OPINION, P6 MARKETS, P9 ARUNABHA GHOSH To reduce or remove emissions, a carbon price is necessary COMPANIES, P4 EDITORIAL CHANNELING FUNDS INNOVATING IN INDIA Govt must take what it gets for Air India; lenders must push for a strong promoter like Tata Group Sebi mulls separate AIF category to buy bad loans from banks ‘India second-largest technology hub for Amazon globally’ CHENNAI/KOCHI, FRIDAY, SEPTEMBER 17, 2021 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL XLIII NO. 113, 16 PAGES, `6.00 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: 59,141.16 ▲ 417.96 NIFTY: 17,629.50 ▲ 110.05 NIKKEI 225: 30,323.34 ▼ 188.37 HANG SENG: 24,667.85 ▼ 365.36 `/$: 73.52 ▼ 0.02 `/€: 86.54 ▲ 0.37 BRENT: $75.12 ▼ $0.34 GOLD: `46,430 ▼ `635 IN THE NEWS Poonawalla Fincorp MD Abhay Bhutada resigns POONAWALLA FINCORP MD Abhay Bhutada on Thursday resigned from the company and its board, a day after being barred by Sebi for alleged insider trading, reports fe Bureau in Pune. The board has accepted Bhutada's resignation. HC stays certain sub-clauses of new IT rules THE MADRAS High Court on Thursday stayed the operation of certain sub-clauses of the recently introduced Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, holding there was prima facie substance in the petitioners' contention that a control mechanism would rob the media of its independence, reports PTI. Zee Ent board throws weight behind directors THE BOARD of ZEE Entertainment Enterprises has decided to support its two former non-executive directors against whom corporate governance issues were raised, reports fe Bureau in Mumbai. 5-YEAR BACKSTOP `31,000-cr support for bad bank: FM FM-SPEAK Holding: State-run banks to have 51% stake in NARCL; PSBs and public FIs to hold up to 49% in IDRCL Sovereign backing: `30,600 crore in guarantee to back security receipts issued by NARCL for 5 years; to cover shortfall between SR face value and actual realisation Functioning: NARCL to acquire NPAs by making an offer to lead bank; once accepted, IDRCL to then manage assets, add value and sell off Asset transfer: NARCL to resolve NPAs of about `2 lakh crore; in phase-I, fullyprovisioned assets of about `90,000 cr to be transferred FE BUREAU New Delhi, September 16 FINANCE MINISTER Nirmala Sitharaman on Thursday said the government will offer guarantee to the tune of `30,600 crore on the security receipts (SRs) issued by the NationalAsset Reconstruction Company (NARCL), or the socalled bad bank, while acquiring non-performing assets from lenders. While this amount will reflect in the government’s contingent liability,the actual fiscal outgo could be lower if the recovery from the bad assets turns out to be higher than expected. Theguarantee,clearedbythe Cabinet, is a decisive step towards the resolution of toxic assets worth `2 lakh crore throughtheNARCLstructure,as sovereignbackingisexpectedto make the entire process a lot moreviable and credible. The guaranteewill coverthe shortfallbetweenthefacevalue oftheSRsandtheactualrealisation from the stressed assets.It will be valid for five years and can be invoked only in case of resolution or liquidation of the assets.The SRswill be tradable. “The backstop (guarantee) gives credibility to the process…So, once you take the bad assets out (of banks’ books),manage them,re-evaluatethemandputthemonthe block forsale,there is certainly a greater prospect of getting a higher value for them. That’s why this route has been adopted,”Sitharaman said. Continued on Page 2 Invest & recoverwhat’s Govt invokes 3-way lost: Mittal toVoda CEO pact to recover power dues from 3 states Says Airtel will opt for moratorium to put `40,000 crore back into network ‘We aim to become more accessible with city stores’ Ikea's Per Hornell talks about the company’s big bet on small-format stores to cater to 500 million homes in India by 2025, and its cluster-based online retail model ■ BrandWagon, P7 QuickPicks Eyeing US growth: Byju’s buys coding site Tynker for $200 m ONLINE EDUCATION giant Byju’s is paying about $200 million to acquire US-based coding platform Tynker, people said, as it accelerates its expansion ahead of an initial public offering expected next year, reports Bloomberg. Byju’s is paying for the purchase in cash and stock, the people said. The companies didn’t disclose the value in their statement announcing the deal on Thursday. Byju’s has made nine acquisitions this year. PAGE 4 Prospects brightening for economy as second Covid wave wanes: RBI PROSPECTS ARE brightening for the Indian economy achieving "escape velocity" from the pandemic as the second wave of Covid-19 wanes and preparedness for future remains on war-alert status, according to an RBI bulletin published on Thursday, reports PTI. An article on the state of the economy, published in the September bulletin, said aggregate demand is gaining firmer ground, while on the supply side, IIP and core industries mirror improvement in industrial activity and services sector indicators point towards sustained recovery. PAGE 2 WHAT MITTAL SAID RISHI RAJ & KIRAN RATHEE New Delhi, September 16 BHARTI AIRTEL CHAIRMAN Sunil Bharti Mittal on Thursday said he spoke to Vodafone Plc CEO Nick Read, after the announcement of the relief package for the telecom sector, to convince him to invest in his company’s India operations now that the government has taken a major investor-friendly step. Mittal also told Read that the new reforms in the telecom sector announced by the government open up several opportunities for the two companies to partner in the areas of infrastructure. “You have a lifetime opportunity to retake what has been a lost cause.The government has been very strong in their response and it is time forVodafone and MrBirla (KM Birla) to step up their contribution into the company.This was my conversation with Nick,”Mittal said,speaking to ON 4-YEAR MORATORIUM ON AGR & SPECTRUM DUES ON PAYING NPV DUES VIA EQUITY ■ Airtel to go for it, to get cash ■ For Airtel total amount of ■ Will invest the amount back CHARGED UP Special Feature TOUGH STAND TELECOM REFORMS ■ Company will wait for ■ Savings on cash flow will not ■ Matter to be decided by flow relief of `35,000-40,000 cr into 5G network go into dividend ■ Tariffs need to be set right ■ Airtel will take lead in some packs company’s Arpu will touch `200 ■ Does not favour any regulatory regime for setting tariffs ON AUCTION PRICING ■ Govt needs to explore other modes of spectrum pricing ■ Current one leading to large swathes of spectrum being unsold ■ 2010 3G & BWA auctions starting point of trouble ■ Since only 3 players now, right time to change the model a group of journalists. “If I was in their place, it would be an opportunity to retrieve the value back into the hands of the people who have invested large amounts of money. Vodafone has invested over $20 billion. Mr compensate dealers A GREENER RIDE "We must leverage this (pent-up demand) to drive innovation, a robust local EV ecosystem and make India not only a big EV market, but also a global EV manufacturing hub." —BHAVISH AGGARWAL, CO-FOUNDER & CEO, OLA crore in 24 hours,he said, Continued on Page 2 Apna turns unicorn in less than 2 years APNA, A DIGITAL hiring start-up that connects millionsofblue-collarworkersto employers, reached a valuationof$1.1billionwithanew funding round led by Tiger Global Management,reports Bloomberg. It reached the unicorn status just 21 months after creating the app, and 15 months after beginning full-scale operations. It’s now raised $100 million in a Series C round also joined by Owl Ventures LLC and others. ■ Page 4 the company's board ■ By end of fiscal, Ola sells `600-crore Fada asks e-scooters in a day Ford how it plans to OLA CO-FOUNDER Bhavish Aggarwal onThursdaysaid Ola Electric sold scooters worth over`600croreonthefirstday of sale of its model S1. As reported earlier, the company had on Wednesday commenced the sale process of its e-scooter,which comes in two models — Ola S1 and S1. “India is committing to EVs and rejecting petrol! We sold 4 scooters/sec at peak & sold scooters worth 600Cr+ in a day! Today is the last day, purchase will shut at midnight,” Aggarwal said in a tweet. In a blogpost, he said after the purchase process started, consumers responded by booking the Ola scooters in “unprecedented numbers”. Noting that the company had sold scooters worth over `600 guidelines ON RAISING TARIFFS ● INDIA EXIT FE BUREAU Chennai, September 16 interest is `7,500-10,000 cr PRESS TRUST OF INDIA New Delhi, September 16 AUTOMOBILE DEALERS’ BODY Fada has sought clarity from Ford about the compensation structure it is working out forits dealerpartners after announcing the closure of its two manufacturing plants in thecountryaspartofarestructuring exercise. In a letter to Ford India presidentandmanagingdirector (MD) Anurag Mehrotra, Fada president Vinkesh Gulati pointed out the difficulties being faced by the company’s dealers across the country. GulatinotedthatForddealers were staring at huge losses as customers have started cancelling the bookings in the wake of the plant closure announcement. Gulatifurthersaidthedealers were worried about the compensation structure as many were not even five years old in the system and may not have even reached the break-even point. Continued on Page 2 Birla would have also put in billions of dollars.This is really time for them to contribute their money, their resources, to revive the beleaguered company,”he added. Continued on Page 2 DUES TO BE RECOVERED BY USING TPAs (` CR) RBI to deduct `5,100 crore from accounts of Karnataka, Tamil Nadu and Jharkhand governments 1,126 Jharkhand 2,458 Tamil Nadu Karnataka 1,540 ANUPAM CHATTERJEE New Delhi, September 16 THE NARENDRA MODI government is showing absolute resolve to discipline state-run electricity distribution entities (discoms) refusing to honour their payment obligations on time.On behalf of the Centre-run power producers such as NTPC, the Union power ministry has invoked the seldom-used tripartite agreements between itself, the Reserve Bank of India (RBI) and the respective state governments, to recover the power dues to the company from the state governments of Karnataka, Tamil Nadu and Jharkhand. Pushed to the wall by the long delays and even refusals by several discoms to pay overdue payments, NTPC has been repeatedly urging the `95,000 cr Discoms owed gencos (state-run and private) at August end * As per the TPAs, RBI is required to deduct amounts equal to discoms’ over-dues to the central-sector gencos from the accounts of state government/ UT concerned and pay it directly to the producers. Centre to invoke the TPAs. The facility has so far been sparinglyused,as such a move strains relations between the Centre and states. Continued on Page 13 Fresh highs FE BUREAU Banking, telecom stocks lead market rally Benchmarks extended their record run on Thursday as a surge in bank stocks boosted the broader index, while debt-laden Vodafone Idea jumped nearly 20% after the government’s announcement on a relief package for the stressed telecom sector. Bank Nifty Intra-day, September 15 37,800 37,668.60 37,600 37,400 37,200 Vodafone Idea Intra-day on BSE (`), September 15 12.00 11.25 11.50 11.00 36,946 37,000 36,800 36,600 Open 9.82 10.50 Previous close 36,852.25 Close 10.00 Previous close 8.93 9.50 9.00 Open Close ● HIGH INTEREST `6K-cr investments for white goods PLI FE BUREAU New Delhi, September 16 AS MANYAS 52 companies — including Daikin, Panasonic, Hitachi,Voltas,Mettube,Nidec and Havells — have pledged investments of `5,886 crore under the production-linked incentive (PLI) scheme for white goods, the department for the promotion of industry and internal trade (DPIIT) said on Thursday. Under the scheme, eligible investors in air-conditioners, LED lights and such components will get incentives of 46% on incremental sales (to be White goods PLI scheme KEY APPLICANTS `5,866 cr Total committed investments Daikin, Panasonic, Hitachi, Mettube, Nidec, Voltas, Bluestar, Havells, Amber, EPack, TVS-Lucas and Dixon `871 cr 52 Committed investment in LED components Total no. of applicants, of which 31 are for AC `4,995 cr ` 2,71,000 cr Pledged investments in AC Incremental output of ACs and LEDs over 5 years calculated overthe baseyearof 2019-20) of products manufactured in India. The total incentives of `6,238 crorewill be disbursed over five years. Theselectionofeligiblecandidates will be completed by November15,the DPIITsaid. Continued on Page 13 INDIC CONTENT Over 20 m Indians streaming YouTube on TV MORE THAN 20 MILLION people in India streamed YouTube on their TV screens in May this year — up 45% year-on-year—reflectingtheincreasing preference of users to tune into theplatformfromtheirlivingrooms, the video streaming companysaid. The Google-owned platform also highlighted that a growing number of YouTube viewers prefer watching contentinIndiclanguageslikeHindi, Tamil,Telugu and others. “...there are more than 20 million such consumers already, who are watchingstoriesonaconnectedTV.So, thisrevolutionofconsumptionofsto- ILLUSTRATION: ROHNIT PHORE PRESS TRUST OF INDIA New Delhi, September 16 ries,diversity of content,content creators...is not limited to just on mobile phones. It’s a phenomenon,which is working on mobile phones and on connected TV,” Google India country manager and vice-president Sanjay Guptasaid.HesaidGoogleiscommittedtohelpIndiabecomealeadingdigital economy, and that“YouTube and digital videos will play a very pivotal role in shapingthe journey”. Satya Raghavan, director of YouTube partnerships, said a large number of consumers use videos for credible content/sources of information,andtolearnnewskills.Also,85% ofvideoviewerssaidsincetheonsetof Covid-19 in India,theyusedYouTube more than ever before,with a similar number saying the platform helps them learn or improve skills they are interested in,he added. Continued on Page 2 CHENNAI/KOCHI
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