ECONOMY, P2 & 3 COMPANIES, P4 FAVOURABLE MONSOON AHEAD Govt has no plan to ban rice exports as stock is in abundance INTERNATIONAL, P8 NORMS RELAXED CRUDE DERIVATIVES TAKE A TOLL $61-BN TAKEOVER In a boost to public expenditure, ministries can now use unspent portion Soaring prices of home care products hurting household budgets Broadcom to buy VMware in second biggest deal of 2022 NEW DELHI, FRIDAY, MAY 27, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLVIII NO. 74, 34 PAGES, `10.00 (PATNA & RAIPUR `10.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 54,252.53 ▲ 503.27 NIFTY: 16,170.15 ▲ 144.35 NIKKEI 225: 26,604.84 ▼ 72.96 HANG SENG: 20,116.20 ▼ 55.07 `/$: 77.58 ▼ 0.05 `/€: 83.11 ▼ 0.35 BRENT: $116.60 ▲ $2.57 GOLD: `50,754 ▼ `232 IN THE NEWS Moody's revises India GDP forecast to 8.8% for 2022 GLOBAL RATING AGENCY Moody’s on Thursday pared down its India growth forecast for the calendar year 2022 to 8.8% from 9.1% announced in March, stating that high inflation in the wake of the Ukraine conflict will slow down the growth momentum, reports fe Bureau in New Delhi. However, it has retained its earlier forecast for 2023 at 5.4%. ONGC to invest `31,000 cr in finding oil, gas INDIA'S TOP OIL and gas producer ONGC on Thursday said it will invest `31,000 crore over the next three years in exploring the Indian sedimentary basin for fuel reserves which could augment the nation's production in its attempt to be self-reliant in the energy sector,reports PTI. In a statement, ONGC said its board held a meeting on Thursday to firm up its 'Future Exploration Strategy'. Special Features ‘Small cities bring 40% of Tata CLiQ Luxury’s revenues’ Tata CLiQ Luxury’s focus is the affluent customer across markets, says CEO Vikas Purohit ■ BrandWagon, P7 Portability Individual policy Group policy You can port from a group health policy,too Continuity of benefits is assured when porting from a group policy to an individual plan ■ Personal Finance, P7 ACQUISITION FACES HURDLES SINGAPORE FIRM TO REDEPLOY FUNDS IN DIGITAL VENTURES Piramal bid for Tech majors in talks with Singtel, Mittal family for 2% Airtel stake RCap runs into regulatory wall Mittal family may sell Singtel stake at a premium as it needs funds for 5G auction Irdai raises concern over stake in competing insurance firms RISHI RAJ New Delhi, May 26 RAJESH KURUP Mumbai, May 26 THE INSURANCE REGULATORY Authorityof India (Irdai) has raised concernsoverPiramalGroup’sstakeincompeting insurance firms, a move that could derail its plans to acquire debtladen Reliance Capital (RCap). However, the group has an option to reduce its stakewithin 18 months,making it compliant to acquire the former Anil Ambani group firm.Piramal can,of course, apply for other businesses of RCap should it so decide. A consortium, led by Piramal Group, is one of the eight serious contenders for acquiring RCap’s assets, from whom creditors are seeking `23,666 crore in dues.A majority of the eight companies showing interest in bidding for the firm want to acquire the firm in its entirety. The Prospective Resolution Applicants included the Piramal Group, Yes Bank and HDFC Ergo. Lenders had extended the deadline for submitting resolution plans to June 30 from the earlierMay26 to rope in more suitors. According to Irdai, an investor cannot individually hold more than 10% and jointly more than 25% of the paidup equity share capital in an insurance firm. Piramal Enterprises (PEL), a group company, is the holding company and promoter of Pramerica Life Insurance Company and holds 50% of the firm’s paid-up capital through its stake in DHFL Investments. Further, PEL has an indirect invest- A consortium, led by Piramal Group, is one of the eight serious contenders for acquiring RCap’s assets According to Irdai, an investor cannot individually hold more than 10% and jointly more than 25% of the paidup equity share capital in an insurance firm Piramal Enterprises is the holding company and promoter of Pramerica Life Insurance Co and holds 50% of the firm’s paidup capital ■ Piramal Group can bring down the stake within 18 months from May 4, 2022 ment of about 20% in Shriram Capital, which is the holding company of Shriram Life Insurance Company with a 74.56% stake,Irdai said in a letterto the administrator of RCap’s resolution process. The indirect holding of Piramal group in Shriram Life Insurance Companyis14.91%(20%of74.56%),which exceedsindividualinvestorlimit,theletter, a copy which was reviewed by FE, said. Continued on Page 2 Ban on cotton exports unlikely to serve any purpose: Textile secretary BANIKINKAR PATTANAYAK New Delhi, May 26 A BAN ON cotton exports at this junctureis unlikelyto serveanypurpose,textiles secretary Upendra Prasad Singh told FE. Outbound shipments of cotton are unviable now, as domestic prices of the fibre have exceeded the global levels, he said. “On top of the high domestic prices, there are logistics costs for exports. So, exports in any case are not happening now,”Singh said on Thursday. The textile and garment industry has been seeking an immediate ban on cotton exports on the assumption that such a move would shore up domestic supplies and curb the exorbitant rise in prices of the fibre and its by-products. Cotton prices have more than doubled in the past one year to breach the `100,000-mark for a candy of 356 kg. Singh said, unlike cotton, there is adequate availability of cotton yarn in the domestic market. Detailed report on Page 2 EXPERTS SAY NOSTALGIA ISN'T A STRONG ENOUGH REASON Brand Ambassador’s return journey faces speed bumps DEVINA JOSHI Mumbai, May 26 THE FAITHFUL AND sturdy Ambassador car, manufactured by Hindustan Motors from 1958 till 2014, is likely to make a comeback over the next twoyears,but its return journey may face a lot of speed bumps. Hind Motor Financial Corporation of India (HMFCI) and French car manufacturerPeugeot are,through a joint venture, reportedly working on relaunchingtheAmbassadorinanew avatar.SomesaythehumbleAmby,as itwas lovinglyreferred to,could even be brought back as an electricvehicle (EV). “As an EV,itwill do betterthan as a non-EV. The brand name is a help. It still resonates with at least two generations of folk in India,” says brand and business strategy expert Harish Bijoor. However, India has changed, and so has its wheels. Historically,theAmbassadorwas in vogue between the early 1960s till the late 1980s,when it was considered a sturdy car, as opposed to the Impalas and Chevrolets of the day. At the peak of its reign, the ■ The Ambassador was in vogue between the early 1960s till the late 1980s, when it was considered a sturdy car ■ Iconic brands from the ’70s and ’80s have,when relaunched, struggled to evolvewith the times SOME OF THE big global digital tech players are in talks with Singtel (Singapore Telecommunications) as well as the Sunil Bharti Mittal familyforbuying the 1-2% stake that the Singapore-based telecom firm is looking to offload in Bharti Airtel. Industry sources awareofthedevelopmentsaidthat the stake sale may either happen directly between Singtel and the concerned digital players or the SunilBhartiMittalfamilymayfirst acquire it and subsequently sell to a digital playerat a premium later. Accordingtosources,acquiring 1-2% stake from Singtel does not Lot of convergence is happening between telecom and tech players Strategic partnership with a tech major will offer Airtel a digital edge ■ In 2020, Google had ■ Facebook and acquired a 7.73% stake in Jio Qualcomm have also In January, Platforms for $4.5 billion invested in Jio Google had acquired 1.28% stake ■ Since 55.92% stake in Bharti Airtel is held by in Bharti for promoters – Mittal family and Singtel – scope for selling $1 billion large stakes to tech majors is not possible bringanystrategicgaintotheMittalfamilysoitwouldliketoropein adigitalpartner.Further,thecompany needs funds for the upcoming5Gauctionssoitdoesnotmake sense for it to spend money else- Government calls off BPCL privatisation FE BUREAU New Delhi, May 26 THE CENTRE ON Thursday called off the process for the strategic disinvestment of BPCL and said the expressions of interest (EoIs) received in this connection"shall stand cancelled." The plan to sell its entire 52.98% stake in the fuel retailer-cum-refiner had hit deadend as potential investors have turned more sceptical of“the lack of pricing freedom”with state-owned fuel retailers,besides the global shift for greener energy. Two bidders even walked out from the privatisation process. “Decision on the re-initiation of the strategic disinvestment process of BPCL will be taken in due course based on reviewof situation,” the department of investment and public asset management (Dipam) saidinastatement. “Owing to prevailing conditions in the global energy market,the majority of QIPs (qualified interested parties) have expressed their inabilityto continue in the current process of disinvestment of BPCL,”it said. The government’s stake in BPCL is worth about `37,300 crore at the market prices. BPCL stake sale was a key component of the Centre’s `65,000 crore disinvestment programme in FY23. With BPCL off the table, the Centre is banking on disinvestment of its stake in privately-run Hindustan Zinc (HZL) to achieve the target.On Wednesday,the Cabinet Committee on EconomicAffairs had approved the plan. The Centre’s 29.54% stake in HZL is worth about `37,326 crore at the current market prices. The government had invited EoIs from bidders for strategic disinvestment of BPCL inMarch2020. InNovember2020,threebidders, including Vedanta,Apollo Global Management and Think Gas (I Squared Capital), showed interest in the government’s stake in BPCL. where around this time. Similarly, for Singtel offloading such a small stake does not mean any strategic shift in its largerinvestment in BhartiAirtel. Roping in some of the big tech Continued on Page 2 Mutual fund staff to come back to office from June 10 RUCHIT PUROHIT Mumbai, May 26 THEASSOCIATION OFMutual Funds in India (Amfi),in its latestadvisorytoallassetmanagement companies (AMCs), has said that all employees of mutual fund houses,especially the ones handling critical roles such as dealing in markets shouldresumeworkfromoffice by June 10 and the flexibility given to the employees to work from home (WFH) should be withdrawn. "The flexibility given to employees to work from home, especially those handling critical functions that deal with the markets, such as investments, dealing, operations, compliance/riskmanagementetc.may be withdrawn. This may be implementedattheearliest,but nolaterthanJune10,2022,"said NS Venkatesh, chief executive, Amfi,in an internal communication to CEOs ofAMCs. The advisory comes in the wakeofrecentcaseoffront-running by fund managers at Axis Mutual Fund. Two fund managers,Viresh Joshi and Deepak Agarwal,ofAxisMFweresacked this month after an investiga- ■ The advisory covers all MF houses employees, especially those handling critical roles ■ It comes in the wake of recent case of frontrunning by fund managers at Axis MF ■ Industry people said there could be more managers under the scanner, outsideAxis TheAmfi decision was based on the removal of Covid restrictions tion was carried out against them amid allegations of irregularities. The culture of work from home amid the pandemic has affected the controls and surveillance measures to capture such actions. People in the mutual fund industry told FE on Thursday that the decision was expected anytime soon and the findings in the Axis MF case have only rushed it.They also added that "therecouldbemorefundmanagersunderthescanner,outside of Axis MF". However, they believethatthedecisiontobring all employees back to officewill lower the risk of such cases due to high compliance and monitoring in dealing rooms at offices. Back in 2020, Amfi had mandatedarecordedline(calls) foremployeesdealingintomarkets for surveillance measures and to keep a check on anymalpractices that might occur. Themutualfundbodyinthe communication to CEOs further said that the decision to withdraw WFH is considering that the government and local municipal authorities have lifted all restrictions imposed earlierand"thingsarenowcompletely back to normal". Amid the outbreak of Covid-19,Amfi had advised all members to strictlyfollowtherulesstatedby theCentreandaskedemployees toworkfromhome,carryingout all transactionsdigitally. FTA talks with India very soon: EU PRESS TRUST OF INDIA New Delhi, May 26 EUROPEAN UNION EXECUTIVE vice-president and trade commissioner Valdis Dombrovskis has said the EU will formally launch negotiations for the proposed free trade agreement with India “very soon”. He has held a meeting with commerce and industry minis- terPiyushGoyalonthesidelines of theWEFmeet in Geneva. "Excellent meeting with ministerGoyal @PiyushGoyal from India. Will formally launch free trade agreement negotiations very soon,”states a tweet by Dombrovskis. India'scommerce secretary BVR Subrahmanyam said in April that India and the 27nation European Union (EU) will restart negotiations for ■ At the peak of its reign, the Ambassador had a B2C (business-toconsumer) appeal, which died soon enough, thanks to the Maruti revolution (800 and Zen) Ambassadorhad a B2C (business-toconsumer) appeal, which died soon enough, thanks to the Maruti revolution (800 and Zen),followed bythe Contessa,Daewoo Cielo and the Premier 118 NE. Despite some engine overhauls and cosmetic changes here and there, Ambassador was relegated to being a B2B (business-to-business) careventually— eitherone that government officers chose to use, or later,a taxi brand — something that always accelerates the erosion of players does offera digital edge to Bharti Airtel as there's lot of convergence happening between telecom and tech players. Just to illustrate, through the strategic partnership with Google struck earlier during the year, Bharti would benefit by way of building extensive offerings that cover a rangeofAndroid-enableddevices, and developing a cloud ecosystem.Similarly,Google through its partnership with Bharti and Jio gets access to more than 700 million mobile users in the country. Googleinpartnershipwith Jiohas already developed a low-cost smartphone which may help in digital inclusion. Reports suggest that Singtel is in talks with the Mittal family for selling around 2% of its stake in Bharti Airtel. The Singaporebasedtelecomfirmwantstoredeploy the funds so garnered in some digital ventures. brand value in consumer minds. “With more choice, consumers saw the Ambassador as regressively old-tech,unstylish and ratherunreliable,” says Shivaji Dasgupta, MD, Inexgro Brand Advisory. Then came the final downfall, when the B2B business started falling as well, at the altar of cars that looked more beautiful,sturdier and proved their worth on Indian roads. Continued on Page 2 New Delhi their long-pending free trade agreement in June. The proposed agreement, officially dubbed as Broadbased Trade and Investment Agreement (BTIA) between India and the EU has been stalled since May 2013 due to several issues. BTIAis a proposed comprehensive free trade agreement being negotiated by the two sides.