OPINION, P6 ECONOMY, P2 A GUDWANI & I SEN GUPTA Govt must take monetary & fiscal steps to revive growth COMPANIES, P5 EDITORIAL LOAN RECAST SOCIAL MEDIA MISUSE Fixing India’s business environment key to realising PM's vision of thriving local toy industry Finance minister to meet heads of banks, NBFCs today Facebook India chief appears before Parliamentary panel NEW DELHI, THURSDAY, SEPTEMBER 3, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 159, 30 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 39,086.03 ▲ 185.23 NIFTY: 11,535.00 ▲ 64.75 NIKKEI 225: 23,247.15 ▲ 109.08 HANG SENG: 25,120.09 ▼ 64.76 `/$: 73.03 ▼ 0.16 `/€: 86.65 ▲ 0.67 BRENT: $45.83 ▲ $0.25 GOLD: `50,957 ▼ `564 Unacademy becomes a unicorn after raising $150 million FE BUREAU New Delhi, September 2 UNACADEMY HAS RAISED $150 million in a round of funding led by SoftBank valuing the ed-tech firm at $1.45 billion,the companysaid in a statement. The five-year-old start-up, now a unicorn, also raised money from existing investors General Atlantic,Sequoia Capital, Nexus Venture Partners, Facebook,and Blume Ventures. It has so far mopped up about $350 million. The latest infusion comes barelysixmonthsafterUnacademy raised $110 million from Facebook,General Atlantic and a clutch of other investors at a valuation of about $510 million.In June 2019,it had raised $50 million from investors. The Bengaluru-based company joins a handful of other start-ups in the ed-tech space thathasbeenattractingconsiderable investor interest of late. Last week, billionaire Yuri Milner-led DST Global infused a fresh$122millioninrivalByju’s whichisexpectedtoinvestmore capital in the firm. Continued on Page 2 CHECKING CHINA PUBG among 118 apps banned As in the past, this time too, the apps have been banned for stealing data of Indian users FE BUREAU New Delhi, September 2 AMID FRESH INCURSION bids by Chinese troops, the government on Wednesday banned another 118 Chinese mobile apps, including the popular gaming platform, PUBG, as well as Baidu, which is China’s largest search engine provider. The government has once again resorted to invoking Section 69A of the Information Technology Act, which empowers it to block apps/contents which are engaged in activities prejudicial to sovereignty and integrity of the country, its defence, security of state and public order. This is the third instance of the government banning Chinese applications since the India-China border skirmish erupted. The government had first banned 59 applications, including TikTok, WeChat Some Chinese apps banned on June 29 ■ TikTok ■ Shareit ■ UC Browser ■ Helo ■ Mi Community ■ Club Factory ■ WeChat ■ CamScanner ■ Bigo Live Other prominent apps banned on Wednesday ■ Baidu ■ PUBG Mobile ■ ShareSave by Xiaomi: Latest gadgets, amazing deals ■ CamCard: Business card reader ■ Rise ofKingdoms: Lost Crusade ■ Alipay ■ VPN forTikTok ■ Soul Hunters ■ TencentWatchlist ■ Learn ChineseAI-Super Chinese ■ APUS launcher ■ Sina News etc, on June 29, followed by another set of 47 applications in July, which were proxies of the banned apps. Continued on Page 13 ONE MORE SHOT Voda Idea looks at fund-raising options In dire straits The company’s board will meet on September 4 to decide on various possibilities Vodafone Idea's spectrum, AGR and debt repayments (` billion) 350 Vodafone Idea's cash ﬂow gap assuming nil capex (` billion) 350 300 300 250 Annualised Ebitda, Q1FY21 49 250 68 200 200 150 100 WITH CLARITY ON adjusted gross revenue (AGR) dues emerging from the Supreme Court's order, Vodafone Idea’s (VIL) board will be meeting on September 4 to consider fund-raising plans. The company has balance dues of `50,400 crore which it needs to payoverthe next 10years as per the SC’s directive. Analysts agree that the company needs to raise funds forthe same alongwith raising tariffs. The company’s management had also said in an investor call after the AprilJune quarter earnings that once there’s clarity on AGR dues payment, it would consider raising funds. In a regulatory filing on Wednesday, Vodafone Idea said, “A meeting of board of directors of the company is scheduled to be held on September4 to considerand eval- 73 50 20 150 159 50 FE BUREAU Mumbai, September 2 13 0 188 100 61 50 40 42 0 FY22E FY23E FY22 FY23 Interest on non-spectrum debt Cash ﬂow Spectrum payments gap AGR-related payments Repayment of non-spectrum debt Source: Jefferies Research, Company, DoT 9.91 Vodafone Idea 10.2 Intra-day on BSE (`) 9.9 9.6 9.3 9.0 9.25 Previous close: 8.89 Open Close uate any and all proposals for raising of funds in one or more tranches by way of a public issue, preferential allotment,private placement, including a qualified institutions placement or through any other permissible mode and/or combination thereof as maybe considered appropriate.” According to analysts at Kotak Institutional Equities, NITI PLAN Sell Uco, BoM and Punjab & Sind Bank Keep four big banks, merge the rest with them, or trim govt stake in the latter to 26% over time PRASANTA SAHU & BANIKINKAR PATTANAYAK New Delhi, September 2 Annualised Ebitda, Q1FY21 Synergies yet be realised ● EDU TECH “VIL remains in a tricky situation even as the court verdict offers short-term cash flow relief. The company needs a combination of quick, sharp improvement in pricing,flawless delivery on the fresh opex cut targets, competitive network spends to stem the trend of market share erosion and some equity infusion”. Continued on Page 2 AS BANKING IS set to be in the list of‘strategic sectors’fit for discretionary privatisation under a new policy being unveiled, the NITI Aayog has prepared a blueprint for the key sector,with consolidation in focus. The think tank has asked the government to retain control over the country’s top four state-run lenders — State Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank, NITI suggests that Punjab & Sind Bank, Bank of Maharashtra and Uco Bank be privatised quickly ■ Cabinet to soon take up list of strategic sectors; banking and insurance likely to feature in it ■ Five other PSBs--BoI, Union Bank, IoB, Central Bank and Indian Bank — may either be merged with the larger lenders or privatised within a stipulated time frame ● CURBS EASED Airlines can run 60% of pre-Covid domestic services Zomato raises fresh SEBs to get `90,000 cr, $62 m from Temasek firm action after that FOOD DELIVERY PLATFORM Zomatohasraisedafresh`456 crore ($62.44 million) from existing investor Singaporebased Temasek, according to regulatory filings sourced from business intelligence platform Tofler. While the amount may not seem large, every penny counts at a time when the lockdown has hurt business badly and revenues are under pressure. In this highly competitive space,Zomato so farhas raised a little over$900 millionwhile investors have infused close to $1.64 billion into rival Swiggy. Given how tough the business is, analysts reckon less than a handful of players will survive in the long run. HSBC analysts estimate India’s food delivery could be valued at about $30 Unit economics India market* (`) 400,000 Deliveries/rider/day 6-10 GMV ($ bn) 3.5 Average order value 300 Daily active riders Avg. no of daily 2.5* orders (m) Rev/order Gross profit Gross margin (%) Opex OP profit OP margin (%) 55 0 0% -20 -20 -36% Source: Company data; HSBC estimates *Pre-Covid-19 billion in the long term in a blue-sky scenario. Continued on Page 13 QuickPicks Canadian pension fund to invest $350 m in Edelweiss arm EDELWEISS GROUP on Wednesday said it had signed an agreement with Canada’s Ontario Teachers’ Pension Plan Board for an investment of approximately `2,600 crore ($350 million) with Edelweiss Alternate Asset Advisors, reports fe Bureau in Mumbai. PAG on August 27 announced 51% stake buy in Edelweiss Wealth Management for around `2,200 crore. PAGE 12 Fortune ‘40 Under 40’ influencers: Isha,Akash and Raveendran debut BILLIONAIRE MUKESH Ambani's twin children Isha and Akash, and ed-tech startup Byju's founder Byju Raveendran, are among the Indians who have debuted on Fortune's '40 Under 40' list of influential people around the globe, reports PTI. This year's list includes 40 influential people under 40 years of age in five categories. PAGE 5 Cabinet nod to‘Mission Karmayogi’ for major reforms in bureaucracy THE Cabinet on Wednesday approved ‘Mission Karmayogi', dubbed as the biggest bureaucratic reform initiative, aimed at capacity building of government employees to make them more "creative, proactive, professional and technology-enabled", reports PTI. To cover around 46 lakh central staff, a sum of `510.86 crore will be spent over 5 years under the mission. As in the past, SEBs will get carrots first; tighter norms after that, govt hopes, will make SEBs reform ANUPAM CHATTERJEE New Delhi, September 2 SENDINGASTERN messageto state-run power distribution entities (discoms) that refuse to mend theirways and be on a commercially viable path despite several bailout packages,theUnionpowerministry hastoldsector-specificlenders PFC-REC that they need not extend any new credit line to the discoms, after the exhaustion of the `90,000-crore liquidity window, if the latter don’t self-correct. “PFC-REC lending norms have been tightened and the prudential norms have been updated to correspond to the best followed by any financial institution,”Unionpowerminister RK Singh told FE. “Any further loan request, apart from the `90,000 crore earmarked for the liquidity infusion scheme will be evaluated according to the revised prudential norms,” Singh added. Clearly, the revised norms will make loss-making, non-compliant ineligible for fresh credit. PRESS TRUST OF INDIA New Delhi, September 2 “PFC-REC lending norms have been tightened and the prudential norms updated to correspond to the best followed by any financial institution. Any further loan request, apart from the `90,000 crore earmarked for the liquidity infusion scheme, will be evaluated as per the revised norms.” BORDER WATCH Indian Army soldiers are seen atop a vehicle on a highway leading to Ladakh, at Gagangeer in Kashmir's Ganderbal district, on Wednesday No questions asked! FE BUREAU Opposition upset, but govt hopes for productive session ■ The much- KEY BILLS delayed monsoon The Banking session of Regulation (Amendment) Parliament is Ordinance, 2020 scheduled for To bring urban and multiSept 14 to Oct 1 —RK SINGH UNION POWER MINISTER PFC-REC have been the principal source of loans for the discoms, as other institutions, including public sector scheduled commercial banks, are virtually out of bounds to them, given the prudential standards they follow. Financial losses of discoms surged 83% annually to `61,360 crore in FY19, an analysis by PFC showed. Continued on Page 2 ■ Both Houses will work in shifts and function on Saturdays and Sundays as well ■ Given Covid-19 precautions, the sessionwill have no Question Hour 45 state co-op banks under the RBI regulation and make it easier for them to access capital The Insolvency & Bankruptcy Code (Amendment) Ordinance, 2020 To suspend insolvency proceedings for up to one year against fresh default from March 25 Codes on Industrial Relations; Social Security; and Operational Safety, Health &Working Conditions Contains reform proposals including easier hiring and retrenchment freedom for employers (uncertain ifthese will figure in final Bill, but states to get freedom to take such steps), fixed term jobs, redefining of trade unions’ role, besides those on social security and operational safety, health &working conditions The Farmers' Produce Trade & Commerce (Promotion & Facilitation) Ordinance, 2020 State governments can’t tax inter-state farm trade so farmers can sell their produce anywhere in the country The Essential Commodities (Amendment) Ordinance, 2020 To remove cereals, edible oil, oil seeds, pulses, onions and potato from theAct’s purview 11 Pending Bills for consideration and passage Ordinances for consideration and passage INFURTHEREASINGofrestrictions, the government on Wednesday permitted Indian airlines to increase the number ofdomesticpassengerflightsto 60%oftheirpre-Covidservices, according to anofficial order. On June 26, the ministry of civil aviation had allowed the airlines to operate a maximum of 45% of their pre-Covid domesticflights. The ministry had restarted domestic passenger services from May 25,after a gap of two monthsduetothecoronavirustriggered lockdown. However, the airlines were allowed to operate not more than 33% of theirpre-Coviddomesticflights. Modifyingitspreviousorder of June 26 where it had put the 45% limit on the number of domestic flights, the ministry issued an order on Wednesday statingthat,“45%capacitymay be read as 60% capacity”. The average occupancy rate in domestic flights since their resumption in India on May25 hasbeen around 50-60% only. Scheduled international passenger flights continue to remain suspended. But special international flights have been operating since May. ● NETFLIX FINTECH BATTLE Amazon adds to its India offerings ‘Bad boys’ get respite from court REUTERS New Delhi/Mumbai, Sept 2 AMAZON HAS ADDED insurance and even gold to its menu of financial services in India,to expand its customer base and attract more subscribers to its Prime loyalty programme in a battleground growth market. The push ramps up competition as financial technology (fin-tech)rivalsand theirdeeppocketed foreign backers struggle for profitability in a ILLUSTRATION: ROHNIT PHORE FE BUREAU New Delhi, September 2 Continued on Page 2 Banking on divestment ONE MORE CHANCE ● FUNDRAISING even as it recommended that three small public-sector banks — Punjab & Sind Bank, Bank of Maharashtra (BoM) and Uco Bank — be privatised on a priority basis. The government has stated that a maximum of four state-run players will be allowed in each of the ‘strategic sectors’, a list of which will soon be placed before the Cabinet for clearance. As for the remaining five PSBs (Bank of India, Union Bank, Indian Overseas Bank, Central Bank and Indian Bank), the government may either amalgamate them with the four larger ones it chooses to retain or trim its stake in them over a stipulated timeframe to 26%, before exiting fully, according to the NITI Aayog proposal. predominantly cash-based economy where about 190 million adults do not have bank accounts. To boost online payments, Amazon launched its Amazon Paydigitalwalletin2016.Ithas since introduced a credit card, signeduptoastate-backedpayments network, and processes payments for movie and flight tickets aswell as telephone and utilitybills. Continued on Page 13 PRESS TRUST OF INDIA New Delhi, September 2 THE SUPREME COURT on Wednesday refused to hear a Netflix petition against a Bihar lower court order restraining it from using Sahara group chief Subrata Roy’s name in its web series Bad Boy Billionaires. A bench headed by CJI SA Bobde,however,grantedliberty to Netflix to withdraw the plea and approach the concerned court to avail appropriate remedyagainsttheorderpassedbya Subrata Roy lowercourtatAraria,Bihar.“Dismissed.Wearesorry,”thebench, also comprising Justices Arun Mishra, AS Bopanna and V Ramasubramanian,saidduring thevideo-conferencedhearing. Continued on Page 13 New Delhi Satyam founder’s plea: Hyd court stays Netflix series A LOCAL civil court has issued an interim stay restrainingNetflixfromairing its web series Bad Boy Billionaires-India on a petition filed by B Ramalinga Raju who was convicted in themulti-croreaccounting scandal of Satyam Computer Services. —PTI
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