OPINION, P6 NATION, P3 INTERNATIONAL, P12 LIAM DENNING HEALTH INFRA COVID LOCKDOWN Elon Musk's Bitcoin tweet presents a Tesla governance worry; he has tweeted head-scratchers before Steel, oil industries supplying 6,650 tn O2 per day, says Pradhan Decision on June 14 on final phase of easing, UK minister Hancock SURJIT S BHALLA Sunil Jain was an evidence-based journalist, a rarity in India & globally MUMBAI, MONDAY, MAY 17, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. LXI NO. 115, 14 PAGES, `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 Continued on Page 2 Cairn’s move to attach India assets: Centre terms report 'speculative', Page 4 LIQUIDITY WOES Q2 Q3 FY21 Q3 FY21 Q4 Q2 Q3 FY21 Q1 837.50 379.04 50.37 -965.86 165.16 Q4 Sample of 358 companies (excluding banks & financials) has been in the past three quarters. For a sample of 358 companies (excluding banks and financials) the total expenditure went up by only 8% y-o-y while revenues rose 19% y-o-y. At Gujarat Ambuja, for instance, costs declined to `3,688/tonne, a drop of 4% y-o-y on the back of lower material costs,higher use of alternate fuels, better efficiencies in energy consumption and logistics and lower clinker factor. At Tata Q4 (bps, chg y-o-y) 15.41 119.79 -35.88 Q1 Q2 Q3 FY21 RM to sales (% chg y-o-y) Q4 Q1 303.80 -39.01 -2.15 8.39 Q2 Tax (% chg y-o-y) Q1 Q1 BIBEK DEBROY -388.11 PBT (bps, chg y-o-y) -269.47 Q4 -7.29 -28.55 Q2 Q3 FY21 19.75 2.56 Q1 ‘With Sunil, no discussion was acrimonious, because he was a thorough gentleman’ OPM (% chg y-o-y) 149.13 THANKS TO STRONG topline growth and heftycost cutting, India Inc’s profits have surged in the three months to March. The huge boost to the bottom line has come from better performances by the metals pack with Tata Steel, and Vedanta which gained from both bettervolumes and rising prices; net sales at Tata Steel jumped 39% year-on-year nudging `50,000 crore. The IT services firms also turned in very strong performances while two-wheeler companies have done well on the back of good demand both in the home and overseas markets.At Bajaj Auto, motorcycle volumes in the export market increased by 24% y-o-y and the mix too improved.Asian Paints reported a fabulous 48% y-o-y volume growth in the domesticdecorativepaints segment. While sales have,no doubt, been strong, India Inc’s bottom line continues to be driven as much by cost cuts as it Total expenditure 38.58 FE BUREAU New Delhi, May 16 Net sales (% chg y-o-y) -3.78 UK'SCAIRNENERGYhasidentified $70 billion of Indian assets overseas for potential seizure to collect $1.72 billion due from the government -- a moveifsuccessfulwillputIndia in league with Pakistan and Venezuela which faced similar enforcementactionoverfailure to payarbitration awards. The assets identified range from Air India's planes to vessels belonging to the Shipping Corporation of India, and properties owned by stateowned banks tooilandgascargoes of PSUs, three people familiarwith the matter said. Cairn plans to move courts in the US to Singapore for seizure of the assets in absence ofIndiangovernment'srefusal to honour an international arbitration award. "The Indian government naturally will challenge such seizure but to save the assets it may have to pawn money equivalent to the value of assets in some financial security such as bank guarantee. Metals pack, IT firms turn in stellar numbers 33.95 AMMAR ZAIDI New Delhi, May 16 A DINNER WAITS Top-line growth, cost cut push earnings -28.88 Cairn Energy identifies $70 billion Indian assets for seizure Q4 EARNINGS -41.54 ● DUES FROM GOVT Q2 Q3 FY21 Q4 Source: Capitaline Steel expenditure went up just 15% y-o-y while sales increased 39% y-o-y. Consequently,operating profit margins for the sample have expanded 840 points y-o-y pushing up the operating profit by a stunning 105%. The stars of the fourth quarter earnings season have been the IT services firms which have turned in stellar numbers. Continued on Page 2 A DINNER WAITED. We planned to invite Namita and Sunil home.Last year. Covid meant postponement - not last year, not this year, not in this world, but in some other world, when we meet again. Like others, friends, family and acquaintances, Sunil Jain has become an obituary column and obituary notice, one of the more than 250,000 Indian names who have died, in a disease that has ravaged the world. Life is unfair. It was too early for many. It was too early for Sunil.Ifonly.Wewereinfected roughly at the same time and exchanged notes, on the phone.“Oxygen levels aren’t that bad.Why should I crowd other people out from hospitals? I am fine at home.”That was classic Sunil. By the time he moved to AIIMS and receivedthebestoftreatment, itwas too late.If onlythat had happened a few days earlier. But for the grace of destiny, it could have been me. Destiny doesn’t follow rational expectations.Even as TOUCHING LIVES Sunil Jain PORTRAIT : SHYAM KUMAR PRASAD I write this,my default expectation is of sending it to email@example.com. In recent years, for me, FE has meantSunilJainandSunilhas meant FE. When his column was due and one scanned the morningFE,Sunilwasthefirst person one read. I speak for myself, but this was probably true of manypeople. Sunil wasn’t just an editor andacolumnist.Hewasanexcolleagueandafriend.Iforget howIfirstmetSunil.Notfrom his India Today or Ficci days. For several years, I was a con- tributing/consulting editor with newspapers, not just writing columns, but edits too, attending edit meetings. And our paths crossed, back and forth - Indian Express, Financial Express and Business Standard.That’s how he became a colleague and a friend. There were formal meetings inside the old Express office and informal meetingsoutside,attheparking spots off Bahadur Shah Zafar Marg. I got to know we studied at the same educational institution (Delhi SchoolofEconomics),though Sunilwasadecadeafterme.It musthavebeenTNNinanand Business Standard who got him into long essays and books, The Great Indian Middle Class, Caste in a Different Mould and the essay he coauthored with Ninan in a volume honouring Montek SinghAhluwalia.Iknewabout his illustrious family. But that didn’t matter. Sunil was just Sunil. If I continue to write for FE, that’s because of Sunil. In2015,roleschanged.The role of media is to be critical, typically of government.And typically, conversations (roughly once a week) were about me being critical of something FE had published, or Sunil being critical of what government had done, or not done,moreoftenthelatter.The formerwas mostlyabout telecom,orregulation.SinceSunil and I agreed on contour of reformsandtheobjective,discussionwasabout sequencing, speedandpoliticaleconomy.It was always a discussion,never acrimonious,notonlybecause Sunilwasafriend,butbecause hewasathoroughgentleman. (That came through in his columns too, never personal.) In 2017,Sunil invited me as a Chief Guest to a FE event in Mumbai. Continued on Page 2 SMALL RELIEF ● ALL-STOCK DEAL Services exporters hit Most flagship welfare schemes Adani Green Lowest rise in Covid in talks to as benefits held back keep pace despite slowdown cases in 25 days acquire BANIKINKAR PATTANAYAK New Delhi, May 16 SERVICES EXPORTERS HAVE urged the government to release benefits under a key scheme for FY20 at the earliest,asthesectorhasbeengasping for liquidity in the wake of the Covid-19 pandemic. Exporters said their FY20 entitlementsundertheService Exports From India Scheme (SEIS) could be to the tune of `3,000-4,000 crore. Through this scheme, the government offers exporters duty credit scrips at 5-7% of the net foreignexchangeearned,depending on the nature of services. Realising that the government faces resource crunch, the state-backed SEPC has pro- SEEKING RELIEF ■ Exporters said their FY20 entitlements under SEIS could be about `3,0004,000 cr ■ SEPC says if govt faces resource crunch, it can cap benefits at `5 cr per exporter ■ However, sectors like travel & tourism, healthcare that are hit hard by Covid should be allowed full benefits, it says posed that the Centre limit the SEIS benefits to a maximum of `5 crore per exporter for various services sectors. Continued on Page 2 QuickPicks NHAI InvIT by month-end, not open to retail investors THE MAIDEN Infrastructure Investment Trust (InvIT) promoted by the National Highways Authority of India (NHAI), through which it aims to mop up `5,100 crore, is likely to hit the market by end-May or early next month, according to official sources, reports Surya Sarathi Ray in New Delhi. NHAI InvIT, the second one promoted by a public-sector entity to be lapped up by investors in a just over a month – PGlnvlT, sponsored by power transmission utility PGCILwas launched in late April and its shares first traded on the exchanges on Friday – will be out of bounds for retail investors.PAGE 4 China,Thailand & Vietnam under anti-dumping probe THE COMMERCE ministry has initiated an antidumping investigation against the import of solar cells from China, Thailand and Vietnam, reports fe Bureau in New Delhi. The investigation was triggered by an application by the Indian Solar Manufacturers’ Association (ISMA). Solar cells are the basic ingredient used in the manufacturing of solar modules and Chinese products are 15-20% cheaper than their Indian counterparts. PAGE 2 India’s oil demand shrinks further amid virus crisis INDIA’S OIL demand worsened in the first half of May as large parts of the nation remained under local lockdowns to battle the world’s worst outbreak of Covid-19, reports Bloomberg. Sales of road transport fuels during May 1-15 dropped by a fifth from the previous month and about 28% from the same period in 2019. PAGE 3 PRASANTA SAHU New Delhi, May 16 NOTWITHSTANDING THE RESOURCE crunch due to economic slowdown, which worsened after Covid-19 outbreak, the Centre has largely kept the momentum of spending on its flagship schemes in recent years,especially in FY21. In fact, the spending has accelerated on the rural job guarantee scheme (MGNREGA) and the schemes on pucca houses for the poor (PM Awas), social assistance to weaker sections (NSAP) and PM-Kisan, under which around 10 crore farmer families are being given `6,000 each a year. Financial achievement (` crore) PMGSY MGNREGA NSAP PM-Kisan JalJeevan Mission Swachh Bharat Mission DBT-LPG Interest subsidy for crop loans PMAwasYojana PM-JanAarogyaYojana Saubhagya Ujjwala FY17 17,923 48,215 8,854 NA 5,980 12,619 13,000 13,397 20,952 NA NA 2,999 FY18 16,862 55,166 8,694 NA 7,038 19,427 13,097 13,046 31,164 NA 1,541 2,496 FY19 15,414 61,815 8,418 1,241 5,484 15,375 16,478 11,496 25,443 960 2,709 5,636 FY20 FY21RE 14,017 13,706 71,687 1,11,500 8,692 42,617 48,714 65,000 10,030 11,000 9,469 7,000 29,628 25,521 16,219 19,832 24,964 40,500 3,200 3100 696 300 1,403 9,670* *Spurt due to free LPG cylinders under Covid relief package In terms of physical achievement, some schemes have reached or are approaching saturation levels – these include the Swachh Bharat Mission (100%) designed to provide for toilets for house- holds and Pradhan Mantri Gram Sadak Yojana, meant to build all-weather roads to virtually all unconnected habitations. Continued on Page 2 ● CAREER UPGRADE Upskilling apps woo white-collar workforce VENKATA SUSMITA BISWAS Mumbai, May 16 Ed-tech market in India THE JOB MARKET crisis heightened by the Covid-19 pandemic has made it imperative forprofessionals to upskill and build a strong job profile. According to a February 2021 study by McKinsey Global Institute, around 18 million Indians will need to switch occupations by 2030. 3 to 3.5 Market size ($ billion) CAGR over next four years 35-40% The current ed-tech market is split almost midway between K12 and post K12. Source: Deloitte India Indianupskillingplatforms like upGrad, Great Learning and Simplilearn want to capitalise on the opportunity. upGrad, backed by Ronnie Screwvala and valued at $850 million, leveraged IPL 2020 to promoteitsonlinecoursesthat promise to give young professionals an edge at their workplace. Continued on Page 2 SB Energy PRESS TRUST OF INDIA New Delhi, May 16 BAIJU KALESH & ANTO ANTONY May 16 WITH 3.11 LAKH fresh coronavirusinfections,Indiasawthe lowest rise in daily Covid-19 cases after a gap of 25 days, while the death toll rose to 2,70,284 with 4,077 new fatalities, according to the Union health ministry data updated on Sunday. A total of 3,11,170 new cases were reported in a day, taking India's total tally of Covid-19casesto 2,46,84,077. A total of 2,95,041 cases were reported in a span of 24 hours onApril 21. The active cases have reduced to 36,18,458 comprising 14.66% of the total infections, while the national Covid-19 recovery rate has improved to 84.25%,the data updated at 8 am showed. ADANI GREEN ENERGY, majority-owned by Indian billionaire Gautam Adani, is in advanced talks to acquire privately-held SB Energy Holdings, according to people familiarwith the matter. AdealcouldvalueSBEnergy, owned by SoftBank Group and BhartiEnterprises,atmorethan $650 million, said one of the people, who asked not to be identified as the information is private.AdaniGreenisexploring a buyout of the renewable energycompanythroughanallstock deal,anotherperson said. An announcement could comeincomingweeks,thepeople said. Discussions could still be delayed or fall apart, they added.ArepresentativeforSoftBank declined to comment, whilerepresentatives forAdani Green and Bharti Enterprises didn’t immediately respond to requests for comment. A deal couldhelpAdaniGreentoreach itsplannedgenerationcapacity of25gigawattsby2025.Shares inAdaniGreenhaverisenmore than370%inthepastyear,givingthecompanyamarketvalue of about $23 billion. — BLOOMBERG Continued on Page 2 Delhi, Haryana lockdown till May 24 now DELHI CHIEF Minister Arvind Kejriwal on Sunday announced extension of the ongoing lockdown by one more week in the national capital, saying the gains made so far in combating Covid19 cannot be lost due to any relaxations now, reports PTI. Haryana, too, on Sunday extendedthelockdownin the state till May 24. The lockdown which already stoodimposedinthestate till May 17 was extended byaweek.Delhi’s positivity rate has gone down to nearly 10% in the last 24 hours. ‘Covaxin works against India, UK strains’ BHARAT BIOTECH on SundaysaiditsCovid-19vaccine 'Covaxin' has been found to be effective against coronavirus strains found in India and the UK,reports PTI. Citing a study published in peer-reviewed medical journal Clinical Infectious Dis- eases, the Hyderabad-based vaccinemajornotedthatvaccination with Covaxin produced neutralising titres againstallkeyemergingvariantstested,includingB.1.617 andB.1.1.7,firstidentifiedin India and the UK, respectively. Page 3 BREAKING GROUND New rules see more women directors, but few are in executive roles FE BUREAU New Delhi, May 16 GIVENHOWTHEshareofdirectorships held by women in the Nifty 500 companies has risen nearlythree-foldoversixyearsto 17% at the end of December 2020fromaround6%inMarch 2014,itmustbesaidtheregulatorypushformorewomendirectorshasyieldedresults.However there are not too manywomen in executive positions, a mere 11%. Also,of the total numberof female executive directors only 31% were professional EDs, the remaining 69% belonged to the promoter group or were representatives of the promoters. Nevertheless, an IIAS study shows the number of women directorshipsasapercentageof total directorships has been on therise;attheendofDecember 2020, of the Nifty 500 companies, 475 had at least onewoman director on the board. Of the remaining 25 companies, two are institutionally controlled--Yes Bank and LIC Housing Finance; two are pro- Women directors as a % of total directors 17% 16% 14% Dec 31, 2018 Dec 31, 2019 moter run--Ashoka Buildcon and Aegis Logistics; and the remaining 21 are PSUs. One can argue that some of Dec 31, 2020 Companies with women as a % of board composition Dec 31 0-9% 10-19% 20-29% 30-39% 40-49% 50% and above Total the directorship gaps may be transitory, but that does not take away the fact that PSUs continue to lag the gender 2018 91 293 94 19 2 1 500 2019 76 246 132 38 6 2 500 2020 72 235 137 43 8 5 500 Source: IiAS Research, PRIME Database Group diversityagenda.Nonetheless, more companiesnowhave one woman on their boards, and several boards have more than one. Regulations have indeed reinforced the focus on gender diversity in boardrooms. As a percentage of total directorsonaboard,itisencouragingtoseeroughly27%ofthe companies have a representation20-29%ofwomenontheir boards.While this reflects corporateIndia’sintenttowelcome more female directors on their boards, only five companies were represented by women to the extent of 50% or more on theirboards for2020. Continued on Page 2
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