OPINION, P6 ECONOMY, P2 POWERPOINT Firms must take work to the worker instead of the worker to work COMPANIES, P4 EDITORIAL WORDS OF PRAISE SINCE MID-MARCH IIM-A’s new index for rural land prices is a building block for better price discovery Retail investors acting like shock absorbers in stock market: FM Demand for consumer durables remains strong NEW DELHI, WEDNESDAY, JUNE 8, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLVIII NO. 84, 24 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: 55,107.34 ▼ 567.98 NIFTY: 16,416.35 ▼ 153.20 NIKKEI 225: 27,943.95 ▲ 28.06 HANG SENG: 21,531.67 ▼ 122.23 `/$: 77.71 ▼ 0.08 `/€: 82.97 ▲ 0.44 BRENT: $120.30 ▲ $0.79 GOLD: `50,857 ▼ `98 IN THE NEWS Cabinet may take up 5G spectrum pricing today THE UNION Cabinet is likely to take a call on spectrum pricing for 5G auctions at its meeting on Wednesday, reports Kiran Rathee in New Delhi. The Digital Communications Commission has endorsed the Trai-recommended reserve price and suggested the Cabinet take a final call. HDFC Bank hikes lending rates by 35 bps HDFC BANK has hiked its marginal cost of fundsbased lending rates (MCLRs) by 35 basis points (bps) across tenures, reports fe Bureau in Mumbai. The new rates come into effect on Tuesday. Its MCLRs will now range between 7.5% and 8.05%. India clears wheat exports of 0.5 MT after ban INDIA SHIPPED out as much as 1.13 million tonne of wheat in May, of which 0.4-0.5 million tonne were despatched after a ban on the grain’s exports was imposed on May 13, sources said, reports Banikinkar Pattanayak in New Delhi. Infosys again told to fix glitches on I-T e-filing portal THE INCOME Tax department on Tuesday directed vendor Infosys to address fresh technical glitches on the department's e-filing portal, reports fe Bureau in New Delhi. Taxpayers and consultants have been complaining about the new portal since its launch. LIC hits new low, stock tanks 20% from issue price SHARES OF LIC continued their downtrend for the sixth consecutive session on Tuesday, reports fe Bureau in Mumbai. The stock declined over 3% on Tuesday to hit its all-time low of `751.00 apiece. The stock is down 20.6% from its issue price of `949 during its public offer. Special Features ` 10-15% Gold Right time to buy gold as prices drop Volatility in stock & debt markets will persist. Allocate some part of the portfolio to gold ■ Personal Finance, P7 Smart use of AI is a must to derive the best results AI should be used in ways that best fit a firm’s needs, says Jim Goodnight, co-founder & CEO, SAS ■ eFE, P7 APPELLATE PANEL PROPOSAL MAY BE REVIEWED On monetary policy Open to self-regulation by eve, markets on edge social media firms: Govt KIRAN RATHEE New Delhi, June 7 THE GOVERNMENT HAS decided to form grievance appellate committees to look into complaints by users of social media firms as currently there’s no self-regulation mechanism in place. Minister of state (MoS) for electronics and IT Rajeev Chandrasekhar on Tuesday said if intermediaries — such as Twitter, Facebook, Google, etc — come up with a proposal forself-regulatory or self-redressal appellate mechanism, the government would surely consider it. “If the industry and these platforms come up with own self-regulatory, self-redressal appellate mechanism, we are open to it,” the minister said, noting that the users currently don’t have such a recourse. Chandrasekhar said the newruleswithregard to appellate committees would be finalised before the end of July. As perthe proposal,these com- It (setting up appellate committees) is being done not to make it difficult for them (social media platforms), it is being done to keep citizens safe...We'll have engagement and public consultation... —RAJEEV CHANDRASEKHAR MoS, ELECTRONICS & IT NEW MECHANISM ■ The new ■ Will adjudi- rules with regard to appellate committees would be finalised before the end of July cate complaints by users on blocking content or a/cs by grievance redressal officers of social media cos mittees shall consist of a chairperson and such other members, as the Central government may, by notification in the official gazette, appoint. Thesecommitteeswouldadju- ■ Currently, users with objections on any content or a/c being blocked can directly move courts for redressal dicate complaints by users relating to blocking of content or accounts by the grievance redressal officers of the social media firms. The government feels that Amazon cautions Future against fresh RIL deals RAJESH KURUP Mumbai, June 7 ADDING A NEW twist to its ongoing spat with Future Group, e-commerce major Amazon has warned its promotersagainstsaleofthecompany’s supply chain and logistics businesses to Reliance Industries (RIL) in a fresh transaction. In a letter addressed to Kishore Biyani and other familymemberswho are classified as promoters,Amazon has said thetransferofthesupplychain and logistics businesses were part of the transaction struck by the board of directors of Future Retail with RIL on August 29,2020,andwas subsequently put on hold by the Singapore emergency arbitrator. Further, the transaction was struckdowninAprilbythe creditors of Future Retail, hence any move to sell these assets to RIL now would be nothing but a ‘fraudulent move’,like the companyhanding over 835 of its stores to Reliance Retail,it said. “It is, therefore, clear that the proposed transaction (sale of supply chain and logistics businesses) is in continuation of a larger fraudulent stratagem to give effect to the impugned transaction by circumventing the binding injunctions contained in the EA order and subsequently reaffirmed by the arbitral tribunalinthetribunalorder.The said actions are contrary to FRESH SALVO ■ New deal is 'manifestation of collusion' between Future and MDA Group (RIL),Amazon said in a letter ■ RILgot FRL’s retail stores against rental dues of a meagre `1,100 cr,it pointed out ■ Amazon earlier accused FRL’s independent directors of ‘facilitating’ sale of 835 retail stores in favour of Rel Retail NCLT to hear Amazon's plea opposing bankruptcy petition against FRL on Friday statements made before courts through pleadings or otherwise.The element of collusion between the Future Group,and the MDA(Reliance Industries) Group is manifest,” the Amazon letter stated. “The newfound conducive discussion belies the statements made by FRL in the March 16 disclosure whereby, FRLhad claimed that the MDA Group had ‘forcefully’ taken over the retail stores and its board of directors have taken a ‘strong objection’ to such actions taken by the MDA Group,”it added. The US retailer also said it was shocking to note that despite the MDA Group having caused such a huge loss of revenue to FRL’s retail business, the Future Group is negotiating the transaction and intends to continue having a business relationship with the MDA Group. RIL got FRL’s retail stores against rental dues of“a mere”`1,100 crore, while the small-store format itself was valued by the lender banks at `3,000 crore,it said. “It is clear that what was injuncted has been achieved by unlawful devices, arrangements, which are not only in contravention of lawbut shake the very foundation of any ethical business operation.” Amazon further said it had constantly expressed willingness to extend financial assistance to FRL for servicing its debts, including a potential investment of `7,000 crore through Samara Capital in FRL.It continues to offer such financial assistance, but the independent directors of FRL, in collusion with the MDA Group and at the behest of the promoters, had raised vague, absurd objections and rejected them. Continued on Page 15 thesaidcommitteeswouldprovide an alternative to a user to file an appeal against the decision of the grievance officer ratherthandirectlygoingtothe courtoflaw.Hence,theusercan appealtothesaidcommitteein case of his dissatisfaction with the order of the grievance officer and seek an alternative redressalmechanism.However, the user has the right to seek judicial remedyat anytime. Currently, users having objections to any content or accountbeingblockedcanmove courts directly for redressal. By creating grievance appellate committees,the government is creating an adjudicating body betweenthegrievanceredressal officers of social media firms and the courtsof law. Themovehasbeenseenbya section of legal observers and internet activists as a case of over-regulation aimed at muzzling criticism of the governmentonsocialmediaplatforms. Continued on Page 15 World Bank trims India growth to 7.5% FE BUREAU New Delhi, June 7 THE WORLD BANK on Tuesday scaled down its FY23 growth forecast for India to 7.5% from 8% predicted in April, citing the damaging impact of rising inflation,supply-chain disruptions and the Russia-Ukraine conflict. These headwinds would offset “buoyancy in the recovery of services consumption from the pandemic”,it said. With this, the multilateral body has revised down its India growth projection for a second time since the Ukraine warbegan — it had cut its forecast by70 basis points inApril. Continued on Page 2 Forecasts for India (% growth, y-o-y, FY23) World Earlier Bank Current 8 7.5 9 8.2 7.8 7.3 9.1 8.8 10.3 8.5 7.9 7.6 7.8 7.2 IMF S&P Moody's* Fitch Morgan Stanley RBI *For calendar year 2022 STOCKS DIPPED, THE 10year bond yields hit a new three-yearhighandtherupee felltoarecordlowinintra-day tradesonTuesday,asmarkets stayednervousaheadofRBI’s monetary policy announcement onWednesday. Thebenchmarkbondyield closedat7.5180%,up2basis points over Monday’s close. Meanwhile, the US treasury wasrulingat2.98%lateTuesday evening, having earlier overshot the 3% mark. The markets are bracing fora40bpshikeinthekeyrepo rate and a sharp upward revisioninthecentralbank’sinflationforecastforFY23.Experts said they are pencilling in a peak repo rate of close to 7% byaboutAprilnextyear. Stocks were in the red for the third straight session on Tuesday.The Sensex tumbled 568 points or 1.02% to close at55,107.34asinvestorscontinued to take risk off the table.The broader NSE Nifty dipped 153.20 points or 0.92%to end at 16,416.35. Marketwatcherssaidpositionswere offloaded ahead of theRBIpolicysinceareporate hike would automatically meanhigherhomeloanrates. Bankshavealreadyhikedtheir lending rates for companies and interest rates could go up 10-year bond yield (%) 7.500 7.450 7.301 7.400 7.350 7.300 7.250 May 25, 2022 June 7, 2022 Sensex `/$ 55,500 77.67 (Inverted scale) Intra-day, June 7 55,350 Intra-day, June 7 55,373.18 55,050 77.71 54,900 77.73 54,750 54,600 THE UNION MINISTRY has paved the way for small consumers to get access to green power by reducing the limit of open access transaction by 10 times to 100 kilowatt (kw) and curbing the surcharges to be built into tariffs. The ministry notified the Green Power Open Access Rules,2022,onTuesday. The new norms also eased the process to apply for green power,underwhichapprovalwill be granted via a national portal in 15 days or else it will be deemed to have been granted. Renewablepowerischeaper than thermal power already, with the tariffs ranging around `2.3-2.7/unit, while thermal power under long-term contracts are mostly sold at `5-6/unit. Under the new open access rules,tariff for the green energy willbedeterminedbyaseparate commission, instead of the power regulators at the central and state levels. The tariff will include average pooled power purchase cost of the renewable energy,wheeling and transmis- 77.71 55,107.34 77.69 55,200 Open Close further.Higher yields are not helpfulfortheequitymarkets. The relentless selling by FPIs—whoareanxiousabout high inflation and slowing corporate profits — has pressured the domestic currency Open access rules eased in boost for green power VIKAS SRIVASATAVA Mumbai, June 7 7.518 7.550 ■ Lower threshold for open access transaction cut from 1 MWto 1 kilowatt 77.75 77.73 Open Close which slipped by 8 paise on Tuesday to 77.71, according to Bloomberg.The intra-day lowwas `77.74,a record low. FPIs sold stocks worth `2,397.65 crore on Tuesday, provisional datashowed. ● $100-M FUNDRAISE Edtech startup PW is 101st unicorn FE BUREAU Bengaluru, June 7 sion charges, cross-subsidy charges, if any, and service charges covering the prudent cost of the distributionlicensee. Cross-subsidy surcharge won’t increase beyond 50% of the tariff for 12 years from the date of operation of the renewable plant. AT A TIME when funding for most edtech startups has been drying up and they are either layingoffstafforshuttingshop, PhysicsWallah (PW) has raised $100 million from WestBridge Capital and GSVVentures in its SeriesAfundinground.Thefirm wasvalued at $1.1 billion in the round, making it the country’s 101st unicorn. It also became thefirstedtechplayertoachieve themilestonein SeriesAround. Thecompanysaidinastatementthatthefundswillbeused for business expansion, branding,openingmorelearningcentres and introducing more course offerings. “We are delighted to join the unicorn bandwagon. This latestdevelopmentwill helpus further our vision and implement new initiatives to augment the learning journeys of students, thereby enabling them to reach new heights in their careers,” PW founder & CEO Alakh Pandey said. Continued on Page 2 Continued on Page 2 ■ Cross-subsidy surcharge limited to 50% of tariff for 12 years from start of a renewable unit, no extra surcharge ■ Approval through central portal, to be granted in 15 days LISTING PLANS OF OYO, PHARMEASY & SNAPDEAL MAY BE HIT Stricter Sebi scrutiny may see startups delaying their IPOs TUSHAR GOENKA Bengaluru, June 7 WITH THE CAPITAL markets regulator now taking a closer look at the disclosures made by startups, several of these new age tech companies (NATC) could see their initial public offerings (IPOs) delayed. The Securities and Exchange Board of India (Sebi) is believed to have called for more details on the key performance indicators (KPI) being put out by startups in their draft red herring prospectuses (DRHP). Among the companies that could see their public issue plans One 97 Comm Zomato Share price on NSE (`) 2,500 2,000 Share price on NSE (`) 175 2,150 1,500 150 615.8 1,000 100 75 76 500 0 125 Nov 17, ‘21 June 7, ‘22 delayed are PharmEasy, OYO Hotels and Snapdeal. In February, Sebi had floated a consultation paper, proposing more disclosures and transparencyfrom NATCS with regards to theiroperating metrics. The regulator wants 50 Jul 22, ‘21 Cartrade Tech Share price on NSE (`) June 7, ‘22 Share price on NSE (`) 700 600 577 500 261 400 300 200 100 Nov 11, ‘21 June 7, ‘22 be significantly lower. Sebi’s concerns stemmed from the steep corrections in the stock prices of startups after listing which have lost anywhere between 30% and 60% of their offer prices. Many of them listed at a discount to the offer price and had lost value even before the tech meltdown in global markets. Anup Jain, managing partner, Orios Venture Partners, said that late-stage companies are going to see a delay in 1,750 1,618 1,500 1,250 65.2 1,000 750 500 250 Aug 19, ‘21 June 7, ‘22 companies to justify the valuations they are asking for by providing details of KPIs as also other metrics. It also wants some of the data to be authenticated bya third party. As a consequence, valuations of future IPOs of NATCs could Fino Payments Bank 612 their IPOs. “With the bullishness cooling off, profitability is now a lot more important.In private markets, the focus is on growth and less so on profits but when you progress to public markets, you have to become profitable. This principle seems to have been cast aside in the hype,” Jain said. In Q4FY22, One97 Communications, the parent of Paytm reported an Ebitda loss of `729 crore while Zomato posted a loss of `449.7 crore, according to analysts at ICICI Securities and Jefferies, respectively. Ankur Bansal, co-founder New Delhi of BlackSoil, said unless companies are profitable, their IPOs may not be successful. “Founders are now raising money through debt to meet theiroperating expenses.They now do not want to raise money through equity because they feel the markets are jittery. They want to keep cash in the bank so the next round of fundraising can happen at a more opportune time rather than immediately. According to the latest Tracxn data, between April 1 and May 25, funding received by startups stood at $4.15 billion compared with $10.11 billion during the JanuaryMarch quarter.