ECONOMY, P2&3 COMPANIES, P4 TREADING CAUTIOUSLY EPFO to start investing in InvITs, leave out private trusts INTERNATIONAL, P8 MISSION MODE HIGHER PRICE FACTOR RECALIBRATING POSITION Govt aims to reduce import dependence on palm oil by a quarter by 2030 No early mover advantage for Hyundai in EV space with Kona US rethinks steps on China tariffs in wake of Taiwan response MUMBAI, FRIDAY, AUGUST 12, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXII NO. 190, 28 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 SENSEX: 59,332.60 ▲ 515.31 NIFTY: 17,659 ▲ 124.25 NIKKEI* 225: 27,819.33 ▼ 180.6 HANG SENG: 20,082.43 ▲ 471.59 `/$: 79.64 ▼ 0.12 `/€: 82.3 ▼ 0.97 BRENT: $97.8 ▲ $0.4 GOLD: `52,202 < > *Prv close — CHANGES NOT FEASIBLE WITH TWO DOMINANT PLAYERS Market share cap rule for UPI apps to be deferred IN THE NEWS Digital firms need more caution post RBI lending norms THE RESERVE BANK of India’s guidelines for regulating digital lending platforms prescribe a more cautious regime for players. Analysts observe the regulations would require lenders to be a lot more careful in their partnerships with Loan Service Provider and fintechs, report Tushar Goenka & Salman SH in Bengaluru. ■ PAGE 9 Google opposed to regulatory body GOOGLE HAS GRAVE reservations about developing a selfregulatory body for the social media sector in India to hear user complaints, though the proposal has support from Facebook and Twitter, sources told Reuters. ■ PAGE 4 UPI transactions by app platforms in July Volume (in million) 2,131 934 THETRANSITIONTO a regime where the Unified Payments Interface (UPI) market share of a single app is capped at 30% is likely to be delayed by two to threeyears. TheNationalPaymentsCorporation of India (NPCI), after discussions with all stakeholders, may decide to extend the December31,2022deadlineby afewyears,accordingtosources in the know.NPCI is believed to 5.25 3.67 Google Pay 0.07 0.15 69 PhonePe 1.11 61 Paytm Amazon Payments Bank Pay Yes Bank Source: NPCI becontemplatingtheextension as it may not be feasible within the current deadline to change theexistingecosystemdynam- icswheretwoplayers–PhonePe and Google Pay – account for over80% of the market. "If you try to change the market share situation within the current deadline, it will mess with UPI volumes. So, the choice really is between messing up UPI and extending the deadline. And a sixmonth kind of extension won't be enough for something like this," said a payments industry executive. Any plan to extend the deadline will be subject to a goahead from the government and the Reserve Bank of India (RBI), he added. An email seeking NPCI's response for this story remained unanswered till the time of going to press. NPCI is understood to be workingwithecosystemplayers like Paytm and WhatsApp to work towards increasing their market share in UPI. Continued on Page 2 Adani’s $5.2-bn Benchmarks at 4-month high alumina bet to challenge metal heavyweights MIRRORING GLOBAL TREND The Sensex & Nifty hit four-month highs on Thursday, driven up primarily by buying in banks & IT stocks. Investors were relieved US inflation data came in at lower than expected, suggesting tightening by the Fed might be less aggressive. A positive sentiment in Asian markets & FPI buying boosted stocks. SWANSY AFONSO & P R SANJAI August 11 NIFTY 50 May 30 16,661.40 June 17 FMCG COMPANIES WILL continue to take price increases for the current financial year, as the decline in prices of palm oil and other commodities is yet to reflect in their raw material costs, reports Shubhra Tandon in New Delhi. ■ PAGE 4 15,293.5 April 11, 2022 Aug 11, 2022 17,659 17,674.95 Nifty IT Intra-day, Aug 11 30,450 Prev close: 29,701.15 30,375 30,300 30,233.70 Nifty PSU Intra-day, Aug 11 2,910 Prev close: 2,803.80 2,890 2,870.65 2,870 2,850 30,150 30,075 30,000 Three experts on the advantages and risks of adopting such a strategy ■ BrandWagon, P7 ICICI Bank Intra-day on NSE (`) 868 Prev close: 848.75 866 864 859.70 862 30,225 When a brand becomes the category Value (` trillion) 2,994 SHRITAMA BOSE Mumbai, August 11 Price hike by FMCG firms to continue FE SPECIAL WIDE CHASM BETWEEN TOP PLAYERS NPCI may extend the December 31, 2022 deadline for 30% limit proposal by two-three years 30,164.20 Open ALSO READ Close 2,830 2,810 860 858 2,828.80 Open Close SENSEX RECLAIMS 59,000-MARK PAGE 9 860.05 856 Open Close ICICI BANK MCAP HITS `6 TRN PAGE 9 500 GLOBAL CAPABILITY CENTRES LIKELY IN 3-4 YEARS MNCs to expand GCC footprint AYUSHMAN BARUAH Bengaluru, August 11 WITH MULTINATIONAL COMPANIES planning to expand theirglobal capabilitycentres (GCCs) in India,the numberof such captive units is likely to go up to 2,000 in the next 3-4 years,from the current 1,500 according to industry estimates. GCCs, also known as global inhouse centres orcaptives,emerged in the early 1990s as offshore units of large multinationals such as General Electric,TexasInstruments,Citigroup and American Express to perform designated technology operations. The 1,500 GCCs,currently operating in India, employ close to 1.4 million people,according to Nasscom. ConsultingfirmANSRisaimingto set up 100 GCCs in the country over the next 3-4 years. “Apart from the large banks and retail chains and CPG (consumer packaged goods) companies in the US, a lot of companies in the mid-market segment, startups and product companies from markets such as Eastern Europe, South EastAsia,MiddleEastarealsomaking a beeline to India.We are seeing trac- The continued expansion of our India operations will help teams grow across unique capabilities such as AI, machine learning, product management, merchandising, supply chain, engineering, analytics, and other functions — ANKUR MITTAL, MD & SENIOR VP (TECHNOLOGY), LOWE'S INDIA tion in the retail/CPG, BFSI (banking,financial services and insurance), healthcare, and travel and logistics sectors,” said Lalit Ahuja, founder and CEO, ANSR. While cost arbitrage was the key driver for enterprises to set up GCCs in India in the early 2000s, over the years,these have evolved into strategic assets providing significant competitive advantage to companies. “Omnichannel,mobile,cloud,digital, information security, etc are no longeroptionalcapabilitiesbutessentialforcompaniestostayrelevant.The Covid-19 pandemic has accelerated digitalisation and assuaged concerns around distributedwork models,givingthesecompaniesmoreconfidence to set up their technology hubs in India,”saidAhuja. AmericanretailgiantLowe’sCompaniesopened its second GCC inBengaluru inApril.Togetherwith Lowe’s existing office, the new facility in Bengaluru’s central business district provides approximately 14,000 square feet of additional space to support its growing workforce. Lowe’s workforce in India has grown 60% amid thepandemicto over 3,800 people. ContinuedonPage2 ADANI ENTERPRISES PLANS to invest $5.2 billion in setting up an alumina refinery in the easternIndianstateofOdisha,asGautam Adani,Asia’srichestman,addsonemorebusiness to his rapidly-expanding empire. The flagship companyof theAdani Group got the approval to build the refinery and a captive power plant in Rayagada for an investment of `416.53 billion ($5.2 billion), according to a Twitter post on Wednesday by the office of the state’s chiefminister,Naveen Patnaik. The refinery will have an annual capacity of 4 million tonne, according to another statement by the local government. A representative for Adani Enterprises declined to comment on the Odisha project or the company’s plans for its fledgling aluminum business. Billionaire Adani had set up a wholly ownedsubsidiary--MundraAluminium--in December,signalling his aspirations in a sector that is dominated by heavyweights such as the Aditya Birla Group and the Londonbased Vedanta Resources. The tycoon, with the world’s biggest wealth gain this year to $126 billion,built his empire on agri-trading andportsbuthasspeedilydiversifiedintoairports, data centres and renewable energy, oftenmovinginlockstepwiththeIndiangovernment’s policy priorities. Adani had scaled up his nascent cement business overnight by acquiring Holcim’s India units for $10.5 billion in May, less than a year after setting up a cement subsidiary. He is now steadily building up his group’s metals portfolio after announcing plans for steel and copper plants earlier in the year. In June, Adani Enterprises raised `60.7 billion in a syndicated club loan for a 500,000 tonne new copper refinery complex in Gujarat. The company also announced a tie up with South Korean steel major Posco in January to explore business opportunities in India,including the setting up of a green steel mill. -- BLOOMBERG FM pitches for ‘genuine debate’ on freebies BANIKINKAR PATTANAYAK New Delhi, August 11 FINANCE MINISTER NIRMALA Sitharaman on Thursday called for a ‘genuine debate’ on the raging issue of ‘freebies’ being resorted to by political parties and governments. The contentious issue gathered traction after Prime Minister Narendra Modi last month cautioned people against the ‘revari culture’ under which votes are sought by pledging freebies. This was followed by the Supreme Court expressing concerns over the ‘the culture of freebies ahead of elections’. In recent years, the Aam Aadmi Party (AAP), has especially been accused by its opponents of promising freebies to draw votes, a charge that the party denies. On Thursday, Delhi chief minister and AAP chief Arvind Kejriwal wondered as to why the Centre was opposed to free education, healthcare, medicine, etc. to the poor. Rejecting his claims, Sitharaman said: “No Indian government has ever called (spending on) health and education 'freebies'.” Continued on Page 2 By classifying such spending as freebies, Kejriwal has given a perverse twist to the debate on freebies. —NIRMALA SITHARAMAN FINANCE MINISTER Govt in SC over norms for freebies EVEN AS the Centre on Thursday asked the Supreme Court to lay down the guidelines for regulatingthefreebies,the apex court said it has no intention to encroach upon the domain of legislature even if there was a statutory vacuum on the issue,reports fe Bureau in NewDelhi. ■ Page 2 Concerns about inflation, CAD easing: Govt source AMID A MODERATION in global commodity prices and normal monsoon showers in India, concerns about any further flare-up in inflation or current account deficit (CAD) are easing, a government source said on Thursday, reports fe Bureau in New Delhi. Nevertheless, the governmentisn’tlettingtheguard down,the source added. TheCentreisn’tplanningto slash the fertiliser subsidy rates at the moment, despite having to bear the elevated burden, said the source. It doesn’twish to add to farmers’ costs of production at this juncture. The government’s fertiliser subsidy Bill is expected to exceed its FY23 Budget estimate of `1.05 trillion byabout `1.4 trillion, as global prices shot up in the wake of the Ukraine war. ■ Detailed report on Page 2 Business travel delivers booster dose for hotels VARUN SINGH & RAJESH KURUP New Delhi/Mumbai, August 11 THE RESUMPTION OF air travel has also lifted the fortunes of the hospitality sector, with check-ins by business travellers rising, and conferences and exhibitions making a comeback. The hospitality industry,as a result is quite hopeful of seeing a turnaround in its fortune during the current fiscal after gettingseverelybatteredinthe last two years due to Covid-led restrictions. “There was a robust increase in demand,whichwas earlier limited to the leisure segment5-6monthsago.During the April-June quarter, business travel picked up significantly as there were a lot of business conferences and events, government delegations and the India-Africa conclave among others. The air travel also opened up and the IPL (Indian Premier League) also helped in boosting occupancies, especially in Mumbai and Pune,”Indian Hotels Company(IHCL)managingdirector and chief executive officer Puneet Chhatwal told FE post the company’s first quarter results. The Tata group company’s financial metrics such as domestic Revenue Per Avail- BUSINESS CLASS ■ Rise in business travel due to conferences, conclaves,visit ofgovernment delegations, IPL ■ Financial metrics of firms such as IHCL, EIH, Lemon Tree Hotels, Roseate Hotels & Resorts exceed pre-Covid levels ■ Staycations, ■ Till 5-6 months drivecations also driving business for hotels ago, travelwas limited to leisure segment During the April-June quarter, business travel picked up significantly as there were a lot of business conferences and events — PUNEET CHHATWAL, MD & CEO, IHCL able Room (RevPAR) was up 42%, occupancy rose 9% and average room rates (ARR) was up 31% during the quarter compared with pre-Covid period (Q1 of FY20). While all brands of IHCL – Taj, SeleQtions, Vivanta and Ginger - posted growth, RevPARfrom keycities such as Mumbai, New Delhi and Bengaluruexceededpre-Covidlevels. EIH, the flagship company of the Oberoi Group, also recorded growth across all its metrics compared with the pre-Covid quarter. Its RevPAR rose30.11%(allhotels,including managed ones) and ARR rose 13.76%,while occupancy was up 72% (from 64%). “Strong tailwinds are visibleincorporateaswellasMICE and direct segments,” Kallol Kundu, chief financial officer at The Oberoi Group said at an investors’conference call. “FY23 began on a strong note bolstered by strong demand, corporate travel increased resulting in a recovery in our business destinations. Continued on Page 2
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