OPINION, P6 COMPANIES, P4 ANUBHUTI SAHAY FY22 may see a strong BoP surplus, but ` to remain weak INTERNATIONAL, P10 EDITORIAL VACCINE WATCH WARMING UP Recovery trackers miss larger picture; consumer confidence may stay low & FY22 PFCE may not hit FY20 levels Morepen Labs starts production of test batch of Sputnik V Hope to expand ties with Europe: China's Xi to Macron, Merkel NEW DELHI, WEDNESDAY, JULY 7, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 109, 18 PAGES, `8.00 (PATNA `8.00, RAIPUR `8.00) 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: 52,861.18 ▼ 18.82 NIFTY: 15,818.25 ▼ 16.10 NIKKEI 225: 28,643.21 ▲ 45.02 HANG SENG: 28,072.86 ▼ 70.64 `/$: 74.55 ▼ 0.24 `/€: 88.26 ▼ 0.01 BRENT: $75.73 ▼ $1.43 GOLD: `4,7793 ▲ `521 Delisting rules: Sebi defines 'same line of biz' SEBI ON Tuesday put in place a standard operating procedure for subsidiary companies planning to get delisted through a 'Scheme of Arrangement' wherein the listed holding companies and the listed subsidiaries are in the same line of business, reports PTI. Institutional buyers lap up NMDC shares IN A POTENTIAL boost to consumption ahead of the festival season,theUniongovernment’s employees and pensioners will likelyseetheiremolumentsrise effectiveJuly1,thankstoalikely big hike in dearness allowance (DA) and dearness relief (DR). The move is seen to enhance their monthly pay by `3,000 to `30,000, depending on the payscales. The DA/DR hike,a prospective accumulation due to restoration of three frozen instalments and July instalment, will take DA/DR allowance rate to about 30% LABOUR REFORM proposals brought in through four labour codes like granting freedom for businesses to retrench workers without prior government permission and to ensure minimum wages to all workers `60,000 cr Likely burden on state governments as they also revise DA/DR for their employees and pensioners fromtheexistingrateof17%of basicpay/pension,whichranges from `23,000 at entry level to `2,25,000the top level. Continued on Page 2 Large cap vs small cap funds: Balancing growth and risks Large-cap are likely to be rolled out in thenextthreetofivemonths in some states, including Uttar Pradesh, Bihar and Madhya Pradesh, according to an official source, reports fe Bureau in New Delhi. ■ Report on Page 2 FE BUREAU New Delhi, July 6 GST GROSS GOODS AND services tax (GST) collections,afterremaining above the `1-lakh-crore mark foreight months in a row, cameinat`92,849croreinJune (May transactions), reflecting the blowto theeconomyfrom a virtuallypan-India lockdown. The government, however, said thanks to reduction in Covid-19 case numbers and easing of the lockdowns,e-way bills generation by businesses rose to 5.5 crore in June, from 3.99 crore in May, indicating a smart recovery of trade and business.About5.9croree-way billswere generated inApril. Gross receipts had come in at `1.03 lakh crore in May, markedlylowerthantherecord `1.41 lakh crore mopped up in the previous month. Other high-frequency indicatorsavailableforJunepointat a mixed bag.While both manufacturing and services PMI shrank the most in 11 months 92,849 1,02,709 1,41,384 1,23,902 1,13,143 1,19,875 1,15,174 1,04,963 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2020 2021 ❚ PMI 70 60 50 40 30 20 10 0 95,480 (` crore) HC says govt free to act against Twitter Manufacturing PMI 51.8 48.1 49.3 41.2 Services PMI March 2020 June 2021 Note: Reading below 50 suggests contraction and above it indicates expansion ❚ Core sector growth % chg, y-o-y) -8.2 Apr ‘20 -30 -37.9 -45 Jan 2020 ❚ Retail auto sales (% chg, y-o-y) PVs 35 15 2.2 0 -15 Source: IHS Markit May 2021 0 -87 -35 -70 -105 -63.7 2-wheelers -88.8 May 2020 -71.08 May 2021 Source: Ofﬁce of Economic Advisor Note: April & May 2021 compared with April & May 2019 in June, exports jumped 47% from a year before and 30% from the pre-pandemic (same month in 2019) level.With the impactofthesecondCovidwave waning and vaccination drive making progress,some parts of the economy may start looking Source FADA up from July. However, no substantial recovery is seen before September when manufacturers typically start to stock up to cater for festive demand, thus boosting economic output. Continued on Page 2 Slams microblogging site for misleading court on grievance officer appointment FE BUREAU New Delhi, July 6 THE DELHI HIGH Court on Tuesday said that the government was free to take action against the microblogging site Twitter as by defying the Indian laws it has lost its intermediary status. “We are not stopping you from taking action. The court has not granted any protection to Twitter. If they are in violation,youknowwhattodo...Iam notgivingthemanyprotection. I have alreadymade it clearthat they have to comply,” Justice Net-net, small cap stocks have relatively higher risk and relatively higher growth potential than large cap ones. Remember, stock picking skills are more relevant for the small cap segment ■ Personal Finance, P7 THE SUPREME COURT is likely to hear this week the Centre’s petition seeking transferofthepleaspending indifferenthighcourtschallengingthevalidityofnewIT Rulestotheapexcourtforan authoritative pronounce- Fighting the pandemic with smart graphene technology Nanomatrix Materials is using proprietary graphene technology to make anti-viral face masks,AC filters & HVAC filters. It plans to develop products for marine disaster management, textiles & more ■ eFE, P7 QuickPicks Govt clarifies discoms can choose which old power plant to discard REMOVING THE ambiguity regarding the rights of electricity distribution companies (discoms) while exiting PPAs with old thermal generating stations, the power ministry has clarified that discoms have the freedom to choose the specific plants from which they want to stop sourcing power, reports Anupam Chatterjee in New Delhi. The clarification makes it easier for Delhi discom BSES to deallocate its share of electricity from NTPC’s Dadri-I unit. PAGE 2 Pandemic, lockdowns boost online sales of smartphones AS A result of the country being in various stages of lockdown, smartphone makers are depending on the online channel now more than ever. In the pre-pandemic era, the share of online sales of smartphones to overall smartphone sales stood at 42% in 2018 and 37% in 2019, according to IDC. As per recent data, this has increased to 48% in 2020, reports fe Bureau in New Delhi. Several smartphone makers took to various virtual means to reach out to potential customers. PAGE 4 Hiring recovered from 10% in April to 35% in May: Survey INDIA'S HIRING rate has recovered moderately from 10% in April to 35% in May 2021, but the aftermath of the second Covid-19 wave has left professionals in India increasingly vulnerable to the economic uncertainty, as per LinkedIn data, reports PTI. India's hiring rate on LinkedIn dropped from 50% in March 2021 to 10% in April 2021. The hiring rate witnessed a modest revival to 35% in May 2021 as localised curfews gradually lifted and economic activity partially resumed. PINE LABS, THE largest POS player,whichprocesses$30billion of payments annually, on Tuesdayraisedafresh$315million in funding led by new investorsFidelityManagement and Research Company and BlackRockaspartofitsongoing financial round. With the latest tranche,thecompanyhasclosed the investment round, taking the total size of the funding to $600 million.The fintech startup’s valuation stands at $3 billionafterthe fundraise. Ishana,TreeLine,Neuberger Berman Investment Advisers, IIFL AMC and Kotak are the other new investors. IIFL AMC routed its investment via its late-stage tech fund, Pine Labs said in a statement onTuesday. PineLabsrepresents14%of card spends through a network of 600,000 POS machines and its cloud-based SaaS platform, Plutus, supports payments RekhaPallitoldadditionalsolicitorgeneral ChetanSharma. Continued on Page 2 ment on the issue, reports PTI. Several petitions challengingthenewInformation Technology Rules, 2021, are pending adjudication in differenthighcourts,including theHCsofDelhiandMadras. ■ Report on Page 2 Ministerial probables arrive in Delhi amid Cabinet reshuffle buzz 600K POS Brands tie-ups Preapproved EMI customers Payments TPV PRESS TRUST OF INDIA New Delhi, July 6 150K Merchants 120+ 85 m $30 bn EMI/ BNPL ann. $2 bn disbursals Gift card $1.5 bn TPV Source: Company data, Credit Suisse across different modes,includinggiftcards,loyaltypoints,and on credit (EMI) by integrating multiple issuer and acquirer banks ona single platform. Continued on Page 2 Sumitomo buys Fullerton India in $2.5-bn deal DIVERSIFIED JAPANESE conglomerate Sumitomo Mitsui Financial Group on Tuesday inked an agreementwith Singapore-based Fullerton Financial Services Holdings to acquire its nonbanking arm Fullerton India —JUSTICE REKHA PALLI, DELHI HC ● FRESH FACES Pine Labs adds fresh $315 m to its wallet FE BUREAU New Delhi, July 6 We are not stopping you from taking action. The court hasn’t granted any protection to Twitter. If they are in violation, you know what to do... I am not giving them any protection. I have already made it clear that they have to comply Govt urges SC to transfer pleas against ITrules to itself; hearing likely this week FUNDRAISING Special Features Mid-cap Additional cost seen for July-March due to likely DA/DR rate hike from 17% to 30% for Union government staff/pensioners UP, MP & Bihar among states to roll out labour reforms in next 3-5 months THE GOVERNMENT on Tuesday was assured of at least `3,700 crore from NMDC's share sale after institutional investors overwhelmingly subscribed to the OFS on Day 1, reports PTI. The government is selling a 7.49% stake in NMDC. Small-cap `30,000 cr Sudden pick-up in e-way bills after May dip signals recovery, says govt ❚ Gross GST collections 1,05,155 PRASANTA SAHU New Delhi, July 6 BOOSTER BREAK-UP 86,449 Monthly pay of govt staff to go up by up to `30,000 GST mop-up slips to `93,000 cr in June 87,422 Consumption boost of `1 lakh cr in store TOUGH STANCE LOCKDOWN LOSSES 90,917 HIGHER OPERATING margin due to higher prices of the metal will help domestic steelmakers to “double down” on capital expenditure and continue with deleveraging and strengthening of balance sheet, rating agency Crisil said in a report on Tuesday, reports fe Bureau in New Delhi. DA HIKES Credit Company in a reported $2.5-billion deal, reports PTI. Fullerton Financial Services is a fullyowned subsidiary of Singaporean investment giant Temasek Holdings. ■ Full report on Page 4 FACE-OFF Activists wearing giant heads depicting EU leaders protest in front of the European Council building in Brussels to highlight the threat of the Energy Charter Treaty to climate action Mixed trends FE BUREAU Economy on the mend With the NIBRI now at 91.3 for the week ended July 4, it is only 8.7 pp below pre-pandemic levels and 3.6 pp below pre-second wave level. Some data in June, like trade, GST e-way bills, auto & diesel sales, have improved sequentially from May levels, in line with Nomura's expectations, despite softer manufacturing and services PMIs and stagnant railway freight revenues. Nomura India Business Resumption Index (NIBRI) 98.1 100 88.8 90 80.8 84.5 80 60.8 70 91.3 80.7 76.7 60.2 48.2 60 50 40 Mar 8 Mar 29 Apr 19 May 10 May 31 Jun 21 Jul 12 Aug 2 Aug 23 Sep 13 Oct 4 Oct 25 Nov 15 Dec 6 Dec 27 Jan 17 Feb 7 Feb 28 Mar 21 Apr 11 may 2 May 23 Jun 13 Jul 4 IN THE NEWS Higher prices: Steelmakers may step up capex ` ` Source: Nomura Global Economics BJP LEADERS Sarbananda Sonowal, Jyotiraditya Scindia and Narayan Rane,all ofwhom are being seen as probables for induction as ministers in the Modi government, arrived in New Delhi on Tuesday amid indications that the Union Council of Ministers is likelyto be expanded on Wednesday. In another pointer to the imminent Cabinet reshuffle, social justice and empowerment minister Thaawarchand Gehlotwas appointed the Karnataka governor, causing yet another ministerial vacancy. JD(U) leader RCP Singh and LJP’s Pashupati Kumar Paras, who are expected to represent the BJP’s allies in the government, also reached here from Bihar.Allremainedtight-lipped toqueriesabouttheirpossibility of joining the government. Rane told reporters that he had not received anycall about his joining the government. Leaders of the LJP faction headed by Paras said he had received a call from home ministerAmit Shah on Monday but said it was related to the birth anniversary of party founder RamVilas Paswan. Continued on Page 2 BARRELING UP Opec+ crisis propels oil to six-year high as market tightens SALMA ELWARDANY, JAVIER BLAS, GRANT SMITH & KHALID AL-ANSARY July 6 OILJUMPEDTO the highest in more than six years after a bitter fight between Saudi Arabia and the United Arab Emirates plunged OPEC+ into crisis and blocked a supply increase. West Texas Intermediate crude had advanced to $76.98 a barrel, the highest since November 2014,as the break- After several days of tense talks, Opec and its allies abandoned their Monday meeting A disagreement over how to measure production cuts upended a tentative deal to boost output The breakdown in talks left the market without the extra supplies for next month it had been counting on down in talks left the market without the extra supplies for next month it had been counting on. What happens next will determinewhetherthe standoff could escalate into a conflict as destructive as last year’s price war. Atstakeisthestabilityofthe globaleconomicrecoveryamid growinginflationarypressures, andtheabilityoftheproducers’ alliance to retain its hard-won control over the oil market. With the US holiday driving season underway and gasoline prices alreadyabove $3 a gallon — seen as a sensitive threshold for motorists — the fear that events could spiral further was evident,with the White House urging a compromise. Meeting abandoned After several days of tense talks,theOrganizationofPetroleum Exporting Countries and New Delhi its allies abandoned their Monday meeting. A disagreement overhowtomeasureproduction cutsupendedatentativedealto boostoutputandswiftlydeteriorated into an unusually personal and public spat between SaudiArabia and the UAE. The last time those two countries clashed over oil policy, in December 2020, the UAE floated the idea of leaving the cartel. Continued on Page 2
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