OPINION, P6 COMPANIES, P4 S PAREKH & A CHOUDHARY Sebi’s insider trading rulings go against the regulatory objective INTERNATIONAL, P8 EDITORIAL UPDATING SOON BUYBACK PROGRAMME Cash flow relief for Voda-Idea in telecom package; several policy changes prospective, will help new palyers iPhone 13 coming to India on Sept 24; price starts at `69,900 Microsoft plans to buy back up to $60 billion in stock MUMBAI, THURSDAY, SEPTEMBER 16, 2021 VOL. LXI NO. 219, 18 PAGES, `7.00 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 58,723.20 ▲ 476.11 NIFTY: 17,519.45 ▲ 139.45 NIKKEI 225: 30,511.71 ▼ 158.39 HANG SENG: 25,033.21 ▼ 469.02 `/$: 73.49 ▲ 0.19 `/€: 86.91 ▲ 0.14 BRENT: $75.32 ▲ $1.72 GOLD: `47,065 ▲ `263 IN THE NEWS Cairn, Air India seek stay on NY court proceedings CAIRN ENERGY AND Air India have jointly asked a New York federal court to stay further proceedings in the British firm's US lawsuit targeting the airline for enforcement of a $1.2billion arbitral award, reports PTI. The move comes after India enacting a law to scrap retrospective taxation. India considers resuming vaccine exports soon INDIA IS CONSIDERING resuming exports of Covid19 vaccines soon, mainly to Africa, as it has partly immunised a majority of its adults and supplies have surged, a source with knowledge of the matter told Reuters. Insider trading: Sebi bars Poonawalla Fincorp MD SEBI ON WEDNESDAY barred Poonawalla Fincorp managing director Abhay Bhutada and seven other entities from the securities market for alleged insider trading activities in the shares of the company, which was earlier known as Magma Fincorp, reports PTI. POLICY CHANGES SOPS OF UP TO 18% Several rules altered to make it easier for operators in future Govt targets investments of `42,500 crore over five years Telcos get cash flow boost as Cabinet clears relief package FE BUREAU New Delhi, September 15 THE UNION CABINET on Wednesday approved the much-awaited revival package for the telecom industry,which is a combination of cash flow reliefforthefinanciallystressed operators as well as long-term measures like redefinition of adjusted gross revenue (AGR) and scrapping of spectrum usagechargeinfutureauctions. The major part of the package,which provides immediate cashflowrelieftothefinancially stretchedVodafone Idea,is that the payment of AGR dues has beendeferredforfouryearswith thenetpresentvalueprotected. Similarly,thedeferredspectrum instalments, which operators payforspectrumacquiredinthe past auctions, have also been deferred for four years. There was already a moratorium on it for FY21 and FY22, so adding that, operators have got a sixyearmoratorium. The deferment of AGR and spectrum dues will provide cash flow relief to Vodafone The latest reforms ensure that the industry is able to invest fearlessly and support India’s digital ambitions. —SUNIL MITTAL, chairman, Bharti Airtel ON OFFER AGR dues payment to be deferred for 4 years, but operators need to pay full in next 5 years Four-year moratorium on spectrum payment, but NPV protected ■ SUC payment at 3-5% of AGR to stay on existing spectrum; in future auctions, SUC to be scrapped NO CUT IN LICENCE FEE ■ Only additional govt dues on account of NPV because of deferral may be converted into equity ■ AGR only on telecom revenues but not from October 1 ■ Penalty and ■ Tenure of spectrum interest on penalty removed Idea(VIL)tothetuneofaround `88,000croreforthefour-year period. Its annual AGR instalment comes to around `8,000 crore and that on spectrum is `14,000 crore. Analysts said the measure surely gives VIL time to tide over its cash flow problems,buttherealrevivalof the company would only happenifitisabletopumpinfunds and generate enough cash to for future auctions raised from 20 years to 30 years invest in its networks and check subscriber churn. While telecom industryveterans like Sunil Bharti Mittal andMukeshAmbaniwelcomed the relief measures, analysts said apart from the cash flow relief component, companies wouldnotbenefitmuchasmost of the measures are linked to future spectrum auctions. The relief measures come FLIGHT PLAN Special Feature Galaxy Z Fold3 5G: The future of the smartphone is here Samsung Galaxy Z Fold3 is both category defying as well as category defining given its multitasking prowess. It is stylish & futuristic-looking with plenty of multitasking features; but then, it’s expensive too ■ Gadgets, P7 Exploring the new normal with tech innovations Businesses are opting for server solutions that aren’t only intelligent & fit every workload requirement but also protect customer data and are resilient to cyber threats, says Dell Technologies’ Manish Gupta ■ eFE, P7 QuickPicks Zee Ent, Dish TV will have to call EGMs in 45 days: IiAS THE BOARDS of ZEE Entertainment Enterprises and Dish TV will have to convene an EGM in 45 days and seek shareholders’ nod after large investors sought removal of certain directors, reports fe Bureau in Mumbai. “...Within 45 days, the company is required to hold an EGM and if they don’t, then the investors have three months to organise the EGM for which the company will have to bear expenses,” proxy advisory firm IiAS said in a note. PAGE 4 GST on food aggregators aimed at improving industry compliance THE GST Council fitment committee’s recommendation to bring food delivery apps such as Zomato and Swiggy within ambit of restaurant services and make them liable to pay the tax is aimed at shifting the responsibility from restaurants to apps to make compliance easier and certain, reports Prasanta Sahu in New Delhi. However, the move will likely marginally increase the tax incidence on small restaurants otherwise exempt from GST (annual turnover less than `20 lakh). PAGE 2 NCLT reserves order on Valli Arunachalam’s withdrawal plea THE CHENNAI bench of the National Company Law Tribunal (NCLT) on Wednesday reserved its order on a withdrawal plea relating to an earlier waiver petition filed by Valli Arunachalam and her family members for maintaining an alleged oppression and mismanagement case against Ambadi Investments (AIL), the holding firm of the Murugappa Group, reports Sajan C Kumar in Chennai. Though Arunachalam had sought to file a fresh waiver plea, AIL strongly opposed it at the hearing. PAGE 5 Tata group among bidders for Air India These reforms demonstrate the government’s firm commitment to ensuring healthy growth of the industry. —KM BIRLA, chairman, Aditya Birla Group into effect from October1. Incaseofdefermentofdues, the telcos have been given the option to pay the interest amount by way of equity,but it would be at the option of the government to convert the due amount pertaining to the deferredpaymentintoequityat end of themoratorium period. Continued on Page 10 BIG PUSH Auto & auto parts PLI `120 crore `42,500 cr `5,000 cr Incentives for 5 years Winning bidder to pay minimum 15% of bid amount in cash, balance to be adjusted against AI debt ■ AI’s total debt was over `60,000 crore as on March 31, 2019 ‘multiple’suitorsthatputinpreliminary bids for the loss-making airline in December2020. Continued on Page 2 Tata group’s organisation framework through a speculative company wise restructurewithmeseentobecritical toimplementingthischange,” he said.Tata Sons chairman N Chandrasekaran also said there are no leadership structural changes on the anvil at the holding company. ■ Pg 4 Outlay for 5 years FE BUREAU New Delhi, September 15 THE CABINETON Wednesday cleared a `25,938-crore production-linked incentive (PLI) scheme to promote advanced technological products in the auto and auto components sector.Under this,the government will offer up to 18% incentive to eligible investors over a five-year period. Despite a slash in outlay from `57,042 crore announced earlier, it still remains the biggest of the 13 PLI schemes proposed last year to lure large corporations to boost domestic manufac- turing and bolster advanced automotive technology supply-chain in India. The government expects the PLI scheme to bring in fresh investments of `42,500 crore over five years, spur incremental production of `2.3 lakh crore and generate ALL COMPANIES that invest in advanced automotive technology, including ICE players, will be eligible to tap the productionlinked incentive (PLI) scheme for the sector, heavyindustrysecretaryArun Goel told FE in an interview on Wednesday, reports Banikinkar Pattanayak in New Delhi. He, however, said those investing in the clean AGENCIES Sensex and Nifty vaulted to fresh lifetime peaks on Wednesday, boosted by telecom and auto stocks which saw brisk buying after the government announced packages for the sectors. The rupee also rose by 18 paise against the dollar on hopes of foreign fund flows 17,550 17,519.45 73.45 `/$ 17,510 73.52 Intra-day, Sept 15 17,470 73.59 73.49 Inverted scale Sensex 58,250 58,100 58,354.11 Intra-day, Sept 15 Close Nifty50 17,430 17,390 Previous close : 58,247.09 Open 17,350 Intra-day, Sept 15 73.67 Previous close : 17,380 Close justices DY Chandrachud and LN Rao said it was distressing that the names recommended by the selection committee werebeingtreatedwithdisdain. Continued on Page 2 Continued on Page 2 73.80 Previous close : 73.6875 Open Close SC slams govt for ‘cherry-picking’ names for tribunal appointments THE SUPREME COURT on WednesdayslammedtheUnion government for “cherry-picking”persons for appointments to various tribunals across the country,a week after it said the governmentwas‘emasculating’ the tribunals bynot appointing members on time. The top court gave the Narendra Modi government two weeks to specify the current status of appointments to these quasi-judicial bodies and also complete the appointments of members. “Return "We (the SC) chose 11 for judicial and 10 for technical (appointments to NCLT). But in the appointments, cherry-picking was done. And the same thing (has been) done with the ITAT members also. We are very unhappy with how the decisions are being taken.” —CHIEF JUSTICE NV RAMANA with the appointment letters...and if someone is not appointed, cite the reason,” a special bench led by Chief Justice NV Ramana told Attorney General KKVenugopal. The Bench also comprising Banks look to resolve large assets even as NARCL gets set up BANKS ARE CONTINUING with their regular practice of putting up large stressed assets for sale to asset reconstruction companies (ARCs) and other investorsevenastheprocessfor setting up the National Asset Reconstruction Company (NARCL)hasbeensetinmotion. The possibility of quicker and better-yielding resolutions in someassetsisthereasonbehind this, according to bankers and otherindustryexecutives. “We are exploring our optionsincaseswherewethink thereisapossibilityofachieving quicker resolution outside the NARCL.Also,manyof the assets which are being canvassed separately for sale to ARCs are not part of the list of assets identifiedfortransfertotheNARCL,”a senior executive with a midsized private banksaid. The process of setting up the bad bank, securing a guarantee from the government and finally getting the institution off the ground could take some time, bankers expect. In the meantime, they are trying to maximise recoveries in as many cases as possible. 73.73 17,387.65 Open 73.66 ● STRESS RELIEVER SHRITAMA BOSE Mumbai, September 15 TWO-WEEK DEADLINE FE BUREAU New Delhi, September 15 Continued on Page 2 advanced auto technology space will get higherbenefits (by5 percentage points) than therest.Thegovernmentwillofferupto18% incentiveunderthescheme.Commentingon whetherChinese playerswould be allowed to invest under the PLI scheme, the secretary said it doesn’t bar companies from any specific country. ■ Full report on Page 2 Auto, telco stocks take markets to new highs 58,400 7.5 lakh jobs. All existing and new players will be able to take advantage of the scheme, and not just firms in the clean auto tech space, heavy industry secretary Arun Goyal told FE. Scheme for ICE players too, says heavy industry secretary Record rally 58,723.20 7,60,000 Jobs to be Potential investments generated from both `2,30,000 cr `1,500 cr the PLI Expected incremental Likely incremental schemes production output Likely investments 58,550 Bids are based on enterprise value ofAir India Drones PLI `25,938 crore 58,700 No structural changes in leadership on the anvil: Tata, Chandrasekaran RATAN TATA, the octogenarianchairmanemeritusofTata Trustswhichhasacontrolling stakeinTataSons,onWednesdaysaidnorevampwastaking place at the group, reports fe Bureau in Mumbai. “I’m extremely disappointed with the recent media reports regarding a major revamp in —MUKESH AMBANI, chairman, RIL 58,850 FE BUREAUS New Delhi/Mumbai, September 15 TATA GROUP, SEEN as the top contenderto acquireAirIndia, has put in a financial bid to acquire the debt-laden national carrier,which still has lucrative bilateral rights and parking slots across the world. ATata Sons spokesperson confirmed the development. SpiceJet’s chairman Ajay Singh has also reportedly submitted a financial bid for AI, but FE could not independently confirm this. “Financial bids for Air India disinvestment received by Transaction Adviser (EY India). Process now moves to concludingstage,”departmentofinvestment and public asset management (DIPAM) secretary Tuhin Kanta Pandeytweeted. Tata Sons was among the The reforms and relief measures will enable the industry to achieve the goals of Digital India. I thank the Prime Minister for this bold initiative. `26,000-cr PLI for clean tech auto investments CHINA CLAMPDOWN Billions blown as Macau casino investors fold amid gambling review FARAH MASTER & DONNY KWOK Hong Kong, September 15 SHARES OF MACAU casino operatorsplummetedasmuch asathirdonWednesday,losing about $18 billion in value, as the government kicked off a regulatoryoverhaul that could see its officials supervising companies in the world’s largest gambling hub. With Macau’s lucrative casinolicencesupforrebidding next year, the plan spooked a Hong Kong market already deep in the red after Beijing’s regulatory crackdown on sectors from technology to educationandproperty that sliced hundreds of billions of dollars off assetvalues. Wynn Macau led the plunge, falling as much as 34% to a record low, followed by a 28% tumble for Sands China. Peers ILLUSTRATION: ROHNIT PHORE MGM China,Galaxy Entertainment,SJMandMelcoEntertainment all fell heavily, taking the droptoHK$143billion($18billion).The slump came after Lei Wai Nong, Macau’s secretary for economy and finance, gave notice on Tuesdayof a 45-dayconsultation period on the gambling industry to beginfromthefollowingday,pointingtodeficiencies inindustrysupervision. Beijing, increasingly wary of Macau’s acute reliance on gambling,has notyet said how the licence rebidding process will be judged. SomeHongKongstockanalystswastedlittletimeindowngradingtheirviewofnear-term prospects for casino operators in the Chinese specialadministrative region, who must all rebid for licenceswhen current permits expire in June 2022. JPMorganisdowngradingto neutral or underweight all Macau gaming names from overweight, because of the tougher scrutiny on capital management and daily operationsaheadof licencerenewals, said analyst DS Kim. “We admit it’s only a‘directional’signal,while the level of actual regulation or execution still remains a moot point,” he said, adding the news would have already implanted doubt in investors’minds. Continued on Page 10
The Financial Express (FE) is a business paper that’s closest to the people who are in the business of business. From business policies to market trends to new developments, The Financial Express comes packed with incisive news on every relevant issue.