OPINION, P6 ECONOMY, P2 EDITORIAL MSP over-reliance traps farmers in lowvalue grain production CESS RECEIPTS TRADE CURBS MSP operations benefit very few farmers; just 5-6% of value of agrioutput is sold at MSP SHWETA SAINI & SIRAJ HUSSAIN INTERNATIONAL, P8 CAG says 40% parked in consolidated fund instead of relevant reserve funds Huawei chief urges US to reconsider 'attack' on global supply chain NEW DELHI, THURSDAY, SEPTEMBER 24, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 177, 18 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: 37,668.42 ▼ 65.66 NIFTY: 11,131.85 ▼ 21.80 NIKKEI 225: 23,346.49 ▼ 13.81 HANG SENG: 23,742.51 ▲ 25.66 `/$: 73.57 ▲ 0.02 `/€: 85.97 ▲ 0.42 BRENT: $41.94 ▲ $0.22 GOLD: `50,251 ▼ `372 IN THE NEWS LS adjourned sine die; Monsoon Session concludes LOK SABHAWAS adjourned sine die on Wednesday evening, bringing the Monsoon Session of Parliament to an end eight days ahead of schedule, reports PTI. The Rajya Sabha was adjourned sine die on Wednesday afternoon. India is eating more at home Unit economics MoS for railways Angadi dies of coronavirus MINISTER OF STATE for railways and Karnataka BJP MP Suresh Angadi passed away on Wednesday, days after he tested positive for Covid, reports PTI. The 65-year-old passed away at around 8 pm at the AIIMS trauma centre. India market* (`) Daily active riders Deliveries/rider/day GMV ($ bn) Average order value 400,000 6-10 3.5 300 Avg no of daily orders (m) Covid surge: Saudi Arabia bans flights to and from India SAUDI ARABIA has banned flights to and from India amid a surge in coronavirus cases, reports PTI. In a circular, Saudi Arabia's civil aviation authority said it has suspended travel to and from India, Brazil and Argentina, including any person who visited any of these countries in the last 14 days prior to their arrival to the Kingdom. FARM BILLS ROW BON APPETIT! 2.5* Unit economics India market* (`) Gross profit Gross margin (%) Opex OP profit OP margin (%) Source: Company data; HSBC estimates 55 0 0% -20 -20 Rev/order -36% *PreCovid-19 Tomar rules out legal backing for MSPs TO BE NOTED Agri reforms won’t disrupt govt procurement, APMCs to co-exist with other markets; signals export bans avoidable MSPwas not part of the law earlier, is not part of it now; PM clarified govt procurement won’t be affected The Bills are very small and the provisions clear, so no need to send them to any House committee FE BUREAU New Delhi, September 23 FE BUREAU New Delhi, September 23 SMALLTOWN INDIA is leading the recovery in food delivery. Online orders in Patna, Jamshedpur,RanchiandSiliguri havenowcrossedpre-Covidlevels, according to a survey by Zomatowhich showed much of the country has gone back to calling for meals as often as it was before the pandemic. PanIndiadeliveriesarenownearing 85% of pre-Covid GMV,higher than the 75% recorded in August.Andthegoodnewsispeople aren’t just ordering more often, they’reorderingmoreatatime. Analystsattributetherevival in food ordering to consumers’ unwillingness to eat out in restaurants but nonetheless wanting a change from home- cooked meals. Moreover, celebrations on festive occasions such as Raksha Bandhan and Janmashthami are also triggering on-line ordering.“Festivals and occasions such as Raksha Bandhan,Janmashtami,Teacher’sDay,andIndependenceDay saw a massive spike in orders,” Zomato said. What’s more, ongoing IPL and the upcoming festivitiesin OctoberandNovember should keep the momentum intact.The survey reveals the GMV or gross merchandise value in a handful of affluent residential areas has surpassed thatinthepre-Covidperiod;this trend could spill over to other areas aswell giventhere are few signs the pandemicwill be containedin the next fewmonths. AGRICULTURE MINISTER NARENDRA Singh Tomar on Wednesday said he was ‘cognizant of” the apparent dichotomy between the unfettered freedom for farmers to access markets, as envisaged in the twofarmBillsclearedbyParliament recently, and the ban on onion exports.He said the concept that prices of agriculture Narendra Singh Tomar, agriculture minister commodities must be marketdetermined to the extent possible was unexceptionable and indicatedthatartificialmarket interventionswould require to be minimised. Speaking at the Indian ExpressGroup’sIdeaExchange Raising the minimum guaranteed days of work under NREGS from 100 days a year per household to be considered if states make such a demand programme, Tomar ruled out the possibility of bringing the minimum support price (MSP) system for farm goods under the Bills, which are awaiting Presidential assent. Continued on Page 2 SWISS CHALLENGE Banks seek bids as Matix Fertilisers puts OTS on table SHRITAMA BOSE Mumbai, September 23 A CONSORTIUM OF lenders led by IDBI Bank on Wednesday sought bids against a onetime settlement (OTS) offer made by the promoters of Matix Fertilisers and Chemicals for its debt of around `4,000 crore. Lenders, who account for approximately 70.74% of the outstanding debt,have agreed to the terms of the OTS offer, which other interested parties can now match or better through the Swiss Challenge process. According to a document issued by SBI Capital Markets (SBICaps), the principal rupee loans owed by Matix to 11 lenders is `3,222.55 crore.The Today’s young workforce requires powerful devices The level of workplace transformation can be dramatic or subtle but the use of right technology is vital for a smooth transition ofworkplace practices, says Lenovo’s Ashish Sikka ■ eFE, P9 QuickPicks Insolvency suspension may be extended by 6 months in one go THE GOVERNMENT will likely extend the suspension of insolvency cases against fresh Covid-related default by another six months from September 25 in one go, once the current six-month deadline is over, to soften the blow to thousands of Covid-ravaged firms, a source told FE, reports fe Bureau in New Delhi. The government has already secured Parliamentary clearance to the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2020, which provides for an up to one-year suspension of the initiatition of insolvency proceedings for fresh defaults from March 25. PAGE 2 India start-ups stand to lose with China curbs: SoftBank’s Misra CHINESE CAPITAL comes with a lot of expertise on business, and Indian start-ups will be missing this input the most following the clampdown on investments from China, Rajeev Misra, CEO of SoftBank Investment Advisers, said, reports PTI. Pegging the financial setback as a result of the Indian government's moves at $10-15 billion, he said the capital can be replaced from others in a market flooded with liquidity. PAGE 4 of a bilateral netting law prevented banks from onlending as much as `2.14 lakh crore during the FY1720period,astheywereforced to lock up higher capital against trades in the OTC market. ■ Page 2 (Reliance Retail, as on June 30, in ` cr) 31,633 Revenue 1,083 Ebitda Investments (in ` cr) KKR investment in Jio Platforms 11,367 KKR investment in Reliance Retail 5,550 Silver Lake investment in Reliance Retail 7,500 Reliance Retail acquisition of retail/wholesale/logistics business ofFuture Group 24,710 No. of investors inJio Platforms 13 Total amount invested inJio Platforms 1,18,318.45 Total stake (%) in Jio platforms 25.24 vate equity firm Silver Lake madeaninvestmentof`7,500 crore in RRVL for a 1.75% stake.Thus,within this month, the retailfirmhasraiseda total fund of `13,050 crore. Continued on Page 2 Postpaid war KIRAN RATHEE To take on Jio, Bharti and Voda Idea may also offer Netflix With Jio foraying into the postpaid segment, challenging the strong presence of incumbents Bharti Airtel and Vodafone Idea, it's the customers who are once again going to be the biggest beneficiaries. Since Jio postpaid plans offer more content options and data than both Bharti and Vodafone Idea across price points, incumbents are sure to beef up their content and data offerings at similar price points to retain their higher Arpu customers. Jio, which earlier had only one postpaid plan (`199 per month) has now unveiled plans starting from `399 and going up to `1,499. All plans come bundled with Netflix (mobile-only, single-device plan), Amazon Prime, Disney-Hotstar and Jio TV/Saavn/Cinema. Detailed report on Page 4 Plans with benefits Reliance Jio `399 75 GB data, Netflix*, Amazon Prime and Disney Hotstar VIP `799 150 GB data, Netflix*, Amazon Prime and Disney Hotstar VIP 2 additional SIMs `999 200 GB data, Netflix*, Amazon Prime and Disney Hotstar VIP 3 additional SIMs Bharti Airtel `499 75 GB data, Amazon Prime `749 125 GB data, Amazon Prime 2 additional SIMs `999 150 GB data, Amazon Prime companyhas foreign currency borrowings,too. Continued on Page 2 SEVENMAJORinfrastructure companies have emerged as bidders for the design and construction of 237 km of mainline for the MumbaiAhmedabad High Speed Rail corridor,reportsfeBureauin NewDelhi.Technicalbidsfor passed bythe Rajya Sabha on Wednesday, reports fe Bureau in New Delhi. Stressing that the Bill is “absolutely critical” for the country’s financial stability, finance minister Nirmala Sitharaman said the absence REPORT CARD RELIANCE INDUSTRIES ON Wednesday said that private equity firm KKR will invest `5,550 crore ($754 million) in its subsidiary Reliance Retail Ventures (RRVL) for a 1.28% stake. The investment values RRVL at `4.21 lakh crore. The investmentinRelianceRetailby KKR comes shortly after it invested `11,367 crore in Jio Platformsfor2.32% stake. EventhoughRelianceRetail is ahead of its peers when it comes to digitisation of its services,it will need to make large investmentstoconsolidatethe back end and digitise operations to take on Amazon and Flipkart.According to UBS, the digitisation and consolidation requires higher capex and that RRVLis on course to raise capital for the same. The investment in RRVL by KKRcomesweeks afterUS pri- Existing one-time settlement offer is the anchor offer that interested parties can now match or better Bullet train project: L&T, Tata among bidders Reliance Retail adds KKR’s $754 m to cart FE BUREAU Mumbai, September 23 Interested lenders soliciting bids for settlement of debt via Swiss challenge method THE BILATERAL NETTING of Qualified Financial Contracts Bill, which would help banks release a portion of their capital locked in transactions in the over-thecounter (OTC ) derivatives market and spurlending,was Continued on Page 2 With Silver Lake earlier investing `7,500 crore for 1.75%, it has raised `13,050 crore during this month Lenders, who account for approx 70.74% of outstanding debt, agreed to OTS offer terms Netting law to help banks unlock capital, spur lending: FM CAPITAL GAINS Special Feature OTS offer made by Matix Fertilisers' promoters for around `4,000-crore debt Vodafone Idea `399 40 GB data, Vi movies and TV `749 120 GB data, Amazon Prime, Vi movies and TV 2 additional SIMs `999 200 GB data, Amazon Prime, Vi movies and TV 4 additional SIMs *Jio’s Netflix offer is for mobile only (one smartphone) which otherwise costs `199 per month; Airtel and Vodafone Idea’s subscription for Amazon Prime is for one year while Jio’s OTT benefits are co-terminus with the plans New Delhi the project were opened on Wednesday. The bidders are L&T, a consortium of Afcons Infrastructure,IRCON International and JMC Projects India, and another consortium of NCC, Tata Project, J KumarInfraprojectsandHSR.
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.