OPINION, P6 ECONOMY, P2 STEPHEN S ROACH China lacks foundation of trust underpinning animal spirits INTERNATIONAL, P8 S SUBRAMANIAN MONEY LAUNDERING CASE TECH WARS IBC is a good law, tweaks can resolve the 'sanctity of the process-value maximisation' trade-off ED arrests Avantha Group promoter Gautam Thapar Apple working with Chinese suppliers for latest iPhones: Report NEW DELHI, THURSDAY, AUGUST 5, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 134, 26 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: 54,369.77 ▲ 546.41 NIFTY: 16,258.80 ▲ 128.05 NIKKEI 225: 27,584.08 ▼ 57.75 HANG SENG: 26,426.55 ▲ 231.73 `/$: 74.19 ▲ 0.10 `/€: 87.98 ▲ 0.30 BRENT: $71.41 ▼ $1.00 GOLD: `47,852 ▲ `2 Q1 PERFORMANCE IN THE NEWS RS nod: DICGC Bill to help small depositors, says FM BOWING OUT SBI reports 55% jump in profits THE US is trying to provide for countries like India the capacity to produce Covid19 vaccines themselves, President Joe Biden has said, as he highlighted the efforts of democratic nations to help the world stem the surge of the pandemic, reports PTI. Special Features Driving connected operations with Internet of Things Tata Communications has been doubling down on Internet ofThings (IoT) to derive new business values and open new revenue channels for its clients, especially in manufacturing ■ eFE, P7 Canon Pixma G670: This makes printing at home easy The Canon Pixma Ink Efficient G670 is a compact and inexpensive machine that can print, scan, copy and supports wireless and mobile printing. Get it for your printing jobs as you work & study from home ■ Gadgets, P7 QuickPicks Commercial coal auctions: Adani firms win 3 out of 8 mines ADANI GROUP entities have won three out of the eight mines, which went under the hammer in the second tranche of commercial coal mining auctions, reports fe Bureau in New Delhi. On the last day of the auction round, Adani subsidiary CG Natural Resources won the Khargaon mine in Chhattisgarh against the highest bid of 6% revenue share. It had also won the Jhigador mine in Chhattisgarh Day 1, while Adani Power Maharashtra had bagged the Gondkhari block in Maharashtra. PAGE 2 Adi Godrej to step down from Godrej Consumer board in Sept VETERAN INDUSTRIALIST and Godrej Group chairman Adi Godrej will step down from the board of Godrej Consumer Products (GCPL) next month, reports PTI. After stepping down from the board with effect from September 30, he will remain the chairman emeritus of the FMCG firm, according to a statement issued on Wednesday. The 79-year-old industrialist passed on the baton of GCPL to his younger daughter Nisaba Godrej in 2017. PAGE 4 Piramal plan for DHFL: 63 Moons moves SC against NCLAT order 63 MOONS Technologies, a debenture holder of the debt-ridden DHFL, on Wednesday moved the Supreme Court against the National Company Law Appellate Tribunal’s order that refused to stay the implementation of Piramal’s approved resolution plan for the mortgage lender, reports fe Bureau in New Delhi. 63 Moons, which holds NCDs worth over `200 crore issued by DHFL, has challenged the NCLAT’s order on grounds that the current resolution plan is disappointing for NCD holders. PAGE 3 26,642 27,638 3.74 48.32 Domestic net interest margin (NIM in %) Net Profit « 4,189 12,501 10,052 Provisions 9 bps « 3.15 6,504 3.24 55.26 19.59 Gross NPA (%) 5.44 5.32 12 bps Net NPA (%) 1.86 1.77 9 bps « US trying to help India, others make Covid jabs: Biden 1.8 Other 7,957 income 11,803 « RBI SAID it will give banks an extra three months till October 31 to implement the revised rules on opening and maintaining current accounts, reports PTI. RBI's rules aim to clamp down on people opening multiple accounts to borrow money. Net interest income 75,998 77,367 « STATE BANK OF INDIA’S (SBI) standalone net profit rose 55% year-on-year (y-o-y) to `6,504croreinQ1FY22onthe back of a 48% jump in noninterest income. However, the bank reported a deterioration in asset quality across segments of retail credit as collections were hit by the second wave of Covid-19. In the June quarter, slippages fell 29% sequentially to `15,666crore.Ofthetotalslippages,`6,416crorecamefrom the small and medium enterprises (SME) segment and `5,268 crore from retail. The ratio of gross non-performing assets (NPAs) in the retail segment was 1.28%. The bank reportedanNPAratioof2.24% initsgoldloanbookand1.39% in its home loan book. Half of SBI’s home loans are to the non-salaried segment and some of them are linked to SME borrowers, said Dinesh Khara,chairman,SBI.Heattrib- Total income « Current a/cs: Banks get more time to comply with rules FE BUREAU Mumbai, August 4 Q1FY22 « FE BUREAU Mumbai, August 4 SBI Q1 report card (` cr) Q1FY21 Chg (%) « Retail asset quality worsens across segments as Covid second wave hits collections « THE DEPOSIT Insurance Credit Guarantee Corporation (DICGC) Amendment Bill, which was approved by the Rajya Sabha on Wednesday amid Opposition uproar, will help small depositors, including those of the crisisridden PMC Bank, finance minister Nirmala Sitharaman said, reports fe Bureau in New Delhi. Birla steps down as Voda Idea chairman Source: BSE uted the high NPAratio in gold loans to the inability of collection staff to reach borrowers amid mobilityrestrictions. Khara said after the second wavereceded,thebankhasseen adecentpullbackinhomeloans and the otherretail segments. Continued on Page 2 ● ‘DEEMED APPROVAL’ CCI clears PNB Housing Finance deal with Carlyle FE BUREAU New Delhi, August 4 THE COMPETITION COMMISSION of India (CCI) has accorded“deemedapproval”to a proposal of Carlyle-backed Pluto Investments and Salisbury Investments to pick up a majoritystake in PNB Housing Finance (PNBHF), even as the Securities Appellate Tribunal (SAT) is yet to deliver its judgment on the deal. In a notice reviewed by FE, the CCI said: “The proposed combination involves Pluto and Salisbury acquiring up to approximately 56.29% (assuming full tendering and acceptance in the mandatory open offer) and approximately 0.24% of the post-preferential allotment equity share capital of PNBHF, respectively.” While the deal value isn’t mentioned in the notice, PNBHF board had earlier approvedaproposal toraise up to `4,000 crore by issuing equity shares and convertible warrants to entities led byCarlyle Group firms. Responding to the news on Wednesday, the share of PNBHF hit the 5% upper circuit at `720.45 on the BSE. Continued on Page 2 BIG WINS Ravi Kumar Dahiya (right) walks away after beating Kazakhstan’s Nurislam Sanayev in the semifinals to assure India of its second silver medal at the Tokyo Olympics on Wednesday; Lovlina Borgohain, however, will bring home a bronze as she lost to Turkey’s Busenaz Surmeneli in the semifinal face-off. POSITIVE CUES Sensex crosses 54k as markets extend rally Banking and financial stocks see hectic buying PRESS TRUST OF INDIA Mumbai, August 4 EQUITY BENCHMARKS SOARED to fresh lifetime highs on Wednesday, with the Sensex surging past the 54,000-markforthefirsttime, asstellarearningswhettedrisk appetite amid supportive global cues. Bankingand finance stocks saw hectic buying after largest lender SBI reported a 55% jump in standalone net profit at `6,504 crore for the June quarter. Surging for the third straight session,Sensex rallied 546.41 points or1.02% to end at its newrecord of 54,369.77, bettering the previous session’s closing high.It scaled its lifetime peak of 54,465.91 during the session. Similarly, Nifty surged 128.05 points or 0.79% to its all-time peak of 16,246.85. It touched a lifetime intra-day high of 16,290.20. 54,500 Sensex (Intra-day, Aug 4) 54,400 54,300 54,369.77 Close 54,200 54,100 54,071.22 Open 54,000 Previous close : 53,823.36 53,900 Nifty50 16,300 10-year bond yield (%) Intra-day, Aug 4 16,258.80 16,275 6.203 6.202 16,250 6.199 6.199 16,225 6.196 16,200 16,175 Intra-day, Aug 4 6.205 6.193 16,195.25 Previous close : 16,130.75 Open Close HDFCwasthetopperformer in the Sensex pack, surging 4.77%,followedbyKotakBank, ICICI Bank,State Bank of India, HDFC Bank and Axis Bank. On the other hand, Titan, Nestle 6.190 Previous close : 6.20 Open Close India, UltraTech Cement, Sun Pharma,Maruti and BhartiAirtel were among the laggards, dropping up to 2.14%. Continued on Page 2 Slow recovery FE BUREAU Services activity stays in contraction zone Services activity shrank for a third straight month in July, but the contraction level narrowed from June. Business activity, new orders and employment dropped again, as local curbs related to the second Covid wave weighed down demand. Firms were pessimistic about the 12-month outlook for output for the first time in a year and inflationary pressures rose across the services sector. 75 Manufacturing PMI 60 55.3 51.8 49.3 45 45.4 30 Services PMI 15 0 March 2020 July 2021 Note: Reading below 50 suggests contraction and above it indicates expansion Source: IHS Markit KM BIRLAhas stepped down as the non-executive chairman of financially-troubled Vodafone Idea,the companysaid in a regulatoryfiling onWednesday. “The board of directors of Vodafone Idea, at its meeting held today (Wednesday), have accepted the request of Kumar MangalamBirlatostepdownas non-executive director and non-executive chairman of the board with effect from close of business hours on August 4, 2021,”the filing said. The board has elected HimanshuKapania,currentlya non-executive director, as the non-executivechairman.Inthe past,hewastheMDofIdeaCellular before it was merged with Kumar Mangalam Birla Vodafone India. A telecom industry veteran, he is at present the chairman of the Ficci council on telecom,electronics and digital economy. Birla’ssteppingdowncomes at a time when VIL is going through a major financial crisis andhaswrittentotheCentrefor reliefintheformofextensionof moratorium on spectrum instalments and fixing a floor price forvoice and data tariffs. Continued on Page 16 BharatPe joins unicorn club, raises $370 m at valuation of $2.8 bn MERCHANT PAYMENTS SOLUTIONS provider BharatPe has raised a fresh $370 million in funding led by new investor Tiger Global atavaluationof$2.85billion, becoming the latest Indian start-uptobecomeaunicorn, reports fe Bureau in New Delhi. It is the 19th start-up to join the ranks of unicorns in the countrythisyear. The fundraise,part of the company’s Series E financial round, includes a mix of primary and secondary investment. The primary component of the round is about $350 million and the secondary amounts to $20 million. ■ Report on Page 4 TELCO TROUBLES Need 3 pvt players in telecom: Vittal FE BUREAU New Delhi, August 4 THE CALLFOR areliefpackage for the telecom industry grew louder on Wednesday with Bharti Airtel also saying the financially-stressed sector needs the government’s help and efforts should be made to ensurethatthreeprivatesector players remain in the market. Speaking to analysts a day after the April-June quarter earnings announcement, Gopal Vittal, managing director and CEO, India and South Asia, said there is serious financial stress in the industry and pointed out that one of the players has told the government that it won’t be able to pay its dues coming up in March 2022. “We hope the government does something to actually provide some relief to the industry. Even more important, I think is that if Arpu We hope the government does something to actually provide some relief to the industry. I would love to see a three-player market continuing as it is appropriate for a country as large as India. —GOPAL VITTAL MD & CEO, INDIA & SOUTH ASIA, BHARTI AIRTEL (average revenue per user) can go up, the industry repair will certainlyhappen,”Vittalsaid.“I would love to see a threeplayer market continuing as it is appropriate for a country as large as India,”he added. Continued on Page 2 Chip shortage: Suzuki Motor arm to cut production at Ahmedabad plant SUZUKI MOTOR Gujarat (SMG),a 100% subsidiary of Japan’s Suzuki Motor Corp, will scale down production activity this month at its Ahmedabad-basedmanufacturing plant due to semicon- ductor shortage, Maruti SuzukiIndiasaidonWednesday.SMG,whichsuppliescars exclusively to MSI, has also decided to cut production to single shift at some lines in the plant. ■ Page 4 LOWER MANDI ARRIVALS Small firms active in farm trade on behalf of bigger companies PRABHUDATTA MISHRA New Delhi, August 4 THOUGHTHE FARM laws that sought to liberalise marketing of agricultural crops have been keptinabeyancesinceJanuary, a steep fall in crop arrivals is being reported from several Agriculture Produce Marketing Committees-controlled mandis,indicating that significant volumes of the crops are directlypurchased from farmers by private traders. Even as big corporate houses are keeping away from directpurchasesoftheagricultural produce from farmers amid the row over the farm laws,smaller traders are active in the market and sell the stocks to the biggies. Direct purchases are less expensive to the traders as manditaxesarenotrequiredto be paid. While there are anecdotal evidences of a flourishing trade outside the mandis from other states, data gathered by FE from the Madhya Pradesh 150.63^ % change, y-o-y 47.6 18.7 32.47* Wheat All crops Mandi arrivals of rabi crop in Madhya Pradesh (April-June 2021), Lakh tonne *Source: Agmarknet portal; ^Source: Mandi Board, MP agriculture department showed arrivals of crops across the mandis in the state witnessed a 19% fall during the rabi harvesting period (April-June). Mandi arrivals of all agriculture and horticulture crops inthestatewereat150.63lakh tonne during April-June against 185.27 lakh tonne in the year-ago period. Wheat arrivals at the state's mandis witnessed an ever sharper 48%year-on-yearfall at 32.47 lakh tonne. New Delhi “As there was no decline in any of the rabi crop output barring masur, crops should have reached the mandis. Covid-19 can't be cited as reason for the fall as the pandemic was there during last season as well and a nationwide lockdown was imposed,” said a market observer adding that some more relaxations in enforcement would further push trading activities outside the APMC market yards. Continued on Page 2
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