OPINION, P6 ECONOMY, P2 EDITORIAL India must avoid the Covid-19 see-saw of lockdowns & laxity IN A FIRST INVESTMENT PROPOSAL Small savings rates can’t be driven by politics; this has happened many times before and this time too K SRINATH REDDY INTERNATIONAL, P8 Pvt sector specialist Mallika Srinivasan appointed PESB chief Biden sets out 'once-in-a-generation' $2-trillion infra plan NEW DELHI, FRIDAY, APRIL 2, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 27, 18 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 50,029.83 ▲ 520.68 NIFTY: 14,867.35 ▲ 176.65 NIKKEI 225: 29,388.87 ▲ 210.07 HANG SENG: 28,938.74 ▲ 560.39 `/$: 73.11 ▲ 0.27 `/€: 86.22 ▼ 0.44 BRENT: $63.13 ▲ $0.39 GOLD: `44,741 ▲ `747 MORE FOR SAVERS IN THE NEWS Covid-19: Highest single-day spike in cases since Oct Govt rolls back small savings rate cut INDIA RECORDED its highest daily rise in Covid-19 cases this year with 72,330 new infections being reported in a span of 24 hours, taking the total tally of cases to 1,22,21,665, according to the Union health ministry data updated on Thursday, reports PTI. The single-day rise in cases is the highest since October 11, 2020. Costly policy Q4FY19 Q2FY20 Q1FY21 THE CENTRE’S SWIFT reversal of a proposedcutin interest rates on small savings schemes, ostensibly to not upsetmiddle-classvotersamid Assemblypolls in some crucial states, will keep its costs of funds elevated.The difference between the usually-higher small savings rates and yields on comparable government securities will remain high, thanks to the rollback. Elevated costs of small savings funds not just dent the exchequerbut also force banks to refrain from trimming their deposit rates beyond a point. Consequently, lenders are reluctant to effectivelypass on INSIDE Special feature on FE CFO AWARDS ON PAGE 5 1.43 1.83 1.22 1.51 Sources: Finance ministry, Bloomberg the benefits of monetary transmission to borrowers, even though the Covid-hit economy needs a massive credit push to get back on its feet fast. At 175 basis points,the gap in the interest rate is already the highest in case of time deposits for one year (See the chart). While the rate on one-year deposit is as high as 5.5%, the yield on one-year G-secs closed at 3.75% on Wednesday. The two-year and five-year time deposits fetch as much as 5.5% and 6.7%, respectively, while the yields on G-secs with thesametenurestoodat4.67% and 5.97% onWednesday. Continued on Page 2 Wholesale despatches FE BUREAU Low base drives up March auto sales All auto companies posted high year-on-year sales growth in March, but it was on the back of a low base of last year when the lockdown had begun to hit sales. The April-March 2020-21 sales saw all firms reporting a drop, underlining that recovery is still eluding the sector. ■ P4 (Units) 6,125 38,277 525 333,900 11,012 66,609 7,023 15,001 26,300 52,600 113 « 809 « Hero MotoCorp 92,714 316,685 544,340 -24.5 -25.5 93,312 505 Ashok 1,734 Leyland 15,761 -7.8 4,64,515 « Toyota Kirloskar 471,535 94 « Tata Motors 100 % chg vs FY20 1,323,396 « M&M 76,976 149,518 FY21 (Units) « Hyundai Motor % chg y-o-y « Maruti Suzuki March ‘20 March ‘21 72 Special Features ‘We’re targeting a turnover of `250 crore by FY23’ Vikas Bagaria, founder, Pee Safe, on expanding the company’s range of offerings from toilet seat sanitisers to grooming products, and launching exclusive brand outlets ■ BrandWagon, P9 QuickPicks Exports grow a record 58% in March to $34 billion MERCHANDISE EXPORTS surged as much as 58.2% year-on-year in March to $34 billion, a record for any month, according to a preliminary estimate of the commerce ministry, reports fe Bureau in New Delhi. Imports grew about 53% to $48.1 billion in March, with gold imports having surged by as much as 584%. The unusual growth in trade was aided by favourable base effects. PAGE 2 Big Bazaar starts 2-hr home delivery service,aims 1 lakh orders a day KISHORE BIYANI-led Future group's retail chain Big Bazaar on Thursday announced its entry into the instant home delivery service, wherein the company will deliver products ordered online in around two hours, reports PTI. Big Bazaar's 2-hour delivery promise is on products across fashion, food, FMCG and home segments for orders placed online through its mobile app and portal and will be served through its nearest physical store. PAGE 4 Collections above `1L cr for 6 months in a row, higher import taxes signal India Inc rebooting 5 -10 -20 5,599,930 Gross GST collections FY19-20 (` crore) FY20-21 Aug 98,202 86,449 Sept 91,916 95,480 Oct comparisions are for periods in recent years when savings rates were cut *Yield on the last day of the previous quarter At `1.24L cr,March GST UPI transactions hit `5.05L cr in March mop-up a newrecord Q1FY22 ● Except for Q1FY22, with G-sec yields of same tenure and senior citizen savings rate with 5-year G-sec yields FE BUREAU New Delhi, April 1 Senior citizen savings scheme 5-year time deposit ● Time deposit rates are compared FORD MOTOR and Mahindra & Mahindra (M&M) will not collaborate on any project they had agreed to as part of their abandoned joint venture in India, the companies said, reports PTI. The two had proposed a JV to develop at least three SUVs for India and emerging markets. 0.93 0.52 0.73 0.61 0.83 2-year time deposit 1-year time deposit Ford, M&M to end collaboration on all India projects 0.23 0.15 0.6 1.75 0.53 0.09 0.71 (Gap between high small savings rates and G-sec yields*, in % points) -10 ● DEBT REPAYMENT RInfra sells Reliance Centre to Yes Bank for `1,200 crore FE BUREAU Mumbai, April 1 RELIANCE INFRASTRUCTURE ON Thursdaysaid it had sold its erstwhileheadquarters ‘Reliance Centre’in Santacruz, Mumbai to Yes Bank for `1,200 crore. The proceeds from the salewill be utilised to repay the debt of the private lender,RelianceInfrastructure said in a stock exchange filing. Afterthis sale,Yes Bank’sexposure toReliance Infrastructure has come down to `2,000 crore,as per sources. FE has learned Reliance Centre may soon be the new address of Yes Bank as the lender is likely to convert the building as its corporate headquarters. The bank currently operates from Indiabulls Finance Centre in Lower Parel, Mumbai. Last July, Yes Bank had taken over the possession of Reliance Centre afterthe company failed to clear dues. Continued on Page 2 DIGITAL DRIVE MORE FORMAL ECONOMY FE BUREAU New Delhi, April 1 GROSS GOODS AND services tax (GST) collections came in at `1,23,902 crore in March (February sales), the highest monthlymop-upsincethetax’s launch in July 2017, and up 27% over the year-ago month, according to official data releasedonThursday. GST collections being above the `1-lakh-crore mark for the sixth month in a row and being abovetheyear-agolevelsforthe seventh consecutive month reflected the economy’s resilience. Indeed, a part of the 95,379 1,05,155 Nov 1,03,491 1,04,963 Dec 1,03,184 1,15,174 Jan 1,10,818 1,19,875 Feb 1,05,361 1,13,143 Mar 97,590 1,23,902 incremental revenue could be ascribed to stronger anti-evasionstepsandashiftinbusiness awayfrom the informal sector. Continued on Page 2 Bajaj: Both expenditure, tax revenues to surpass REs WHILETHE CENTRE’Staxrevenues in FY21 would be higher than the revised estimate (RE) byawide margin,its budgetary expenditurewillalsoexceedthe respective RE andyet,the fiscal deficit would be a little lower than 9.5% of GDP projected, revenue and economic affairs secretaryTarunBajajtoldPrasantaSahuinNewDelhi.“Asthe figures are coming in, we will exceed the RE (for tax receipts) byagoodnumberinspiteofthe fact that income tax refund has beenabout`70,000croremore in FY21 than the previous year. WewillexceedREsinbothdirect taxesandindirecttaxes,”hesaid. ■ Full report on Page 2 Centre releases extra `45,000 cr to states from divisible pool THANKSTOtheincreasedbuoyancyintaxrevenuesinthefourthquarter,theCentrereleased an‘additional’`45,000croreastaxdevolution tostategovernmentsinFY21,thefinanceministry said on Thursday, reports fe Bureau in New Delhi.The devolution was 8.2% higher thantherevisedestimate(RE).“AsperRE2020- 21,`5,49,959 crore,being 41% of the shareablepooloftaxesanddutieswereestimatedto be released to the states.However,ministry of financehasdevolvedanamountof`5,94,996 crore, based on the initial estimates of shareable pool thatwould be collected in 2020-21,” the ministrysaid in a statement. ■ Page 2 Volumes rose to 2.73 billion, NPCI data show FE BUREAU Mumbai, April 1 THE VALUE OF transactions through the Unified Payments Interface (UPI) rose 19% month-on-month (m-o-m) to `5.05 lakh crore.Volumes rose by an equivalent amount to 2.73 billion,according to data released byNational Payments Corporation of India (NPCI) on Twitter. Growth in UPI volumes has beendrivenoverthelastyearby burgeoning QR-based acceptancepointsacrossthecountry. FEreportedlastmonththevalue of peer-to-merchant (P2M) transactions through UPI has exceeded that of transactions madeusingcreditcardsordebit cardsatpointsofsale(PoS).Such P2M transactions have benefited from the zero-merchant discount rate (MDR) regime. Innovations in merchant alert systems have also done a lot to boost merchant transactions over the channel. In the six months to September 2020, payments through UPI-based applications surpassed 50% of total retail digital payments in volume, becoming the most Volume (in m) 3,200 2,731.68 2,400 1,600 999.57 800 0 Apr 2020 Mar 2021 Amount (` in cr) 600,000 5,04,886.44 450,000 300,000 150,000 0 1,51,140.66 Apr 2020 Mar 2021 Source: NPCI populartransactionmethodfor cashless transactions, Moody’s said in a recent report. In the early years of its growth,UPIwasgrowinglargely onthebackofpeer-to-peer(P2P) payments,with the P2M piece accounting for 20-30%. That equation may have changed with the demands of social distancing leading more people to opt fordigital payments. Continued on Page 2 STAKE SALE China road asset fetches IL&FS `1k cr PRESS TRUST OF INDIA Mumbai, April 1 DEBT-LADEN Infrastructure Leasing and Financial Services (IL&FS) on Thursday announced the completion of 49% stake sale in its Chinese road asset — Chongqing Yuhe Expressway (CYEC). The stake has been sold to China Merchants & PingAn Infrastructure Phase 1 Equity Investment Fund (Tianjin) Co Ltd (PingAn), a fund jointly owned by PingAn Insurance and China Merchants, a release from IL&FS Group said. The transaction will help the group address `2,600 crore of its overall debt of close to `99,000 crore (as of October 2018). The group, through its step-down Singapore-based subsidiary,ITNLInternational ■ IL&FS, through its step- down Singapore arm, ITNL International, was holding a 49% stake in CYEC ■ The group said buyer PingAn bid at an aggregate equity valuation of $281 m for a 100% stake ■ This values IIPL's 49% stake at around $140 m and PingAn has agreed to take over `1,600crore debt in CYEC Pte Ltd (IIPL), was holding a 49% stake in CYEC. The balance 51% stake in CYEC is held by Chongqing Expressway Group (CEG). “IL&FS has duly received `1,035 crore ($141.3 million) in Singapore as part of this stake sale transaction,” the group said in the release. Continued on Page 13 POLL POSITIONS (Clockwise from top left) Voters show their ID cards in Nandigram, West Bengal, on Thursday; Union home minister Amit Shah during a roadshow in Puducherry; tribal Bodo voters display their inked fingers in Morigaon district, Assam BENGAL ELECTIONS Over 80% turnout, some violence in 2nd phase; Mamata alleges foul play Wipro to acquireAmpion for $117 m PRESS TRUST OF INDIA Nandigram/Kolkata, April 1 IT MAJOR Wipro said on Thursday that it will acquire Ampion, an Australia-based provider of cyber security, DevOps and quality engineering services for $117 millioninafullcashtransaction, reports fe Bureau in Bengaluru.The transaction is expected to be completed A LARGE VOTER turnout of over80%despitesporadicincidents of violence and allegations ofvote fraud onThursday marked the second phase of West BengalAssemblypolls. West Bengal chief minister Mamata Banerjee also accused central forces deployed in Nandigramconstituency,where she is locked in battle with her during the quarter ending June with the objective to strengthen Wipro’s position in Australia and New Zealand.Thisannouncement comes right after Wipro’s recent acquisition of Capco, a British consulting firm for $1.45 billion. ■ Report on Page 4 former lieutenant, Suvendu Adhikari now with the BJP, of helpingthesaffronpartyunder instructions from Union home ministerAmitShah. Allegationsofboothcapturing and partisan behavior promptedtheECtoseekareport on an incident in Boyal village where the feisty TMC boss stayed put for more than two hours outside a polling booth following a siege of sorts by BJP supporters. Banerjee slammed theElectionCommissionfornot taking any action despite lodging 63 complaints and threatened to move court over it. Among the complaints were allegationsof“boothcapturing” and “massive fake voting” in Boyal. The area saw a face-off betweenTMC and BJPsupporters who gave vent at each other with slogans of “Khela Hobe” and“Jai Shri Ram”. Continued on Page 13 ● INTERVIEW: TT SRINIVASARAGHAVAN, MD, Sundaram Finance ‘Volatility not for us, ours is a model of steady growth’ SundaramFinancehasabalance sheetof`35,000croredespitenot havingraisedequityinthelast50 years. TT Srinivasaraghavan, whosteppeddownasmanaging directorafter37years in the company, tells AnkurMishra it will continue to pursue prudent and measuredgrowth.Editedexcerpts: For a company that will celebrate 70 years in 2024, you havegrownconservatively… Therearetwopartstoit.First,our growth is not comparable to peers,asyouhaverightlypointed out.UnlikeotherNBFCs,wehave not raised any equity in the last 50 years, building up a balance sheet of `35,000 crore just through retained earnings. Though there is nothing wrong with raising equity, ours has been a model of steady and sustained growth,without suffering the volatility that often accompanieslargeinvestments. Wehaveconductedourbusiness thewaywe are comfortable.It is athingofchoice. About50%ofyourborrowings are via debentures and 1516% from banks. Isn’t it cheapertoborrowfrombanks? Itisnottrueinourcasebecause, being AAA-rated,we are able to raise money through debentures at rates lower than that offeredbybanks.Oneofthereasons for that is that banks need to comply with MCLR norms, and can’t go below the MCLR. Thecapitalmarket,ontheother New Delhi hand,movesupanddownquite smoothly.We might be saving 100 bps or more by borrowing through debentures. Given the opportunities, doyouthinkitmakessensefor Sundaram Finance to step up thepace? Idon’twanttosecond-guessmy successor’sapproachbutIthink as a business philosophy, we would like to continue with the present paceof growth. Continued on Page 2
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