INVESTOR & EDUCATION, P8 MOTOBAHN, P9 INTERNATIONAL, P11 MORE AVENUES FIRST- AND LAST-MILE MOBILITY A DOSE OF OPTIMISM Design graduates now have a better chance of finding a career in any field Country-specific solutions needed for EV adoption in India Janet Yellen expects US economy to slow, but recession not inevitable POISED FOR MARKET GAIN Maruti’s product pipeline has just kick-started with upgrades of key models CHENNAI/KOCHI, MONDAY, JUNE 20, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XLIV 37, 30 PAGES, `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 Not easy for airline to turn profit in India: IATA official IT IS NOT easy for an airline to turn a profit in India and a lot of issues such as fare caps and high taxes on jet fuel have to be resolved, said Philip Goh, regional V-P for Asia Pacific, IATA, reports PTI. Goh said pricing ought to be left to airlines and should not be governed the way it is being governed. He also said taxation — on fuels and other things — is always an issue for the airlines. FE SPECIALS CLOSE TO FINISH LINE ■ Vodafone Idea can now raise the remaining `20,000 crore ■ So far, promoters have pumped in `4,500 crore in the company ■ To raise `10,000 crore in equity investment and `10,000 crore in debt ■ Telco feels that once the govt converts its debt into equity, investors will put in money ■ VIL needs funds not only for 5G auctions but also 4G capex intogovernmentequity.Thisfolloweda telecom revival package announced by the government in September,2021. The net present value (NPV) of this interest is expected to be about `16,133 crore. Continued on Page 2 Falling edible oil prices to cool inflation a tad ($/tonne) 1,915 1,650 Global prices of crude edible oils 1,254 THE GOVERNMENT HAS decided to extend the social security schemes run by the Employees’ State Insurance Corporation to all 744 districts of the country by the end of 2022, reports Surya Sarathi Ray in New Delhi. Currently, the scheme is fully implemented in 443 districts and partially in 153 districts, whereas 148 districts are not covered under it. AHEAD OF THE 5G auctions next month, the government will convert its debt into equity in Vodafone Idea, official sources said.The movewill help the financially-stressed telecom operatorreach its `25,000-crore fund-raising target.“The decision of the government to convert the interest of `16,133 crore into equitywill be notified to the company and the company’s boardwill accomplish this in 23 weeks time,” a senior government source told FE. Aftertheequityconversion,thegovernmentwillholda32% stake inVodafone Idea and the promoters’stakewill get diluted to around 50% from the current 75%. The conversion of debt into equity will be done under Section 62 (4) of the Companies Act.Vodafone Idea will issue shares to the government on a preferential basis to be held by the department of investment and public asset management (Dipam). InJanuary,VodafoneIdea'sboardhad informed the department of telecommunications (DoT) that it will opt for converting the interest on its adjusted grossrevenue(AGR)andspectrumdues 1,950 ESIC to cover all 744 districts by 2022 end PRASANTA SAHU & RISHI RAJ New Delhi, June 19 1,335 2,150 THE UNION CABINET may give its nod this week to a proposal to cut land licensing fee (LLF) for industrial users of railway land to 2-3% of the value of land as against 6% now, reports Prasanta Sahu in New Delhi. The approval of the much-awaited LLF policy will facilitate implementation of PM Gati Shakti - National Master Plan for Multi-modal Connectivity. Telco nears its fundraise target of `25,000 crore 1,520 Cabinet nod likely for cut in rail land rentals this week 32% govt stake in Voda before 5G auctions 1,815 INDIA HAS COMPLETELY protected the interests of its farmers, fishermen and MSMEs in the recentlyconcluded 12th ministerial conference of the World Trade Organization (WTO) in Geneva, commerce and industry minister Piyush Goyal said on Sunday, reports fe Bureau in New Delhi. “In the WTO ministerial conference, we fully protected the interests of farmers, MSMEs and fishermen. There will be no burden on them. We protected their interests,” the minister was quoted as saying by PTI. DEBT CONVERSION IN 2-3 WEEKS 1,075 IN THE NEWS Goyal: Completely protected India’s interests at WTO Inflation in “oil & fats” (%) 2022 Jan Feb Mar Apr Palm June 17, ‘21 Sunflower May 17, ‘22 Soya June 17, ‘22 All prices CIF (Mumbai) May Source: SEA SANDIP DAS & SHUBHRATANDON New Delhi/Mumbai, June 19 STICKY FOOD INFLATION will likely moderate in the near term on eased domesticsupplies and softening prices of key edible oils,giving comfort to the Reserve Bank of India (RBI), which is battling “persistent” inflation. Global prices of oil palm, soyabean and sunflower oils have declined 10-16% in the last one month as supplies picked up.This,coupledwith a slashing of tariff barriers onimports of edibleoils and the removal of an export ban by Indonesia,has let leading food companies in India cut retail prices. Morepricereductions areintheoffing, as tariff cuts and global supply 18.7 16.4 18.8 17.3 13.3 Source: MoSPI improvements start fully reflecting on landed cost of crude edible oils,according to industry sources. Landed prices of palm oil declined 16% to $1,520 a tonne,from the levels prevailing a month back.Similarly,the landedcost of crudesoyabeanandsunflower oils declined 10% and 12% to $1,680 a tonne and $1,950 a tonne, respectively,in the last one month. In early May, RBI governor Shaktikanta Das had stated that edible oil prices might go further up despite the central bank hiking the repo rate by40 bpsinanunscheduledmeeting;laterin the June review,the ratewas hiked further by 50 bps to 4.9%. Continued on Page 2 Over a fourth of stocks hit 52-week low M-cap erosion for 142 stocks since October 18 stands at `26.3 trillion NIFTY500 BEARS THE BRUNT OF SELL-OFF ACROSS THE GLOBE ● TCS 3,023.85 YOOSEF KP Mumbai, June 19 ● HDFC Bank 1,271.60 ● Infosys 1,367.15 THE SUSTAINED SELL-OFF in the broader market has hammered many blue-chip stocks. More than a fourth of Nifty500 companies slipping to their 52-week lows last week as growing fears of recession triggeredasell-offacrosstheglobe. With central banks around the world moving toward aggressive policy tightening, investors chose to stay away from risky assets as sucking out liquidity from the systemwould stifle economic growth. As many as 142 stocks from the NSE500 universe tested their 52weeklowssinceJune13astheindex plunged to its lowest levels since May25,2021.Theindex,whichrepresents about 90% of the nation’s market capitalisation with an ● HDFC 2,026.00 ● Bajaj Finance 5,220.00 Stocks at 52-week low (NSE) ● HCL Technologies ● Asian Paints Fall in 3-months (%) -15.9 -12.9 -25.2 -15 -22.5 944.05 -19.9 -17.7 2,560.00 ● Wipro -32.6 402.05 ● Axis Bank ● UltraTech Cement -14.1 626.60 5,157.05 almost 98% of the total turnover, has corrected 18.2% since October highs.The erosion in market value for these 142 stocks since October 18standsat`26.3trillion,withTCS and HDFC Bank losing `2.2 trillion and `2.1 trillion,respectively. Market participants are of the view that if the slide in equities per- -18.8 sist, the retail investors, too, could think about withdrawing monies from the marketswherevertheyare in profit or in smaller losses. Moreover,flows from the household may slowdown as banks raise deposit rates. According to analysts, asset allocation decisions of households towardsequitieshaveahighdepen- dence on bank deposit rates.The list features marquee names from the information technology and metal space. Shares of top four IT firms – TCS,Infosys,HCLTechnologies and Wipro — plummeted to their 52week lows on June 17. Continued on Page 2 No rollback; Agniveers must pledge they were not among protesters KRISHN KAUSHIK New Delhi, June 19 IRRESPECTIVE OF THE continuing protestsacrossthecountry,theAgnipath scheme of recruiting soldiers for fouryears will not be rolled back, and aspiring Agniveers will have to “pledge” that they did not take part in the protests, arson, or vandalism, the leadership of the militarysaid on Sunday.Themilitaryhadbeentrying to carrying out this reform for decades, and the coronavirus pandemichadprovidedthe opportunity to do it, tri-services Lt Gen Anil Puri told reporters. Heaccusedcoachinginstitutesof instigating the protests,and advised protesterstonot“wastetime”,and to instead focus on preparing for the tests. All three services will begin training their Agniveers by November-December this year. With no let-up in the protests for the fifth day running,Defence Minister Rajnath Singh met the service chiefs for the second time in two days. Army Chief General Manoj Pande, Navy Chief Admiral R Hari Kumar,and Air Force Chief Air Chief Marshal V R Chaudhari had met Singh on Saturday as well. Lt Gen Puri,Additional Secretary, Department of Military Affairs (DMA), addressed the press conference afewhourslater,alongwith the A year on, key post for SBI official still vacant at Jio Payments Bank SHRITAMA BOSE Mumbai, June 19 to the streets.” “Every individual who wants to joinAgniveerwill havetopledgethat hehasnotparticipatedintheprotest orvandalism,”Puri said.“Policeverification is mandatory” even in the existing system, he said, and those who are named in FIRswould not be able to join as Agniveers. “I request the protesters, don't waste time.Qualifying in the physical (tests) is not easy.” A KEY POSITION in the risk department of Jio Payments Bank,typically held by an official on deputation from State Bank of India (SBI), has remained unfilled for nearly a year,three people aware of the matter told FE. SBI now has just two of its employees in operational roles at the payments bank, down from three earlier. DeputyCEO Kishorekumar Sonecha and an another executive in the treasury division are the only two SBI officials deputed to Jio Payments Bank at present. Two of the people FE spoke to said that the vacancy in the thirdspotissettobefilledafter thecurrentyear’sroundofpromotions.The name of the personwhowaslastondeputation in the risk department before being promoted and sent back to SBI could not be immediately ascertained. Continued on Page 2 Continued on Page 2 Clockwise from left: Police detain Congress workers at a protest against the Agnipath scheme in Patna; security personnel stand guard along railway tracks; passengers sleep on the platform at the Patna railway station after several trains were cancelled on Sunday topofficersforpersonnelineachservice.Thosewhowereparticipatingin the protests would not be recruited, Puri warned. “Military is based on discipline.Thereisnospaceforarson orvandalism.” “Anger can be expressed”, Puri said, but peacefully, in discussions. The protesters, he alleged, had been “instigated” by two kinds of people: “inimical elements, and those who run coaching institutes”. The latter group, he said,“have a huge contribution in sending them (protesters) Co-founders make surprise buyout offer for Zilingo OLIVIA POH & YOOLIM LEE June 19 ZILINGO CO-FOUNDERS MADE a last-ditch offer to buy the embattled fashion e-commerce platform as the board debates its future, according to people familiar with the matter. Co-founder Dhurv Kapoor on Sunday proposed a management buyout to the Singapore-based company’s board, according to the people,who asked not to be named as the matter is THE PROPOSAL ■ Co-founder Dhurv Kapoor secures commitments from small group of new investors ■ To get $8 million in new equity in newly incorporated entity in tranches ■ Remaining assets and the old corporate entity to be liquidated in due course private. He has secured commitments from a small group of new investors including a US private equity firm,the people said. Under the preliminary proposal,the investorgroupwill inject $8 million in newequityin a newly incorporated entity in tranches, while the remaining assets and the old corporate entity will be liquidated in due course, according to Kapoor’s email sent to investors and seen by Bloomberg News. All outstanding debt owed to creditor ZorroAssetswill be frozen forthree years,according to email. The move comes as Zilingo’s board is scheduled to meet on Mondaytodiscussthefutureofthecompany, according to people with knowledgeofthematter.Allegations of financial irregularities in March prompted an investigation into the company,valued at $970 million in 2019,and led to the dismissal of cofounderAnkiti Bose as chief executive officerin May. — BLOOMBERG EYE ON A LARGER CONSUMER BASE THROUGH PHYSICAL STORES ■ BRANDWAGON, P9 Will new ad norms kill creativity? Four industry leaders on the impact of the new advertising guidelines ■ PERSONAL FINANCE, P7 Bet on balanced advantage funds Balanced advantage funds make for a better choice within all hybrid mutual funds ■ eFE, P10 Women breaking financial shackles LXME, a fintech startup, is allowing women to take charge of their finances D2C brands to make offline presence felt after ruling online SHUBHRATANDON Mumbai, June 19 AFTER CARVING A niche in the online space, direct-toconsumer or D2C brands across FMCG,retail,cosmetics, grooming, personal and hygiene care, among others, arenowfastentering the physical store space. The idea behind the move is to tap into a largerconsumerbase as people still want to touch and feel a product before buying. In doing so, these new-age companies know they would face competition from the industry’s bigger and established players. These legacy companies already have a stronghold on distribution channels and retail outlets, but D2C brands are still willing to take on the challenge. Entrepreneurs and executives of some of the D2C brands told FE that the key differentiator between them and legacy companies is that their product offerings are different and the consumer interest is high in their products even from the remotest parts of the country. Also, physical presence in the brick-and-mortar space gives them higher visibility, which sometimes gets diluted in a flurry of brands present in an online marketplace. Iffat Haider Jivan,business head of Ed-a-Mamma, which was founded by actor Alia WHAT’S IN STORE! ■ D2C brands expand into offline space to build scale ■ Strengthening online presence to take on growing competition from bigger companies entering D2C ■ Tweak product and pricing to take on competition from larger companies in the space ■ Tap into large customer base that still buys offline Bhatt, told FE,“People need to see the brand physically and experience it ifyou reallywant to create a presence. Today, if you have to establish a brand, you would not want it to be known as a marketplace brand, because there are plenty of them. You may keep selling,but our idea is to build and grow the brand, and expanding into offline space is a natural progression.” Ed-a-Mamma, which is a sustainable kids wear brand, sold 900,000 units in FY22,up from 100,000-150,000 units sold in the five months of operation since its launch in end October in the previous financial year. The company plans to add newproduct lines and enter multiple categories in the current year and reach 60 stores across India, along with exploring options to take the brand global. Varun Alagh, CEO & cofounder, Honasa Consumer, which owns Mamaearth, said that even though the company ventured into the exclusive brand outlet format as an experiment, over the last 18 months, the offline space has shown tremendous growth in terms of scale and revenue. “Every brand needs to be selling at places where their consumers shop,hence offline will continue to grow in the coming year,”he said. Mamaearth,apersonalcare brand that uses natural ingredients, clocked a turnover of `465 crore in FY21.Alagh estimates the revenue to have doubled in FY22. With multinationals and offline retailers also getting into the D2C market,the competition is intensifying in the online space,too. However, native D2C players say that the online market is different, and does not fear competition. Continued on Page 2 CHENNAI/KOCHI
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