OPINION, P6 ECONOMY, P2 P SETH, P PINGALI, & B MITTRA The ethanol PLI could adversely impact India’s food security MARKETS, P9 EDITORIAL DISINVESTMENT ‘NOT ACCEPTABLE’ Govt must listen to Tesla, Hyundai on import duty relief, a temporary cut to benefit India in long run BPCL, LIC transactions by year end, strategic sales in focus: Pandey Many companies lacking on disclosure front, says Sebi chief Tyagi MUMBAI, THURSDAY, JULY 29, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. LXI NO. 178, 22 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: 52,443.71 ▼ 135.05 NIFTY: 15,709.40 ▼ 37.05 NIKKEI 225: 27,581.66 ▼ 388.56 HANG SENG: 25,473.88 ▲ 387.45 `/$: 74.38 ▲ 0.09 `/€: 87.89 ▼ 0.14 BRENT: $74.84 ▲ $0.36 GOLD: `47,617 ▲ `55 TARIFF TWEAK Bharti’s entry-level pre-paid plans hiked Scraps base pre-paid Entry-level prepaid plans plan of `49, replaces with 28-day validity it with `79 plan I-T portal issues to be resolved soon, says FM WITH GLITCHES STILL haunting the new income tax portal, finance minister Nirmala Sitharaman on Wednesday said she wished the Infosys-developed website did not have such a launch but hoped issues will be sorted out soon, reports PTI. Govt calls for state-specific sero surveys THE CENTRE ON Wednesday asked states to conduct state-specific Sero Surveys to generate district-level data on sero-prevalence so that these findings would guide formulation of localised public health responses to manage Covid cases, reports fe Bureau in Pune. Special Features Adopting a product based approach to get a head start ■ eFE, P7 Nokia G20: This Android phone is a beauty built to last Nokia G20 is a good looking, premium-styled device with 3-day battery life. Priced at `12,999, this super-fast and responsive phone outperforms some of the more expensive offerings in this segment ■ Gadgets, P7 QuickPicks India smartphone shipments cross 33 m units in April-June INDIA’S SMARTPHONE shipments grew 82% y-o-y to reach over 33 million units during April-June 2021, reports fe Bureau in New Delhi. However, the market fell 14% q-o-q as the second wave adversely impacted consumer sentiment, Counterpoint Research said on Wednesday. Smartphone shipments witnessed low volumes during April and May. However, the market saw a pent-up demand in June as curbs were lifted and stores started to reopen, said Counterpoint’s Prachir Singh. PAGE 4 Bond yields rise as international crude prices inch higher BOND YIELDS rose nearly 1-3 basis points on Wednesday on rising oil prices, reports fe Bureau in Mumbai. The sell-off in bonds took place as primary dealers had to lighten their positions ahead of weekly bond auction due on Friday. Dealers also said that traders had cut their long positions ahead of the release of the Federal Reserve's meeting. The yield on new 10-year benchmark 6.10%-2031 bond ended at 6.1879%, which is almost 1 bps higher than its previous close. PAGE 9 After Flipkart,Amazon files plea in SC against antitrust probe A DAY AFTER Flipkart, Amazon on Wednesday also moved the Supreme Court challenging the Karnataka HC’s order allowing the CCI antitrust probe, reports fe Bureau in New Delhi. Amazon said the HC order “fails to appreciate that the prima facie order does not meet the jurisdictional prerequisites for a finding of contravention of Section 3(4) of the Competition Act, even at the prima facie stage” and is contrary to the principles laid down by the courts. PAGE 5 `75 Reliance Jio `69 and `39 with 14 days validity `49 `39 with Vodafone 14 days validity Idea ment in its Arpu. Its current Arpu at `145 is the best in the industry.Bharti has around 55 million users in the `49 plan. Since Reliance Jio, whose pre-paid tariffs are on an average15-20%lowerthanBharti's, is not raising tariffs across the board, Bharti has taken bold as well as cautious steps in rejigging its tariffs to improve its realisationsaswell asArpu. Continued on Page 2 FE BUREAU New Delhi, July 28 IN A RELIEF to depositors of stressed banks, the Cabinet on Wednesday cleared amendmentstotheDepositInsurance Credit Guarantee Corporation (DICGC) Act,which will enable customerstohaveaccesstotheir deposits up to `5 lakh within just 90 days, if their banks go bustandareplacedundermoratorium.The Cabinet also approved amendments to the limited liability partnership (LLP) Acttodecriminaliseadozenoffencesandenablesuchentitiesto enjoythe same benefits as large companies — a decision that is Amended DICGC Act to cover 98.3% of depositors and 50.9% of deposit value in the banking system Earlier, even 8-10 yearswould lapse until customers ofa fallen bank could get the insured amount Itwill cover all types ofbanks,which also include RRBs and co-operative banks 12 offences, remove 3 sections expected to help hundreds of start-ups,among others. Briefing reporters, finance and corporate affairs minister Nirmala Sitharaman said the DICGC (amendment) Bill will cover 98.3% of depositors and 50.9% of deposit value in the banking system,wayabove the global level of 80% and 20- Investment comes within four months of it entering the unicorn club FE BUREAU New Delhi, July 28 The DICGC (amendment) Bill to be presented in this session ofParliament ■ Amendments to LLPBill to decriminalise Gupshup raises fresh $240 million ■ Definition ofsmall LLPs to be significantly expanded 30%, respectively. There were instances when 8-10 years used to lapse until a customer ofafallenbankcouldfinallylay their hands on the insured deposit amount, that too, only afterthebank’sliquidation,the minister said. Continued on Page 2 CONVERSATIONALMESSAGING PLATFORM Gupshup has raised a fresh $240 million in funding from a clutch of investors, including Fidelity Management and Research Company, Tiger Global, Think Investments and Malabar Investments, the company saidinastatementonWednesday. The investment which comes less than four months after it secured $100 million from investors and is primarily a follow-on funding round also saw participation from Harbor Spring Capital, certain Investment is an extension ofthe funding round announced in earlyApril Funds to be used for secondary share buys from current & former staff, prior investors Company also looking at suitable M&A opportunities Firm turned unicorn in April with $100 million funding by Tiger Global at a valuation of $1.4 bn accounts managed by Neuberger Berman Investment Advisers, White Oak, Neeraj Arora and others. Continued on Page 16 Droom turns unicorn with $200-m round THELOKSABHAonWednesdayapprovedthe Insolvency and Bankruptcy Code (amendment) Bill, which will replace an Ordinance that was promulgated inApril to introduce a so-called pre-pack resolution scheme for micro, small and medium enterprises (MSMEs),reports fe Bureau in NewDelhi. Theschemeallowsonlythedebtortotrig- ONLINE AUTOMOBILE MARKETPLACE Droom has closedthefirstlegofitspre-IPO fundingroundofupto$200 millionatavaluationof$1.2 billion, making it the latest entrant to the unicorn club, reports fe Bureau in New COVID COST ger its own bankruptcy process with the approvaloffinancialcreditorshavingatleast 66% of voting power. It will yield resolution faster than the extant corporate insolvency resolution process (CIRP) and cut costs,analysts reckon. If lenders wish to trigger insolvencyagainstMSMEs,theycanstilldosobut under the usual CIRP. ■ Page 2 Delhi.Itislookingtogopublic in 2022 and plans to get listed either in India or on Nasdaq.The financial round was backed by new investors 57 Stars, Seven Train Ventures and a clutch of existing investor. ■ Page 4 ● COURT CALL Maruti misses Street estimates on all fronts FE BUREAU Mumbai, July 28 Report card PRODUCTION SHUTDOWNS DUE to Covid, higher raw material prices as well as chip shortages, dented Maruti Suzuki's earnings during the April-June quarter with the company missing analysts estimates on all the fronts.The worst was the operating margin,which as a result of higher raw material prices came at a multi-year low — if last year’s negative numbers are excludedwhichwas an aberration due to national lockdown. Lower sales volume, which was a result of production shutdownsandclosureofdealerships due to the secondwave ofCovid,sawnetprofitat `441 crore. Though this was an improvement since the company had a net loss of `249 crore in the same quarter last year,itwasjust half of `878.72 crore that Bloomberg’s analysts'consensushadestimated. Revenue from operations Ebitda Q1FY21 Q1FY22 (` crore) % chg Ebitda Net margin profit/ (%) Net loss 4.6 333 -21 NA NA NA Coming on a lowerbase,the company’s revenue from operations at `17,771 crore was up 333% on a year-on-year basis. However, it remained much below estimates of `18,171 crore.Thesalesinthefirstquarterremained farbelowthe previous high in Q1FY19 aswell. Continued on Page 16 RBI allows non-bank payment system providers to participate in RTGS, NEFT THERESERVEBANKofIndia on Wednesday allowed authorised non-bank payment system providers to participate in centralised payment systems, such as RTGS and NEFT, as direct FM-SPEAK IN CONVERSATION Pre-pack scheme: Lok Sabha clears Bill to replace IBC ordinance « Building capabilities around products and diversifying the same is part of L&T Infotech’s framework to deliver in the era of cloud based services technology, says CEO & MD Sanjay Jalona Bharti Airtel NA -249 441 AFTERHIKINGPOST-PAIDtariffsattheupperend—corporate customers — last week, the country’s second-largest telecom operator, Bharti Airtel on Wednesdayraisedthebarforits entry-level pre-paid users.The companyhas scrappedthe base level monthly pre-paid plan of `49 and replaced it with a monthlyplanof`79,withmore data. Simply put, Bharti's tariff plans nowstart at `79 a month against the earlier`49. This is the second time Bharti has raised the base level plan.In December2019,it had scrapped the `35 entry-level plan to replace it with the `49 plan. Mostly entry-level plans aresubscribedby2Guserswho are on feature phones. With such hikes, they either leave the network or upgrade to higher level plans, which also include4Gplans.Inbothcases, the company's average revenue per user sees a jump. Last time, when Bharti raised the tariff level from `35 to `49, it lost around 35 million users but saw improve- `79 Access to deposits in 90 days if a bank goes bust -863 821 FE BUREAU New Delhi, July 28 Deposit insurance cover gets stronger 17,771 THE RBI ON Tuesday said it has imposed a penalty of `5 crore on Axis Bank for contravention of certain provisions of directions issued by the RBI, including on cybersecurity framework, reports PTI. The penalty has been imposed for "contravention of/non-compliance" with certain provisions of directions issued by the RBI. CHANGES TO ACT 4,107 IN THE NEWS RBI imposes `5-cr penalty on Axis Bank members, reports PTI. PSPs include prepaid payment instrument issuers,cardnetworks,whitelabelATMoperators and trade receivables discounting system platforms. ■ Page 10 HC gives Twitter one last chance to comply with IT rules FE BUREAU New Delhi, July 28 EXPRESSING DISPLEASURE OVER appointment of a “contingent worker” as chief compliance officer (CCO),the Delhi HighCourtonWednesdaygave themicrobloggingsite,Twitter one “last opportunity” to file a “better” affidavit showing full compliancewiththenewInformationTechnology(IT) Rules. Justice Rekha Palli took strong exception to Twitter’s attitude and termed its latest compliance affidavit as “unacceptable”. The judge told Twitter“not make thingsworse foritself by expectingthecourttowaitforever”,as the affidavit filed by it showed serious non-compliance with the Information Technology (Intermediary Guidelines and Digital Ethics Code) Rules, 2021. The court did not take kindlyto the company's move to appoint one Vinay Prakash, a 31-year old “contingent worker” via a third-party contractor,as CCO when the rules mandate appointment of a keymanagerial person or a senior employee as CCO. Continued on Page 16 CLOSE TIES Foreign minister Subrahmanyam Jaishankar (right) with US secretary of state Antony Blinken before meetings at Hyderabad House, in New Delhi on Wednesday Racing ahead PTI FE BUREAU Bajaj Finserv m-cap zips past Axis Bank Bajaj Finserv overtook the market capitalisation of Axis Bank for the first time as the shares surged to a life-time high. The stock has returned a whopping 56.9% so far in 2021 against 16.5% of Axis Bank. At the close, the market capitalisation of Bajaj Finserv stood at `2.22 lakh crore, which is `738 crore higher than Axis Bank. 3,00,000 2,50,000 2,21,586 Axis Bank 2,00,000 1,50,000 1,23,337 1,00,000 1,00,938 50,000 July 28, 2020 2,22,324 Bajaj Finserv Market cap on NSE (` crore) Source: Bloomberg July 28, 2021 FLIGHT PLAN Jhunjhunwala ready to take his new airline plan to the skies RAGINI SAXENA July 28 BILLIONAIRE INVESTOR RAKESHJhunjhunwalaisplanning on having 70 aircraft within four years for a new airline he wants to set up in India on optimism more people will travelbyair.Jhunjhunwala,who is considering investing $35 million and would own 40% of the carrier, expects to get a noobjection certificate from the aviationministryinthenext15 days, he said in a Bloomberg Television interview on Wednesday.Theultra-lowcostairline will be called Akasa Air and the team,which includes a former seniorDeltaAirLinesexecutive, is looking at planes that can carry180 passengers,he said. It’s a bold bet by Jhunjhunwala, who’s known locally as India’sWarrenBuffett,inamarket that has seen some airlines collapse in the face of intense fare wars and high costs. Still, what was once the world’s fastest-growing aviation market holds an allure and Jhun- ILLUSTRATION: ROHNIT PHORE jhunwala is looking at opportunitiestowooflyerswithabrand new carrier offering low fares. “Forthecultureofacompanyto be frugal you’ve to start off fresh,”Jhunjhunwala said.“I’m very,verybullishonIndia’saviationsectorintermsofdemand.” EvenbeforeCovid,airlinesin India were struggling. Kingfisher Airlines, once the country’s second-largest domestic carrier, ended operations in 2012, and Jet Airways India, whichwas recentlyapproved to fly again, collapsed in 2019. While demand for air travel has beenhitglobally,India’saviation industry is at greater risk of delayedrecoveryasthethreatof athirdwaveofinfectionslooms. Airlines are feeling the impact. Vistara,aSingaporeAirlinesTata Group JV, is in talks with BoeingandAirbustodelaydeliveries and make changes to paymenttimetables.IndiGo,India’s largestairline, reportedawiderthan-anticipated loss as Covid crimpeditsrevenue. Continued on Page 2
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