ECONOMY, P2 COMPANIES, P4 GoM HASN'T MET SINCE JUNE Inflation fears: GST rates overhaul unlikely in FY23 BRANDWAGON, P9 PROGRESS REPORT TO TAKE ON UNORGANISED SECTOR SPONSORED INFLUENCER CONTENT FM to meet chiefs of state-run banks to review schemes for Scheduled Castes Branded furniture players look to get into more cities, towns New-age beauty brands in favour of consensus marketing HYDERABAD, MONDAY, SEPTEMBER 19, 2022 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL XIX 121, 14 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 IN THE NEWS Speciality steel PLI: Tata Steel among 75 applicants TATA STEEL, JSW Steel, ArcelorMittal Nippon Steel are among around 75 firms that have shown interests in the `6,322-crore productionlinked incentive scheme for speciality steel, reports fe Bureau in New Delhi. “The response has been very good,” said a steel ministry source. ■ PAGE 5 Honda looks to re-enter SUV market next year JAPANESE AUTO MAJOR Honda expects its India business to get back on growth path as it gears up to re-enter the high-selling sports utility vehicle segment next year, said Honda Cars India president and CEO Takuya Tsumura, reports PTI. ■ PAGE 4 MSP panel to hold second meeting on September 27 THE COMMITTEE ON the minimum support price, natural farming and crop diversification will hold its second meeting on September 27 in Hyderabad, reports PTI. Three internal sub-groups were formed after the first meeting to discuss the mandated topics. ONGC wants govt to scrap windfall tax, gas at $10 ONGC WANTS THE government to scrap windfall profit tax levied on domestically-produced crude oil, reports PTI. The state-run firm also favours a floor price for natural gas at $10 per mBtu to help bring deposits in challenging areas to production. Ola Electric gears up to open over 200 experience centres OLA ELECTRIC SAID it is gearing up to open over 200 experience centres by FY23 end, up from 20 outlets at present, CEO Bhavish Aggarwal tweeted on Sunday, reports Tushar Goenka in Bengaluru. ■ PAGE 4 EYE ON ‘SUSTAINABLE FINANCE’ Banks to seek wider priority sector ambit CRITICAL ROLE IBA to soon approach RBI with the proposal ■ What is BANIKINKAR PATTANAYAK New Delhi, September 18 BANKS MAY SOON approach the Reserve Bank of India (RBI) to extend the priority-sectorlending (PSL) status to “sustainable finance” to improve credit flow to this segment, given the increasingly critical role it is going to playin shaping the development needs of countries across the globe. Banking sources told FE that lenders, especially foreign banks like StandardCharteredBank,havedecided to undertake a comprehensive analysis on sustainable financing under the aegis of the Indian Banks’Association before submitting the proposal to the central bank for consideration. “The idea is to first properly assess, with comprehensive data, the importanceofsustainablefinancingandthen make a case for extending the PSL status to the financing of green power, green hydrogen, electric vehicles or other sustainability projects,” said a senior banker. “Once the analysis is done, it will be submitted with the IBA first before taking up the issuewith the RBI,”he added. The PSL status is typically granted to those sectorswhich the government and the central bank consider critical for the basic development requirements of the country. Banks are man- sustainable finance? Broadly, it's any form of financial product/ service that promotes environmental, social and governance purposes, among others ■ Why are foreign banks keen on PSL tag for sustainable finance? These banks,which want to scale up sustainable finance, will find it relatively easy to meet PSL target in India. Plus, they can better align their financing practices herewith those globally NOTJUSTTHEfearofrepercussionsfor dealing with sanctioned entities, risks around settlement and liquidity with respect to activating rupee trade are weighing on bankers’minds. Even so, banks have set in motion theprocessforopeningvostroaccounts amid requests for such accounts from both sanctioned and non-sanctioned entities from countries such as Russia and Belarus. Bankers FE spoke to said that one of the difficulties of enabling trade trans- PAIN POINTS dated ensure adequate and timely credit to these sectors,in sync with the RBI stipulations from time to time. At present,advances to agriculture, micro, small and medium enterprises, exports, education, housing, social infrastructure, renewable energy and others such as self-help groups forstipulated purposes qualifyforthe PSLtag. Continued on Page 2 actions in rupee is the presence of a counterpartyrisk.“Whenwe undertake the transaction for the customer here, there is no telling who is settling the transaction at the other end orwhether itwillgothroughsmoothly.Itistoughto carry out that kind of due diligence for everytransaction.TheSwiftchannelisa much smoother and safer option from that perspective,”said a seniorbanker. There is also an element of liquidity risk arising out of a trade differential between countries with which rupee trade is being sought to be initiated. Continued on Page 2 set in motion the process for opening vostro accounts ■ Of course, the threat of being penalised for doing business with sanctioned entities remains ■ Doing so FE SPECIALS could also mean a breach of fundraising covenants for some banks Settlement and liquidity risks around rupee trade weighing on bankers’ minds Issues with expiring validity Emcure Pharmaceuticals Dec 08, 2021 Nov 24, 2021 2,000 ONE Mobikwik Systems Oct 07, 2021 1,900 LETravenuesTechnology Dec 16, 2021 1,600 WITH COVID NO more acting as a hindrance to travel and removal of fare caps by the government,airlines are set to see their cash registers ringing this festival period followed by Christmas and New Year’s holidays. Airfares on most popular routes have not only crossed the pre-Covid levels, but are at multi-year highs as flyers take to revenge travel after facing a host of restrictions in the last two years. Online travel aggregators FE spoke to said for the Diwali period, fares are 30- Aadhar Housing Finance 7,300 Archean Chemical Industries 2,200 Bikaji Foods 1,000 Oct 14, 2021 1,550 Veeda Clinical Research Sahajanand MedicalTechnologies Dec 17, 2021 1,500 Landmark Cars Nov 24, 2021 1,350 762 Healthium Medtech DCX Systems Sterlite PowerTransmission Dec 02, 2021 1,250 600 ESDS Software Solution Dec 03, 2021 1,200 JK Files & Engineering 500 Puranik Builders Nov 18, 2021 1,000 Concord Enviro Systems 500 Penna Cement Industries TextilesandSSBAInnovationswithdrew their offer documents in August,regulatoryfilings show. “Markets are still volatile.A few launches would happen but a del- DEAL CONTOURS uge of IPOs is unlikely,”said Pranav Haldea,managing director,PRIME Database.“We have seen this in the past as well. If market conditions are not good,companies are happy ■ The stake is being sold at an equity valuation of `2,371 crore ■ Mahindra Holdings to sell an additional 9.99% stake in Mahindra Susten to any investor ■ Mahindra Susten and Ontario fund's arm 2OLto set up an InvITby FY24 SKY-HIGH ■ Fares are 30-40% higher than the year-ago period ■ Compared to Diwali 2019, fares are up nearly 2-3 times ■ January-August saw 67% rise in number of flyers to 77 million 40% higher than the year-ago period. Compared to Diwali 2019, fares are up nearly 2-3 times. Aone-way,non-stop Mum- to let the approval lapse.” The benchmark BSE Sensex slid 1.6% last week. Continued on Page 2 Advance taxes: Growth slows to 10% in Q2 from 33% in Q1 PRASANTA SAHU New Delhi, September 18 bai-Kolkata flight, which cost `3,558 in 2019 during Diwali, is priced at `10,878 this year. Similarly, a Delhi-Mumbai non-stop flight, which cost `3,206, is priced at nearly `6,000 this year. Other popular routes like KolkataDelhi and Delhi-Bengaluru arewitnessing a similar jump. Airlines sawa 67% rise in the number of domestic flyers to 77 million during January-August compared to the year-ago period, according to the DGCA data. THE GROWTH IN advance tax collections dropped to a little over 10% in the September quarter from 33% in the previous quarter, reflecting a normalisation of the base,an overall moderation in corporate earnings and easing inflation. Government officials also cited a 36% growth in collections via the tax deducted at source (TDS) route for the lower growth in advance taxes. The central government’s overall net (postrefunds) direct tax collections rose 23% on year to `7 trillion till September 17, the CHANGING finance ministry said in a statement on EARNINGS Sunday. OUTLOOK Advance tax collecQ1FY23 Q2FY23* tions stood at `2.95 trillion as on SeptemAdvance taxes ber17,up17%growth (` trillion) on year. The mop-up 1.94 was at `1.01 trillion in the June quarter, up a 1.01 third on year.The September installment of the tax, therefore, is seen at `1.94 trillion, Growth %, y-o-y up 10.2% on year. 10.2 Advance taxes are 33 paid by companies, LLPs and individuals *Inferred from data put in four installments in out by finance ministry a financial year: 15% by June 15, 45% by September15,75% byDecemberand 100% by March 15. Revenue secretary Tarun Bajaj said advance taxes for Q2FY23 were still trickling in.“It is not over as yet. Also, we are now collecting a larger portion of tax by way of TDS, which grew 36%. So,that gets adjusted in instalments of advance tax.One can’t look at advance taxes in isolation,” Bajaj told FE. He added that the overall gross tax (before refund) growthwas 30%-plus till September17 and the refunds have grown by over 83%. Continued on Page 2 Continued on Page 2 ■ Loans of `575 crore advanced by Mahindra Group to Mahindra Susten would also be repaid renewable power assets seeded by MSPL with operational capacities of about 1.54 GWp, by FY24, Mahindra said in a regulatory update.“This transaction will enable Mahindra Susten to build a strong renewableenergybusinessfocusedon solar energy, hybrid energy, 832 Source: primedatabase.com/ investment bankers Source : primedatabase.com ■ Following the deal, Mahindra Group to receive about `1,300 crore integrated energy storage and round-the-clock green energy plants,”it said. Consequent to the stake sale,MahindraSustenwillcease to be a wholly-owned subsidiaryof Mahindra Holdings. Continued on Page 2 Airfares soar up to 40% on Diwali rush, revenge travel SWARAJ BAGGONKAR Mumbai, September 18 Estimated issue size (` cr) 4,000 India1 Payments THE TURMOIL IN Indian equities last week has put a cloud on public share sales lined up for this year. Regulatory approvals for as many as 19 initial public offerings (IPOs),valid for a year,expire in the next two months. Most of these IPOsmaynotbeabletohitthemarket within the given timeframe, said a senior banker familiar with matter.Together,thesefirmsaimto raise anywhere between `23,00024,000 crore. Companies have the option of lettingtheregulatoryapprovallapse or withdraw their IPO and refile. Gemini Edibles & Fats India withdrew its `2,500-crore IPO recently, said people in the know. Stitched CANADA-BASED ONTARIO TEACHERS’ Pension Plan Board (OTPP) will buy a 30% stake in Mahindra Group’s renewable energy platform — Mahindra Susten — for `711 crore. OTPP’s arm 2452991 Ontario (2OL) will buy the stake at an equity value of `2,371 crore. The platform — Mahindra Susten — includes renewable engineering,procurementand construction businesses with capacity constructed of over 4 GWpandanindependentpower producer business with about 1.54 GWp of operational solar plants. OTPP is a global investor with net assets of C$242.5 billion. The companies will also set up an infrastructure investment trust (InvIT), including Companies aiming for IPOs around Diwali Date ofapproval Estimated issue amount (` cr) ASHLEY COUTINHO Mumbai, September 18 FE BUREAU Mumbai, September 18 ■ Even so, banks have MARKETVOLATILITY PLAYING SPOILSPORT Approvals for as many as 19 listings expire in next two months Ontario fund buys 30% in Mahindra arm for `711 cr Bankers uneasy over risks around Re trade SHRITAMA BOSE Mumbai, September 18 Cloud over IPOs worth `24,000 crore FIRST PHYSICAL STORE OPENED IN MUMBAI A WEEK AGO ■ MOTOBAHN, P9 Motor insurance Since the chances of an accident shoot up during floods,it is advisable to take a comprehensive motor insurance cover ■ PERSONAL FINANCE, P7 Business cycle funds These funds provide investors an opportunity to ride the economic wave ■ eFE, P10 AI, analytics to be the building blocks Embedded finance and proliferation of 5G will have transformative impacts on businesses Victoria’s Secret India journey may not be satin-smooth ALOKANANDA CHAKRABORTY New Delhi, September 18 VICTORIA’S SECRET (VS) opened its first physical store — if you discount the pop-up store at Delhi airport that openedin2014andshutdown in 2015 — in Mumbai’s PhoenixPalladiummallaweek ago under a franchisee agreement with Dubai-based fashion and lifestyle retail conglomerate Apparel Group. But the India expansion is unlikely to be a cakewalk. An overwhelming 60% of the $6billion women’s inner wear market in India is unorganised with a plethora of regional brands vying for attention. The store launch followed the US-based company’s digital debut in the country last year.“The growth of beauty estore seems to be really good and the store is doing much more than expected,” says TusharVed,president,Apparel Group. “Through the online channel, we are able to penetrate into tier one, two and three cities, and are able to reach the consumers where they are based.” Two more stores — in Delhi bythisyearend and Bengaluru nextyear— are in the pipeline. “Our plan is to open 8-10 exclusive retail stores in the next three to five years. Apart from this,oncethere is enough offline retail presence for the WHAT'S IN STORE ■ An overwhelming 60% of India's ■ Last year, actor Priyanka Chopra joined football star Megan Rapinoe and five other women as the face ofVS ■ The store launch followed the US-based company’s digital debut in the country last year VS’ flagship intimate wear, we willlaunch the categoryonline too,”adds Ved. The Mumbai store features the US retailer’s complete range across its three brands – $6-billion Two more stores — in Delhi by this year end and Bengaluru next year — are in the pipeline Victoria’sSecretLingerie,PINK and Victoria’s Secret Beauty — and stocks everything from intimate wear, athleisure, fragrances and body care. It will also offer the newly- women's inner wear market is unorganised with a plethora of regional brands launched Bare Eau de Parfum, which is made with upcycled materials and responsibly sourced ingredients. The Mumbai store launch comes about exactly a year after the Columbus-based retailer’s parent L Brands split into two companies — Victoria’s Secret and Bath & Body Works — to focus better. That split followed a steady drop in its global sales — from its peak of $7.78 billion in 2016 to a low of $5.41 billion in 2020. Salespickedupin2021,touching $6.79 billion. That was also the time VS kicked off a transformation process, trying to shift from a brand associated with the male gaze to a companyrepresenting female empowerment. It also started promoting online shopping and sharpening focus on markets outside the US. Stepping intoIndia fits into this plan. Today, VS operates 1,350 retail locations worldwide and its digital sales contribute upwards of 40% to its overallsales,comparedto24% in 2018.Lastyear,Indian-born actor Priyanka Chopra joined football star Megan Rapinoe and five other women as the face of VS, emphasising that change to its image. The branded market in India has two clear segments, depending on the preferred sales channel — brands such as Enamor and Triumph are largely offline-focused, while players such as Clovia and Zivame are digital-first omnichannel. Continued on Page 2 HYDERABAD
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