OPINION, P6 COMPANIES, P4 ANIRBAN GHOSH EU’s carbon border adjustment has little climate gains MARKETS, P9 EDITORIAL Q1 REPORT CARD ON THE ANVIL New responsibilities for resolution professionals could help check promoter malfeasance, boost recoveries HUL net profit rises 10% to `2,061 cr; recovery led by rural demand RBI working on digital currency, pilots in near future: Deputy governor MUMBAI, FRIDAY, JULY 23, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. LXI NO. 173, 20 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 SENSEX: 52,837.21 ▲ 638.70 NIFTY: 15,824.05 ▲ 191.95 NIKKEI 225: 27,548.00 ▲ 159.84 HANG SENG: 27,723.84 ▲ 499.26 `/$: 74.47 ▲ 0.15 `/€: 87.83 ▲ 0.21 BRENT: $72.56 ▲ $0.33 GOLD: `47,471 ▼ `562 CABINET NOD IN THE NEWS Cabinet approves raising FDI limit to aid BPCL sale Specialty steel PLI caps group benefit at `200 crore/year THE Cabinet on Thursday approved raising the foreign investment limit in privatisation-bound public sector oil refiners, a move that will aid the sale of government stake in BPCL, reports PTI. Officials said the Cabinet has approved a proposal to allow FDI limit in state refineries that are disinvestment candidates to 100% from 49%. The `6,322-crore scheme designed to create investment of `40,000 crore over 5 years Pegasus snooping reports: Plea in SC seeks SIT probe POTENTIAL GAIN ` 40,000 cr ■ Investments in specialty steel over 5 years Zomato shares to debut on exchanges today ONLINE FOOD ordering platform Zomato, which last week closed its mega IPO raising over `9,000 crore, will list on the stock exchanges on Friday, days ahead of its earlier schedule of the next week, reports PTI. Postpaid users contribute 20% of revenues; move to help boost average revenue per user KIRAN RATHEE New Delhi, July 22 specialty steel by FY27, imports to drop BHARTI AIRTEL, THE country’s second largest telecom operator, on Thursday made the first move in raising tariffs by announcing a price hike for its postpaid subscribers. The hike is substantial — at 50% — in the enterprise segment, which accounts for around 60% of the company’s postpaid users. Though postpaid users comprise only 5% of the total subscriber base of the company,intermsofrevenuesthey contribute around 20% and are high Arpu users. The aver- ■ Production of THE CABINET ON Thursday approved a `6,322-crore production-linked incentive (PLI) scheme to boost domestic output of high-grade specialty steel,whichaccountedfor60% of India’s imports of the metal last fiscal, and brightens the prospects of the local industry that primarily operates at the lowerend of thevalue chain. Under the scheme, to be implemented between FY24 and FY28, eligible manufacturerswill get incentives in the range of 4-12% on incremental production. However, the benefit will be capped at a maximum of `200 crore per group peryear,Union minister AnuragSinghThakursaidafter theCabinet meeting.Thislimit willpreventcorneringofasubstantial chunk of incentives by any large industrial group. Thebenefitswilllargelyoff- A PETITION has been filed in the Supreme Court seeking a special investigation team (SIT) into reports of government using Israeli software Pegasus to spy on Indian citizens, Opposition leaders, activists, journalists and even on its own ministers, reports fe Bureau in New Delhi. Bharti hikes postpaid Sale of PSBs,general insurer faces delays tariffs by up to 50% `2,50,000 cr FE BUREAU New Delhi, July 22 `33,000 cr ■ Export opportunities to be generated 5,25,000 ■ Total jobs to be created, including 68,000 direct ones set the“disabilities”tothetune of $80-100 pertonne faced by the local industry for producing each tonne of specialty steel due to elevated logistics, power and capital costs, and taxes and other levies. MISSING TIMELINES TAKING THE LEAD THE NEW PACKS Enterprise segment: Retail customers: ■ `199 and `249 monthly plans discontinued ■ `749 monthly planwith 2 SIMs dropped ■ Starting plan ■ `999 monthly plan now `299 ■ All corporate now becomes the base family plan Tata Asset Management’s Rahul Singh suggests a mix of dynamic asset allocation or balanced advantage funds and large & midcap/ flexicap funds and reducing small cap exposure ■ Personal Finance, P7 Financial bids for Air India by September 15, says Centre FINANCIAL BIDS for the government’s entire stake in Air India are likely to be in by September 15, Parliament was informed on Thursday, reports fe Bureau in New Delhi. The government also informed the house that Cairn Energy's and Devas Multimedia’s lawsuits in the United States District Court for Southern District of New York seeking declaratory and money judgment against AI as an ‘alter ego’ of the government of India won’t impact the ongoing disinvestment process of the airline. PAGE 2 Bajaj Auto plans to set up subsidiary for EV business BAJAJ AUTO on Thursday said it plans to set up a wholly owned subsidiary to pursue its electric vehicle (EV) ambitions, reports Geeta Nair in Pune. Rakesh Sharma, ED, Bajaj Auto, said the company plans to be a major part of the EV market, from the Yulu range of entry-level electric bikes to high-performance motorcycles and everything in between. Efforts are underway with R&D, a collaboration with KTM, working vendors and building capability. Soumen Rai, CFO, Bajaj Auto, said the company is setting up a domestic subsidiary after a long time. PAGE 4 546.50 550 545 ■ Only 3 SIMswill be given instead ofearlier 4 540 ■ 60% oftotal ■ Add-on SIM 525 postpaid users are in enterprise segment connection rate also raised from `249 to `299 age revenue per user (Arpu) of the company, therefore, will rise as a result of this move. At the end of the March quarter, Bharti’s Arpu was `145, the highest in the industry. The move is seen as smart aswellascautiousasfarasrais- 535 530 529.20 520 Previous close: 515 525.85 Open Close ing tariffs is concerned in an environment where with Jio not taking an initiative in raising prepaid tariffs, other operators are constrained as their tariffs are already at a premium to Jio’s. Continued on Page 2 DESPITE A BUDGET announcementthatprivatisationoftwo public-sector banks (PSBs) and onegeneralinsurerwillbe‘taken up’ in the current fiscal, the government isn’t reasonably expecting these deals will be throughintheyear,accordingto official sources. Proceeds from the sale of the PSBs and the insurer are not built into the budget estimate (BE) of `1.75 lakh crore for disinvestment revenue in the current year,the sources added. With the uncertainty over the duration and brunt of the pandemic looming,it is still an openquestionifsomeofthebigticketdealsbeingplannedcould be completed in the year, but governmentofficialsareguardedly optimistic about meeting the target.Already, Covid-induceddelaysarebeingnoticedin the processes regarding strategic sales of BPCL,IDBI Bank,Air India and also the listing of LIC. two public sector banks and one general insurer not integral to FY22 disinvestment target ■ Privatisation of Strategic sales ofBPCL,AI, IDBI Bank, and LIC IPO high on disinvestment agenda ■Concerns over meeting `1.75L-cr disinvestment target for FY22 rise due to Covid-induced delays in processes ■A10% stake sale in LIC could fetch govt `80k-1L cr, but the process could push the issue to March, or even to FY23 Privatisation of PSBs will require amendments or repeal of the Banking Companies (Acquisition and Transfer of Undertakings)Actsof1970and 1980 (NationalisationActs). Continued on Page 2 FUTURE DEAL Continued on Page 2 ADITYA KALRA New Delhi, July 22 FE BUREAU New Delhi, July 22 QuickPicks Intra-day on BSE (`), July 22 A DIFFICULT GOAL CCI accuses Amazon of concealing facts S&P changes outlook for Adani Mumbai discom to ‘negative’ ‘Inflation impact biggest risk to equity valuations’ Bharti Airtel userswould be moved to this plan ● DOWNGRADE Special Feature PRASANTA SAHU New Delhi, July 22 S&P GLOBAL RATINGS has downgraded the outlook for Adani Electricity Mumbai (AEML) to‘negative’from‘stable’, mainly over apprehensions that the leveragelevels of Adani Transmission (ATL), AEML’s holding company,will rise over the next two years as it undertakes significantly higher spending to grow its asset base. The agency has retained ‘BBB-’ credit rating on AEML. Obligations rated 'BBB' by S&P exhibits adequate protection parameters, but adverse economic conditions are more likelytoweakentheircapacityto meet financial commitments. AEML runs the power distributionbusinessin Mumbai. Overthenexttwoyears,S&P expects ATL’s leverage level (ratiobetweenfundfromoperations and debt) to dip to 7% in FY22, before rising to 8.2% in FY23, as it sets to incur `17,000-crorecapitalexpenditureoverthenextthreefiscalsto complete several under-constructiontransmissionprojects. Continued on Page 15 THE COMPETITION COMMISSION has accused Amazon of concealing facts and making false submissions when it sought approval for a 2019 investment in a Future Group unit, a letter to the US e-commerce giant seen by Reuters showed. The letter complicates Amazon’s bitter legal battle with Future Group over the firm’s decision to sell its retail assets to Reliance Industries a matterthat is nowbefore the Supreme Court. Amazon has argued that terms agreed upon in its 2019 deal to pay $192 million for a 49% stake in Future’s gift voucher unit prevent its parent, Future Group, from selling its Future Retail business to Reliance. In the letter dated June 4, the Competition Commission of India (CCI) saidAmazon hid factual aspects of the transaction by not revealing its strategic interest in Future In the letter dated June 4, CCI said Amazon hid factual aspects of its transaction with Future Group in a 2019 deal by not revealing its strategic interest in Future Retail when it sought approval It also asked Amazon why it should not take action and penalise the company for providing false information The review of the submissions were carried out by CCI after a complaint from Future Group Retail when it sought approval for the 2019 deal. Continued on Page 15 ■ Future Group induced us to invest `1,431 cr in unit, says Amazon, Page 5 BlackBuck turns unicorn with latest raise ONLINE TRUCKING PLATFORM BlackBuck joined the ranks of unicorns after it secured $67 million in fresh funding led byTribe Capital, IFC Emerging Asia Fund and VEF at a valuation of over $1 billion, reports fe Bureau in New Delhi. The investment, part of the company’s Series E financialround,alsosawpartic- ipation from existing investors Wellington Management, Sands Capital and International Finance Corporation, the company said in a statement onThursday. The Bengaluru-based firm had last raised $150 million in funding from a clutch of investors in May2019. ■ Report on Page 5 UPSETTING PLANS Tata’s pushback against new e-comm rules ADITYA KALRA & ABHIRUP ROY New Delhi, July 22 TATA GROUP IS taking a more vocal interest in rules shaping online marketplaces, hinting at ambitions as it reappraises its retail strategy just as e-commerce reform threatens to muddy plans. The $106-billion conglomerate yet e-commerce minnow was far more vociferous in discussions than market leader Amazon at a July 3 meeting with government officials about proposals such as the prohibition of sales of own-brand or affiliates’goods,attendees said. The rules would greatly increase ■ Tata group aims to pilot an app this year through which it plans to offer multiple services ■ Tata bought a majority stake in online grocer BigBasket in May for over $1 billion ■ The pilot could begin as early as September in Bengaluru, according to sources ■ The group reportedly plans to buy many more brands to boost its e-commerce presence the compliance burden of a conglomerate’s numerous entities and interests, and hurt them far more than smaller rivals, Tata vicepresident Poornima Sampath told the online gathering, according and took control ofonline pharmacy 1mg in June to two attendees. Tatadeclinedtocomment forthis article.Sampath did not respond to a request for comment. Continued on Page 15 Mumbai
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