COMPANIES, P4 ECONOMY, P2 CAPITAL GAINS Ola Electric raises $200 million at over $5-billion valuation INTERNATIONAL, P8 APPOINTMENT ELECTRIC CARS FREEDOM OF EXPRESSION Badal Bagri resigns as Bharti Airtel CFO; Soumen Ray named new CFO Have asked Tesla to make in India; govt will give all support: Gadkari Nobel Peace Prize awarded to journalists Ressa and Muratov NEW DELHI, SATURDAY, OCTOBER 9, 2021 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVII NO. 190, 18 PAGES, `10.00 (PATNA `10.00, RAIPUR `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 60,059.06 ▲ 381.23 NIFTY: 17,895.20 ▲ 104.85 NIKKEI 225: 28,048.94 ▲ 370.73 HANG SENG: 24,837.85 ▲ 136.12 `/$: 74.99 ▼ 0.21 `/€: 86.75 ▼ 0.29 BRENT: $82.58 ▲ $0.63 GOLD: `46,806 ▲ `105 IN THE NEWS Prices of cooking oils, except mustard oil, fall THE GOVERNMENT ON Friday said retail prices of cooking oils, except mustard oil, have fallen in the domestic market despite a surge in global rates on the back of its decision to reduce import duties on crude and refined edible oils, reports PTI. International prices of edible oils have gone up in the range of 1.95-7.17% after the import duty reduction. MobiKwik gets Sebi nod for `1,900-crore IPO MOBIKWIK HAS RECEIVED markets regulator Sebi's approval to launch an initial public offering, through which it plans to raise up to `1,900 crore, reports PTI. The Gurgaon-based company had filed the Draft Red Herring Prospectus for the IPO with Sebi in July. CEA Subramanian to step down, to return to academia CHIEF ECONOMIC ADVISER KV Subramanian on Friday said he has decided to return to academia after completion of his threeyear term in the finance ministry, reports PTI. The government had appointed Subramanian, a ISB Hyderabad professor, as the CEA in December 2018. READY FOR TAKE-OFF AIR INDIA BACK IN THE TATA HANGAR Tata Sons’ arm wins bid by offering `18,000 crore as enterprise value consideration; debt-laden carrier returns to founder after nearly 70 years FE BUERAU New Delhi, October 8 IT'S COME FULL circle.India’s flag-carrierAirIndia isallsetto return to the hands of Tata Group, which founded it close to 90 years ago, latest by the end of 2021. The diversified conglomerate won the rather sedate race for full ownership of the state-owned airline that has long guzzled taxpayers' money by offering `18,000 crore as enterprise value (EV) consideration. Tatas bested the `15,100crore bid by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of `12,906 crore set by the government to be the winning bidder, Tuhin Kanta Pandey, secretary, department of investment and public asset management,said.The airline, though heavily indebted, continues to hold great brand strength and repute, with its iconic Maharaja tag. While the government as the carrier’s owner will get CHANGE OF GUARD `12,906 cr `15,300 cr The reserve price set for AI `18,000 cr Winning bid ofTalace Pvt Ltd, a wholly-owned arm ofTata Sons `15,100 cr The bid by a consortium led by SpiceJet promoter Ajay Singh `61,562 cr Total debt ofAI as onAug 31, 2021 `2,700 crore or15% of the bid amount in cash, the balance will go towards clearing the airline’spartdebt.AirIndiahad a heavy debt of `61,562 crore as on August 31; the government had assumed the car- Debt to be taken over byTalace,whichwill also pay `2,700 crore in cash to government `46,262 cr `14,718 cr Balance debt to be transferred to govtowned SPV Value ofAI's non-core assets (land parcels and buildings); these too to be transferred to the govt-owned SPV The transaction to be completed by Dec 2021 One-year lock-in forTalace to retain at least 51% stake inAI One-year job security for all 13,500AI andAI Express employees rier's `22,064-crore debt in FY20, in an effort to make its sale feasible. It will take over another`46,262-croredebtas part of the deal with Tatas. The AI sale will be the first incidence of outright privati- DAS-SPEAK Special Features Maruti’s new move could be a step towards sustainability The S-Assist digital tool can replace paper-based thick owner’s manual that comes with every new car sold, but the carmaker isn’t removing it from its cars just yet. ■ Motobahn, P7 Covid-19 drug could lead to a windfall for Divi’s Labs Merck’s Molnupiravir, if it’s approved in US, to boost revenues for firm, the API manufacturer; FY22-24e EPS up 0.4-4.4%; TP raised to `5,750 from `5,465; ‘Buy’ rating maintained ■ Investor, P7 QuickPicks TCS net profit rises 6.8% to `9,624 cr in July-September TCS, THE COUNTRY'S largest IT firm, on Friday reported a consolidated net profit of `9,624 crore during the July-September quarter, up 6.8% from the preceding quarter, reports fe Bureau in Bengaluru. The number was a tad below Street expectations. Though the profit was driven by broad-based demand across all verticals, it was also aided by other income which grew by 54.1% on a q-o-q basis. PAGE 4 Govt plans to start new power dispatch system from FY23 THE POWER MINISTRY said on Friday that it would implement the first phase of the Market Based Economic Despatch (MBED) system from April 1, 2022, fe Bureau in New Delhi. MBED is an electricity market design, aimed to cut power procurement costs of discoms, which will accumulate demand requirements from all states in a central pool and allocate power to them from the cheapest source available across the country. PAGE 2 Zee gets time till Oct 22 to file reply to Invesco’s EGM plea THE NCLT ON Friday directed Zee Entertainment Enterprises (ZEEL) to file its reply to a plea moved by Invesco Developing Markets Funds by October 22, reports fe Bureau in Mumbai. Invesco can also decide to file a rejoinder to ZEEL’s reply on the same date, the NCLT Mumbai said. The move follows an NCLAT order on Thursday that granted ZEEL more time to file its reply. PAGE 4 'We don’t want to rock the boat as we approach the shore' FE BUREAU New Delhi, October 8 EVENAS IT left keypolicyrates and its accommodative stance unchanged, the Reserve Bank of India (RBI) on Friday signalled the start of policy normalisation, announcing measures to drain excess liquidity in calibrated fashion. Although there has been concerns about the large liquiditysurplus and inflationary pressures, RBI governor Shaktikanta Das was clear the economic recovery needed support given that the contact-intensive sectors, accounting for 40% of the economy,werestilllaggingand that output gap was relatively high. Das asserted the RBI’s approach was one of gradualism. “We do realise as we approach the shore, we don’t want to rock the boat”,the governor observed. While the real GDP growth forecast for FY22 has been left unchanged at 9.5%,RBI’s projectionforFY23at7.8%isseen to be somewhat muted. The inflation forecast forFY22was cut to 5.3% from 5.7% earlier with the central bank seemingly not too concerned about the sharp rise in the prices of GDP growth projection too retained at 9.5% for FY22 ■ Retail inflation likely to be 5.3% for 2021-22, lower than earlier projection of 5.7% ■ To introduce framework for retail digital payments in offline mode across India ■ Per transaction limit via IMPS to be increased to `5 lakh from current `2 lakh ■ GSAP programme stopped for now to ensure no further infusion of liquidity ■ Extends three-year SLTRO of `10,000 cr for SFBs till year end crude oil.Experts believe rates may not be hiked for a few more months,but that money market rates would nonetheless move up. Continued on Page 2 While admittedly it will take considerable effort to rebuild Air India, it will hopefully provide a very strong market oppportunity for the Tata Group's presence in the aviation industry. Welcome back, Air India! —RATAN TATA, TATA SONS CHAIRMAN EMERITUS This is a historic moment. It will be our endeavour to build a world-class airline which makes every Indian proud. —N CHANDRASEKARAN, TATA SONS CHAIRMAN sation of a state-owned firm in the country after a gap of 17 years.TheCentre'nationalised' AI in 1953. Besides100%ownershipof the airline, the wining bidder will also acquire 100% stake in Air India Express and 50% in AirIndia SATSAirport Services. Thetransaction,however,doesn’tincludethenationalcarrier's non-core assets,including land parcelsandbuildings,including the one at Mumbai’s Nariman Point,which, put together, are valued at `14,718 crore. These assets will be transferred to government-owned AirIndiaAsset Holding. Air India will be the third airlinebrandintheTatas'stable Upbeat FE BUREAU Equity MFs see inflows for seventh month in a row Equity-oriented schemes continued to see net inflows for the seventh month in a row in September, even as markets continued to scale new highs. Almost all categories saw fresh inflows barring the small cap category. Monthly inflows through systematic investment plans hit an all time high of `10,000 crore. 25,000 22,584 20,000 Net equity inflows (` crore) 10,083 5,000 0 April 8,667 8,677 Aug Sept 4,609 3,437 May June July ARBITRAL AWARD Delhi HC rejects Gangwal plea against IndiGo partner Bhatia INDU BHAN New Delhi, October 8 THE DELHI HIGH Court on Fridayrejected Rakesh Gangwal’s plea for directions to his estranged partner Rahul Bhatia and his company, InterGlobe Enterprises (IGE),to call an extraordinary general meeting (EGM) to vote on a resolution for removal of restrictions on the transfer of shares within 30 days. This plea was based on the London Court of International Court call ■ It asked Gangwal and Bhatia to conduct EGM at joint cost within the stipulated timelines under the Companies Act ■ Directed Gangwal to pay $25,000 each to Bhatia and his firm IGE for defamation claims raised by latter Arbitration’s(LCAI) September 23 award. The arbitration award is in relationtothedisputebetween Continued on Page 2 ● RBI BOOST Nifty ends at all-time high, Sensex scales 60k PRESS TRUST OF INDIA Mumbai, October 8 15,000 10,000 – it already owns 84% stake in AirAsia India and 51% in Vistara.The deal will add as many 141 wide-body and narrowbodyplanestoTataGroup'saircraftfleet,asignificantnumber of which is owned by AI. Besides, the Tatas would also get thousands of trained pilots andcrew,lucrativelandingand parking slots — 1,800 at domesticairportsandhalfthat number at airports overseas — and privileged bilateral rights across Europe, North America andWestAsia. Reacting to the news, Tata Sons chairman emeritus Ratan Tatatweetedanoldphotograph of the company's former chairman JRD Tata getting down from an Air India aircraft. He said:“WelcomeBack,AirIndia... TheTataGroupwinningthebid forAirIndiaisgreatnews.While admittedlyitwilltakeconsiderableefforttorebuildAirIndia,it will hopefully provide a very strong market opportunity to theTataGroup’spresenceinthe aviation industry.” Tata Sons chairman NChandrasekaransaid:“Thisis a historic moment, and it will bearareprivilegeforourGroup to own and operate the country’sflagbearerairline.Itwillbe ourendeavourtobuildaworldclassairlinewhichmakesevery Indian proud.” He also referred totheairline’s“attractiveinternational footprint” and the valuable slots and bilateral rights held byit. ■ LCIA has asked both to jointly make requisition to call EGM to vote on resolution to remove transfer restriction articles in 30 days from the date of award Gangwal and Bhatiwho are copromoters of IndiGo Airline. Continued on Page 2 THE SENSEX SOARED past the 60,000-level while the Nifty finished at an all-time high on Friday after the RBI kept the key interest rates unchanged but maintained its accommodative stance to bolster economic recovery. Market heavyweight Reliance Industries led the gains, while ITstocks too sawheavybuying ahead of TCS'results. The 30-share BSE Sensex jumped 381.23 points or 0.64% to close at 60,059.06, just shy of its lifetime high. The NSE Nifty rose 104.85 points or 0.59% to its fresh closing peak of 17,895.20. Reliance Industrieswas the top gainer in the Sensex pack, rallying 3.84%, followed by Infosys, Tech Mahindra, HCL Tech,TCS,Tata Steel and L&T. In contrast, HUL, NTPC, Kotak Bank,Maruti Suzuki,Dr Reddy's andTitanwere among the laggards, shedding up to 1.16%.Rate-sensitivebanking and realtyindices ended in the red,but auto closedwith gains. On a weekly basis, the Sensex rallied 1,293.48 points or 2.20%, and the Nifty soared 363.15 points or 2.07%. LIGHTS OUT China’s energy crisis is hitting everything from iPhones to milk JEFF SUTHERLAND & TOM HANCOCK October 8 THE HITFROM China’s energy crunch is starting to ripple throughout the globe,hurting everyonefromToyotaMotorto Australian sheep farmers and makers of cardboard boxes. The extreme electricity shortage caused by soaring prices of coal in the world’s largest exporter is set to hurt China’s own growth, and the knock-on impact to supply chains could crimp a global economystruggling to emerge from the pandemic. The timing couldn’t be worse, with the shipping industry already facing congested supply lines that are delaying deliveries of clothes and toys for the year-end holidays.ItalsocomesjustasChina starts its harvest season, raising concerns over sharply highergrocerybills. “If the electricity shortages and production cuts continue, they could become yet anotherfactorcausing global supplyside problems, especially if they starttoaffectthe production of export products,” said Louis Kuijs,seniorAsia econ- omist at Oxford Economics. Economists have already warned of slower growth in China.At Citigroup, a vulnerability index indicates that exporters of inputs to China’s manufacturing sector as well as commodities are particularlyatrisktoaweakeningChinese economy. Neighbors like Taiwan and Korea are sensitive, as are metal exporters suchasAustraliaandChile,and key trading partners such as New Delhi Germany are also somewhat exposed. As for global consumers, the question is whether manufacturers and retailers will absorb higher costs orwill pass them along. “Thisislookinglikeanother stagflationaryshockformanufacturing,notjustforChinabut for the world,” said Craig Botham,chiefChinaeconomist at Pantheon Macroeconomics. Continued on Page 2
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.