an EPC
contractor for a 200 MW project in
Gujarat. It will also start work on
floating solar projects. NHDC, its
joint venture with the Madhya Pradesh government, is developing a
floating solar project.
NHPC has also taken up green
hydrogen projects on a pilot basis,
Goyal said. “We are doing pilot projects for green hydrogen in Leh,
Kargil and Chamba. We would look
at the outcome and the commercial
viability of these projects.”
The company is looking to add
value to its renewable energy subsidiary and is planning to raise funds
through private placements or an
IPO, with the green energy getting
major policy focus, following the
Centre‘s ambitious target of having
an installed renewable energy
capacity of 500 GW by 2030.
Another state-run power major,
NTPC, is also planning to list its subsidiary NTPC Green Energy Ltd on
the stock exchanges after shelving
its plan to bring in a strategic investor last fiscal.
Stage set for Hollywood’s big box office clash
Lata Jha
lata.j@htlive.com
New DelHI
I
n what’s shaping up to be the biggest weekend for Hollywood at
the box office after many months,
Christopher Nolan’s Oppenheimer
and Greta Gerwig’s Barbie are set to
engage in a theatrical clash, generating immense excitement not only
for the viewers in their home market
but also among Indian fans.
Nolan’s devoted fan base and the
movie’s positioning as a big-screen
spectacle shot on IMAX are helping
the epic Robert Oppenheimer biographical thriller dominate advance
ticket sales in India. Theatres in cities such as Mumbai and Delhi have
scheduled IMAX screenings as early
as 12 am and 3.30 am on Friday
morning.
“These tent-pole films are coming
from celebrated filmmakers and the
advances have been impressive for
both, although Oppenheimer is lead-
For Oppenheimer’s IMAX shows,
50% of advance bookings have been
locked in.
AP
ing for now,” Sanjeev Kumar Bijli,
executive director of PVR Inox Ltd,
said. It has already secured 25% of all
advances for Oppenheimer and 20%
for Barbie for the opening weekend.
For Oppenheimer’s IMAX shows,
50% of advance bookings have been
locked in, and the film is likely to
make ₹7-8 crore over the opening
weekend in India, while Barbie may both films should do well especially
ring in ₹4-5 crore. While it is com- in metros and niche, premium marmon for south Indian productions to kets. IMAX formats for Oppenheimer
screen early morning shows for big- are doing particularly well, with the
ticket films on the first day, it is not first weekend’s occupancy at over
common for Hollywood films in 80%. Tickets too are being priced at
India, barring blockbusters like a premium with IMAX shows for the
thriller at ₹1,000, compared with
Avengers: Endgame.
average ticket prices of
Moreover, while it is
not unusual for Hindi
Oppenheimer is ₹700 for Mission:
Impossible in cities like
language films to clash
likely to make
Delhi.
at the Indian box office,
₹7-8 crore over
Ashish Saksena,chief
Bijli said this is the first
the opening
operating officer, cintime that two Hollyweekend in India,
ema, BookMyShow,
wood blockbusters will
directly compete for while Barbie may said Mission: Impossible
attention, especially at ring in ₹4-5 crore has set the tempo, and
the box-office clash
a time Mission: Impossibetween Oppenheimer
ble — Dead Reckoning
Part One, which was released last and Barbie is building on it. “While
week, continues to perform both films are creating a buzz worldstrongly. The Tom Cruise-starrer, wide, Oppenheimer has started off on
which is also being screened in an impressive note in India as the
IMAX and ICE formats, earned advance sales opened earlier. Over
360,000 tickets have been sold on
₹67.75 crore at last count in India.
Abneesh Roy, executive director, BookMyShow since it went live
Nuvama Institutional Equities, said three weeks ago.”
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05
06
CORPORATE
Thursday, 20 July 2023
Chennai
LIVEMINT.COM
New stainless steel policy to
target 5X jump in capacity
ADB retains
India’s growth
forecast of
6.4% in FY24
Ravi Dutta Mishra
ravi.dutt@livemint.com
NEW DELHI
A key objective is to cut dependence on China for raw materials nickel, silicon and chromium
Vedanta acquired ESL in 2018 through an insolvency resolution at
Kolkata, marking Agarwal’s entry into the steel business. BLOOMBERG
Vedanta makes a
fresh bid to sell
steel business ESL
Vedanta’s CEO Sunil Duggal
wrote to shareholders of ESL’s
spokesperson for Citigroup progress: “ESL performed
in India declined to comment, resiliently amidst challenges
JPMorgan didn’t respond to an that were used as an opportuemailed query.
nity to be future-ready by
Founded in 2006, ESL, undertaking yield improvebased in Bokaro, was acquired ment, debottlenecking and
by Vedanta in June 2018 plant maintenance initiatives.”
through an insolvency resoluESL registered an increase
tion at Kolkata, marking Agar- in saleable production to 1,285
wal’s entry into the steel busi- kilotonne (kt) with the highness. ESL, with a greenfield est-ever net sales realization,
manufacturing facility, is pri- resulting in favourable operatmarily engaged in the produc- ing margins. It continued to
tion of TMT bars, DI pipes, prioritize its value-added portwire rods, billets, and pig iron. folio, resulting in a 5% increase
Soon after the acquisition, in its sales. ESL successfully
Vedanta pumped in $300 mil- operationalized two iron ore
lion to augment ESL’s capacity mines with 100% captive sourfrom 1.5 million tonnes (mt) to cing of iron ore.
2.5 mt, following which the
ESL has its own sinter
company turned profitable plants, blast furnaces, coke
within a year of the acquisi- oven, oxygen plant, billet
caster, wire rod
tion, i.e. in 2019.
mill, bar mill,
In an interview
Soon after the
ductile iron pipes
with Business
acquisition,
Standard
in Vedanta pumped plant, and a
December, Anil
power plant.
in $300 mn to
In December
Agarwal, when
augment ESL’s
2018, Agarwal
asked about the
rumoured sale, capacity from 1.5 said Vedanta
mt to 2.5 mt
would scale up its
said: “We have
steel business to 7
not arrived at a
mt per annum by
decision. In any
business, I tell my CEOs (chief setting up a new steel plant in
executive officers) that we Jharkhand with a capacity of
have to be in the top three. We 4.5 mt per annum at an investhave to have a vision. Increase ment of $3-4 billion. The plant
the capacity because we are in was supposed to be a part of
a beautiful state, Jharkhand, ESL at Bokaro.
If the latest ESL sale deal is
which is my home state. But it
has to have world-class capac- consummated, it may help
ity and cannot be a small plant. Vedanta pay a better dividend
We have a capacity of about 3 to its shareholders, including
mt... we are contemplating. its London-based parent
We have to take it to 15-20 mt. Vedanta Resources Plc, which
We are either in that business holds 68.11% of the Indian
company. This will enable the
or we are not.”
Environmental clearance latter to meet its looming debt
was a stumbling block for the obligations. Vedanta Resoursale. But, one of the people ces has paid down around $2
cited above said this hurdle is billion of its debt during fiscal
likely to be overcome as clear- year 2022-23, a Moody’s
report said.
ance is likely soon.
satish.john@livemint.com
In its FY23 annual report,
FROM PAGE 1
Naman Suri & Mihir Mishra
NEW DELHI
T
he Union steel ministry has
started industry consultations to frame India’s first
stainless steel policy, an official aware of the matter said.
The policy will aim to raise domestic
capacity by nearly fivefold by 2047,
from the current 6.6 million tonnes
(mt) to 30 mt.
A key objective of the policy is to
reduce dependence on China for
nickel, silicon and chromium, which
are used to make stainless steel. “We
are totally dependent on a single country (China) for many of these raw mate- The policy is being formulated at the request of the stainless steel industry, which says its concerns are often left out since
ISTOCKPHOTO
rials required to manufacture stainless they differ from those of the carbon steel sector.
steel. The policy would look at ways to
The policy is being formulated at the stainless steel sector. This is mainly
The stainless steel policy is being
diversify its sourcing,” the official cited
above said on condition of anonymity. request of the stainless steel industry, because there are no similarities in the considered at a time the government is
In March, Jindal Stainless Ltd which says its concerns are often left processes of making stainless steel and planning to build long-term infrastrucacquired a 49% stake in an Indonesian out since they differ from those of the carbon steel,” said Rajamani Krishna- ture with significant use of the alloy.
nickel smelter for about ₹1,300 crore to carbon steel sector. “It (the policy on murti, president of the Indian Stainless Crisil Research estimates stainless steel
consumption to reach 13 mt by FY40
secure supplies. Sourcing such inputs stainless steel) is encouraging and a Steel Development Association.
and 20 mt by FY47. Per capita confrom countries other than China
sumption is also estimated to reach
and finding them within India are
SECURING SUPPLIES
about 12kg by 2047 from 2.5kg
among the options being considTHE govt is planning
THE stainless steel
CRISIL Research
now.
ered, the official cited above added. THE policy would
at ways to
to build long-term
industry expects
estimates stainless
The industry expects the RailIndonesia is one of the largest look
diversify sourcing,
infrastructure with
the Railways to
steel consumption
ways to account for a big chunk of
nickel producers in the world.
said an official aware significant use of
account for a big
to hit 13 mt by FY40
demand. The demand from RailSeparately, the mines ministry is of the matter
stainless steel
chunk of demand
and 20 mt by FY47
ways is expected to more than trifocusing on scouting for 30 minerple by FY25 and constitute 25% of
als, including 17 rare earth eleIn 2017, India unveiled a steel policy the incremental demand for the metal
ments and six platinum-group ele- step in the right direction for the sector
ments, given their economic impor- since decisions like the export duty on to raise crude steel capacity from 122 mt between FY23 and FY25. The Union
tance and limited availability. Some of steel and removal of countervailing in FY16 to 300 mt by FY31, and increase budget has doubled the amount earthe minerals needed by the steel indus- duty have benefited the carbon steel per capita steel consumption to 160kg marked for manufacturing railway
coaches to `47,500 crore for FY24.
sector but adversely impacted the from 61kg during the same period.
try also figure in this list.
R
etaining its earlier forecast, the Asian Development Bank (ADB) on
Wednesday said India’s GDP is
expected to grow by 6.4% in
the ongoing financial year and
6.7% in FY25, driven by recovery in consumption demand
and easing global commodity
prices.
The projections released by
ADB were close to the Reserve
Bank’s estimates of 6.5% real
GDP growth for 2023-24.
The ADB projections
assume “normal rainfall and
other weather factors, and no
further geopolitical shocks”.
However, it added that the
global economic slowdown
has suppressed merchandise
trade, which could be a drag on
growth. India’s goods exports
have been declining for the
last five months amid falling
demand in the West.
Exports from developing
Asia weakened in the first
quarter of 2023 as global
demand slowed. However,
consumption and investment
are projected to boost aggregate regional growth to 4.8% in
2023, as earlier forecast, with
the forecast for 2024 revised
down only marginally to 4.7%,
ADB stated.
As far as inflation is concerned, ADB said as food and
oil prices moderated, inflation
eased below the 6% upper tolerance level of the monetary
policy.
Go First may need to sign fresh leases before its relaunch
FROM PAGE 1
The airline has already
begun preliminary discussions
to bring lessors on board
towards an August relaunch,
the second person said. Go
First’s lenders, resolution professional (RP), and lessors have
had several discussions on its
plans to resume with 26 aircraft, the person added.
The lessors are concerned
mostly about two aspects—the
condition of the grounded aircraft and the pending payments. “During the discussions, they (lessors) were made
aware that the airline owes
more money to the creditors
than the lessors. Pratt & Whit-
ney, too, has given a commitment that they will supply 4-5
aircraft engines every month
till December for the aircraft
and provide the required
maintenance services. And, if
the creditors and engine suppliers are comfortable with the
plan to resume the operations
first and use the cash flows for
immediate repayments and
lease rentals, the lessors should
also come on board. That is in
the interest of all stakeholders,” a third person aware of
the developments said.
In the battle between the lessors and the airline, a division
bench of the Delhi high court
recently dismissed an appeal
filed by Go First’s RP challeng-
The airline has started talks to
bring lessors on board.
PTI
ing an earlier order that
allowed lessors to inspect the
airline’s aircraft and their parts
regularly. Lessors can now
carry out regular inspections.
Simultaneously, the civil avia-
tion regulator Directorate GenAdditionally, the expreseral of Civil Aviation (DGCA), sions of interest (EoI) floated
was also directed to decide by the RP are expected to
within 15 days to grant approv- attract potential new owners
als to the airline to resume backed by private equity funds
operations.
or other deep“It is likely that
pocketed invesIn its latest plan
once DGCA gives
tors as strategic
submitted to
its approval to the DGCA, the airline partners.
revival plan pro“That will bring
said it could
posed by the airin additional
recommence
line, both the
funds,” said the
about 160 daily
creditors and the
third person, jusflight operations tifying why the
lessors would be
comfortable to
lessors should
restart flight
give their nod to
operations. Gradually, as the Go First’s flight resumption
business picks up, the cash plan without any delay.
from operations can be used to
Last week, the airline’s RP,
repay the older debts and lease Shailendra Ajmera, invited
dues,” the person added.
EoIs for Go First, registered as
Go Airlines (India) Ltd. The
last date for the submission of
EoIs is 9 August, a company
advertisement stated. The list
of provisional resolution
applicants is expected on 19
August.
In its latest plan submitted
to DGCA, the airline said it
could recommence approximately 160 daily flight operations with 26 aircraft. Out of
the 26 aircraft, nearly four aircraft are to be kept in reserve
for a backup plan in case there
are issues related to technical
glitches in any of the operational aircraft.
Comments from the airline
were awaited till press time.
anu.sharma@livemint.com
Announcements on chip fabs Pristyn Care suspends founders of Lybrate amid dispute
soon, says Chandrasekhar
FROM PAGE 1
FROM PAGE 1
modified scheme, but after the
two split up and decided to
apply for the scheme separately, the proposal is likely to
stay with Vedanta or be
replaced by a fresh one from
Vedanta, Chandrasekhar said.
He noted that the legal entity
that applied continues to
remain, and any equity
changes were not relevant to
the proposal.
Vedanta-Foxconn was
among the first three appli- The fab will start producing
cants to the original scheme chips within 2-3 years.
AFP
launched in January 2021.
Chandrasekhar said proposals Semiconductor Laboratory in
from the other two—Interna- Mohali, Punjab, where a
tional Semiconductor Consor- research-cum-commercial fab
tium (ISMC) and Singapore’s will come up, he said.
IGSS Ventures—were no
“The India Semiconductor
longer being considered by the Research Centre is going to be
advisory committee.
announced very shortly. It’s a
“Foxconn has indicated that public-private partnership
they will anyway
between the priindependently Vedanta-Foxconn vate sector and
submit a prothe government.
was among the
posal,” he said.
It will include the
first three
The Taiwanese
modernization of
applicants to
contract manuSCL (Semi-Conthe original
facturer is in talks
ductor Laborasemiconductor
with Taiwan
tory) as a
scheme
Semiconductor
research-cumManufacturing
commercial fab,”
Co. Ltd (TSMC)
he said. The govand a few other semiconductor ernment is looking to invest
fabricators, The Economic about ₹10,000 crore in the fab
Times reported on 14 July.
project. The research centre
The government will also may also open a branch in
launch the India Semiconduc- South India.
tor Research Centre in a publicThe ministry of electronics
private partnership model, and information technology
which will also modernize the (MeitY) will also work with
Invest India to pursue investment deals in the semiconductor space involving entities
from Japan, Taiwan, South
Korea, Europe, and the US. On
Wednesday, former Intel India
head Nivruti Rai was named
managing director and chief
executive officer of Invest
India, which comes under the
ministry of commerce and
industry. “We will be working
with Invest India in going out
there and aggressively positioning India as a very attractive
investment destination for
semiconductors,” Chandrasekhar said. MeitY is also holding
the Semicon India 2023 event
later this month, where it will
pitch India as a destination for
potential investors while showcasing recent investments in
the semiconductor industry,
primarily that of US-based
Micron Technology Inc.
After Micron announced
investments of $825 million in
its $2.75 billion packaging
plant, a number of proposals for
setting up testing and packaging units for compound and silicon semiconductor chips have
been submitted to the government, Chandrasekhar said.
The minister added that the
government was comfortable
with not taking equity in any of
the projects the Centre and
states together were financing
since India was only beginning
to attract potential investors
and companies needed economic incentives to choose
India over other countries.
of the people cited above said.
The final tranche will become
due in 2024.
“Nearly 60-80% of the payment owed to the founders has
not yet been paid,” one of the
people cited above said.
On Tuesday, Arora and Narang served a notice to Pristyn
Care’s operating entity GHV
Advanced Care alleging the
company had failed to acquire
the second tranche of shares in
Lybrate, as agreed in the original share-purchase agreement,
the people cited above said.
Narang and Arora did not
respond to emails on Wednesday.
“Pristyn Care has and shall
continue to act in accordance
with the contractual terms and
conditions. Pristyn Care has
not defaulted on any of its contractual obligations. At this
point, it would be inappropriate to comment on the matter,” a spokesperson said.
Pristyn Care achieved unicorn status in April 2021 in a
round led by Tiger Global
Management. Its other investors include Peak XV Partners
(formerly Sequoia Capital
Pristyn Care offers support to
patients booking surgeries. MINT
India), Hummingbird Ventures
and Epiq Capital. At that time,
the company said it had raised
a total of around $150 million
Mumbai, Pune, Delhi, Bengafrom external investors.
The company laid off 45 luru, Hyderabad, Chennai,
employees in March citing Kolkata, and some tier-2 cities.
non-performance, a spokes- It offers medical care in 12 surgical categories,
person said at
including general
that time.
Pristyn Care
The startup achieved unicorn surgery, ophthalmology, ENT,
ecosystem has
status in April
urology, and
been
going
2021 in a round
gynaecology.
through a fundled by Tiger
Pristyn Care
ing crunch, with
Global
reported the revmultiple other
Management
enue of ₹96 crore
companies letin the year ended
ting go of staff to
31 March 2021, on
save costs.
Pristyn Care offers tech-ena- a loss of around ₹64 crore. It
bled support to patients book- has not yet filed its FY22 finaning surgeries across centres in cial statements.
Tata Sons to set up £4 bn battery factory in UK
Alisha Sachdev
alisha.sachdev@livemint.com
NEW DELHI
T
ata Sons on Wednesday
said it would invest £4
billion ($5.16 billion) to
establish a new 40GW battery
cell gigafactory in the UK.
The cells will be utilized to
supply to group companies
Tata Motors and Jaguar Land
Rover for their electric vehicles, as well as cater to renewable energy storage solutions
for customers in Europe and
the UK, the company said in a
press release. “JLR and Tata
Motors will be anchor customers, with supplies commencing from 2026”, it said.
The factory is likely to be
housed under Tata’s cell man-
N. Chandrasekaran, chairman, Tata Sons.
ufacturing subsidiary Agratas.
The Tata Group announced
last month it will invest over
₹13,000 crore to set up a
20GW lithium-ion cell manufacturing factory in Sanand,
Gujarat.
AP
“The Tata group is deeply
committed to a sustainable
future across all of our business. Today, I am delighted to
announce the Tata group will
be setting up one of Europe’s
largest battery cell manufac-
turing facilities in the UK. Our
multi-billion pound investment will bring state-of-theart technology to the country,
helping to power the automotive sector’s transition to electric mobility, anchored by our
own business, Jaguar Land
Rover. With this strategic
investment, the Tata group
further strengthens its commitment to the UK alongside
our many companies operating here across technology,
consumer, hospitality, steel,
chemicals, and automotive. I
also want to thank His Majesty’s government, which has
worked so closely with us to
enable this investment,” said
N. Chandrasekaran, chairman
of Tata Sons.
According to Tata Sons, the
battery gigafactory will produce high-quality, high-performance, sustainable battery
cells and packs for various
applications within the mobility and energy sectors. The
company’s strategic growth
plans for its flexible manufacturing capacity will begin with
a rapid ramp-up phase and the
start of production in 2026.
“The gigafactory intends to
maximize its renewable
energy mix, with an ambition
for 100% clean power. The
plant will employ innovative
technologies and resource-efficient processes like battery
recycling to recover and reuse
all the original raw materials to
deliver a truly circular economy ecosystem”, the group
said.
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CORPORATE
LIVEMINT.COM
FMCG cos to amp up
marketing this fiscal
Cheaper inputs help firms spend more on advertising, marketing
Suneera Tandon
suneera.t@htlive.com
nEw DElhi
E
asing raw material prices will provide
consumer goods makers headroom to
allocate more funds for advertising
and promotions (A&P), according to industry insiders. This will be a welcome relief
after record-high inflation ate into companies’ marketing budgets for several years.
“When inflation was high last year, A&P
spending was reduced first. Since the scenario has reversed, we do not see why we
will cut back our marketing budgets,” said
Manoj Verma, the chief operating officer of
Bikaji Foods International Ltd.
The upcoming festive season is likely to
be a big driver for the company’s volumes,
as consumers tend to buy large gift packs of
namkeens, snacks and sweets, he said. “We
are coming up with ad films that will be With markets opening up and consumers venturing out, demand for packaged foods
MINT
aired. The festive season is big for us, and has rebounded, prompting companies to increase their advertising spending.
that’s where our marketing spend is primarily skewed towards. You will see us back month, FMCG major Dabur India said it is Bisleri International Pvt. Ltd, said. “While
witnessing a “reversal” in the commodity running prime time campaigns on TV for
on air big time.”
In response to the challenges of higher cycle, resulting in a fall in prices of most key the reach, awareness and imagery creation
inflation, companies had pared their A&P commodities, barring food and beverages. will be an integral part of our overall
budgets to protect margins. For instance, “This allows us to expect an expansion in spends, we are also focussing on a digitalHindustan Unilever Ltd (HUL), one of the gross margins for the current year. This first approach to connect with the Gen-Z.
largest FMCG companies in India, reported expanded gross margin will be allocated in We will leverage sports associations, IPL,
a moderation in A&P spending in the Sep- two primary ways. A portion will be allo- marathons, football, athletic events, among
cated for A&P investments, which others, to create a 360-degree immersive
tember quarter to 7% of sales. This
had experienced some modera- consumer experience. A significant part of
was in line with the inflationary
tion due to high inflation. Two, our marketing strategy is on accelerating
pressures witnessed by the
the remaining part will be for our presence in trade.”
industry. Notably, HUL’s
gradual improvement of our
average A&P spending
With markets opening up and consumFMCG sector’s
operating margins,” the ers venturing out, demand for packaged
between FY19 and FY21
contribution to
stood at 12%. However, this
maker of Vatika shampoo foods has rebounded, prompting compaoverall ad spends
has risen sequentially. Anaand Real drink said.
nies to increase their advertising spends. “It
lysts at BNP Paribas expect the
Beverage company Bisleri has been a good year with markets reopencompany’s marketing expenses
Ltd expects its marketing budget ing and rising consumer demand. To conat 9.5% of June quarter sales.
to increase 30-40% this financial year. solidate the favourable times, we are
With declining raw material costs, the “We will see a 30-40% increase in our mar- embarking on a diverse and aggressive
brokerage also expects FMCG companies keting budgets, keeping in line with our marketing campaign for our brands,” Manto partially reinvest gross margin gains to vision of strengthening Bisleri’s packaged ish Aggarwal, director, Bikano, Bikanervala
boost ad spending, and promotional offers drinking water business, and accelerating Foods Pvt. Ltd, said. The FMCG sector
to drive demand, BNP Paribas said in its growth of our new portfolio of carbonated comprises 30% of total advertising spends,
India consumer report on 12 July.
soft drinks and Vedica Himalayan spring followed by online retail at 18%, according
In its FY23 annual report released last water,” Tushar Malhotra, head, marketing, to a 2023 report by Dentsu India.
30%
Thursday, 20 July 2023
Chennai
Fresh bids for advanced chemistry cells
Alisha Sachdev
alisha.sachdev@livemint.com
nEw DElhi
T
he ministry of heavy
industries will be issuing
a fresh tender for applications under the productionlinked incentive scheme inviting bids for the ₹18,000-crore
Advanced Chemistry Cells, or
ACC project. The scheme aims
to incentivize production of
20GWh battery storage capacity, it said on Wednesday.
During the initial round of
awards under the PLI scheme,
three companies qualified for
incentives: Ola Electric, Reliance New Energy, and Rajesh
Exports. However, Ola Electric
(for 20GWh lithium-ion cell)
and Reliance New Energy (for
5GWh sodium-ion cell manufacturing) have presented the
roadmap for actual production
to the government.
Bangalore-based precious
jewellery firm Rajesh Exports,
which had qualified for incentives for a 5GWh lithium-ion
cell production capacity is yet
to submit plans and is likely to
be disqualified.
The three firms committed a
The scheme aims to incentivize production of 20GWh battery
storage capacity.
cumulative investment of
₹27,000 crore under the PLI
scheme. The government will
sanction additional incentives
for a 10GWh capacity project
using new battery technologies
such as solid state, zinc-based,
and iron-air batteries. The process for this will start in September, said heavy industries
secretary Kamran Rizvi on the
sidelines of the G20 energy
transition working group
meeting in Goa on Wednesday.
G20 sherpa in India’s presidency year, Amitabh Kant said
battery storage capacity will be
AFP
key to India’s energy transition
journey.
The ministry will be holding
consultations with industry
stakeholder on 24 July, ahead
of the re-bidding process for
the ACC PLI scheme. Ola Electric will deploy the first phase of
its lithium-ion cell manufacturing facility at Krishnagiri in
Tamil Nadu with a capacity of
5GWh by the end of 2024,
Rizvi added.
Ola is striving to have 1GWh
capacity on stream at the unit
by the end of this year, people
in the know told Mint.
Besides the 50GWh capacity
which will be created as a part
of the ACC PLI scheme, the private sector will set up a battery
manufacturing capacity of
100GWh, Rizvi added.
This round of the ACC PLI
scheme is set to woo the interest of large global lithium-ion
battery manufacturers such as
Panasonic, Samsung, and LG
Chem, which had not participated in the first round. Some
of the players have shown
interest in applying for the
scheme once bids are invited,
people in the know said, seeking anonymity. Besides,
domestic battery firms such as
Amara Raja and Exide that
were wait-listed earlier, are
likely to submit fresh bids.
India has high dependence
on foreign markets for lithiumion cell importing for its electric vehicles, considering that
there are no existing facilities in
the country. It imports cells primarily from China, as well as
South Korea, Germany and
Japan. According to the ministry, 10 bids were received from
firms with manufacturing
capacity of 128 GWh under the
ACC PLI scheme earlier.
Dunzo defers salary payments to September
Sneha Shah
sneha.shah@livemint.com
MuMbai
Q
uick
commerce
startup Dunzo on
Wednesday delayed
its salary payouts for
the second time in a fortnight as
it battles a cash crunch.
While June salaries were disbursed on time, the Reliance
Industries and Google-backed
company had capped payouts
at ₹75,000 for those earning
more.
On Tuesday, Dunzo wrote to
its employees that it will pay the
July and August salaries, as well
as the unpaid portion for the
higher earners, by 4 Septem- force were said to be affected by
ber. Earlier, the company had the move to cap salaries at
decided to pay out the unpaid ₹75,000. Dunzo had fired
portion by 15 July, and there around 30% of its staff in April.
was no plan to defer salaries for
“Pending salaries for June
others.
will now be paid
“At this stage,
on 4 September,
Facing cash
we need to focus crunch, last week, 2023. Additionon streamlining the company had ally, the July salour cash flow so
ary for all team
capped the
we can build a
members will be
salary payouts
more sustainable
paid only on 4
to ₹75,000 for
business for the
September along
June
future,” Dunzo’s
with the August
payroll team
salary. While we
emailed employhave set 4 Sepees. Mint has reviewed a copy of tember as the date for all pendthe email.
ing salary payouts, we are
Around 500 employees con- working to resolve this issue at
stituting 40-45% of its work- the earliest to minimize the
impact on our team members,”
the letter said.
A company spokesperson
did not offer a comment.
Dunzo had raised $75 million
in debt funding through convertible notes in April. Apart
from Google and Reliance, it
counts investors such as Lightbox, Evolvence, Alteria Capital
among its investors.
A person aware of the company’s plans said that Dunzo is
in the process of raising around
$50 million from new investors. Many high-growth startups with rapid cash burn are
nearing the end of the runway,
as they find it hard to raise
funding.
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08
m
GLOBAL
Thursday, 20 July 2023
Chennai
MINT SHORTS
Credit Suisse to lay off more than
40 staff in China securities unit
Hong Kong: Credit Suisse is set to launch a new round of layoffs
which may impact more than 40 employees in one of its China
units, two people with direct knowledge of the matter said, as the
now subsidiary of former Swiss rival UBS cut costs following its
takeover last month. Credit Suisse Securities (China), 51%-owned
by Credit Suisse, is expected to start the cuts, accounting for
about 20% of its local workforce, as early as Monday, according
to the sources. Staff in wealth management and investment banking divisions will take the biggest hit, the sources said. REUTERS
LIVEMINT.COM
Ukraine says Russia targeting
grain sites after deal exit
Kyiv’s allegations came as a fire of unclear origin broke out at a military site in Russian-annexed Crimea
AFP
Sunak’s popularity sinks to
lowest since taking over as PM
feedback@livemint.com
Kyiv, UKraine
AP
Rishi Sunak’s popularity rating sank to its lowest level since
he became UK prime minister in October, highlighting the
growing challenge he faces in leading his party to victory at
the next general election. Some 65% of Britons now have an
unfavourable view of the PM compared with 25% who see
him in a positive light, according to a YouGov poll of 2,151
British adults published Wednesday.
BLOOMBERG
Former Wirecard COO sends sign
of life three years after vanishing
Former Wirecard AG ,chief operating officer Jan Marsalek contacted a Munich court through his lawyer, the first sign of life
after the executive disappeared three years ago during the dramatic collapse of the German payments company. The Munich
district court received a letter written by Marsalek’s lawyer, a
spokesperson for the institution said Tuesday, declining to comment on details. Marsalek, 43, has been one of the key figures
behind Wirecard’s spectacular rise to one of Germany’s most valuable companies before its implosion in June 2020. BLOOMBERG
J&J must pay $18.8 mn to California
cancer patient in baby powder suit
Johnson & Johnson’s must pay $18.8 million to a California man
who said he developed cancer from exposure to its baby powder,
a jury decided on Tuesday, a setback for the company as it seeks
to settle thousands of similar cases over its talc-based products
in the US bankruptcy court.
REUTERS
U
kraine accused Russia on
Wednesday of deliberately striking its Black
Sea grain facilities — and
destroying tonnes of
food — since Moscow quit an export
deal meant to stave off a global crisis.
Kyiv’s allegations came as a fire of
unclear origin broke out at a military site in Russian-annexed Crimea, prompting local officials to
call for the evacuation of thousands
of civilians.
Military sites on the peninsula, a
key supply artery for Russia’s war in
Ukraine, have been hit repeatedly in
recent months.
Russia, for its part, fired strikes at
Ukraine’s Odesa for the second night
in a row, with the defence ministry
claiming to have struck fuel and
ammunition facilities near the Black
Sea port.
But Ukraine President Volodymyr
Zelensky claimed Russia was taking
aim at the very basis of the nowlapsed grain deal, which was brokered last by the UN and Turkey amid
fears of food shortages in vulnerable
nations.
“Russian terrorists deliberately targeted the grain deal infrastructure,
and every Russian missile is a blow
not only to Ukraine, but to everyone
in the world who wants a normal and
safe life,” Zelensky said on social
media.
Ports in Odesa were key transit
hubs for the export of grain from
Ukraine until Moscow said earlier this
week it would withdraw from the deal
giving safe passage to cargo ships in
the Black Sea.
Kyiv claimed Russia had destroyed
60,000 tonnes of grain meant for
“Every Russian missile is a blow not only to Ukraine, but to everyone in the world
who wants a normal and safe life,” Ukraine President Volodymyr Zelensky.
AFP
export in overnight strikes around media reported that detonations
Odesa after accusing Moscow of pur- were heard in the area and footage
posefully hitting grain terminals.
showed columns of black smoke in
Ukraine’s agriculture ministry said the sky.
the grain was meant to be “sent
Russian President Vladimir Putin
through the grain corridor 60 days was briefed on the incident, the
ago.”
Kremlin said.
Following the fire
“We know that there
Kyiv claimed
early Wednesday at the
was a fire there. EmerRussia had
Crimea military site, destroyed 60,000 gency measures are
Russian officials called
being taken, the situatonnes of grain
for the evacuation of
meant for export tion is being clarified,”
2,000 people from the
Kremlin spokesman
in overnight
area.
Dmitry Peskov said.
strikes
“The temporary evacA section of the
uation of residents of
Tavrida highway that
four localities adjacent
crosses the peninsula
to the military field in the Kirovsky from Kerch to Sevastopol was closed
district is planned,” said the Moscow- due to the fire, Russia’s TASS news
installed head of Crimea, Sergei agency reported.
Aksyonov.
Russia has kept up its aerial bomAuthorities did not specify the bardment of Ukraine, but Kyiv’s
cause of the fire, but some Russian defences have steadily improved.
Evolve from
‘Can AI take my job?’
Goldman
Sachs profit
plunges on
realty hits,
deals slump
Bloomberg
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to
‘How can AI work for me?’
To decode the right answers,
you need to ask better questions. Stay updated with
the latest happenings in the word of tech,
only with Mint.
oldman Sachs Group
Inc.’s profit plunged as
the Wall Street giant
notched one of its weakest
quarters under chief executive
officer David Solomon.
Second-quarter earnings
fell 58% on an investmentbanking slump, real estate
markdowns and a goodwill
writedown in the consumer
business, which houses the
GreenSky lending business.
Return on equity, a key measure of profitability, slid to 4%
— the worst among the top US
banks.
The firm had been actively
tamping down expectations
heading into the report,
prompting analysts to slash
their estimates for quarterly
profit by almost half since midJune. Shares of the company
fell 0.8% at 9:35 a.m. in New
York.
Goldman’s management
has been working to smooth
the firm’s sometimes volatile
quarterly results, which featured big gains during the
post-pandemic boom followed
by a run of missed profitability
goals. Investors are looking to
see whether the second quarter represents a trough for the
New York-based company,
with a steadier run of earnings
gains ahead.
“They’ve come out and
revealed all the problems,”
said Sandy Pomeroy, a money
manager at Neuberger Berman Group. “They need to
come out and articulate some
confidence that we are at the
bottom from a cyclical perspective and that they’ve
cleaned up all of their problems.”
Pomeroy bought Goldman
stock in January after it had
tumbled from its 2021 high.
Ukraine’s airforce said it had shot
down 13 cruise missiles fired by Russian forces overnight and 23 Iranianmade attack drones launched by
Moscow.
As a result of the strikes, “10 civilians were injured, including a nineyear-old boy”, the Office of the Prosecutor General said in a statement.
One civilian was injured in a strike
on an “industrial facility” in Odesa,
according to the head of the local military administration, Oleg Kiper,
while another three were hurt after
an X-59 missile slammed into a city
neighbourhood, having been shot
down.
Russia claimed to have advanced
one kilometre (less than one mile) in
the past day along the front line in
Ukraine’s northeastern region of
Kharkiv.
The Russian army already said
Tuesday it had carried out a “retaliation strike” against sites in Odesa after
an attack on the sole bridge linking
annexed Crimea to mainland Russia.
Ukrainian forces carried out the
assault on the Kerch bridge using seaborne drones, a security service
source told AFP.
The day of the attack, Moscow
withdrew from the grain deal, accusing Kyiv of using the Black Sea grain
corridor for “combat purposes”.
The Kremlin also issued a veiled
warning over the “risks” to ships that
might continue with grain exports
from Ukraine.
Were a new arrangement to allow
for exports “formalised without Russia, then these risks should be taken
into account”, Peskov said.
Russia said Tuesday it would lift
“safe navigation guarantees” for
cargo ship in the Black Sea and signalled it would disband the grain
deal’s coordination centre in Istanbul.
5 EU nations
want Ukraine
grain ban to
be extended
Reuters
feedback@livemint.com
WarsaW
F
ive central European
countries want a ban on
Ukrainian grains imports
to be extended at least until the
end of the year, agriculture
ministers said on Wednesday
after meeting in Warsaw.
The European Union in May
allowed Bulgaria, Hungary,
Poland, Romania and Slovakia
to ban domestic sales of
Ukrainian wheat, maize, rapeseed and sunflower seeds,
while allowing transit of such
cargoes for export elsewhere.
That ban is set to end on 15
September.
The countries include some
of Kyiv’s staunchest diplomatic supporters in its war
against Moscow, but they say
inflows of Ukrainian grain
have hurt farmers at home.
Polish Agriculture Minister
Robert Telus said the five
countries signed a common
declaration regarding the
extension of the ban until at
least the end of the year, which
they will present in talks
with the European Commission.
Tech stocks, meme stocks,
crypto enjoy a resurgence
Eric Wallerstein
feedback@livemint.com
F
or many investors, it’s like
2022 never happened.
Tech stocks are rising
manically, spilling into meme
stocks. The cryptoverse is
enjoying a resurgence. Bullishness is hitting a fever pitch in
the options market. In short,
risk-on investments are the
most popular they have been
since late 2021—right before
stocks entered the longest bear
market in decades.
Speculative stocks are
soaring: Shades of memestock mania are cropping up.
The MEME ETF—tied to the
Solactive Roundhill Meme
Stock Index—has risen 61% this
year.
Its top holdings by weighting
are: bitcoin miner Riot Platforms (up 439% this year), artificial-intelligence lending platform Upstart Holdings (up
308%), Coinbase Global (up
196%), electric-car maker Rivian Automotive (up 34%), and
Carvana (up 740%). The fervor
has driven record-high options
trading tied to many of those
companies’ shares.
And against all odds, bitcoin
has climbed 80% in 2023.
Individual investors are
amped: Retail traders are
all-in. Bullish sentiment—represented as the expectation
that stocks
will rise in
the next six
months—
this month hit its highest level
since 2021, according to surveys by the American Association of Individual Investors.
The bull-bear spread, the
difference between investors
who see the stock market trotting higher versus those
expecting a rout, has been positive for six consecutive weeks.
That’s the longest stretch since
November 2021.
Americans are also growing
more confident about the economy as a whole. Consumer sentiment, measured by the University of Michigan’s survey,
jumped to 72.6 in July from
The market looks a lot like 2021—right before stocks entered a
deep slump
ISTOCK
64.4 the prior month. That’s the
highest reading since September 2021 and the biggest
increase since 2005. Since the
Federal Reserve rescued the
banking system in March,
investors have had less to worry
about, according to David Wagner, a portfolio manager at
Aptus Capital Advisors. “The
only thing that can stop this
rally is if a big time risk is put
back on the table,” he said.
Fear has faded: Rather
than scoop up options that
would protect portfolios’ gains
if stocks fell, investors are
reaching for bets that would
pay out if the rally continued.
The put-call ratio—a measure
of fear in the options market—
has fallen to its lowest levels
since January 2022, according
to Cboe Global Markets data.
T h e
Cboe Volatility Index,
or the VIX,
is trading around 13. The index
is commonly referred to as Wall
Street’s fear gauge as it measures prices of options used to
protect against market
declines. Anything below 20 is
associated with little demand
for insurance.
One reason why investors
look complacent to many in the
market is that stocks are quietly
marching higher. The S&P
500’s daily swings haven’t been
this small since late 2021,
according to a Cboe measure.
How it could unravel:
Market contrarians say the perfect storm is brewing for a
crash. Retail investors were
similarly euphoric in late 2021.
They showed few signs of
unnerve: The put-call ratio was
low, as was the VIX. But by early
January 2022, all three major
stock indexes had peaked, and
the S&P 500 went on to lose
19% that year.
“The FOMO [fear of missing
out] becomes so great that
retail investors come clamoring in at the end, the last hurrah, just in time for the market
bottom to fall out,” said
Amanda Agati, chief investment officer of PNC Asset Management G-roup.
It isn’t just the exuberance
that is giving some cause for
concern. Higher borrowing
costs threaten to slow down the
economy, choking off credit for
businesses and making it
harder for companies and
households to get loans. Over
the past year or so, rates on auto
loans and mortgages have
jumped around 3 percentage
points. Interest on credit cards
is up to 22% from 16%, Federal
Reserve data show.
While inflation has eased,
hitting 3% in June, it’s still
above the Fed’s target rate of
2%. And Fed officials are likely
concerned about Americans
getting used to elevated inflation. “If we get stagflation, rates
will have to continue rising,”
said Jason Bloom, head of fixed
income and alternatives ETF
strategy for Invesco. “That’s not
a great recipe for investors.”
©2023 DOW JONES & COMPANY, INC
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TWEETS & QUOTES
Satya Nadella
@satyanadella
Janet Yellen
Dinesh Khara
Secretary of the treasury, US
Chairman,
State Bank of India
We are on a solid path to bringing inflation down, as we saw in
last week’s encouraging CPI
report. And that comes alongside a strong labour market that
is bringing more people into the
labour force
Chairman, Microsoft
There’s no question we
are creating massive
new opportunity across
our ecosystem in this
era of AI
Covid norms for int’l
travellers eased
Thursday, 20 July 2023
Chennai
Kristalina Georgieva
@KGeorgieva
MD, IMF
As a bank, we don’t
expect a rate cut.
Status quo is likely to
be maintained by the
Reserve Bank of India
I could not think of a better place
to reflect on last two days of G20
India meetings than the home of
Gandhiji. It is exactly the sense of
unity that Gandhiji brought that
we need in this world
Google says HC app
order is temporary
DOWN TIME
G
T
oogle said that Madras high court’s
directive ordering the company to
charge a lower 4% in-app payment on
Disney’s streaming service in the country was a
temporary measure until the court proceedings
play out. Disney in India has gone to court in
what is the latest and most high-profile
challenge to Google’s policy of imposing a
“service fee” of 11-26% on in-app payments. The
service charge was introduced after an antitrust
directive ruled against Google’s earlier 15-30%
fee and forced Google to allow third-party
payments. The Madras high court on Tuesday
said Google should receive a lower 4% fee for inapp purchases from Disney+ Hotstar, and
cannot remove Disney’s app from its India app
store, in what is a significant challenge to
Google’s payments business model.Google will
need to comply with the court directives until it
is overturned or modified.
REUTERS
he Union health ministry has further
eased covid-19 guidelines for international
visitors, dropping the earlier requirement
for RT-PCR based testing of a random 2% subset
of international travellers.The guidelines have
been eased after taking note of the prevalent
coronavirus situation and the significant
achievements made in the vaccination coverage
across the globe.The new guidelines shall come
into effect from midnight of 20 July. However,
the earlier advice for precautionary measures to
be followed by airlines as well as international
travellers in context of covid shall continue to
apply, the ministry said. “The present guidelines
are being revised considering declining
trajectory of covid-19 cases globally,” an official
from the ministry said. The government further
said that all international travellers should
preferably be fully vaccinated as per the
approved primary schedule of vaccination
against covid in their country. PRIYANKA SHARMA
Commuters stranded at the Chhatrapati Shivaji Maharaj Terminus after heavy monsoon rainfall disrupted local train services in Mumbai on
Wednesday. The Maharashtra government has declared a holiday for schools in Mumbai, Thane, Raigad, and Palghar districts on Thursday.
The demand is expected to remain healthy across
markets in the country.
HT
‘FY24 premium hotel
occupancy to hit 72%’
I
ndia’s hotel occupancies are likely to see a
spurt from the slow introduction of room
supply which is likely to grow at a three-year
CAGR of 3.5-4%, adding approximately 15,00016,000 premium branded rooms. Gateway
cities like Delhi and Mumbai are likely to top the
occupancy chart above 75% this fiscal. Demand
is expected to remain healthy across markets,
although Bengaluru and Pune are likely to be
laggards compared to other key cities.
According to credit ratings agency Icra Ltd,
pan-India premium hotel occupancy will hover
at an all-time high of 70-72% in FY24, after
recovering to 68-70% in the previous fiscal.
Across India, premium hotel average room
rates (ARRs) are expected to be at ₹6,000-6,200
in this fiscal and the occupancy is expected to be
at decadal highs. The RevPAR is expected to
remain at a 20-25% discount to the FY08 peak.
Consistent improvement in consumer
sentiments despite the inflationary
environment, stable corporate performance,
and domestic air passenger traffic inching above
pre-covid levels augur well for travel and hotel
demand.
VARUNI KHOSLA
L&T Finance Q1 net
profit doubles
PTI
Flooded paddy fields in Punjab,
Haryana to depress crop yields
60% of cultivated land under water; 2 states contribute 20% of India’s rice production
Puja Das
puja.das@livemint.com
P
addy farmers in Punjab and Haryana are
in distress as 60% of their cultivated land
is under water after the extremely heavy
rainfall between 7 July and 10 July. This
may hit yields significantly resulting in
lower crop production if the paddy fields are not
affected further.
Punjab and Haryana have witnessed rainfall in
large excess of 96% and 91% above the long period
average (LPA), respectively during 1 June to 12 July.
Heavy rainfall in these states has reportedly led to
submergence of standing paddy crop in districts of
Amritsar, Hoshiarpur, Gurdaspur and Fatehgarh
in Punjab and in Ambala, Kurukshetra and Yamunanagar districts of Haryana.
About 250,000 hectares of paddy fields in 14
districts of Punjab and 150,000 hectares in seven
districts of Haryana are submerged in water,
according to people associated with local farm Union of Dakonda.
associations. These two states together contribute
“The consumption of fertilisers and pesticides
about 20% to India’s rice production.
will increase to save crops during such weather
Because of the rain deluge in the second week of conditions, which is not feasible for all farmers.”
July and overflow of water from Sutlej, Ravi and
Meanwhile, India Meteorological Department
Beas that are tributaries of the Indus River in Hima- (IMD) predicts heavy rainfall in Himachal Pradesh
chal Pradesh and
and Uttarakhand
flow through east
until Monday, and in
About 250,000 hectares of paddy Punjab and Haryana
Punjab have affected
adjoining districts of
during the weekend.
fields in 14 districts of Punjab and
Punjab, including
“Further rainfall
Jalandhar and Firoz- 150,000 hectares in seven districts of may hit paddy crops
Haryana are submerged in water
pur. About 3.2 milat a time when farmlion hectares area
ers require to cultiare under paddy
vate new seeds and
cultivation in Punjab. “Paddy cannot be resown in wait for at least 20-22 days to get seedlings from
50% of the total 60% affected fields. The current them amid a crunch in availability of ready-made
damage indicates at least 30% less crop in the com- seedlings,” said Ramandeep Singh Mann, an agriing kharif marketing season. If it downpours fur- culture policy expert based in Punjab. “Paddy sowther, crop loss could be more,” said Jagmohan ing was almost 90% complete when the floods hit
Singh Uppal, general secretary of Bhartiya Kishan Punjab and Haryana,” Mann added.
Govt has issued mandatory quality norms
for insulated flasks, bottles.
ISTOCK
T
he government on Wednesday said
it has issued mandatory quality
norms for insulated flask, bottles
and containers with a view to containing
import of the sub-standard goods and
boost domestic manufacturing of these
products.
A notification in this regard was issued
by the Department for Promotion of
Industry and Internal Trade (DPIIT) on 14
July.
These items—resin-treated
compressed wood laminates and
insulated flask, bottles and containers for
domestic use—under the quality control
orders (QCO), cannot be produced, sold/
traded, imported and stocked unless they
bear the BIS (Bureau of Indian Standards)
mark.
Now, manufacturing, storing and sale
of non-BIS certified products are
prohibited as per the BIS Act, 2016.
The violation of the provision of the BIS
Act can attract a penalty of imprisonment
of up to two years or a fine of at least ₹2
lakh for the first offence.
In case of second and subsequent
offences, the fine will increase to ₹5 lakh
minimum and extend up to ten times the
value of goods or articles.
PTI
Railways offers ₹20 meal for general category passengers
T
he Railways has decided to serve healthy and hygienic food at affordable
prices to general seating coach passengers as it looks to expand its F&B
service for all categories of travellers.
A new economy meals and snacks/combo meals menu has been devised to
provide food service to general class passengers through extended service
counters located near GS coaches at platforms. The price of these meals has
kept at ₹20 and ₹50 for economy and snack meal, respectively. A railway
ministry statement said that along with food, drinking water services would
also provide at affordable rates under the scheme.
The meals will be supplied from the kitchen units (Refreshment Rooms &
Jan Ahaars) of IRCTC. The location of these counters is to be decided by zonal
railways to align these counters with the location of GS coaches on platforms.
The provision of this extended service counters at the platforms has been done
on an experimental basis for a period of six months, the Railways statement
said.
SUBHASH NARAYAN
A new economy meals and snacks/combo meals menu has been
devised to provide food service to general class passengers.
Govt plans to sell its over 29% stake in
tranches,starting with sale of about 5% stake.
MINT
‘HZL sale likely
after turnaround’
T
he government may postpone its plans to
sell its stake in Hindustan Zinc Ltd until a
turnaround in the industry’s fortunes,
following advice from merchant bankers, two
people in privy to the matter told Reuters. The
government though, still hopes to push through
the long-delayed sale this financial year, one of
the persons mentioned above said. The
government plans to sell its over 29% stake in
tranches, starting with the sale of about 5%
stake. Vedanta Group holds a 64.9% stake.
HZL’s stock price has declined over 16% from
the highs touched in January due to a sharp drop
in zinc prices and as Vedanta tried to sell two
units to the miner. The government is waiting
for the share price to recover, the first official
said. “Merchant bankers have advised against a
sale offer at the moment as institutional
investors are presently not keen to invest in the
metals sector,” the official said.
REUTERS
PFC’s NCD issue
to close on 28 July
S
Quality norms for flasks, bottles
L
&T Finance Holdings Ltd (LTFH) on
Wednesday reported a 102.6% jump in
consolidated net profit at ₹530.93 crore
for the first quarter of FY24, from ₹262 crore a
year ago, on the back of steady net interest
margins.
The company’s revenue from operations
increased 7.86% to ₹3,223.3 crore in the June
quarter of FY24, from ₹2,988.4 crore in Q1
FY23.
“We have achieved retailization of 82% in Q1
FY24 itself, much ahead of Lakshya 2026 goal
of greater than 80% retailization. In fact, we
have been able to achieve most of our Lakshya
2026 goals almost three years in advance,” said
Dinanath Dubhashi, managing director and
chief executive, L&T Finance Holdings Ltd.
“This achievement is attributed to the twin
strategy of strongly growing the retail asset
book on one side and ensuring a sharp
reduction in the wholesale book on the other,
while maintaining best in class asset quality,”
Dubhashi added.
MAYUR BHALERAO
09
MINT
The Sebi PIT rules prohibit trading by Designated
Persons when the trading window is closed. MINT
Sebi extends DP
trading restriction
S
ebi on Wednesday extended the framework
for restricting trading by Designated Persons
(DPs) during the “trading window closure” by
freezing PAN at security level to all listed
companies in a phased manner beginning
October.
At present, the framework is applicable to
listed companies that are part of benchmark
indices—Nifty 50 and Sensex.
To ensure smooth implementation of the
framework, the regulator prescribed a glide
path, the Securities and Exchange Board of
India (Sebi) said in a circular.
Under this, the new rules will be applicable for
top 1,000 companies in terms of BSE market
capitalization from 1 October; next 1,000 firms
from 1 January 2024; and remaining companies
listed on BSE, NSE and MSEI from 1 April 2024.
For those companies making debut on stock
exchanges after issuance of this circular, the rule
will apply from the first day of the second
quarter from the quarter in which the company
gets listed.
The Sebi PIT (Prohibition of Insider Trading)
rules prohibit trading by a DP when the trading
window is closed.
PTI
tate-run Power Finance Corp (PFC) will
utilize the net proceeds of its upcoming
₹5,000 crore NCD issue for onward
lending and debt servicing, said a company
statement.
Recently, the power sector-focused NBFC
filed ‘tranche I prospectus’ for public issue of
secured, rated, listed, redeemable, nonconvertible debentures of the face value of
₹1,000 each. The base issue size is ₹500 crore
with a green shoe option of up to ₹4,500 crore,
aggregating up to ₹5,000 crore (tranche I
issue), which is within the shelf limit of
₹10,000 crore (overall issue).
PFC said, “...a maximum up to 25% will be
utilized for general corporate purposes.” The
‘tranche I’ issue opens on Friday, and closes on
28 July with an option of early closure or
extension in compliance. The NCDs are
proposed to be listed on BSE.
STAFF WRITER
ED searches Naresh
Goyal’s premises
T
he Enforcement Directorate (ED)
conducted searches against Jet Airways
founder Naresh Goyal on Wednesday as
part of a fresh money-laundering investigation
against him and others, officials aware of the
matter said. The federal agency raided six-seven
premises in Mumbai and some other locations
as part of the investigation being conducted
under the Prevention of Money Laundering Act
(PMLA).
The money-laundering case stems from a
recent FIR lodged by the Central Bureau of
Investigation (CBI) against Jet Airways, Goyal,
his wife Anita and some former company
executives in connection with an alleged Rs 538crore fraud at the Canara Bank.
In February, the Bombay high court had
quashed a money-laundering case lodged by the
ED against Goyal and his wife on the basis of a
Maharashtra Police FIR to probe charges of
cheating and forgery on a complaint from Akbar
Travels.
PTI
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10
LONG STORY
Thursday, 20 July 2023
Chennai
LIVEMINT.COM
THE BEST OF FRENEMIES:
SAUDI PRINCE & UAE PREZ
The Saudi leader has pulled away from his former mentor as they compete to dominate the Gulf
Summer Said
feedback@livemint.com
S
audi Crown Prince Mohammed
bin Salman gathered local journalists in Riyadh for a rare offthe-record briefing in December
and delivered a stunning message. The country’s ally of decades, the
United Arab Emirates, had “stabbed us in
the back,” he said.
“They will see what I can do,” he told the
group, according to people at the meeting.
A rift has opened up between the
37-year-old Mohammed and his onetime
mentor, U.A.E. President Sheikh
Mohamed bin Zayed Al Nahyan, that
reflects a competition for geopolitical and
economic power in the Middle East and
global oil markets. The two royals, who
spent almost a decade climbing to the top
of the Arab world, are now feuding over
who calls the shots in a Middle East where
the U.S. plays a diminished role.
U.S. officials said they worry that the
Gulf rivalry could make it harder to create
a unified security alliance to counter Iran,
end the eight-year-old war in Yemen and
expand Israel’s diplomatic ties with Muslim nations.
“These are two highly ambitious people
who want to be key players in the region
and the go-to players,” a senior Biden
administration official said. “On some level
they still collaborate. Now, neither seems
comfortable with the other being on the
same pedestal. On balance, it’s not helpful
to us for them to be at each other’s throats.”
Once close, the two men—the Saudi is
known as MBS and the 62-year-old U.A.E.
president as MBZ—haven’t spoken in
more than six months, people close to
them said, and their private disputes have
spilled into the open.
The U.A.E. and Saudi Arabia have divergent interests in Yemen that have undermined efforts to end that country’s conflict, and Emirati frustrations over Saudi
pressure to raise the global price of oil are
creating new fissures in the Organization
of the Petroleum Exporting Countries.
The two countries are also increasingly
economic competitors. As part of MBS’s
plans to end Saudi Arabia’s economic reliance on oil, he is pushing companies to
move their regional headquarters to
Riyadh, the Saudi capital, from U.A.E.’s
Dubai, a more cosmopolitan city favored
by Westerners. He’s also launching plans
to set up tech centers, draw more tourists
and develop logistical hubs that would
rival the U.A.E.’s position as the Middle
East’s center of commerce. In March, he
announced a second national airline that
would compete with Dubai’s highly
ranked Emirates.
In the realm of soft power, the Saudi purchase in 2021 of Newcastle, England’s soccer club and investment in global superstar
players took place just as Manchester
City—owned by a prominent member of
Abu Dhabi’s ruling family—won the
English and European soccer titles.
The Emirati president, MBZ, has chafed
at being eclipsed by a Saudi royal who
U.A.E. officials believe has made some serious missteps, according to Gulf officials.
Crown prince Mohammed bin Salman of Saudi Arabia (left) and Sheikh Mohamed bin Zayed Al Nahyan, president of the United Arab Emirates.
and ended his political isolation triggered
by a Saudi hit team’s 2018 killing of journalist Jamal Khashoggi.
He turned to China for help restoring
Saudi Arabia’s relations with Iran and then
orchestrated Syria’s return to the Arab
League, a process that the U.A.E. had initiated several years earlier. The country had
been expelled in 2011
after President Bashar
al-Assad’s brutal crackdown on Syrian
civilians demonstrating for change.
MBS is in talks with the U.S. about formally recognizing Israel, which the U.A.E.
did in 2020. MBS is leading diplomatic
efforts to quash violence in Sudan, where
the U.A.E. backs an opposing side.
In an effort to smooth over tensions,
Saudi Arabia and the U.A.E. have traded
communiqués outlining their complaints
and demands for change, according to
DEal wIth Iran
n separate statements responding to officials from both nations.
In a pointed response to Saudi comThe Wall Street Journal, a U.A.E. official speaking for the government said plaints, MBZ privately warned the Saudi
claims of strained relations were “categor- ruler late last year that his actions were
ically false and lack foundation,” and a undermining ties between their two
Saudi official called the idea “simply not nations. He accused the Saudi crown
prince of getting too close to Russia with
accurate.”
its oil policies and pur“The U.A.E. is a close
suing risky moves, such
regional partner of
Saudi Arabia, and our As part of plans to end Saudi as the diplomatic deal
policies converge on a Arabia’s economic reliance on with Iran, without conferring with the U.A.E.,
wide range of issues of
oil, the country is pushing
Gulf officials said.
mutual interest,” the
MBZ skipped an Arab
Saudi official said. The
companies to move their
summit MBS called for
two countries work
regional headquarters to
Chinese leader Xi Jintogether with other
ping’s visit to Riyadh,
Gulf neighbors on politRiyadh from Dubai.
and didn’t show for the
ical, security and ecoArab League’s vote in
nomic coordination, the
May to allow Syria back into the group.
official said.
The U.A.E. official said their “strategic MBS himself was absent when MBZ met
partnership is based on the same objec- with Arab leaders at a hastily arranged
tives and vision for regional prosperity, regional summit in the U.A.E. in January.
“Tensions are rising between them, in
security, and stability.”
In December, after intensifying divi- part because MBS wants to step out from
sions over Yemen policy and OPEC limits, under MBZ’s shadow,” said Dina EsfanMBS called the meeting with the journal- diary, a senior adviser at the Internaists. The Saudi leader said he had sent the tional Crisis Group’s Middle East and
U.A.E. a list of demands, the people there North Africa Program. “Things are going
said. If the smaller Gulf nation didn’t fall in to get worse, because both countries are
line, MBS warned, Saudi Arabia was pre- getting more confident and assertive in
pared to take punitive steps, much like it their foreign policy.”
did against Qatar in 2017, when Riyadh
severed diplomatic relations for more FOrgED allIanCE
he Saudis and Emiratis have called
than three years and engineered an ecothemselves the closest of allies, but
nomic boycott, with help from Abu Dhabi.
“It will be worse than what I did with they have had a sometimes tense relationQatar,” he told the journalists, according ship since even before the U.A.E. gained
independence from Britain in 1971.
to people there.
The U.A.E.’s founding father, Sheikh
Since the December meeting, MBS has
undertaken a series of diplomatic moves Zayed al Nahyan, bristled at Saudi domi-
I
T
nation of the Arabian peninsula, and thenSaudi King Faisal refused to recognize his
Persian Gulf neighbor for years, seeking
leverage in various territorial disputes. In
2009, the U.A.E. scuttled plans for a common Gulf central bank over its proposed
location in Riyadh. To this day, there are
territorial disputes
over oil-rich land
between the two countries.
The two countries became closer with
the rise of MBZ and MBS. The Emirati
royal became de facto ruler of his country
at the age of 54 in 2014 when his halfbrother, President Sheikh Khalifa bin
Zayed, had a debilitating stroke. When
MBS began accruing power after his
father King Salman’s accession in 2015,
MBZ began grooming the young Saudi
prince, then just 29 years old.
The two men hardly knew each other
before an overnight camping trip in the
vast Saudi desert, the Journal has
reported. Accompanied by trained falcons
and a small entourage, the outing—
roughly equivalent in Gulf tradition to a
round of presidential golf—was a turning
point in their friendship, according to
people familiar with the excursion.
MBZ and other senior Emirati officials
played a key role in lobbying the Trump
administration in favor of MBS, who was
then still deputy crown prince. MBZ
helped orchestrate then-President
Donald Trump’s trip to Saudi Arabia in
2017, which bolstered MBS. The Saudi
prince launched a palace coup the next
month to become heir apparent and
then began eliminating critics and
potential rivals.
In formulating a plan to transform and
open up his conservative kingdom, MBS
looked to MBZ for guidance and tapped
some of the same banks and consultants
that the Emiratis used for a similar plan a
decade earlier.
MBS and MBZ forged a foreign-policy
alliance that intervened in Yemen, bolstered Abdel Fattah Al Sisi’s grip on
power in Egypt, armed Libyan fighters
in that divided country’s east and boycotted Qatar over ties to Iran and Islamists. Both men have since tried to
extricate their countries from those
interventions. Today, MBS feels that the
Emirati president led him into disastrous conflicts that served the interests
of the U.A.E. and not Saudi Arabia, Gulf
officials said.
MBS “does not like him and he wants to
show him up,” said Douglas London, a
retired Central Intelligence Agency offi-
mint
SHORT
STORY
WHat
A rift has opened up between
Saudi crown prince Mohammed bin
Salman and his onetime mentor,
U.A.E president Sheikh Mohamed
bin Zayed Al Nahyan. They haven’t
spoken in over six months.
WHy
The feud reflects a competition
for geopolitical and economic
power in the Middle East.
Saudi Arabia wants to rival the
U.A.E’s position as the region’s
center of commerce.
So
Divisions between the two leaders
are threatening to undermine
ongoing efforts to end the war in
Yemen. The rivalry has also vexed
the Biden administration, which
wants a united front against Iran.
cer who now works as a nonresident
scholar at the Middle East Institute, a
Washington-based think tank. He said
that as threats from Iran and terrorist
groups recede, tensions between them are
likely to escalate. Still, London said the
Saudi leader had developed a more practical approach to leading his country that
makes it unlikely that he would take rash
actions against the U.A.E.
OPEC DIsPutE
he rift bubbled to the surface in October last year when OPEC, the 13-nation oil-production group that has allied
with Russia, decided to slash output in a
move that blindsided the Biden administration. The U.A.E. went along with the
cut, but in private told U.S. officials and
the media that Saudi Arabia had forced it
to join the decision.
The dynamic reflected a longer-running feud between the Saudis and Emiratis over policy in OPEC, a body that Riyadh
has long dominated as the world’s top
crude exporter. The Emiratis have raised
their oil-production capacity to more than
four million barrels a day and have plans to
T
AP & REUTERS
If the Saudis withdrew from Yemen
go above five million, but are allowed
under OPEC policy to pump no more than now, the Houthi-controlled north would
about three million, costing it hundreds of align with Iran and the south would align
with the U.A.E., leaving Riyadh with little
billions of dollars in lost revenues.
The Emirati increase in oil-production to show for the war, said Yemeni officials,
capacity also gives it the potential ability reflecting Saudi concerns.
to move output up and down, and with it
global oil prices. Until recently, only Saudi BIDEn gOal
Arabia wielded that sort of market power.
he Saudi-Emirati rivalry has vexed
Emirati frustrations reached the point
the Biden administration, which
where they told U.S. officials they were wants friendly Gulf capitals like Riyadh
ready to pull out of OPEC, according to and Abu Dhabi to help form a united front
Gulf and U.S. officials. U.S. officials said against Iran. Ending the war in Yemen,
they took it as a sign of Emirati anger, not which triggered a humanitarian disaster,
a real threat. At OPEC’s last meeting, in is also a key foreign policy goal of the
June, the Emiratis were allowed a modest administration, which wants stability in
increase in their production baseline, and the region and in oil markets.
their energy minister emerged holding
Neither MBS nor MBZ is perfectly
hands with his Saudi counterpart.
aligned with Washington on important
Divisions between the two leaders are matters such as Ukraine and China. U.S.
threatening to undermine ongoing efforts officials are increasingly worried about
to end the war in Yemen, which pits the the outreach to Beijing and Moscow by
Saudis, Emiratis and a host of Yemeni fac- MBZ, who like MBS has built stronger ties
tions against Iran-backed Houthi rebels with them.
who took over large parts of the country in
Biden came into office pledging to treat
2014, including the capital, San’a.
the kingdom as a pariah state over the
The U.A.E. continues to back a Yemeni Khashoggi killing, which MBS has said he
separatist movement seeking to restore a didn’t order. Instead, Biden visited Saudi
Yemeni state in the south. This could Arabia in July 2022, helping end his isolaundermine efforts to
tion. Now, U.S. compakeep the country united.
nies that had been hesiThe rift bubbled to the
Saudi- and Emiratitant to engage with the
backed fighters working
kingdom are taking a
surface in October last
together to defeat
second look. That interyear when OPEC decided
Houthi forces have at
est will likely accelerate
times turned their weapas a year-end deadline
to slash output in a move
ons on each other over
approaches for compathe years.
nies with contracts from
that blindsided the Biden
In December, the
the Saudi government to
administration.
U.A.E. signed a security
establish a base in
deal with the SaudiRiyadh instead of flying
backed Yemeni presidential leadership in from Dubai.
council that gives Abu Dhabi the right to
The Biden administration brokered a
intervene in Yemen and the waters off its May 7 meeting between MBS and the Emicoast. Saudi officials viewed it as a chal- rati president’s younger brother, Sheikh
lenge to their Yemen strategy.
Tahnoun bin Zayed, once seen as a confiSaudi Arabia has plans to build a pipe- dant of the Saudi crown prince, said peoline from the kingdom to the Arabian Sea ple familiar with the matter. Tahnoun had
via the Yemeni province of Hadramout, been frozen out, making at least six trips to
with a seaport in its regional capital, the kingdom without securing a meeting
Mukalla. Emirati-backed forces in Hadra- with MBS until he got help from the U.S.,
mout threaten those plans.
the people said.
An analyst at the Middle East and North
MBS told Tahnoun that the U.A.E.
Africa program at Chatham House, an shouldn’t disrupt cease-fire talks in
independent think tank in London, has Yemen that the Saudis are leading and
warned that the rival Yemeni forces are promised concessions to the U.A.E., the
preparing for new clashes that threaten people said. But later he told his advisers
ongoing peace talks. “The two Gulf mon- that they shouldn’t change any policies
archies are increasingly aggressive toward the U.A.E. “I don’t trust them anytowards each other in the region. Yemen more,” he told advisers, the people said.
is just the first front line,” Chatham House
Dion Nissenbaum, Stephen Kalin and
research fellow Farea Al-Muslimi wrote Saleh al-Batati contributed to this story.
on Twitter.
©2023 DOW JONES & COMPANY, INC
T
This PDF was uploade To Telegram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER):@LBSNEWSPAPER
MINT MONEY
LIVEMINT.COM
Understanding the risks in
AIFs and PMS investments
ThuRsday, 20 July 2023
Chennai
MINT 20* MUTUAL FUND
SCHEMES TO INVEST IN
20
We have hand-picked 20 mutual funds for your portfolio that have jumped
through hoops of good returns, low risk, good portfolio hygiene and our own
qualitative research. We have restricted the choice universe to 10 categories out
of the total 37 and given you at least two options to pick from each.
3-years return
(%)
EQUIT Y
There is no cap on total expense ratio for PMSes and AIFs; the returns can be disappointing
Sashind Ningthoukhongjam &
sashindnj@livemint.com
UTI Nifty Index Fund - Growth
I
nvesting in alternative investment
funds (AIFs) can be a risky affair.
Some investors learnt it the hard
way when ICICI Prudential closed
its real estate AIF recently. Six
underlying investments remained
stuck with the fund even after the
expiry of its term in March. This
implied that the payouts by the AIF
would be delayed.
A similar thing happened at 360 ONE
Private Equity Fund (formerly known as
IIFL Private Equity Fund). When the
real estate AIF closed in March, investors realized they did not benefit much.
The asset management company
(AMC) told Mint that its fund generated
a 6% annual return for its investors.
ICICI AMC told Mint that it is looking to liquidate its remaining investment in the fund by next March, in line
with AIF regulations. Market regulator
Sebi allows one additional year post the
expiration of the term to liquidate
assets and make distributions to investors. Mint could not independently
ascertain the annual return generated
by ICICI Prudential fund’s real estate
AIF. On an absolute basis though, it
returned 117% of the investment
amount over the duration of the fund.
Both these incidents highlight the
inherent risky nature of AIFs. The
liquidity risk in AIFs is so grave that even
some venture capital funds have been
unable to sell their investments due to
the ongoing startup funding winter,
according to financial market experts.
To be sure, AIFs are high-risk investments with a minimum ticket size of ₹1
crore. These instruments are meant for
ultra high net-worth individuals with a
very high risk appetite. There are three
categories of AIFs. Category 1 AIFs,
which include venture capital funds,
invest in start-ups or early-stage ventures or small and medium enterprises
(SMEs). Category 2 AIFs include those
funds that don’t take leverage or borrowings other than to meet daily
requirements. They also include funds
that don’t come under either category
1 or category 3. This comprises real
estate funds, private equity (PE) funds,
and funds for distressed assets, etc.
Category 3 AIFs are those that employ
complex trading strategies and employ
leverage through investment in listed or
unlisted securities. This includes hedge
funds and private investment in public
equity (PIPE) funds.
The big fat commissions
Munish Randev, founder and chief
executive officer of Cervin Family, said
that distributors pushed these real
estate AIFs heavily as they were getting
fat commissions. Many high net-worth
individuals (HNIs), he said, are unaware
of the inherent risks of investing in
these funds. “If even 3-4 of the projects
fail, there is a risk of return of capital let
alone generating returns,” said Randev.
Large commissions in AIFs are not limited to real estate funds. Sebi, in a recent
consultation paper, pointed out that the
quantum of AIF commissions goes as
high as 4-5% of the committed amount
in some cases. In sharp contrast to the
trail commissions for other products,
such high upfront commissions
increase the chances of misselling of
AIF schemes. In fact, the growth in AIFs
in the past few years could partly be
attributed to distributors pushing these
products to earn hefty commissions.
In category 2 AIFs, which includes
Category average
Should Sebi standardize commissions?
Canara Robeco Flexi Cap
Parag Parikh Flexi Cap
Category average
Why distributors push for PMS & AIFs?
 No such
cap exists
for AIFs and
PMS
 Sebi pointed
out that AIF
commissions go
as high as 5-6%
Axis Midcap
 This creates
SBI Small Cap
incentives for
distributors to sell
more AIFs and PMSes
2,779,604
Category average Midcap
Category average Smallcap
Canara Robeco Equity Tax Saver
Mirae Asset Tax Saver
Category 1
Category 2
Category 3
2018-19
Category average
21.93
25.70
23.38
14.23
18.19
13.31
9,919
37,699
24.97
36.20
30.91
40.45
16.55
20.03
15.94
18.57
21,780
18,625
24.66
25.34
24.04
16.02
16.40
13.10
5,750
16,634
15.96
15.43
14.04
11.57
10.90
9.87
9,247
47,662
4.72
4.46
4.39
5.17
NA
4.77
22,513
6,467
BALANCED ADVANTAGE
2019-20
Edelweiss Balanced Advantage
20,00,000
ICICI Prudential Balanced Advantage
2020-21
Category average
ARBITRAGE
10,00,000
2021-22
Kotak Equity Arbitrage
Tata Arbitrage
5,00,000
Category average
2022-23
0
11,586
8,973
HY BR ID
25,00,000
15,00,000
13.31
13.08
12.94
EQUITY (TAXSAVER)
AIF fund raised (₹ cr)
30,00,000
22.88
22.70
22.40
EQUITY SMALL AND MIDCAP
Growth of PMS, MF and AIFs
Total PMS AUM (₹ cr)
Corpus
(₹ cr)
EQUITY FLEXICAP
Distributors try to sell high ticket investments like PMS and AIFs since they get more commissions
compared to MFs but investors needs to be wary of these high risk products.
 The total
expense ratio for
mutual funds is
capped at 2.25%
5-years return
(%)
LARGE-CAP
HDFC Index Fund - Nifty 50 Plan
Akshat Rohatgi
11
2018-19 2019-20 2020-21 2021-22 2022-23
Source: Fisdom, CMIE
0
50,000 100,000
150,000
200,000
250,000
*Cumulative net figures
300,000
Source: Sebi
Average MF AUM (₹ cr)
Returns since
launch
OU T OF T HE BOX
4.76
17.19
BHARAT Bond ETF - April 2031
Motilal Oswal S&P 500 Index Fund
Date of
launch
23 Jul 2020
28 Apr 2020
Absolute returns
Returns as on 17 July 2023; Corpus data as of June 2023; Growth option in regular plans has been used
*Debt funds can be viewed in the full table online
Data and analysis by CRISIL Research
24,48,383
27,03,629
32,10,593
38,37,994
40,51,147
2018-19
2019-20
2020-21
2021-22
2022-23
Source: Amfi
(excluding fund of funds)
Types of AIF funds
Category 1
INVESTS in startups or early stage ventures
or social venture or SMEs or infrastructure or
areas the government or regulators consider
socially or economically desirable.
 Eg: venture capital funds, SME funds, social
venture funds, infrastructure funds, etc.
 Upfront commission allowed up to
one-third of the present value
Category 2
DO NOT fall in Category I and III.
Those funds that don’t take borrowings
other than to meet daily requirements
 Eg: Real estate funds, private equity
funds (PE funds), funds for distressed
assets, etc.
 Upfront commission allowed up to
one-third of the present value
Category 3
EMPLOY diverse or complex
trading strategies and may
employ leverage including
through investment in listed
or unlisted derivatives.
 Eg: hedge funds, PIPE
funds, etc.
 Upfront commission not
allowed
MF: mutual fund; AUM: assets under management; AIFs: Alternative investment funds; PMS: Portfolio Management Service
the above real estate funds along with not exist in the case of PMS as the
private equity funds, the cumulative underlying securities are held in the
fundraising amount went up more than personal demat account of the investor.
218% from ₹83,554 crore in FY19 to This means they are taxed every time a
₹2,66,296 crore in FY23.
buy or sell execution is carried out. CatIn a recent order, Sebi said that egory 3 AIF gains are taxed at the highupfront fees, which means charging est slab rate. For category 1 and catecommissions beforehand, will be gory 2, the taxes are paid by investors at
capped at one-third of the total com- their individual tax slab rate.
Abhishek Kumar, a regismissions for category 1
tered investment adviser
and category 2 AIFs. Earand founder of SahajMoney,
lier, any amount could be
AIFs and PMS
taken upfront by AMCs have also filled in said AIFs and PMSses rely
on contracts signed
from investors. Experts
for credit risk
said this gives an incen- mutual funds that between a client and the
company whereas mutual
tive to distributors and
lost sheen after
funds are highly regulated.
wealth managers to sell
the FT crisis
He added that many clients
these AIFs. Upfront comin 2020
don’t know the risk associmission is not permitted
ated with such products and
under Category 3 AIFs.
are also not familiar with the
Portfolio Management
Services (PMSes) is another product details of the contract term.
He added that in PMSes and AIF,
meant for HNIs with greater risk appetite. The minimum ticket size for a PMS since there is no cap on total expenses,
the fund manager could charge higher
investment is ₹50 lakh.
Unlike mutual funds, where the total fees than what mutual funds would
expense ratio is capped at 2.25%, no normally charge and in some cases,
such caps exist for PMSes and AIFs. these structures also include a perThis means that higher management formance bonus. Add to this the high
fees can be charged on these products distribution cost, and it would mean
and distributors get more commission that the fund manager has to try to get
to sell these products. Additionally, a much superior alpha to beat its
equity mutual funds enjoy long-term benchmark. This may lead to concencapital gains benefits for units held for trated bets on a few securities that can
more than one year. Such benefit does turn risky.
Srikanth Bhagavat, managing
director and principal advisor of Hexagon Wealth, said many investors get
into AIFs without adequately understanding the risks due to their high
returns. Distributors, too, are eager to
sell those products due to their high
commissions.
AIFs and PMS have also filled in for
credit risk mutual funds that lost sheen
after the Franklin Templeton (FT) crisis in 2020. From managing ₹61,837
crore of assets under management
(AUM) earlier, credit risk MFs now
manage ₹24,687 crore of AUM, which
translates into a decline of about 60%.
Such funds invest in the credit of not
the best-rated companies to get higher
yield. These risky investments
migrated towards AIFs and PMSes.
“When people started exiting from
credit risk mutual funds, lots of AIFs
and PMS were getting set up and it was
them that started filling in the gaps,”
said Kumar.
Experts point out that since the differences in commission structures create an incentive for distributors to push
one product over another, the solution
is to simply have the same commissions
across all investment products including AIFs, PMSses, and mutual funds.
This, they said, would remove the
incentive to push high-risk investments to unsuspecting clients.
Corpus
(₹ cr)
12,945
2,830
Compiled by Neil Borate
Is TCS applicable if NRIs transfer
the proceeds of property sale?
ISTOCK
Archit Gupta
Can non-resident Indians
(NRIs) transfer the proceeds of a property sale to
their country of residence?
In such a case, will banks
collect tax at source even
after all tax dues on such
sale has been cleared?
—Name withheld on request
NRIs are allowed to remit
upto $1 million in a financial
year from the balance held in
their NRO (non-resident ordinary) account or from the sale
proceeds of a property held in
India. These sales proceeds
must first be credited to their
NRO account in India. Any tax
due on such sale should have
been duly paid by the NRI in
India. In case of an NRI, TCS is
not applicable for money
remitted to foreign accounts
from an NRO account.
My US-based father-in-law
wants to gift me a house.
What will be the tax implications for me as an Indian
resident?
—Name withheld on request
There is no tax implication
upon receiving a gift from
specified relatives. Certain
taxpayers have been included
in the list of specified relatives
under the income tax act,
where any gift received from
m
ASK MINT
N R I TA X AT I O N
them is tax free.
I work as a merchant navy
officer. I was sailing
between 1 August 2021 and
31 January 2022 in the last
financial year (FY22). In
this financial year (FY23), I
have been sailing between
1 July 2022 and 30 November 2022. Can you tell me
what would be the tax
treatment of my income
this year?
—Name withheld on request
A seafarer serving on Indian
ships outside India for a period
of 182 days or more in a year is
considered to be a non-resident. However, the time spent
by a ship in Indian territorial
waters is considered a period
of service in India, according
to tax rules framed in 1990.
The number of days outside
India of Indian crew working
on such Indian ships gets
counted only from the date
when the Indian ship crosses
the coastal boundaries of
India.
Based on the information
provided by you, it seems you
have spent 153 days in India in
the FY 2022-23, in such a case
you may be a resident or not
ordinarily resident in India for
tax purposes.
Archit Gupta is founder and
chief executive officer, Clear.in
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
WHAT BENCHMARKS MEAN FOR ASSET CLASSES, INVESTORS AND FUND MANAGERS
POWER
POINT
PRAMOD DWIDEVI
Respond to this column at
feedback@livemint.com
I
n the investment world, benchmarks are essential when comparing fund performances across all asset classes, including equity,
fixed income, etc. Creating benchmarks has been an evolving science. Finding a precise and accurate benchmark is a process that
comes with its own challenges and a number of factors need to be
carefully considered before selecting the one that will work for you.
What makes for a good benchmark?
Unambiguous: The benchmark’s methodology and constituents should be transparent and readily available. The way a benchmark is constructed should also be available and known to all.
Investable: It should allow the investor to cease active management and just hold all its constituent securities. This means
that the benchmark’s constituents should be liquid and accessi-
ble, allowing for a fully replicable implementation of the investment strategy.
Measurable: The benchmark should allow for returns to be easily
calculable and on a reasonable frequency. The methodology should
be so transparent that its performance over the horizon is calculable.
Relevance: The benchmark should be relevant to the investor’s
investment objectives. It should ideally bear a close resemblance
to the underlying strategy. For example, if a fund is thematic and
invests in Infrastructure, it is irrelevant to have a Banking Index as
the benchmark or a mid-cap fund with Nifty 100 as the benchmark.
Reflective of investment opinion: Managers have current
investment knowledge, regardless of whether the knowledge is
positive, negative, or neutral, of the securities, or they can factor
exposures within the benchmark.
Transparency and stability: It should be specified in
advance and before the start of an evaluation period, and its calculation methodology should be known to all parties. A good
benchmark should also remain stable and consistent over time,
with minimal changes to its composition or methodology.
Owned: Managers should be aware of the strengths and weaknesses of the benchmarks they have been asked to be judged
against. With this benchmark, managers need to accept accountability for their client’s portfolio and be prepared to explain any
variance. All in all, managers should be fully aware of the bench-
marks they are being measured against, and it should be in line
with their strategy and fully acceptable to them.
While mutual funds have a standardized approach and are wellregulated, it gets tricky when we look at PMS as a space. While most
PMS managers offer a distinct style bias, they are categorized as a
standard all-cap equity fund. This makes them distinct from
mutual funds. A broader market index, however, will not do justice
if chosen as a benchmark in this case. In
The benchmark want of an evolution in the benchmarking space, most end up choosing a
should be
broader benchmark. Ideally, this needs
relevant to the
a nuanced understanding of style at the
investor’s
allocator or investor level, and only
investment
then, a curated index reflective of their
style, owned by the PMS manager, be
objectives
chosen.
However, the Association of Portfolio
Managers in India (APMI) in its recent circular asked PMS firms to
choose one out of three pre-fixed benchmarks for each of the asset
classes, irrespective of the strategy (be it large, flexi, mid or small
cap) applicable. The members and non-members did react initially,
as rightly, the pre-fixed BMs are not owned by the PMS Manager.
Especially for someone who has a longer track record, changing a
benchmark needs to have valid reasoning, and that’s fair practice.
Even the globally accepted, GIPS guidelines are clear on this
and ask for fair representation and full disclosures. For example,
the old benchmark needs to be declared along with the new one
for a minimum of one year and for as long as the disclosures are
relevant to interpreting the track record.
A firm may not be GIPS-verified, and most in India are not. It
is still a fair practice, which has merit, to allow both old and new
benchmarks. After some further discussion and feedback, the
association agreed to do so and allowed firms to show past performance until 31 March with both benchmarks for the next 36
months. This announcement finally provides some clarity and
is totally in line with fair practices followed elsewhere. A better
idea would have been to have both, a statuary or industry-wide
benchmark and a portfolio manager owned benchmark.
While benchmarks play an important role for asset owners and
investors, it’s evident that none are likely to be a perfect match for a client. It is obvious that a benchmark that is not derived based on an investor’s objective would lead to the wrong risk-return attribution. Thus,
what matters is how well the benchmark fits the investor’s objective.
In summation, regulatory interest in benchmarks and indices
suggests that Benchmarking as a concept needs continuous
debate and evolution in order to fulfil its purpose effectively.
Pramod Dwidevi is co-head, business development, Karma Capital.
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12
VIEWS
ThUrsday, 20 JUly 2023
Chennai
LIVEMINT.COM
OUR VIEW
GUEst VIEW
PTI
Use contextual tools and models
to catalyse our climate transition
Special technologies and business models can play a big role in our battle against global warming
ficient climate technologies that can
offer alternatives for carbon-heavy
industries. Two, digital technology
solutions that can optimize supply
chains for a lighter carbon footprint.
And three, tools that can support the
development of the carbon accounting
market.
Disruptive climate technology will
displace or transform industry incumbents. The most obvious example is of
electric vehicles (EVs) replacing internal combustion engine (ICE) vehicles.
The energy transition will rely on a
number of other technologies too,
though, whether they are advanced
electrolyzers for hydrogen production,
new zinc- or sodium-based battery
technologies, or improved nuclear
energy generation. Carbon capture and
removal technologies are required to
meet industrial decarbonization goals.
Computational tools too have a vital
role to play across sectors. Coupling
these, for instance, with Clustered Regularly Interspaced Short Palindromic
Repeats (CRISPR), which is a genome
editing technology, is enabling us to
produce food differently. For example,
String Bio is using a methane based synthetic biology platform to produce food,
feed and agricultural inputs. The company’s proprietary bio-stimulant CleanRise has been shown to improve rice
yields by 30-40% while decreasing
methane emissions from paddy by 60%.
Rice cultivation contributes 10% of
global methane emissions, a GHG 25
times more potent than carbon dioxide.
While new technologies will curb
carbon belchers, there is also room for
optimization of our current systems. A
McKinsey report estimates that 80% of
the emissions of an organization lie in
its supply chain. This cuts across industries such as agriculture, textiles, electronics and manufacturing. Technology
will be critical to manage footprints and
drive carbon-related decisions. This is
especially important in fragmented
markets such as India where production
is widely distributed. For example, food
RITU VERMA
is managing partner at Ankur Capital.
India’s G20 presidency:
Let’s be more ambitious
While G20 communiques prove elusive, India has little time left to get a better deal for the
Global South. The effort to reform institutions must cover World Bank and IMF ownership
G
20 meetings seem to be degenerating into a juvenile game of
passing the parcel. Most themeoriented working groups have
been unable to agree on a communique, with the task left to
non-controversial huddles, like on startups.
Even the third meeting under the G20 aegis of
finance ministers and central bank governors
(FMCBGs), which ended in Gandhinagar on
Tuesday, issued only an outcome document
and a chair’s summary. A communique
requires consensus, but the Ukraine shadow
has split the gathering along sharply drawn
lines, hurting prospects of unanimity. And so,
the chair of the second-most important G20
grouping, Indian finance minister Nirmala
Sitharaman, exercised the next best option:
the gathering passed that buck to the leaders’
summit in September. What is encouraging,
though, is the fact that the FMCBG meeting
was united on almost every other item on the
agenda, which included reforms of multilateral development banks (MDBs), a shared
regulatory framework for crypto-assets, the
path ahead for equity in taxation rules and an
acknowledgement of macroeconomic risks
arising from climate change and the necessary
transition path.
Among these key issues of global governance, MDB reform will likely be the Indian
G20 presidency’s showpiece, since it initiated
the process by setting up a committee headed
by Larry Summers, president emeritus of Harvard University, and N.K. Singh, former Indian
bureaucrat and chairperson of the 15th finance
commission. The panel has now submitted the
report’s first volume (the second and final part
is expected in October), which was accepted
unanimously by the FMCBG conclave. Members particularly endorsed the ‘G20 Roadmap
for Implementing the Recommendations of
the G20 Independent Review of MDBs Capital
Adequacy Frameworks.’ The primary focus of
the MDB reform process is on making MDBs
mission-agile for 21st century challenges so
that they’re better equipped to finance strategic development goals and other imperatives
such as climate and health. This is a lofty ideal,
but falls short of the changes that MDBs need
to undertake, especially in light of the Global
South’s sense of alienation from instruments
and institutions of global governance.
MDB reforms would be incomplete without
setting right the shareholding structure of the
World Bank Group and International Monetary Fund. The process must account for the
conditions around their birth after World War
II, when Western powers carved up global
institutions among themselves; a large chunk
of ownership in both went to them, the lion’s
share taken by the US, giving the West extraordinary control. The contextual arguments
both for and against this arrangement no
longer hold relevance in today’s global configuration. The biggest stumbling block to an
overhaul of their ownership is that it would
require US Congress approval; given its current partisan character, it is nigh impossible
for US politicians to agree on yielding control
over two key global institutions. It is here that
the panel led by Summers and Singh should
have clearly outlined the realistic challenges
that the process is likely to face and also the
mitigation processes that G20 ministers could
adopt to make its recommendations more
meaningful. But, like all else, it appears that
can has also been kicked down the road.
C
limate change is front and centre
of the development debate going
on around the world. We are
finally seeing our economic system
account for the cost and impact of
air pollution on the environment by
putting a value on every metric tonne of
greenhouse gas (GHG) emissions. And
our transition to a low-carbon economy
is being spurred by consumers and governments as well as regulators.
Last year, venture capital saw $37 billion globally in climate-dedicated dry
powder. Impressive, but that still only
scratches the surface of the emerging
carbon economy, especially for Indialike markets. India is the world’s third
largest emitter, but our emissions per
capita are only one-fifth the global average. With an emerging middle class, an
expanding manufacturing base and an
agricultural heartland responding to
the challenges of food security, our
emissions trajectory is poised to change
dramatically over the next decade. Our
market structures are notably different.
While policy and industry have their
place, the India net-zero story needs
contextually-developed new technologies and business models that can mitigate GHG emissions and enable the
economy to adapt.
We need to create fundamental tools
to effectively catalyse the climate transition underway. Here, we see three key
investment opportunities. One, cost-ef-
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune*
www.livemint.com
Saturday, July 20, 2013
Vol.7
No.172
`5.00 in Delhi­NCR/`6.00 outside Delhi­NCR
waste is a big carbon problem. In fact,
it’s linked to 8-10% of all annual GHG
emissions.
A digitally-enabled supply chain can
help monitor production processes,
diminish inefficiencies in logistics, limit
wastage and ultimately reduce emissions. We are seeing companies using
digital solutions to match demand and
supply for perishable commodities,
bringing down the rate of food waste to
single digits. Others are linking buyers
to sustainably grown crops, allowing
customers to make planet-friendly
choices. Digital technology will play an
outsized role in reimagining business
supply chains and managing complex
‘scope 3’ emissions for greater resilience and circularity.
Finally, our legacy accounting systems don’t include the costs of the
earth’s seemingly free resources. The
climate transition is forcing a shift. The
carbon accounting market is estimated
at $12 billion and expected to reach $65
billion by 2030. While regulators have a
critical role to play in creating standards, tools for people to comply and
report are needed to make the system
work. Currently, most consulting organizations use resource-intensive techniques to manage and audit carbon
credits. The future, though, will likely
lie at the intersection of software and
hardware-led measurement methodologies that will scale and provide authentic data cost efficiently. Most of these
measurement and integration tools will
need to be vertically focused, so as to
address specific-sector needs. As regulatory requirements evolve, we expect
these tools to become integrated with
reporting systems.
To create long-term value, business
opportunities in the climate transition
need to be holistic, accurate and transparent. Short-term opportunists
abound that attempt tricks like greenwashing. But, as markets tighten, they
will be pushed out. Unlocking what’s
good for the planet will ultimately make
for a good investment opportunity.
12 PAGES
+ 20 PAGES LOUNGE
Dipankar Gupta on the
idea of a citizen elite >4
Q&A:
EARNINGS: Weak rupee lifts Bajaj Auto
margins in June quarter >3
POLITICS: Congress tally to decline in 2014,
but BJP will fall short, says survey >3
CORPORATE: CBI says Wal­Mart
violated investment rules >5
CONTENT PARTNER
SENSEX 20,149.85 Æ 21.44
NIFTY 6,029.20 æ 8.85
JUNE QUARTER
RIL net profit
rises even as
revenue falls
DOLLAR `59.35 æ `0.33
India’s air passenger traffic fell 1.84% in June from a year ago, after having
recovered in March from 10 months of decline. Domestic airlines carried 5.01 million
passengers in June, compared with 5.10 million a year ago, showed data released by
India’s aviation regulator on Friday. The Directorate General of Civil Aviation (DGCA)
warned of a declining trend in its statement announcing the data for June. The
summer quarter of April-June is peak travel season as schools close for holidays. In
2012, air traffic dropped to 58.82 million people from 60.7 million in 2011, while
international traffic grew 21.8%, according to the civil aviation ministry.
2012
2013
(figures in mn)
Profit jumps 19% on
sale of investments,
higher margins, but
lower oil prices push
revenues down
&
Margins,
other income
boost profit
MARK TO MARKET
PALLAVI PENGONDA
Year-on-year change
5.33
Jan
liz.m@livemint.com
·························
NEW DELHI
5.1
5.18
1.59%
5.09
5.07
Apr
R
-3.36%
4.89
Mar
-0.27%
5.44
May
4.81%
5.71
MUMBAI
R
eliance Industries Ltd
(RIL) on Friday posted a
19% rise in stand-alone
net profit for the quarter ended
30 June, largely in line with
Street expectations, helped by
the sale of investments, higher
refining margins and income
from its petrochemicals business.
Net profit rose to `5,352
crore while revenue fell 4.6%
to `90,589 crore, the oil, petrochemicals and retail conglomerate said. From the quarter
ended March, net profit fell
4.2%, on account of a slide in
refining margins, and revenue
was 4.6% higher.
A Bloomberg estimate had
pegged profit at `5,290.4 crore
and revenue at `89,639 crore.
Chief financial officer Alok
Agarwal said at a press conference that overall the results
were “slightly better than expected” and revenue was down
year-on-year (y-o-y) because
of lower oil prices, which had
brought down revenue from
the segment.
But most of the growth in net
profit on a y-o-y basis came
from so-called other income,
rather than its core business
operations. Out of the `849
crore increase in net profit
over the year-ago period, `631
crore came from a rise in other
income, mainly sale of investments. At `2,535 crore, other
income contributed 47% to the
profit.
Agarwal said this was because some of RIL’s investments had matured, and the
conglomerate decided to cash
out of some of its other investments. As RIL invests more
money towards its capital expenditure (capex) plans across
businesses, the proportion of
other income to net profit will
come down, he added.
“Reliance achieved strong
results during the first quarter
of FY 2013-14, while investing
in projects that will provide
NOTE TO READERS
There is no Markets Watch with
today’s edition.
Mint is also available for R9.50 with
Hindustan Times in Delhi-NCR only
W
hile Reliance Industries Ltd’s
(RIL’s) net profit of
`5,352 crore for the June
quarter came in better
than expectations, operating performance has
been lacklustre. Revenue
fell 4.6% while operating
profit increased 3.8%.
The reason: savings on
raw material costs, driven mainly by lower crude
prices. Operating margins thus improved,
while other income
helped boost profit
growth to 18.9% from a
year ago.
The petrochemicals
business, which was expected to perform better
during the quarter, has
disappointed. Revenue
increased marginally by
half a percentage point
from a year ago while
earnings before interest
and tax (Ebit) increased
7.5% to `1,888 crore. Volumes fell, while prices
rose marginally. An improvement in ethylene
chain margins fuelled a
60 basis points year-onyear (y-o-y) increase in
the petrochemicals Ebit
margin. A basis point is
0.01 percentage point.
On the other hand, the
refining business has
been consistently performing well and that
trend has continued for
the June quarter.
Note, though, that the
refining Ebit contribution
5.1
Jun
Market share in June (in %)
8.9
-3.04%
60.7
Go Air
18.9
58.82
Air India
19.5
29.5
IndiGo
23.1*
SpiceJet Jet Airways
2011
2012
*Combined share of Jet Airways and
subsidiary Jet Konnect
Source: DGCA
eadying for polls under the
leadership of Gujarat chief
minister Narendra Modi, the
Bharatiya Janata Party (BJP) on
Friday announced the team
that will guide the party in the
run-up to the general election
scheduled for May next year.
Acknowledging the altered
demography of India, the main
opposition party constituted a
special cell to target first-time
voters, which it estimates to be
about one-fifth of the total
electorate of more than 700
million. The four-member
team to oversee this will be
headed by Amit Shah, a close
confidante of Modi and the
party’s chief campaign manager in Uttar Pradesh.
The BJP, which recently
warned of a snap poll, has set
up 20 committees to strategize
and implement its campaign
plan.
A 12-member central election committee will include all
its top leaders including
former prime minister Atal Bihari Vajpayee, who has not
OIL $107.80 æ $0.90
QUICK EDIT
Fiscal mess
in China
I
t is becoming more
clear by the day that the
Chinese economy is losing
momentum. The massive
credit bubble in that
country continues to pose
a risk to stability. And let
us not forget the recent
news that exports—one of
the principal drivers of the
Chinese economic
miracle—fell in June.
But perhaps the most
telling indication of the
problems faced by the new
Chinese leadership is to be
found in a new report on
China by the International
Monetary Fund (IMF). The
multilateral lender has
reworked the fiscal deficit
and public debt numbers
for the country. After
taking into account
borrowings of local
governments as well as
off-budget items, IMF says
that what it calls the
“augmented” public debt
is nearly 50% of China’s
gross domestic product
(GDP) while the
“augmented” fiscal deficit
is close to 10% of GDP; it
adds ominously that the
estimates will be “refined”
later.
It’s a hidden mess of
Indian proportions.
TURN TO BACK PAGE ®
PARAS JAIN/MINT
HDFC profit
up, but below
estimates
N. CHANDRASEKARAN/TCS
·························
MUMBAI
H
sustainable advantage for a
longer period,” said Mukesh
Ambani, chairman and managing director. “Robust growth
in petrochemical products demand augurs well for our biggest ever expansion programme. Retail business continues to make remarkable
progress and registered a 53%
growth in revenues during the
first quarter. At Reliance, we
are committed to invest for
growth in India, for India.”
The group’s refining and
TURN TO PAGE 2®
TURN TO BACK PAGE ®
Our discussions
highlight the commitment
of India and the United
States to actively further
the G20 agenda.
We have critical mass across
markets, now we have to scale up
B Y J OEL R EBELLO
joel.r@livemint.com
ousing Development Finance Corp. Ltd (HDFC),
India’s largest mortgage finance company, said on Friday
that stand-alone net profit for
the June quarter rose 17% from
a year earlier, falling short of
estimates, partly because the
company did not sell any investments unlike last year.
Profit rose to `1,173 crore
from `1,002 crore in the corresponding period last year.
Bloomberg’s estimate was
pegged at `1,208 crore. In the
same period last year, HDFC
earned `20 crore from profit
on the sale of investments.
Income from operations,
which includes its main home
loan business, increased to
`5,557 crore from `4,915 crore.
The loan book stood at `1.76
trillion, up from `1.48 trillion
last year.
On a consolidated basis, net
profit rose 34% to `1,707 crore,
or `10.90 per share, from
`1,276 crore, or `8.50 per
share last year, helped by an
increase in premium income
from the insurance business to
`2,291 crore from `2,007 crore
TURN TO PAGE 2®
-1.84%
5.01
Total air traffic
GOLD `26,795 Æ `145
Team Modi
takes charge
of BJP’s 2014
campaign
B Y L IZ M ATHEW
-3.77%
5.13
5.06
Feb
B Y A VEEK D ATTA
P .R . S ANJAI
·························
EURO `77.92 æ `0.07
FLIGHT TURBULENCE
HEMANT MISHRA/MINT
B Y L ESLIE D ’M ONTE
Z AHRA K HAN
·························
&
MUMBAI
I
ndia’s largest information
technology (IT) services
company Tata Consultancy
Services Ltd (TCS) exceeded
analyst estimates for the June
quarter when it announced
earnings on Thursday. Natarajan Chandrasekaran, managing director and chief executive officer, spoke in an interview about the strategies working for the company, pricing
trends and new markets. Edited excerpts:
Many IT firms maintain they are
cautiously optimistic about the
sector. You say you’re bullish.
What strategies are helping you to
maintain your margins and post
growth figures consistently?
(Laughs). I don’t know.
There is nothing different. I
feel that technology is in the
middle of everything. On the
one hand, there is pressure on
companies to contain costs
and streamline processes. On
the other, they are searching
for new business models and
technology is making a lot of
things possible. Tech is in everything today. People are
thinking about ways to change
N I R MA L A SI THA R A MA N
Looking ahead: Chandrasekaran says the company is prepared for every
likely scenario with regard to the US immigration Bill.
mint INTERVIEW
their businesses. Data is being
generated in real time in all
markets. Some companies are
getting it right while others are
learning. Our job is to educate
them (which helps get more
business).
You are one of the companies see­
ing good discretionary spends.
Companies today want to future-proof their businesses.
They want a simplistic design
and want to optimize costs in a
bid to become agile. This gives
us an opportunity to become
partners in transforming their
businesses. Front-end systems, for example, are getting
redesigned everywhere and
the opportunity is huge. We
also have concepts such as responsive ware, mobility, cloud
and analytics working in tanTURN TO PAGE 12®
my VIEW | MUSING MACRO
Three small but effective ideas to help small businesses
AJIT RANADE
T
is a Pune-based economist
he youth should aspire to be job givers,
not just job seekers. Who gave this
clarion call? Most would guess that it
was our Prime Minister, during his electoral
campaign of 2014. But it was not just him.
This mantra has been chanted by leaders
across the political spectrum repeatedly
over the years, and has now become a
national slogan. The President of India
echoed it, so did the Chief Minister of Punjab. The Swadeshi Jagran Manch swears by
it. Business schools sell this message to their
management graduates. But how to succeed
as a job giver, i.e., an entrepreneur? Unfortunately, only one in 10 entrepreneurs succeeds. This ratio is still better than chances
of landing a formal sector job. Hence, the
slogan makes sense in a country where
barely 10% of the workforce is in the organized sector. Only a fraction of India’s workforce has contractual rights like social security, pension or health benefits. For the rest,
it is casual work, uncertain livelihoods and
temporary jobs. Also, you can’t sugar-coat
this precarity by calling it the exciting gig
economy. Joblessness among the youth is a
global problem, aggravated by disruptive
threats of automation and artificial intelligence. So, the youth are encouraged to
become innovators and startup heroes.
What does the ‘job givers’ landscape look
like? India has an estimated 64 million
micro, small or medium-sized enterprises
(MSMEs), which is where jobs are being created. Add to these even-smaller nano enterprises, of which there may be another 30
million that are neither registered nor
counted. They may be vegetable sellers
accepting UPI digital payments, but they are
otherwise completely informal. To succeed
as a small, micro or nano enterprise, what
does it take? There is not enough large-scale
granular data on such enterprises. But there
are many small sample surveys that offer
important insights. A National Commission
on Enterprises in the Unorganized Sector
was set up in 2004. It generated several
reports and led to laws like the one for the
rights of street hawkers. It had one remarkable revelation regarding employment in the
informal sector. Only 18% of informal-sector
workers said that they worked for an identified employer. The rest had multiple ‘jobs’
and hence no single employer and no real
employment relationship. This was decades
before the ‘gig economy’ became popular.
Another landmark report was produced in
2019 by the U.K. Sinha committee appointed
by the Reserve Bank of India. It highlighted
the woes that plague small businesses, from
access to credit, working capital and markets, payment delays and
problems of financial and
digital literacy. There has
been progress on some
aspects highlighted by the
Sinha committee, and the
emergence of fintech is
also helping address some
credit access issues. Here
are three small but effective ideas that can be
implemented quickly.
The first relates to payment delays faced by
entrepreneurs functioning
with a business-to-business model. The national MSME Act specifies that payment to small businesses cannot
be delayed by more than 45 days. But this
law is observed more in the breach. Small
vendors hesitate to sue their defaulting customer or take him to bankruptcy court, or
name and shame him on a government por-
tal. Because the small guy depends on repeat
business, he cannot afford to be black-listed
by an offended big customer. The process,
therefore, should be made automatic. As
soon as a goods and services tax (GST)
invoice is generated by the vendor, the
45-day clock should start ticking. This can
be automated by linking
vendors’ Udyam registration with the GST network.
When the 45 days are up,
either the GST credit gets
reversed or a penalty is
imposed. This shouldn’t
need court action or complaint, and work purely by
automation.
The second idea is on
digitalization. Small vendors can benefit immensely
by going digital. This does
not mean merely adopting
UPI payments but making
all aspects of business digital. They need a
super app, which is like a mini Enterprise
Resource Planning (ERP) software, used for
accounts, tax filing, inventory control, loan
repayments and so on. An ERP app should
be extremely user-friendly, available in multiple languages and for free download. Just
Automated
penalties, digital
solutions and
peer-to-peer
lending can help
resolve their
problems
as the government developed the Bhim app
to popularize UPI, so also it should sponsor
a ‘hackathon’, or a competition to build a
free mini ERP app for all Udyam registered
businesses. Udyam registrations are barely
15 million, about 25% of the potential. This
will provide added incentive to register.
The third idea is to enable access to capital
in the form of debt or equity. Most small
retail vendors are known in their neighbourhoods. Their regular customers would
gladly give them credit for working capital.
Why not allow peer-to-peer lending, fortified by block chain contracts? To prevent
remote vultures of private equity from
exploiting this, such peer lending can be
restricted to a district or pin code. This concept can be extended to raise local equity,
with shareholder contracts standardized.
This may create local equity and credit pools
and solve some capital requirement problems. The peer-to-peer lending model needs
to be blessed by the Reserve Bank of India,
and can begin as a sandbox initiative.
To rev up the entrepreneurship engine,
and create more job givers and creators, all
kinds of policy tweaks are needed. We need
the ease of not just doing business, but also
opening and shutting down a business, especially in the nano and micro world.
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VIEWS
LIVEMINT.COM
ThuRSday, 20 July 2023
Chennai
guEst VIEW
13
M I N T C U R AT O R
Dispel myths around innovation
to create a culture that fosters it
Remote work looks inevitable:
So let’s focus on fixing its bugs
WFH drawbacks like low in-person contact aren’t easy to address
The truth of this multifaceted concept must be understood closely if we are to generate the magic fuel needed for its ignition
ISTOCKPHOTO
SARAH GREEN CARMICHAEL
is a Bloomberg Opinion editor.
HARSH MARIWALA &
ABHEEK SINGHI
are, respectively, founder and chairman of
Marico, and the chair of practices at Boston
Consulting Group India.
E
S
ay the word ‘innovation’ and it is likely
to evoke the image of a young entrepreneur in a garage like startup, or that of a
scientist in a lab creating a product that
magically disrupts the market. These
are images that have become associated
with innovation—gripping and appealing. Also,
somewhat mythical and only half true.
Myth: Startups are the champions of innovation: It
is a widely held belief that a startup, with its agility
and flexibility, is the poster child of innovation.
Startups, over the decades, have been a key source
of invention and innovation. However, it is critical
to recognize the innovation capacity of large,
established corporations. These organizations
often spearhead innovation, leveraging their
considerable resources, extensive networks and
in-depth market knowledge. Even in the technology sector, the performance of Nvidia and Taiwan
Semiconductor Manufacturing Company (TSMC),
Microsoft and Alphabet shows that innovation is
not restricted to startups, but is often driven by
large established companies.
Myth: Innovation needs to be disruptive: The
narrative of disruption often takes centre-stage
when we speak of innovation. Yes, there are examples of silver-bullet moments, when an innovation
is a complete breakthrough and truly disruptive.
However, many innovations result from evolutionary changes achieved through a series of incremental improvements. One could think of the
entire smartphone category as an exemplar, where
each player has built on the innovations done by
someone else in the category. Another embodiment of it is the Toyota Production System, a philosophy focused on waste reduction and continuous process refinement that revolutionized the
global automobile industry (and more). It underlines that innovation can be gradual and iterative,
rather than just radical and disruptive.
Myth: Innovation happens in laboratories.: One of
the enduring myths about innovation is that it
originates in R&D labs (or garages). While labs
undoubtedly contribute to technological advancements, innovations blossom in the marketplace.
This is sparked by direct interaction and co-creation with customers, understanding their needs
and desires, and developing solutions in partnerships across the value chain. As an example, when
Marico was entering the ‘masala oats’ category
with Saffola, interactions and experiments with
consumers provided insights on the importance of
a savoury Indian breakfast and resulted in both
expanding the oats market and gaining share.
Myth: Innovation is a functional activity, typically
owned by product development: Innovation is sometimes narrowly perceived as focused on specific
functional areas, such as product development or
R&D. We believe it infuses every aspect of business
—from marketing strategies and customer service
protocols to supply chain and human resource
policies. Pidilite and Asian Paints are examples that
showcase innovation not just in their product
lines, but also in unique distribution strategies and
customer/influencer engagement programmes.
Innovation is a leadership focus area; a recent
BCG global survey of 700 CEOs highlighted that
nearly 60% considered innovation a top-3 priority.
In our discussions, we hear the big question not
about the importance of innovation but the how.
There is sometimes a belief that innovation can be
achieved by putting a stage-gated process and
having a dedicated structure. While these indeed
play a role, we believe that the magic sauce has a
few other important ingredients.
The foundational element in this is talent. The
three qualities to actively seek (at an individual
level) are genuine curiosity, a challenger mindset
and resilient energy—to question the present, to
generate different solutions, and to persevere
through the journey. Innovation is a team sport
and requires diversity of thought. Team members
should have a blend of different experiences, backgrounds and contexts to ensure no ‘group-think’
happens. Above all, they should have an ownership
mindset.
This mindset is something that the top management must both look for and actively nurture. A flat
organization that is structured appropriately for
stability but does not function as a hierarchy for
ideas can help foster this culture. Another critical
element in developing this culture is a test-andlearn approach. We believe that market research,
while helpful, can be restrictive at times for innovation. Actually trying an idea out in the market at
a small scale is helpful in both testing it genuinely
and managing risk.
Leaders play a critical role in creating such a
culture by encouraging new ideas, promoting
collaboration and encouraging risk-taking. One
innovative idea that we adopted to promote
collaboration was ‘4pm popcorn’. Turning on the
office popcorn machine in the afternoon brought
employees towards it around the same time, thus
creating informal networks and conversation
across the hierarchy and functions. Leaders must
genuinely encourage risk-taking. One critical
element in this is how to treat failures; we suggest
truly celebrating risk-taking by reading ‘FAIL’ as
First Attempt In Learning.
We believe that the final ingredient in the magic
sauce is execution. Innovation is not about ideas,
but about bringing those ideas to life—through
trying them out in the market and running model
iterations till action standards are met.
In conclusion, innovation is a multifaceted
concept, and understanding the realities behind
these myths can be instrumental in creating a
culture of innovation. Innovation is not merely a
process, a disruptive force, or the exclusive domain
of startups and labs. Nor is it about being the first
to launch or being confined to specific business
functions. The true essence of innovation lies
in its holistic approach, talent and culture,
continuous improvements, customer interaction
and effective execution.
These are the authors’ personal views.
mployees who work entirely from
home are less creative and less productive, according to a new working
paper from the Stanford Institute for Economic Policy Research. Fully remote
employees also receive less feedback and
must spend more time coordinating, which
makes them work longer hours to keep up
with their in-office peers.
The researchers also predict we will see
even more remote work in the future. If
WFH has so many drawbacks, why can we
expect more of it? How can we mitigate its
downsides?
The Stanford paper, by Jose Maria Barrero, Nicholas Bloom and Stephen J. Davis,
notes that the share of people working
from home at least some of the time has
doubled roughly every 15 years since about
1980; by 2019, about 5% of workdays took
place at home. That figure surged to 60% in
2020 and has now plateaued at about 25%.
The authors say the change between 2019
and 2023 levels will fast-forward the
remote-work revolution by about 35 years.
They expect to see remote work decline
slowly for the next couple of years before
accelerating again for the next 20. It will be
a continuation of the long-term trend and
will be fuelled by pandemic-era innovations. The number of patents mentioning
terms like ‘telework’ tripled after March
2020, and in the past, those kinds of advances have sent more workers remote.
The findings hold an important implication for corporate leaders: Urging employees to return to the office full-time may not
work well. Fast internet connections have
made at least some remote work inevitable.
Rather than trying to fight the technology,
employers might be better off addressing
challenges of fully remote work—disengagement, slower learning, loneliness.
Those downsides don’t always apply to
hybrid work. It is associated with productivity gains. A debate raging since the covid
vaccine rollout is how many days of face
time matter.
Even if the question could be answered,
I’m not sure it would influence behaviour
as much as we think. A lot of work will
become virtual, whether we like it or not. A
lot of it already has. Some management
problems that leaders struggled with during the pandemic—meeting creep,
employees sending a dozen emails in place
of a five-minute conversation, monitoring
and giving feedback to remote workers—
have been around a long time. They’ll
become more common as technology
sends more workers home, sparking a need
to think about managing remote staff.
Some studies expect WFH trends to gain
force in times ahead
ISTOCKPHOTO
Many managers have complained to me
about the challenges of motivating their
far-flung employees. A senior executive
feels as if he has two types of remote workers: lazy ones who do the bare minimum,
and conscientious ones who do too much
—or do the wrong things. Unlike other
bosses who tried solving this problem by
calling people back to office, he motivated
slowpokes by prodding them with shortterm goals and ensured that his sprinters
were running in the right direction.
Managers could also go back to the midcentury research of Frederick Herzberg
and find that the same aspects that motivated employees in the pre-internet era
probably still work: achievement, recognition, interesting work and responsibility.
Or consider mentoring. A challenge
faced by remote workers, confirm Barrero,
Bloom and Davis, is that they don’t have
the same chances to learn as in-person
employees. A lot of on-the-job learning
happens informally by overhearing colleagues working on the same types of problems. I myself learnt a lot from listening to
my bosses on the phone, interviewing
sources or giving feedback to authors. But
eavesdropping may not the best way to
learn—or teach. More knowledge can be
transmitted when we’re intentional about
doing so: taking the time to include junior
colleagues on a call, walking them through
the goals and debriefing afterwards.
Loneliness might be a tough nut to
crack. Studies have long suggested the
importance of friends at work. It’s good for
morale and engagement. Those human
connections are vital for a good life—
they’re the whole point, according to Marc
Schulz, associate director of the decadeslong Harvard Study of Adult Development.
It’s difficult to forge such ties remotely.
Memes shared on Slack do not equal sitting
next to someone every day at work. This
problem could be solved by bringing
employees together periodically to renew
those bonds, but a remote-work future
might just have to be a more isolated one.
Albeit remote and hybrid work has many
upsides, they will not be unalloyed goods.
The changing nature of work is not so different from the other changes that the
internet has brought into our lives.
Improvements are always accompanied by
new problems.
©BLOOMBERG
MY VIEW | WOrld ApArT
The British economy is haunted by the ghosts of Brexit
RAHUL JACOB
T
is a Mint columnist and a
former Financial Times foreign
correspondent.
his week, the UK will see rail strikes as
workers demand significantly higher
pay raises. From Sunday, workers on
London’s fabulous metro are threatening
industrial action. Earlier this month, it was
the turn of doctors of the National Health
Service (NHS), who rejected Prime Minister
Rishi Sunak’s offer of a 6% salary hike and
are demanding 35% to catch up with what in
developed-world terms has been runaway
inflation. It was a staggering 8.7% in May,
and inflation in grocery bills was in double
digits. New rentals are 25% more expensive
than they were pre-pandemic.
Whichever economic metric one looks at,
the UK seems a country in accelerated terminal decline. It has long been a fading
power with an outsized place on the global
stage. But, like a boulder gathering speed as
it rolls down a slope, even that trajectory has
speeded up after the debacle that was Brexit.
The underlying problem, which long predates a particularly irresponsible Conservative Party government under former PM
Boris Johnson, is that UK’s productivity
growth lags other developed economies.
The Resolution Foundation, a think-tank,
has repeatedly sounded alarm bells about
the US, France and Germany being “onesixth more productive than the UK, measured in terms of [gross domestic product]
per hour worked. And this gap has grown
over time.” A report from the foundation
bluntly calls the UK “stagnation nation.” As
the FT’s chief economics commentator Martin Wolf pointed out earlier this month, citing data from the Conference Board, GDP
per employed person in purchasing-powerparity terms fell from 81% of US levels in
2007 to 68% in 2021. Its growth in household incomes lags even that of France, where
workers famously trade pay for more leisure.
The Frankenstein’s monster that loomed
over this period of moderate decline, of
course, was former PM David Cameron’s
gamble in allowing a referendum in 2016 on
taking the UK out of the European Union.
Sunak has done well to pull back from the
brinkmanship and open hostility his predecessors showed in negotiations with the EU,
but the effects of severing these links to
dynamic supply chains with Europe are
everywhere apparent. From manufacturing
inventories to replenishing grocery store
shelves, the UK has gone through its own
variation of a non-violent but damaging partition in trade terms. Labour shortages are
apparent everywhere. Immigration queues
at Heathrow are routinely running to twohour wait times, for instance, and hotels last
summer were forced to make fewer rooms
available despite holiday
season demand because
they had too few workers
as workers from eastern
Europe are no longer easily
available. If its student visa
schemes were not so routinely used to work in that
country by many from the
developing world, including India, I would wager
that retailers in London
would seize up. Even as it
sensibly makes it easier to
get work visas, the Conservative Party has doubled down on trying to act tough on immigration because with such a dismal economic record, nationalist populism might
help it in opinion polls where it is well
behind the Labour Party. Last month, Sunak
even donned a bullet proof vest to join a raid
on illegal immigrants in Harrow.
Sunak has been left such a toxic legacy
that not much can be done to prevent a Tory
wipeout in the next election. Even nominally
‘feel good’ events such as the 75th anniversary for the country’s famous NHS this
month instead become moments to reflect
on its decline. A general air of pessimism in
reporting by the heavily
influential Murdoch media
outlets doesn’t help. A
much-quoted statistic of
7.4 million people on hospital waiting lists was not
people waiting for operations, but overwhelmingly
those waiting for “diagnostic tests and results”, The
Times clarified last week.
This important distinction
notwithstanding, the article began by wistfully, if
absurdly, comparing the
NHS’s current predicament with Denmark, a country with a tenth
of the UK’s population. The problem is that
the UK spends much less on CT scanners
and MRI machines than any OECD country.
Underinvestment in machinery and manpower is widely apparent, except perhaps to
the elite who wallow in an overheated nos-
Bad policies
have added to
the woes of a
country that’s
falling badly
behind on
productivity
talgia and hypernationalism. The wildly disproportionate outrage after Jonny Bairstow’s dismissal in an Ashes cricket Test this
month being against the spirit of the game
was Wodehousian in its tragicomic melodrama. Even the prime minister’s spokesman felt compelled to weigh in. Australian
players were abused when they walked
through the Long Room at the hallowed
Marylebone Cricket Club. Wimbledon usually is the epitome of good crowd behaviour,
but this year’s tournament was diminished
by the booing of defending champion Novak
Djokovic in the semis and finals and a cold
reception for the world No. 2 Daniil Medvedev and women’s world No. 2 Aryna Sabalenka, who, along with other Russian and
Belarusian players, were arbitrarily banned
from last year’s tournament.
As so often in India, one finds oneself in a
country with an outsized opinion of its past
and present involved in trivial debates about
both. Both countries’ deluded trade policies
tilt, Don Quixote-like on his skinny horse,
against the logic of gigantic cross-border
supply chains that are the foundation of East
Asia’s exports. London, nicknamed Londongrad for its perennial role as a laundromat
for foreign money, is still a vibrant place in
summer. But the UK’s cracks are showing.
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14
Thursday, 20 July 2023
Chennai
BUSINESS OF LIFE
CULTURE
LIVEMINT.COM
A female experience of
the law as we know it
In her book, advocate
Aaliya Waziri dissects the
ways in which the law
and gender intersect and
how far the legal system
upholds the patriarchy
Bruce lee in
‘Game of Death’
Shrabonti Bagchi
shrabonti.b@livemint.com
he title of this book by Aaliya
Waziri, a writer and advocate
working as a judicial law clerk at
the Delhi high court, comes from
an essay by Lucia OsborneCrowley, a British-Australian writer whose
fierce memoir of reclaiming her body after a
violent rape is a seminal feminist text today.
Anyone who has moved through this world in
the body of a woman knows what it feels like to
wish to be invisible, writes Osborne-Crowley.
Her influence on Waziri is evident—her books,
I Choose Elena and My Body Keeps Your Secrets,
are often described as “a hybrid of academic
prose, memoir and reportage”, and Waziri’s
book follows a similar path.
In The Body Of A Woman: Essays On Law, Gender And Society is an important book—not only
because a critical examination of how India’s
legal framework intersects with gender is rare
but also because of the empathy and humanity The mother of Jyoti Singh, aka Nirbhaya, during a protest in 2015. The horrific rape significantly changed laws in India
HINDUSTAN TIMES
Waziri brings to topics such as The Criminal
Law (Amendment) Act, 2013, passed in the the bridge that we use to cross their intersecsonal choices, the Puttaswamy Judgement
aftermath of the Nirbhaya case; marital rape tion, says Waziri: “This book is as much about
includes privacy of the physical body,” she says,
laws in India; the gaps in cyberbullying laws; that intersection as what occurs on the banks of
referring to the landmark 2017 verdict when a
practices like witch-hunting; and abortion laws these rivers, the lives they touch and the crops
nine-judge bench of the Supreme Court delivin India and the US. The one flaw is the obvious they harvest. This book pivots on the idea that
ered a unanimous verdict in the Justice K.S. Putfact that this is a collection of essays written and legal feminism is contextual. That there is no
taswamy v. Union of India case, affirming that
published by Waziri on various platforms over formula to fix everything but we can start by
the Constitution guarantees to each individual
the past two years or so, and as such, despite the strengthening our institutional responses by,
a fundamental right to privacy.
attempt to create an overarching narrative that first and foremost, not treating women as secIn the same breath, it is disingenuous of the
holds the book together, they can sometimes ond-class citizens of the country.”
law to defend marital rape in the interest of
The writer acknowledges that India is an
feel disparate.
“family values”. “It is my argument that the State
The strongest parts of the book are the ones affirmatively legislated country; that on the
claims an unsaid interest in permitting marital
that stem from personal experience—such as a whole, the Constitution and legal system lean—
rape. If we were to pierce the veil of this
chapter on the infamous “sulli deals” case, when at least philosophically—towards delivering
so-called ‘legitimate interest’ that the State proMuslim women such as Waziri’s mother, a gender justice, even though their edicts may not
claims to have, we will find that beneath this
prominent writer and literary historian, were encompass every situation, especially in a rapgarb lies a deep-seated concern for preserving
“auctioned off” online through an open-source idly evolving society. One example of this,
patriarchy,” says Waziri.
In the Body of a Woman:
app. “(My mother) bakes the best sourdough according to Waziri, is India’s progressive
While there are gaps in the book—the most
Essays on Law, Gender
bread and loves going for walks in the rain. She Maternity Benefit Act of 1961, which stands in
prominent being a discussion of the laws relatand Society By Aaliya
is called ‘Apa’ by almost everyone and is stark contrast to US laws that offer minimal suping to sexual harassment at work —which the
port to women in
Waziri, Simon & Schuster
obsessed with red
author acknowledges, it is a vital step towards
terms of mandatory
232 pages, Rs 499
shoes. In early Januopening conversations around gender and jusary 2022, she was sup- India is an affirmatively legislated maternity leaves and
tice in India, especially with critical issues such
posedly sold off on an
country; the Constitution and benefits. “More of the law in India working actively to uphold as marital rape and same-sex marriage hanging
recently,
t h e the patriarchy, and one of the most disturbing in the balance today.
auction of Muslim
legal system lean towards
Supreme Court of essays in the book is the one that talks about
women hosted on
Despite a certain unevenness of tone stemdelivering gender justice
India disallowed the marital rape. “By conceding to the argument ming from an inadequately smooth transition
GitHub,”
writes
distinction between that non-consensual sex by a husband with his between Waziri’s passionate prose and her citWaziri in this chapter,
married and unmar- wife is merely an extension of ‘disagreements in ing of the law, the book serves to remind us that
a searing indictment
of how technology, supposedly a great leveller, ried women in terms of accessing abortion care married life and the bedroom’, we are reducing legal writing in India remains, for the most part,
has led to stripping women of their agency and services. It is already commendable that an a woman’s violation of bodily integrity to a mere dehumanised and obscure. Waziri says she has
Indian woman, who is not a minor, does not quarrel, once again purely based on her marital been inspired by writers like Chimamanda
personhood.
“I began writing to fill a void where gender- require the approval of her husband, partner or status,” Waziri writes in the book.
Ngozi Adichie in the US/Nigeria and Laura
She is dismayed by the fact that the law still Bates in the UK, who provide intelligible writing
responsive literature answering loopholes family provided she is of ‘sound mind’ should
allows for a distinction between forced sexual on women and the evolving nature of their
within the laws should have existed. For a long she seek an abortion,” says Waziri.
This is a remarkably open-minded and pro- intercourse by a husband with his wife and needs vis-à-vis their respective societies.
time I looked for a toolbox for legal feminism, or
a piece of legal literature that goes beyond cri- gressive piece of legislation, rare even among criminalises the same by non-husbands, while
“The reason I was writing was because I found
tiquing the legislative apertures and instead more mature democracies and certainly revolu- all along women stay victims regardless of their there is no Indian counterpart to these pieces of
offers a solution to the problem at hand. This tionary in the light of abortion rights being con- marital status. “It is the prime example of legal feminism that offers a holistic understandcollection of essays acknowledges that there is tinually eroded in the US. Waziri also notes that entrenched patriarchy within the legal system,” ing of the different facets of everyday sexism
no guide, no manual, no contemporary relata- at the time of independence, our Constitution the author tells Lounge. “I am of the view that faced by the average Indian woman,” she says.
ble or accessible piece of literature narrating a granted universal adult franchise to all Indian marital rape, as a concept, is violative of the right “Historically, this can be attributed to the mishow-to,” Waziri tells Lounge in an email inter- citizens regardless of their gender, a right to decisional autonomy and bodily integrity taken notion that gender-related issues are
women in the West had to fight for.
granted to all citizens of India. Defining privacy unworthy of time, energy and, more imporview.
At the same time, there are several instances as the ability to make the most intimate and per- tantly, of resources.”
Law and gender are two rivers and culture is
T
Bruce Lee’s
legacy endures
50 years on
Bruce Lee’s philosophy still inspires
everyone, from actors to protestors
Agencies
feedback@livemint.com
H
ong Kong businessman W. Wong still remembers the day
in 1972 when he first heard neighbourhood kids rave
about a figure who seemed larger than life: Bruce Lee.
Lee, a consummate martial artist whose films spawned a kung
fu craze around the world, was one of the first Asian men to
achieve Hollywood superstardom before his death at 32. His
influence can still be felt in Hong Kong, where he spent his childhood and final years, as fans this week hold exhibitions and martial arts workshops to mark the 50th anniversary of Lee’s death.
At a studio for Wing Chun—a style of martial arts Lee practised
before inventing his own Jeet Kune Do method—the martial arts
master is revered as something akin to a patron saint.
Lee’s appeal had not diminished for the next generation, said
Mic Leung, 45, who trained at the same studio and, as a teenager,
sought out Lee’s movies on old videotapes. “When we talk about
the ‘god of martial arts’, we could only be talking about Bruce Lee.
There is no one else,” he said.
Born in San Francisco in 1940, Lee was raised in Hong Kong
and had an early brush with fame as a child actor. At 18, he continued his studies in the United States and over the next decade
taught martial arts and scored minor parts in Hollywood. But it
was not until Lee returned to Hong
The martial arts Kong that he landed his first lead role
in the martial arts film “The Big Boss”,
master is
which made him a household name in
revered as
Asia after its 1971 release.
something akin
The next year saw two more box
to a patron saint office hits—”Fist of Fury” and “The
Way of the Dragon”—cementing Lee’s
in Hong Kong
persona as a relentless, lightning-fast
fighter. Lee had completed filming his
fourth star vehicle, “Enter the Dragon”, and was halfway through
his fifth when he died on July 20, 1973 from swelling of the brain,
attributed to an adverse reaction to painkillers.
Film scholar Aaron Han Joon Magnan-Park, who taught Lee’s
movies at the University of Hong Kong, said Lee expressed a kind
of Chinese identity that transcended national borders.
Despite Lee’s enduring fame, preserving his legacy in Hong
Kong was no easy task, fan club chairman Wong told AFP. Government support was intermittent at best, he said. Fans in 2004
successfully petitioned to set up a bronze statue of Lee on Hong
Kong’s famed waterfront, but a campaign to revitalise his former
mansion could not save it from demolition in 2019.
Wong, who had organised a smaller exhibit in Sham Shui Po
district, acknowledged a decline of interest among young people but said Lee’s philosophy always has the potential to
become relevant again. He pointed to how protesters in Hong
Kong’s 2019 democracy movement cited the martial artist’s
mantra—”Be water, my friend”—as a reminder to adopt flexible
tactics of resistance.
Songs that document Bengal’s seasonal food calendar
ISTOCKPHOTO
Calendar-like rhymes
that suggest apt foods
for each season form a
part of a genre of folk
songs called Baromashi
Priyadarshini Chatterjee
feedback@livemint.com
T
here’s no denying that the pattering
of raindrops pairs best with the
crunch of pakoras and adrak wali
chai. But the damp monsoon months also
bring with them a host of diseases. Kitchens, across the country, for centuries, have
whipped up antidotes to these ailments,
ranging from medicinal porridges to
broths made with seasonal greens.
A centuries-old Bengali verse recommends eating yoghurt in the month of
Ashadh—which marks the onset of monsoons—followed by khoi, or popped rice,
in the months of Shravana, sugar palm
during Bhadra, and cucumber in the
month of Ashwin, at the fag end of the
rainy season. This verse can be traced to
the Dak Tantra, a body of aphorisms
attributed to the ancient folk figure of
Dak. Composed as a lyrical calendar, it lists
food items to be consumed through the 12
months of the Bengali lunar year.
This calendar-like rhyme is part of a
genre of folk songs called Baromashi or
Baramashya, which translates as ballads or
songs of the 12 months. Baromashi is not
restricted to Bengal but is part of folk literature across the country. The songs are
centred around love and longing, and
often speak of the trials and tribulations of
a woman, separated from her partner.
But in Bengal, quite a few Baromashi
focus on food. As V.P. Dwivedi writes in his
1980 book, Bārahmāsā: The Song of Seasons in Literature & Art, in the classical
Baromasi, there is a greater emphasis on
depicting sorrows of the deserted woman.
However, in the folk Baromasi, the change
in nature, and as a consequence changes
brought in the routine of farmers and
other villagers, is given prime importance.
Seasonality of food and eating practices
is a recurrent theme in these songs. Bengal has a strong tradition of harnessing the
medicinal virtues of seasonal food, naturally compatible with changes in immunity. These lyrical calendars-guides are
nifty ways of remembering what and
when to grow and eat, while also passing
on this culinary wisdom to generations to
come.
In this Baromashi, attributed to yet
another important ancient folk figure
Khona, in the month of Chaitra, bitter
leaves of gima, or Glinus oppositifolius,
are a must-have. Incidentally, gima is a
kind of carpetweed, considered particularly efficacious for skin disorders that the
month of Chaitra brings with it. In Bengal,
it is customary to eat gima shak on Chaitra
Sankranti. To combat the sweltering heat
of Baishakh, the ballad recommends eating the leaves of nalita, or tender jute
leaves, which turn particularly sweet at
the time.
For the rainy months of Ashadh and
Shravan, this Baromashi recommends
popped rice and curd respectively (interestingly, a reversal of Dak’s recommendation). During Bhadra, when the air is
heavy with the sweet smell of ripe Palmyra
palm, people must enjoy rice cakes made
with its pulp. During Kartik, the song suggests eating a soupy curry made with
Khoilsha fish. And in the cold month of
Pousha, when the digestive fire is believed
to be weak, a bowl of fortifying Kanji, or
fermented rice-water, is recommended.
There are numerous such Baromashistyle seasonal eating guides in the Bengali folk repertoire. But their recommendations may vary. A particular Baromashi may have multiple versions, each
one slightly altered as it travelled
through the region and picked up local
accents, dialects and preferences. Or, a
Baromashi could roll out a completely
different set of food items for each
month of the year, depending on the
region it belongs to.
In rice-growing Bengal, where paddy is
a symbol of abundance, quite a few such
songs are dedicated to the life cycle of rice.
One Baromashi, documented in Charlotte
Vaudeville’s Bārahmāsā in Indian Literatures: Songs of the Twelve Months in IndoAryan Literatures, for instance, illustrates
the monthly stages of autumn rice cultivation. “In Phalgun , I took the plough , in
Chaitra the seed , In Baišakh, ( the paddy )
shines , in Jaishtha , it has ears . In Asharh,
the paddy is gold, the golden harvest is
ripe, In Šrăban, the farmers gather the
autumn—rice.”
Even the Baromashis, which are not
centred around food, are strewn with
clues to the culinary culture of a region. A
particularly good example is Fullara’s
Baromashya, often dubbed as one of the
most important and popular baromashi in
Bengali literature. Part of the 16th centu-
ry-lyrical prose, Chandimangal, composed by Kabikankan Mukundaram
Chakrabarti, the ballad describes the sufferings of Fullara, the wife of the hunter
Kalketu. Food, or the lack of it, is a recurrent motif.
Fullarar Baramasya reveals how, in 17th
century Rarh Bengal, meat was verboten
in the month of Baisakh and everyone
turned vegetarian for the whole month. In
sharp contrast, during Ambika Puja, in the
month of Ashwin, goats, buffalo and rams
would be sacrificed and the meat distributed to every home.
Through the tale of Fullara’s hardships,
the verse also tells the story of how the
poor of the land survived periods of scarcity. For instance, when there’s no food to
eat at home, Fullara survives on tart bainchi fruits, a kind of indigenous plum that
grows in the wild.
In her book Thhod Bori Khanra, Bengali
writer Kalyani Datta, archived yet another
old poem that specifies the tattwo, or gifts,
traditionally sent by a girl’s parents to her
in-laws through the year. The idea is to
send gifts of the best seasonal produce and
items of use. So, the bounty includes summer fruits like mangoes and ripe jackfruit
in the month of Jaishtha, silvery hilsa in
the rainy month of Ashadh, gifts of sweetsmelling, ripe sugar palm in the month of
Bhadra and in the month of Pousha, clay
pots or nagri full of jaggery.
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