MARKETS, P7 ECONOMY, P2 INTERNATIONAL, P8 DOUBLING PENETRATION IN 5 YRS NO FULL-TIME CEO FOR NLMC ‘RIGHT TIME FOR SUCCESSION’ Insurance sector needs `50,000 cr capital per year, says Irdai’s Panda Land monetisation stuck, to gather pace only after 2024 polls Netflix’s Reed Hastings gives up CEO title; Peters named co-chief MUMBAI, SATURDAY, JANUARY 21, 2023 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. LXIII NO. 18, 16 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: 60621.77 ▼ 236.66 NIFTY: 18027.65 ▼ 80.20 NIKKEI 225: 26553.53 ▲ 148.30 HANG SENG: 22044.65 ▲ 393.67 `/$: 81.13 ▲ 0.24 `/€: 87.87 ▼ 0.21 BRENT: $86.67 ▲ $0.52 GOLD: `56770 ▲ `346 HC quashes Yes Bank AT1 bonds write-off THE BOMBAY HIGH Court on Friday set aside the Yes Bank administrator’s order to write down AT-1 bonds worth over `8,400 crore, thus bringing relief to investors, including 63 moons, reports Siddhant Mishra. ■ PAGE 7 UAE explores non-oil trade in rupees INDIAAND UAE are discussing ways to boost non-oil trade in rupees. “We are still in early-stage discussions with India on this dirham-rupee trade,” Thani Al-Zeyoudi, the UAE’s minister of state for foreign trade, said in Davos, reports Bloomberg. ■ PAGE 3 EXPLAINER Antitrust heat on Google rises ■ PAGE 5 RIL profit dips 15% in Q3 Board approves raising `20,000 cr via NCDs REPORT CARD Gross revenue (` cr) SHUBHRATANDON New Delhi, January 20 RELIANCE INDUSTRIES (RIL) ON Friday reported a 15% year-on-year decline in net profit to `15,792 crore during the OctoberDecember quarter,constrained primarily by higherfinance cost,depreciation and special additional excise duty (SAED). Profit was below the Bloomberg consensus estimate of `16,037.40crore. Depreciation increased 32.6% y-o-y to `10,187croreduetoanexpandedassetbase acrossallbusinessesandhighernetworkutilisation in the digital services business. Financecostincreased36.4%y-o-yto`5,201 crore due to an increase in interest rates and loan balances. Proactive resource managementhelpedcontaintheimpactofsharphike in rates byRBI,the companysaid. Theboardalsoapprovedraising`20,000 crore throughnon-convertible debentures. Revenues from operations increased 15.3% y-o-y to `2.20 trillion, supported by continuinggrowthmomentuminconsumer businesses, largely in line with Bloomberg estimatesof`2.29trillion.Thedigitalservices segmentachieved20.4%y-o-ygrowth,while the retail segmentgrew17.2%y-o-y.Higher realisationintheoil-to-chemical(O2C)business,with an increase in energy prices along RESULTS CORNER JSW Steel net falls 89.5%, lags estimates Ebitda (` cr) 13.5 17.4 Continued on Page 2 ■ PAGE 15 HDFC Life reports 15% rise in profit ■ PAGE 15 FE BUREAU New Delhi, January 20 sions that led us here,”said Pichai. The layoffs are global and impact US staff immediately. AFTER ACQUIRING ACC and Ambuja Cement, the Adani group has proposed a major overhaul in the transportation and freight rate for the carriage of goods in HimachalPradesh,whichitbelievesisinefficient, leading to “far-reaching consequences for all stakeholders”. In a letter to the HP state government, Adani Cement has suggested that operational decisions regarding transportation should be decided by the companies as is the practice in other states. “Deployment, route, etc, to be decided bycompaniesbasedonmarketprinciples… capacityandtypeoftruckstobedecidedby companies as per their transportation needs and swapping of bags between Ambuja /ACC units and other group companies to be permitted,”the letter said. The company has pointed out that the freightrateinthestateis“controlledbythe unions”whohave“artificiallykeptitatvery ahighlevel”.Thepopulationoftrucksinthe state is three times the demand. Continued on Page 2 Continued on Page 2 INSIDE PAGE 4 FACE FINES OF UP TO `50 LAKH, SUSPENSION Consumer safeguard: Influencers must disclose paid promotions 28 24.6 20.5 16.4 Value of influencer marketing industry in India (` bn) 12.8 THE `1,275-CRORE MARKET for online endorsements, growing at a CAGR of over 15% and tipped to hit `2,457 crore by 2025, isinforaupheavalaftertheconsumer affairsministryonFridayannouncedguidelines requiring social media and virtual influencers,includingcelebrities,todisclose paid promotions.Any misleading advertising will attract a fine of up to `50 lakh or a suspension from online platforms for as long as twoyears. RohitAgarwal,founder&director,Alpha Zegus,amarketingagencythathandlesover 70 influencers, said that at present, most influenceradscomeacrossas‘personalrecommendations’withoutanyindicationofa monetary advantage to the influencer behind it.“This becomes unfairto the audience,”Agarwal said. Industry experts believe the number of brand-influencer deals is bound to fall, but assert that influencers cannot abandon their responsibilities. So far, many influ- GROWING INFLUENCE Nearly two-thirds of Indians follow an influencer 9 GEETIKA SRIVASTAVA New Delhi, January 20 2021 2022 2023 2024 2025 2026 2021 to 2022, with projections until 2026; Source: Statista encersprotectedthemselvesagainstliabilities by inserting an indemnity clause in their agreements. The new guidelines, which come into effect immediately, make the influencers equally accountable to consumers in the event the brand or product they endorse fails to meet the promised standards. Dhruv Suri, partner at PSA Legal, said contracts between influencers and brands 18,549 15,792 Attributable to owners of the company mayseetheinclusionofmanymoreclauses spelling out the liabilities of both parties. “The new guidelines could also pose a challengetosignificantsocialmediaintermediaries.Theymaybeunderpressuretocomply with directives,which could hamper their easeofdoingbusiness,”saidSiddhantSethi, partnerat Sethi & MehandruAdvocates. Continued on Page 2 INSIDE Reliance Retail posts 6.2% rise ■ PAGE 4 in profit at `2,400 cr JEFFREY DASTIN January 20 Swiggy sacks 380 staffers bps ON THE BACK of an increase in subscriber base and higher user engagement on the network, Jio Platforms’ consolidated revenue from operations rose 2.5% quarteron-quarter to `24,892 crore in OctoberDecember.Net profit during the periodwas up3.2%to`4,881crore.Thenumberswere broadlyin linewith estimates.Telecom arm Reliance Jio added 5.3 million subscribers during the quarter. Its average revenue per user per month rose marginally q-o-q to `178.2 during the quarter from `177.2, reports Jatin Grover. ■ Page 4 Adani moots freight overhaul in Himachal Over the past two years we’ve seen periods of dramatic growth… we hired for a different economic reality than the one we face today -14.9 Jio profit up 3.2% to `4,881 crore Google joins tech layoff wave, to cut 12,000 jobs GOOGLE’S PARENT ALPHABET is eliminatingabout12,000jobs,or6%ofitsworkforce, globally, it said on Friday, as Silicon Valley reels from recent layoffs and faces a troubled outlook. Alphabet,whose shares rose 3% in premarket trading, is making the cuts just as the US company confronts a threat to its long-held perch atop the tech sector. Foryears,Alphabethasattractedtoptalent to build Google, YouTube and other productsthatreachbillionsofusers,butitis now locked in competition with Microsoft in a burgeoning area known as generative artificial intelligence. The cuts at Alphabet come days after Microsoftsaiditwouldfire10,000workers. AlphabetCEOSundarPichaitoldstaffin amemothatthefirmhadrevieweditsproducts, people and priorities, leading to job cuts across geographies and tech. It had rapidly expanded for better times but now faced“a different economic reality”. “Thefactthatthesechangeswillimpact the lives of Googlers weighs heavily on me, and I take full responsibility for the deci- % Change MUKESH AMBANI, CMD, RELIANCE INDUSTRIES withnearly2xgrowthintheoilandgasbusiness,also contributed to growth in revenue. “Ourstrongbalancesheetandrobustcash flows remains the cornerstone of our commitment to growing existing businesses as well as investing in new opportunities,” Mukesh Ambani, chairman and managing director,RelianceIndustries,said. Theconglomerate’sEbitda surged13.5% y-o-y to `38,460 crore,supported by strong growth in the subscriber base and 17.5% increaseinArpu(averagerevenueperuser)in digital services,growth across consumption baskets, new stores and rising contribution from digital channels in retail segment. SUNDAR PICHAI, CEO, ALPHABET Q3FY23 Ebitda margins Net (%) profit (` cr) -30 17.7 38,460 Q3FY22 Our strong balance sheet and robust cash flows remain the cornerstone of our commitment to growing existing businesses as well as investing in new opportunities Bandhan Bank Q3 net profit down 66% ■ PAGE 5 Consolidated figures 33,886 15.3 220,592 THE DGCA ON Friday slapped a fine of `30 lakh on Air India for failing to follow procedure regarding the unruly passenger on its New York-Delhi flight. It also suspended the licence of the pilot-in-command for three months, reports fe Bureau. ■ PAGE 4 EARNINGS MISS ESTIMATES 191,271 IN THE NEWS DGCA fines Air India `30 lakh, suspends pilot’s licence PMS schemes’ returns trail Nifty’s in CY22 ASHLEY COUTINHO Mumbai, January 20 THE MAJORITY OF portfolio management services (PMS) schemes underperformed the Nifty50 in CY 2022 amid sustained market volatility. As many as 56%,or 168,of the 300 PMS schemes were not able to beat the returns generated by the benchmark in CY22. The 300 schemes collectively delivered average returns of -0.2% — far lower than the 4.3% delivered by the benchmark Nifty50, Nifty Midcap 100 (3.5%) and Nifty 500 (3%). Thirty two schemes delivered double-digit returns during the year. This means that a typical investor withfour-sixschemesinhisportfoliowould have not been able to beat Nifty returns in the last three years. Among individual categories, large-cap PMS schemes (average returns of 1.3%), multi-cap schemes (-1.5%), and mid-cap schemes (-3.4%) underperformed their respective categories. Small-cap PMS schemes (6.5%) outperformed the benchmark NiftySmallcap 100 (-13.8%). Most PMS schemes tend to adopt concentrated portfolios, which can work both ways. If few of the calls go wrong, it can hit overall performance,” said Dhaval Kapadia, director – portfolio specialist, Morningstar InvestmentAdvisers India. Molecule Venture’s small-cap Growth strategywas the top performerwith returns of 35.2%, followed by Counter Cyclical Investments’small-capstrategyDiversified LongTermValue(29.3%)andICICIPrudential’sValueStrategy(24.5%).Marcellus’midcap strategyRising Giants (-22.5%)was the worst performer in CY22.The AMC’s Kings ofCapital(-4.4%),ConsistentCompounders WORST PERFORMERS Returns (%) 1-year 3-year Deep value 15.9 24.4 Basant Maheshwari Equity fund 17.7 6.7 Alder Capital B2C growth 17.9 4.6 Sageone Core portfolio 18.7 21.2 Motilal Oswal IOP V2 20.5 13.8 Motilal Oswal IOP 20.7 6.3 Lake Water India growth 20.9 11.3 Motilal Oswal Focused midcap 21.4 NJ Asset Bluechip Management 21.7 AMC Strategy Centrum Marcellus Rising giants 17.6 22.5 Source: PMS Bazaar (-8.8%) and Little Champs (-10.5%) were other schemes that fared abysmally. “The world over, as the market matures, the alpha over the indices starts dropping even in actively managed funds. If the returns are dropping and the costs remain the same, with an expense ratio of nearly 2%, outperformance will come off significantly,”said SameerKamdar,founder & CEO,Smart Money. Continued on Page 2