MARKETS, P9 COMPANIES, P4 INTERNATIONAL, P8 RULEBOOK DOMESTIC DEMAND GROWING ANGER Indian steel industry to remain stable, says Chandrasekaran After 'partygate', UK PM Johnson faces confidence vote RBI issues guidelines on standard asset provisioning for NBFCs NEW DELHI, TUESDAY, JUNE 7, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLVIII NO. 83, 16 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: 55,675.32 ▼ 93.91 NIFTY: 16,569.55 ▼ 14.75 NIKKEI 225: 27,915.89 ▲ 154.32 HANG SENG: 21,653.90 ▲ 571.77 `/$: 77.63 < > 0.00 `/€: 83.42 < > 0.00 BRENT: $119.60 ▼ $0.12 GOLD: `50,955 ▼ `288 — — CAUTIONING AGAINST big hikes in MSP of crops, NITI Aayog member Ramesh Chand said food inflation will be less than 6% by July, thanks to the RBI’s monetary tightening, import duty cuts on edible oils and curbs on wheat exports, report Prasanta Sahu & Sandip Das in New Delhi. LIC shares sink to fresh all-time low SHARES OF LIC India fell for the fifth straight session on Monday to its all-time low of `775.40, reports fe Bureau in Mumbai. The stock hit the all-time low on the BSE on Monday, down 3.1% from its previous close. Growth likely to remain strong for Infosys EPS CAGR of 15% is expected over FY23-25; ‘Buy’ retained with new target price of `1,830 ■ Investor, P7 6.8 6.359 6.4 6.0 5.6 December 6, 2021 ■ The yield on June 6, 2022 ■ It closed 10-year note shot up to 7.514% in intra-day trades on Monday at 7.498%; previous highest level was in January 2019 (7.588%) CRRby50 bps taking it 4.5% of netdemandandtimeliabilities, inamovethatimpoundedsome `87,000 crore of liquidity. The long-term yield has now moved up by about 175 bps from the bottom in October2020,whereas the repo has moved up by 40 bps. Mahendra Jajoo,CIO,Mirae Asset Management, believes there could be a furtherhike in the CRR by about 50 bps but possibly in phases. “The RBI would be looking to bring down the surplus liquidity to levelsofaround`2trillionpos- ■ With Monday’s gain, the yields have jumped over 100 basis points so far in 2022 sibly by October from levels of around `3.5trillioncurrently,” he said. Jajoo said it was unlikely that the RBI would conduct any open market operations before the second half of the year and would probably wait for more visibility on crude oil prices and the inflation trajectory. Inflation forecasts of economistsforFY23rangebetween 6.6% and 7.2% with the rate coming off towards the end of the year. Continued on Page 2 NEW BUSINESS ORDERS IN DEFENCE, SHIPBUILDING & OIL REFINING Russia, Europe eye India trade route VIKAS SRIVASTAVA Mumbai, June 6 THE RUSSIA-UKRAINE war and the stringent sanctions on Russia by the West have thrown up more opportunities for India’s businesses than earlier anticipated. Defence production and maintenance, shipbuilding and oil refining are three areas where Indian firms are already beneficiaries or have at least receivedenquiriesfrompotential importers. India’s petroleum products exports,whichsurged161%in FY22 to $67.5 billion, partly drivenbyariseinprices,willget a further fillip in the current year with several European countries resorting to India to source refined products from Russia’s Urals crude, which is out of bounds for them. Currently, discounted Russian crude allows private Indian refiners Reliance and Nayara to realise over$15-$18 per barrel from the export of refinedproductstoEuropeand the US.Thiscompareswith$7$9 per barrel in March-April whenthemajorityofdiscounts were taken by traders. Given the possibility of a prolonged stand-off between Moscow and the West and the chances of a steady supply of Russian crude to India at relatively lower rates, India's private oil refiners may go for capacityexpansionintheshort term to raise supplies to Europe. Eventually, the changed structure of crude sourcing could even let India realise its goal of becoming a refinery hub. Continued on Page 2 INVENTORY LEVELS SOAR TO 60 DAYS Dealers want firms to halt two-wheeler despatches RISHI RAJ & VARUN SINGH New Delhi, June 6 A LARGE SECTION of twowheelerdealershasaskedmanufacturers to put a complete stop to monthly despatches by cutting down production, as inventory levels have soared to around 60 days due to the continuing weak retail sales. Normal inventoryavailable should be of around 15 days and ideally not cross 30 days, the dealers concerned told FE. Theysaidthebulkoftheinventory is of entry-level motorcycles,apartfromscooters,where sales have slowed down with consumer preference moving to electric variants. Industry sources said 75% of the monthly two-wheeler sales are of entry-level models, which has seen distress for over a year now due to high ownership costs. Since Hero Two-wheeler retail sales 2019 2022 (Units) Growth « Special Feature May 9, 2022 7.2 1,420,563 1,222,994 NITI Aayog cautions against sharp MSP hikes Prime Minister Narendra Modi releases a special coin series during the 'Iconic Week Celebrations' of the finance ministry on Monday, as FM Nirmala Sitharaman looks on. The `1, `2, `5, `10 and `20 coins, also 'visuallyimpaired friendly', will have the Azadi Ka Amrit Mahotsav design. The PM also launched 'Jan Samarth’ portal — a one-stop portal for 12 government schemes ■ Report on Page 2 7.498 7.468 « AUTOMAKER TATA Motors has won an order to deliver 10,000 units of its XPRES-T EV sedan, from BluSmart Electric Mobility, making it India’s biggest electric vehicle fleet order, reports fe Bureau in Mumbai. EVEN AS THE Reserve Bank of India’s monetary policy committee began its three-day meeting on Monday,theyields on the benchmark 10-year bonds breached the 7.5% level in intra-daytrades before closing at 7.49%, the highest levels since January 2019. Whileahikeinthereporate of 40-50 basis points has been pencilled in,the bond markets are bracing for some hawkish commentary, experts said. Meanwhile,theyield on the US treasury has trended up over the last five sessions and was trading 5 bps higher at 2.9% on Monday evening. Bhaskar Panda, executive vice-president&head,overseas treasury,HDFCBank,believesa 40bpshikeinJunecouldbefollowed upwith a 25-35 bps hike inAugust.“Itispossiblethecash reserve ratio could also be increased byabout 25 bps now, butthestanceislikelytoremain accommodative,”hesaid.Panda expectstheyieldtomoveinthe range of 7.5-7.75% over the next six months. In an off-cycle meeting in early May, the RBI raised the repo by 40 bps to 4.4% and the 7.6 1,338,382 1,194,520 Tata Motors bags biggest EV fleet order in India FE BUREAU Mumbai, June 6 « THE ELECTRONICS & IT ministry has again put up the draft IT rules for consultations, reports fe Bureau in New Delhi. Stakeholders can send in comments in next 30 days. A formal public consultation meet will be held by mid-June. SPECIAL COINS Bond yields spike to over 3-yr high 1,189,679 1,017,785 MeitY puts up draft IT rules for public consultation THREE-DAY MPC MEETING BEGINS « IN THE NEWS -14.5 -10.8 -13.9 Jan Apr May Sou : Source: Fada MotoCorp is the leader in the entry-level segment of bikes, the company’s inventoryposi- tionisthehighestwithsomeof the dealers, almost touching 90+ days. Email queries sent to Hero MotoCorp, Bajaj Auto, TVS Motor Company, and Honda Motorcycle and Scooter India, asking what their respective inventory levels with dealers are andwhetherthe latterhave urged them to stop despatches, did not elicit any response till the time of going to the press. Though the Federation of Automobile Dealers Associations (Fada),in its sales data for May, said the two-wheeler inventory is at 23-25 days, industry sources pointed out that Fada only captures inventory position from the main dealerships and not their secondarychannels,so there is a mismatch. Continued on Page 2 No bots data: Musk threatens to drop $44-bn Twitter takeover MOLLY SCHUETZ June 6 ELON MUSK ON Monday said he believesTwitter is breaching their merger agreement by not meeting his demands forinformation about spam and fake accounts, injecting another twist into a takeover saga marked by the billionaire’s serial outbursts. The shares fell about 5% early on Monday in NewYork. Musk believes Twitter is “activelyresisting”and“thwarting his information rights” by refusing to disclose the information, according to an amended securities filing on Monday. Last month, Musk said he wouldn’t proceedwith his $44billion takeover of Twitter unless the social media giant can prove bots make up fewer than5%ofitsusers,asthecompanyhasstatedinpublicfilings. Musk has estimated that fake FRESH WARNING Musk believesTwitter is “actively resisting” and “thwarting his information rights” by refusing to disclose information on bots ■ He had earlier said he wouldn’t proceed with his takeover plans unlessTwitter can prove bots make up fewer than 5% of its users ■ He has estimated that fake accounts make up at least 20% of all Twitter users accounts make up at least 20% of all users. Monday’s stock slump reinforced doubts that Muskwould finalise his $54.20-a-share offer,further widening the gap between the market’s expectations and the billionaire’s price. Theshareshavebarely—and only briefly — surpassed $50 since Musk sprung his buyout plan onApril 14. Twitter chief executive officer Parag Agrawal has sparred with Musk publicly on Twitter aboutbots.Agrawalhassaidthe company has human reviewers lookat“thousandsofaccounts” to determine the prevalence of bots,butaddedthathecouldn’t share more specifics because of privacy concerns. “Unfortunately,wedon’tbelievethatthis specific estimation can be performed externally, given the critical need to use both public and private information,” Agrawalwrotein May. Twitter didn’t immediately respond to a request for comment. In the filing on Monday, Musk sharply disagreed with Twitter’s assessment. “Twitter’slatestoffertosimply provide additional details regarding the company’s own testingmethodologies,whether through written materials or verbal explanations, is tantamount to refusing Mr. Musk’s data requests,” according to the filing,which was addressed to Twitter’s legal counsel, Vijaya Gadde. Continued on Page 2 New Delhi Russia's defence firms have approached Indian firms to buy shipbuilding, defence equipment components ■ Some European firms, which earlier bought from Russia, now want India to assemble such products & supply to them ■ Several European countries are turning to India to source refined products from Russia’s Urals crude