NATION, P12 COMING UP PARTNERSHIP PUSH Good comeback, now for inclusive growth; exports, digital economy need to be supported PM to visit Italy, UK from Oct 29; to attend G20 and climate summits Reliance's new green energy business seen taking shape FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLIII NO. 144, 14 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 13.3 8.4 5.9 Net sales Operating profit Net profit price. Asian Paints reported a stand-alonerevenuegrowthin decoratives of a smart 36% yo-y,on the back of a 34% jump in volumes while JSW Steel posted an increase in consolidated sales of 71% y-o-y, as steel prices stayed elevated.At Indian Hotels, the domestic businesshadrecoveredto86% of pre-Covid revenues while the internationalportfoliowas at62%ofpre-pandemiclevels. The consolidated revenue grew 184% y-o-y. At retailer AvenueSupermarts,thestandalone revenues were up nearly 50% y-o-y driven up by better footfalls post the secondwave. Standalone revenue at Shoppers Stop more than doubled Saving lives with telemedicine The Himachal Pradesh government’s telemedicine programme with Apollo Telehealth saves lives ■ PERSONAL FINANCE, P9 Investing in multi-cap funds now Investors fear that the bullish momentum in mid-and smallcap funds could see a reversal for a longer period ■ INFRASTRUCTURE, P11 Another arrow in the green quiver Companies are looking to reduce their emissions by capturing carbon and using it for the production of a host of items ■ SCIENCE & TECH, P7 What could derail CoP26 talks Some countries are resisting pressure to set stronger targets to cut pollution QuickPicks NCLAT to NCLT: Provide hearing chance to 2 top Videocon execs THE NCLAT has directed the NCLT to pass a new order after providing opportunity of hearing to two former employees ofVideocon, whose assets and bank accounts were frozen, reports PTI. Directing the NCLT to pass necessary fresh recent orders in a "fair, just, dispassionate manner on merits, afresh", it said "there was negation of principles of natural justice" by it. PAGE 12 FB documents show content control struggle in India INTERNAL DOCUMENTS at Facebook show "a struggle with misinformation, hate speech and celebrations of violence" in India, the company's biggest market, reports PTI. Researchers at the social media giant point out that there are groups and pages "replete with inflammatory and misleading anti-Muslim content". y-o-y, above estimates helped by the low base of last year’s lockdown. This helped the retailerreportapositiveEbitda and narrow the net loss. Sales,which were up a good 35% y-o-y,for a sample of 202 companies (excluding banks and financials),were driven by good realisations and price increases. It must be mentioned,though,thatthesample isskewedbyRelianceIndustries whosesaleswereup50%y-o-y. Gateway Distriparks, for instance recently took a `1,000/FEU hike in its transportation rates to pass on recent cost increases; the company plans to pass on the impact of normalisation of BUDGET OUTLAY (in ` cr) 2019-20 2020-21 2021-22 Telcos to Trai: Identify clear and contiguous spectrum for auctions Trai had in 2018 submitted reserve price for 5G spectrum in the 3300-3600 MHz ■ But this was not put for auction held in March this year ■ Industry feels the price is too high ■ 700 MHz spectrum has gone unsold in the last two auctions ■ DoT feels that prices need to be revised More than 60% of spectrum remained unsold in 2016 and March 2021 auctions wouldneedtoshell out`9,840 crore for a pan-India minimum block of 20 MHz.As telcos need about 100 MHz to offer pan-India 5G services, the cost would work out to around `49,200 crore. Telecom executives have pointed out that given there are just three players, a realistic reserve price could see the spectrum sold at the reserve price itself. Continued on Page 2 Continued on Page 2 Source: government ● THIRD TRANCHE 5G ROAD MAP TELECOM OPERATORS HAVE urged the Telecom Regulatory Authorityof India (Trai) to earmark only unemcumbered blocks of spectrum for the 5G auctions asking itto make sure the spectrum is not in use by any government department and has been vacated. Moreover, they have requestedTrai to auction spectrum that is contiguous. In their meetings with the regulator, in what can be called a pre-consultation process, operators have reiterated their demand for a new pricing methodology for the reserve price.Thegovernmentplansto auction 5G spectrum in the first half of CY2022. Trai is expected to soon come out with a consultation paper on the auction, specifying the bands and quantum to be put up for sale. The reserve price for 5G spectrum,announcedin2018, was felt to be very high. However, auctions for 5G were not held in March 2021 but were conducted for other 4G bands. In 2018, Trai had recommended a reserve price of `492 crore per MHz for the 3300-3600 MHz band.should it stay with this,operators Continued on Page 2 TRADE WINDS India-UAE FTA talks: Duty relief likely for job-intensive sectors FY19 Source: DGCIS FY20 26.6 INDIA IS IN talks with its thirdlargest export destination, the UAE, for duty-free market accessinproductsrangingfrom gems & jewelleryand textiles & garments to certain engineeringgoodslikesteelunderaproposed free trade agreement (FTA), sources told FE. It would be the first FTA to be signed by India in just overa decade. Topreventanymisuseofthe FTAbenefits and curb potential illegal inflows of Chinese goods via a key transit hub like Dubai, New Delhi will likely insist on strictrulesoforigin.Itmayeither stipulate a 35% value addition at the UAE for all products tobeeligiblefordutyconcession orimposesimilarconditionson selectproductswhereitseesthe maximum scope forabuse,said one of the sources. Both the sides started formalnegotiationsforacomprehensive economic partnership agreement(CEPA),astheFTAis formally called, in New Delhi from September 23. They aim to wrap up talks by December and sign a deal byMarch 2022. About 87% of the products that the UAE imports are currently taxed at 5%,while 11% attract zero duty; the rest see higher duty incidence or are in the prohibited or special lists of India's exports to UAE Imports from UAE (in $ bn) 30.1 BANIKINKAR PATTANAYAK New Delhi, October 24 FY21 WINDOWOFOPPORTUNITY India-UAE FTA talks cover both preferential tariffs and rules of origin ■ Indiawants UAE to scrap 5% import duty on gems & jewellery under an earlyharvest deal ■ Dubai being a key transit hub, India wants rules of origin of products to be applied Freer movement of skilled workers to be part of services trade talks goods, said another source. While it slaps a 5% dutyon textiles & garments and jewellery, certain steel products are taxed at 10%.These three segments alone made up for 34% of India’s $16.7-billion exports to the UAE last fiscal and 43% in thepre-pandemicyearofFY20. COAL CRISIS Govt likely to raise over `10,000 cr via Bharat Bond ETF by Dec PRESS TRUST OF INDIA New Delhi, October 24 THE GOVERNMENTISlikelyto launch the next tranche of the Bharat Bond ETF by December and expects to raise over `10,000 crore to fund growth plans of central public sector enterprises, according to a seniorfinanceministryofficial. The official added that the fund requirements of CPSEs are being worked out and the third tranche of the exchangetraded fund (ETF) will be launched bythe end of the calendar year.“We are finalising on the amount to be raised but it would be over `10,000 crore,”the official said. Bharat Bond ETF is an exchange-traded fund that invests in debt of public sector companies.The ETF currently investsonlyin‘AAA’-ratedbonds of public sectorcompanies. Thefundsraisedviathedebt ETF helps in smoothening borrowing plans of the participating CPSEs or PSBs. It also helps them in meeting their capital expenditure needs.The second trancheoftheBharatBondETF, which was launched in July 2020,wasoversubscribedmore than three times, collecting about `11,000crore. Continued on Page 2 Private gencos ask govt for penalty mechanism for short supply of fuel ANUPAM CHATTERJEE New Delhi, October 24 INDEPENDENT POWER PRODUCERS (IPPs) have asked the government to put in place“an equitable penalty mechanism” for all stakeholders — namely power plants, coal companies and railways — to ensure that the risks of coal supply are balanced evenly between all parties.Currently,IPPs have to make full payments in advance, whilethereisnopenaltyforcoal companies,including Coal India, and railways, if the desired Independent power producers have asked govt to put in place 'an equitable penalty mechanism' ■ This is for all stakeholders — namely power plants, coal companies and railways ■ Currently, IPPs have to make full payments for coal in advance,while there is no penalty for coal companies ■ State-run gencos do not make payments to coal suppliers in advance ■ Mechanism to ensure that the risks ofcoal supply are balanced evenly between all parties quantityandqualityofcoaldoes not reach private gencos on time.Gencosownedbythecentral and state governments, however, are not required to makethepaymentsinadvance. Continued on Page 2 Safety first FE BUREAU Gold loans turn fastest-growing segment Gold loans have become the fastest-growing loan segment for banks in a year when the persisting pains of the pandemic have led lenders to look for low-risk growth. Outstanding loans against gold jewellery stood at `62,926 crore as on August 27, 66% higher y-o-y, as per sectoral data put out by the RBI. Lending against gold has been seen as the safest form of retail lending, at par with housing loans Personal loans Outstanding (` cr)* Housing (including priority sector housing) 29.4 14,69,744 Advances against fixed deposits (including FCNR (B), NRNR deposits etc) Advances to Individuals against share, bonds, etc Vehicle loans Loans against gold jewellery 10.9 4,390 -26.6 10.3 -3.2 8.2 62,926 8,38,288 Other personal loans 9.2 61,088 1,15,612 62,964 2,68,643 Credit card outstanding Education Source: RBI Variation (%, y-o-y) 10,258 Consumer durables 66.2 18.1 *as on Aug 27, 2021 TRACKING KHARIF Most mandi prices rule below MSPs, may hit rural demand PRABHUDATTA MISHRA New Delhi, October 24 MANDI PRICES OFeightoutof 10 major monsoon-sown crops are currently ruling belowtheirbenchmarkratesin leading producing states. This may help government to keep food prices in check even as it threatens to hit rural demand. The average prices were about 4-34% lowerthan MSPs in the case of paddy, jowar, bajra, maize, moong, urad, tur andgroundnutduringOctober 1-22, according to Agmarknet data.Onlysoyabeanandcotton prices were higher — by 16% and 20%,respectively. Themandipricesof8kharif crops (out of 10 major crops) were 4-37% below MSPs during October 2020. One of the main demands of agitating farmers is legal guarantee for the minimum support price (MSP) mechanism. The Modi government stepped up MSP procurement of paddyandwheat lastyear,to pacify the farmers. Mandi prices of Kharif crops* (% change against MSP) -11.1 -11 -21.6 -20.3 *During October 1-22; -33.8 Source: Agmarknet portal -4.4 -4 -4 15.5 20.1 Soyabean (MP) ■ eFE, P8 OPM (bps) Source: Capitaline Cotton (Guj) Bags and accessories brands recalibrate their retail strategy to make up for lost business RM to sales (bps) Sample of 202 companies (excluding banks & financials) Groundnut (Guj) Making a comeback -45.3 437.8 -139.2 KIRAN RATHEE New Delhi, October 24 ■ BRANDWAGON, P10 355.9 WITH NEARLY 94% of the `73,000-crore budgetaryallocation under the Mahatma Gandhi National Rural employment scheme (MGNREGS)havingbeenspent,the rural development ministry hassoughtanadditionaloutlay of`25,000croreinthesupplementarybudget for 2021-22. MGNREGS is a demanddriven scheme for the enhancement of livelihood security of the households in ruralareasbyprovidingatleast one hundred days of guaranteed wage employment to every household whose adult members volunteer to do unskilled manual work in every financial year. 73,000 26.7 SURYA SARATHI RAY New Delhi, October 24 1,11,500 31.5 haulage rates as well. The blended realisations at Concor improved by 10% y-o-y,above estimates.At ACC,the blended realizations were up 5% y-o-y as the companysold more premium products and enjoyed a better regional mix. However,not all companies were able to pass on the rising input costs.At Havells,the price hikes did not match the sharp rise in prices of raw materials resulting in lower gross margins.However,themanagement expects margins to recover to pre-Covid levels in the next few quarters.AtHindustanUnilever, gross margins contracted 140 bps y-o-y while ebitda margins fell 45 bpsy-o-y. At JSW Steel, higher costs more than offset the better realizationsand analysts point out high prices of coal could keep margins under pressure, unless these are passed on.The consolidated gross margins at Asian Paints fell bya steep 965 bps y-o-y, thanks to a steep increase in the cost of raw materials. Gross margins at Nestlewere down 240 bpsy-oy due to costlier raw material prices of edible oils and packaging materials. Theratioofrawmaterialsto saleswasup355basispoints,in thethreemonthstoSeptember. 71,686.7 %, q-o-q Tur (Mah) FE SPECIALS %, y-o-y Ministry seeks additional `25,000 crore for rural jobs scheme Urad (Mah) INDIA CONTINUES TO be a high cost environment for airlines to operate in and it is critical to empower the Airports Economic Regulatory Authority further to protect the interest of passengers, said Philip Goh, regional V-P for Asia Pacific of IATA. WITH DEMAND COMINGback acrossmarkets,ruralandurban, theSeptemberquartersawcorporate sales regain momentum. Larger players continued totakeawaymarketsharefrom unorganised units. However, inflation in inputs weighed on profits keeping margins in check; some firms took price hikes and cut back on nonessential expenses to protect their margins. Management commentaryisreassuringwith mostexpectingdemandtolook upfurtherinthemonthsahead. At UltraTech, for instance, the management is confident of strong demand recovery of about 6-8% y-o-y in H2FY22, post the monsoons. The quarter reflected a resurgence in demand across businesses, albeit on the subdued base of Q2FY21. Revenues at Jubilant Foodworks were up 39% y-o-y while at TVS Motor, they rose a smart 22% y-o-y led by a 16% increase in the average sales 34.5 Moong (Ktk) India high cost environment for airlines: IATA’s Goh FE BUREAU New Delhi, October 24 Q2FY22 Maize (Ktk) THE GOVERNMENT MAY introduce two key financial sector bills, including the proposed law for facilitating privatisation of public sector banks as announced by the finance minister in the Budget, reports PTI. The Centre is also likely to table amendments to the Pension Fund Regulatory and Development Authority Act, 2013. Most companies expect demand to look up further in the months ahead Jowar (Mah) Winter session: 2 key financial bills to be introduced ● MGNREGS OUTLAY Sales rise, input costs hurt India Inc profit margins Paddy (UP) PETROLAND DIESEL prices on Sunday were hiked for the fifth straight day by 35 paise a litre each, pushing pump rates to new high across the country, reports PTI. The price of petrol in Delhi rose to its highest-ever level of `107.59 a litre and `113.46 in Mumbai. In Mumbai, diesel now comes for `104.38 a litre, while in Delhi, it costs `96.32. Q2 EARNINGS Bajra (Raj) IN THE NEWS Petrol and diesel prices hiked for fifth straight day 16.7 CHENNAI/KOCHI, MONDAY, OCTOBER 25, 2021 30.3 Shifting from paddy to maize can boost Punjab farmers’ income SHOBHANA SUBRAMANIAN 28.9 A GULATI & R ROY ECONOMY, P2 29.8 OPINION, P6 TheCentre,however,pruned the paddy procurement target forthecurrentyearto50million tonne (in terms of rice),against actualpurchasesofover60milliontonne(MT)during2020-21 marketing year (October-September),which was an all-time high and almost half the total production of the grain in the year. The wheat purchases for the Central Pool was also about 40%ofproductionof109.5MT in the last season. In contrast, out of 61.8 MT of oilseeds and pulses produced during 2020- 21 crop year, government procurementwas only2%. Highermoisture content in the crops due to unduly prolonged monsoon rains have impacted the market prices in manyplaces,traders said.Even though the kharif harvesting season began from October 1, the south-west monsoon is active in many states and is predicted to retreat from the entire countryonlyon October 26 against normal October15. Continued on Page 2 CHENNAI/KOCHI
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