OPINION, P6 MARKETS, P11 RENU KOHLI Rising protectionism could contribute to India’s macro trilemma INTERNATIONAL, P8 EDITORIAL NORMALCY SOON PERFORMANCE TARGETS Centre sticking to borrowing target is good, if not realistic; problem more acute for states Business returning to pre-Covid levels: HDFC Bank MD Aditya Puri Apple grants CEO Cook first major stock package since 2011 NEW DELHI, THURSDAY, OCTOBER 1, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 183, 20 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: 38,067.93 ▲ 94.71 NIFTY: 11,247.55 ▲ 25.15 NIKKEI 225: 23,185.12 ▼ 353.98 HANG SENG: 23,459.05 ▲ 183.52 `/$: 73.77 ▲ 0.08 `/€: 86.51 ▼ 0.25 BRENT: $40.44 ▼ $0.59 GOLD: `50,310 ▼ `3.00 ever, tariffs are still very low, thereforepricingrevivaliscritical for the healthy growth of the sector.” Birla said AGR dues have added to the financialwoes of the sectorbut efforts are being made to resolve the financial burden through staggered payments, which have been upheld by the Supreme Court. Gadgets, P9 Voice technology is the new frontier in healthcare Scribetech’s Augnito is an AI-based medical speech-totext software that uses deep learning and natural language voice control and commands to enable doctors to record patient data in real-time ■ eFE, P9 QuickPicks ‘Lay-off freedom for more units to promote formalisation of labour’ THE BASIC objective behind increasing of the lay-offs threshold from 100 to 300 is to reduce red-tapism in labour law governance, labour minister Santosh Kumar Gangwar told Surya Sarathi Ray in an interview. Increase of this threshold will therefore lead to formalisation of workforce, encourage labour-intensive production and encourage establishment of bigger enterprises, Gangwar added. PAGE 2 India’s external debt stands at $554.5 bn at June end: RBI INDIA'S EXTERNAL debt stood at $554.5 billion at the end of June, recording a decrease of $3.9 billion over its level at the end of March 2020, RBI said on Wednesday, reports PTI. Further, the external debt to GDP ratio increased to 21.8% at June end 2020 from 20.6% as on March 31. Valuation loss due to the depreciation of the dollar vis-a-vis major currencies such as euro, yen and SDR was at $0.7 billion. Govt slashes domestic natural gas price by 25% to $1.79/mmbtu THE UNION government has cut the price of domestic gas by a sharp 25.1% to $1.79 per million British thermal units (mmBtu) as higher production and coronavirus-induced low demand has suppressed global gas prices, reports fe Bureau in New Delhi. The new price will be effective for six months starting October 1. This the third straight cut after the government, in September 2019, lowered domestic natural gas prices by 12.5% to $3.23/mmBtu. PAGE 2 5.95 7.1 5.71 5.88 5.82 6.00 5.90 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 *Target BajajsaidtheCentrewillborrow `4.34 lakh crore,or about 34% ofthefull-yeartarget.Ithasfactored in potential stimulus requirement and lower-thanexpected disinvestment rev- Continued on Page 14 THE UNION HOME ministry on Wednesday issued new guidelines for permitting more activities in areas outside the containment zones thatincludeopeningupcinemas,theatresandmultiplexes Adani, Birla firms among 42 bidders for 23 coal blocks Sept 1, 2020 Sept 30, 2020 enues in the borrowing plan. Even“some surprises”can also be accommodated,Bajajadded. Asubstantialshortfallintax revenuewasacknowledgedearlier.The government had budgeted disinvestment proceeds of `2.1 lakh crore forFY21. Thegovernmenthasalready borrowed`7.66lakhcrorefrom the market in H1, including `68,000crorethroughagreenshoe option,at aweighted average yield of 5.82%, the lowest rate in 15years. gatherings beyond the limit of 100 persons, subject to certain conditions. However, the ministry said that restrictions on international travel, except those permitted by the Centre,will continue. Continued on Page 14 Continued on Page 14 FE BUREAU Mumbai, September 30 PRIVATE EQUITY MAJOR General Atlantic will invest `3,675 crorein Reliance Retail Ventures (RRVL) for a 0.84% stake. The stake sale values Reliance Retail, a subsidiary of Reliance Industries, at `4.285 lakh crore. The investment in Reliance Retail by General Atlantic comes shortly after it invested `6,598.38 crore in Jio Platforms for a 1.34% stake. According to Morgan Stanley,theimpliedvaluations in the General Atlantic deal are slightly higher versus the last two transactions due to the completion of a cash infusion in Reliance Retail by Silver Lake. The investment in RRVL by GA comes within a month of Congress workers beat up a burning effigy of Uttar Pradesh CM Yogi Adityanath during a protest against the Hathras gangrape and murder case, in New Delhi on Wednesday BABRI DEMOLITION CASE Advani, Joshi & 30 others acquitted LKAdvani outside his New Delhi residence onWednesday 5,550 Silver Lake clusive evidence against them. The court also observed that late Vishwa Hindu Parishad leaderAshok Singhal wanted to save the structure because Ram idolswere inside. In his 2,300-pageverdict,special CBI judge SK Yadav said the CBI could not produce any conclusive evidence against any accused. Continued on Page 14 16,725 0.84 4.285 1.28 4.21 1.75 4.21 3.9 NA Investments in Jio Platform Total 1,18,318.45 25.24 US private equity firm Silver Lake and KKR making a total investment of `13,050 crore in the retail venture of RIL. Thus within this month, the retail firm has sold a total of 3.9% stake raising funds worth `16,725 crore. Continued on Page 14 Q1: Current account in rare, large surplus IN A RARITY, India produced a current account surplus for the second straight quarter in Q1FY21, and that too, a rather big and unprecedented one of $19.8 billion or 3.9% of the gross domestic product (GDP). The current accountwas in a small surplus of $0.6 billion or 0.1% of GDP in the previous quarter (Q4FY20). The surpluses have been enabled by a narrowing of the country’s usually very large merchandise trade deficit, owing to steeper decline in imports relative to exports. Though the current account surplus brings a semblance of improvement UP IN ARMS NEARLY 28 YEARS after the demolition of the Babri mosque in Ayodhya, a special CBI court here on Wednesday acquitted all the 32 people accused of conspiring to raze the structure among other charges,includingBJPveterans LKAdvaniandMMJoshi,onthe grounds of absence of anycon- KKR FALL IN IMPORTS FE BUREAU New Delhi, September 30 PRESS TRUST OF INDIA Lucknow, September 30 3,675 5.80 FE BUREAU New Delhi, September 30 ADANI GROUP FIRMS have placed bids for nine coal blocks underthemaidenauctionsince commercial mining by private sectorwasallowed.WhileAdani Enterprises has bid for seven mines, its subsidiaries Adani Power Resources, Chendipada Collieries and Stratatech Mineral Resources bid forone each. Aditya Birla Group’s Hildalco Industries has bid for fiveminesandgroupfirmEssel Mining has bid for four. As FE reported on Wednesday, the Union coal ministry has received bids for only 23 coal mines out of the 38 blocks offered for the auctions. As many as 42 companies have placed their bids physicallyfor commercial coal mining, the government said. Jindal Steel and Power has placed two bids and its subsidiary,JindalPower,hasbidfor another two mines. State government undertaking company Andhra Pradesh Mineral Development Corporation has submitted fourbids aswell. Vedanta submitted bids for three mines and its subsidiary Bharat Aluminium Company hasbidforoneblock.RealEstate firm Aurobindo Realty has bid forfourcoal blocks. General Atlantic Total Continued on Page 14 with up to 50% of their seatingcapacityfromOctober15. States and UT governments have been given the flexibility to decide on reopening schools and coaching institutions after October 15 in a graded manner, and permitting social, religious and political Investment Stake Valuations (` crore) (%) (lakh) 7,500 Cinemas to reopen on Oct 15; states to decide on schools PRESS TRUST OF INDIA New Delhi, September 30 PE player to acquire 0.84% stake in RIL’s retail arm; it earlier invested `6,598 cr in Jio Platforms 5.85 Current account balance (as % GDP) Net accretion to forex reserves ($ bn, RHS) 6 24 19.8 3.9 16 4 2 0.1 0 8 0 -2 -8 -4 -11.3 -16 in India’s balance of payments, this has obviously not resulted from any wholesome, structural change but only reflects the current economic turmoil. Continued on Page 12 ● LEADERSHIP CRISIS Shareholders of Dhanlaxmi Bank vote against MD & CEO RAJESH RAVI Kochi, September 30 THRISSUR-BASED LENDER Dhanlaxmi Bank plunged into a crisis on Wednesday after shareholders voted against the appointment of Sunil Gurbaxani as MD and CEO of the lender. More than 90% of the shareholders voted against the appointment of the CEO who had been appointed in February following an approval from the Reserve Bank of India (RBI). Thevoting took place at the bank’s annual general meeting (AGM) with only 9.5% votes polled in favour of his appointment. Shareholders, however, approved appointment of all other directors with overwhelming majority. Continued on Page 14 FY22 COMEBACK Digital, OTT to drive recovery in M&E revenues FE BUREAU New Delhi, September 30 DIGITAL AND OTT categories are estimated to have clocked revenues of `25,400 crore in FY21, an increase of 17% even as the M&E space as a whole, contracted 20% to report revenues of `1.4 lakh crore. Not surprisingly, digital media advertising revenues are projected to overtake those from television in the current financial year, mopping up `22,300 crore against `21,700 crore by television channels.The bulk of the ad revenues are, however, cornered bysocial media giants FacebookandGoogle.TheM&E sector is expected to notch up revenues of `1.87 lakh crore in FY22withanaccelerationinthe use of digital modes among users across geographies. The fall in M&E revenues in 900 Performance forecast 750 Overall revenue (` billion) 600 450 300 FY20 150 0 Digital & OTT TV Print FY21 FY22 *VFX & postproduction Films Anima- Gaming Out of Radio home tion* 19 14 17 These wireless headphones, priced at `29,990, equipped with a host of intelligent features deliver great noise-cancellation and sound quality in a lightweight, comfortable design 0 4.34 25 12 17 SonyWH-1000XM4: Audio, design & build noteworthy 3 H2* 6.01 General Atlantic to invest `3,675 cr in Reliance Retail Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 Q2FY20 Q3FY20 Q4FY20 Q1FY21 pay their dues over 10 years ■ DoThas given a two-year moratorium to companies on payment of spectrum instalments ● COMMERCIAL MINING Special Features ■ ■ SC has allowed telcos to 6 7.66 31 16 28 RESULTS FROM an early safety study of Moderna’s coronavirus vaccine candidate in older adults showed that it produced virusneutralising antibodies at levels similar to those seen in younger adults, with side effects roughly on par with high-dose flu shots, researchers said, reports Reuters. `50,250 crore THE CENTRE ON Wednesday stuck to its enhanced gross market borrowing target of `12 lakh crore for FY21, brightening the chances of its budgetary expenditure for the year being reined in at the estimated level, even amid anticipations of a second tranche of fiscal stimulus. The budgetarycost of stimuli — already announced and thetranchelikelytobeunveiled in November — may be met solely through ‘reprioritisation’,orthecurbingofexpenditure under select other heads. Announcingthecalendarfor thesecondhalfofthisfiscal,economic affairs secretary Tarun H1 9 181 Study: Moderna’s Covid-19 vaccine appears safe Vodafone Idea needs to pay total outstandingAGR dues of FE BUREAU New Delhi, September 30 12 (%) 6.10 5.94 12* 6.05 101 49 77 90 99 143 THE GOVERNMENT has kept interest rates on various small savings schemes unchanged for a second straight quarter through December, economic affairs secretary Tarun Bajaj said on Wednesday, reports fe Bureau in New Delhi. a tariff hike in December 2019 ■ Birla says another round of tariff hike is much needed 10-year bond yield (Gross market borrowing, ` lakh cr) 15 FY21 borrowing (` lakh cr) 61 VODAFONE IDEA, WHICH earlierreceived an in-principle approvalfromitsboardtoraise funds to the tune of `25,000 crore through share sale and debt to pay its adjusted gross revenue (AGR) dues, on Wednesdaysaidrevivalofpricing is critical for the health of the telecom sector, underlining that while tariffs continue to be the lowest in the country, data consumption is the highest in the world. Addressing shareholders at the company’s 25th annual general meeting, chairman Kumar Mangalam Birla said, “The telecom industry witnessed first round of tariff hikes taken by all operators in December 2019. How- ■ Telecom industry had gone for Unusual jump 5.85 FE BUREAU Mumbai, September 30 `25,000 crore To borrow `4.34 L cr in H2; says stimulus 2.0 may not inflate Budget size 306 188 296 183 Govt retains small savings rates for Dec qtr The company has already received approval from its board to raise funds to the tune of 778 708 769 AGR dues have added to financial burden of the sector but efforts on to resolve it, says Voda Idea chairman 218 254 338 THE GOVERNMENT has for the fourth time extended the deadline for bidding for the privatisation of the country’s second-biggest oil refiner Bharat Petroleum (BPCL) by one-and-a-half months to November 16, reports PTI. Initially, the EoI submission deadline was May 2. RETAIL BET Centre sticks to borrowing target 5.92 Pricing power critical, says Birla `12L CR IN FY21 5.57 TARIFF WAR IN THE NEWS Fourth extension: BPCL bid deadline moved to Nov 16 Music Source: KPMG in India analysis, 2020, based on primary and secondary research FY21 has been led bythe steepestdeclineinthefilmssegment, analysts at KPMG said in a report unveiled on Wednesday. Thoughthepandemicsqueezed theatre,out-of-home and print businesses, it lifted consumption of the digital and over-thetop (OTT) segment as people startedworking from home. While more users explored content across platforms,film producers launched movies on OTT. At least nine Hindi films have premiered across Netflix, Amazon Prime Video and Disney+Hotstar with more in the pipeline.Nachiket Pantvaidya, group COO, Balaji Telefilms and CEO at AltBalaji, told FE viewers sampled OTT content during the pandemic and the firm did not need to spend to acquire new customers. Continued on Page 12
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