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APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL 32 NO. 180, 38 PAGES, `10.00 (NORTH EAST STATES & ANDAMAN `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 READ TO LEAD SENSEX: 62,622.24 ▼ 346.89 NIFTY: 18,534.40 ▼ 99.45 NIKKEI 225: 30,887.88 ▼ 440.28 HANG SENG: 18,234.27 ▼ 361.51 `/$: 82.73 ▼ 0.01 `/€: 88.31 ▲ 0.35 BRENT: $72.78 ▼ $0.76 GOLD: `60,133 ▼ `34 THE GOVERNMENT HAS ruled out any easing of restrictions on foreign investments from countries sharing land borders with India despite demand from sections of the industry and startup ecosystem, reports Mukesh Jagota. ■ PAGE3 EXPLAINER South India’s delimitation anxieties ■ PAGE 19 FE S P E C I A L S Tech in healthcare: Is AI a doubleedged sword? Patient safety, privacy & potential cyber attacks are key areas of concern Company may reapply with lower capex plan FY17 Quarterly GVA FY18 FY19 7 Trade, hotels & transport FY20 FY22 (% growth, y-o-y) at basic price (% growth, y-o y-o-y) 80 Govt final Private final consumption expenditure consumption 60 expenditure Q4 FY23 40 -20 SHYAM Higher revenues keep FY23 fiscal deficit at 6.4% THE CENTRE HAS contained its fiscal deficit at the revised estimate (RE) of 6.4% of the GDP for FY23, aidedbyhigher-than-estimatedtaxandnon-taxrevenue receipt, reports Prasanta Sahu. The Centre’s capital expenditure overshot FY23RE by 1.2% to `7.36 trillion even as it reported a small undershooting in revenue expenditure. ■ Page 2 -40 -60 2.8 8.9 1.6 8 20 0 ■ Vedanta-Foxconn failed to get technology partner to make WITH THE VEDANTA-FOXCONN joint venture,Singapore-based IGSS Ventures and ISMC consortium not being able to qualify for subsidy under the `76,000-crore semiconductor manufacturing incentive scheme,thegovernmentonWednesday reopened the application window,inviting fresh investors. Theearlierapplicantsarealsoeligible to reapply,minister of state for electronicsandinformationtechnologyRajeevChandrasekharsaid.With theVedanta-FoxconnJVfailingtoget a technology partner to make the moreexpensive28-nanometerchips, the government has now allowed applicants to explore the possibility of manufacturing the less complex and cheaper40-nanometerchips. The28-nanometerchipsarethinner and considered superior, as devicesinwhichtheyareusedcanbe packed with more features. In comparison, 40-nanometer chips are 28-nanometer chips ■ Govt to now allow -0.8 Gross fixed capital formation 7.1 Electricity, gas, water and utility 6.9 Agriculture Manufacturing 4.5 Q4FY23 Source: MOSPI At 3.5%, April core sector growth lowest in 6 months GROWTH IN CORE infrastructure industries slowed to a six-month lowof 3.5% inApril due to a high base effect and contraction in four of the eight sectors, reports Surabhi.The eight core industries grewmarginallyhigherat3.6%inMarch2023,butgrewmuch faster pace by 9.5% in April 2022.This is the slowest growth since October 2022. ■ Page 2 `4,000-crore Coal India offer for sale opens today MITHUN DASGUPTA Kolkata, May 31 THE GOVERNMENTWILLsell up to 3%stakein state-runcoalminerCoal India through an offer for sale (OFS) opening on Thursday.With the floor priceat`225,theOFScouldfetchthe government up to `4,160 crore. “OfferforsaleinCILopenstomorrow for non-retail investors. Retail investors can bid on Friday.Governmentwilldivest3%equityincluding aGreenShoeoptionof1.5%,”DIPAM secretaryTuhinKantaPandeysaidin a tweet onWednesday. CoalIndiasaidinastockexchange filing that the government plans to sell up to 92.4 million shares (1.5% stake) for non-retail investors on Thursday, with the option to sell another1.5%tobothretailandnonretail investors on Friday. It said shares equivalent to up to 5%oftheoffersizemaybeofferedto eligible and willing employees,after the completion of the offer and subject to approval from authorities. 40-nanometer chips We are fully equipped to make semiconductors… the government is with us shoulder to shoulder ANIL AGARWAL, chairman, Vedanta Resources Continued on Page 6 2.3 Q4FY20 applicants to make less complex, cheaper thicker and demand for these is expected to be less.Analysts said the technologyhas become so advanced that currently even 4-nanometer chips are being produced. It is expected that Vedanta-Foxconn will reapply for 40-nanometer chipswherelesscapitaloutlaywould be required. However, analysts said such plants may have problems in getting global orders and scaling up. Financial, real estate and professional services 5.5 ■ Since 28nanometer chips are thinner, more superior, demand for 40-nanometer chips expected to be less FRESH WINDOW 9.1 All at constant prices (% chg, y-o-y) 6.5 Q1 FY21 FY23 (second (Provisional (first advance advance estimate) estimate) estimate) Consumption and investment 6.1 -21.4 -23.4 FY23 FY23 -1.4 -5.8 10.4 7.2 7 FY21 Quarterly GDP JATIN GROVER New Delhi, May 31 Vedanta trims debt to $6.4 bn VEDANTARESOURCESHASpaidall itsmaturingloansandbondsduein May and June, reducing its gross debt to $6.4 billion, the company said in a stock exchange update. However,a moment of reckoning is approachingastheminerhas$2billionofbondsduein2024—arecord annual bill for the firm.■ Page 4 Continued on Page 9 Sebi seeks more disclosures from ‘high-risk’ FPIs Consultation paper proposes granular data of ownership SIDDHANT MISHRA & JOYDEEP GHOSH Mumbai, May 31 THE SECURITIES AND Exchange Board of India (Sebi) on Wednesday proposedtotightentheguidelinesfor foreignfundswithasubstantialstake in Indian companies. The decision comes on the back of criticism regarding the lack of oversight over theultimatebeneficialownersinforeign portfolio investments (FPI) in theAdani Group. Inaconsultationpaper,theregulator has proposed mandating additional disclosure from high-risk FPIs with assets of over `25,000 crore to prevent circumventing norms on minimum public shareholding. Sebi has defined high-risk FPIs as those holding more than 50% of their equity assets under management (AUM) in a single corporate group. It has estimated that around 6% or `2.6 trillion of the FPI investment falls in the high-risk category. Therulesalsoaimstokeepacheckon hostileacquisitionsofIndianentities. The additional disclosure would include granular data of all entities withanyownership,economicinterest, or control rights on a full lookthrough basis, up to the level of all natural persons and/or Public Retail Funds orlarge public-listed entities. “At the time of registration,highrisk FPIs shall be asked to submit an undertaking confirming they have INSIDE TRICKYTO ENFORCE, SAY EXPERTS PAGE 10 While the move appears in line with need for higher transparency, it will pose one challenge in terms of enforcement —SANDEEP PAREKH founder & managing partner of Finsec Law Advisors It would require inapplicability of secrecy or privacy laws of offshore jurisdictions where investors are situated, which will be a challenge —MANENDRA SINGH, partner, Economic Laws Practice suitable mechanisms in place with theirinvestors(onafulllook-through basis),whichshallincludewaivingoff theirprivacyrightsintheirrespective home jurisdictions in favour of Sebi, to allow for the submission of additional granular disclosures to Sebi/DDP(dedicateddepositoryparticipants) if anyof the concentration or size threshold conditions were to be crossed,” says the paper. Continued on Page 6 Deloitte red-flags Adani Ports deals ADVAIT PALEPU & CHRIS KAY May 31 ADANI PORTS & Special Economic Zone’sauditorhassoundedanoteof cautionoverinsufficientdisclosures around the company’s transactions with certain entities, returning the spotlight to allegations made by short-seller Hindenburg Research on GautamAdani’s empire. Deloitte Haskins & Sells raised concerns on Tuesday over the port unit’s transactions with three entities, which the company said were unrelated parties. But the auditor said it couldn’t confirm that the parties were indeed unrelated, and that the firm has refused to get an independent external examination that would help prove so. It therefore signed off on the company’s books only with what’s called a “qualified opinion”. An Adni Group spokesperson saidonWedensday,“Theauditcommittee of the companyaswell as the company are of the view that an independent examination at this RELATED PARTIES OR NOT? ■ Financial deals with parties named in report also flagged ■ Contract with arm of ■ Myanmar port sale to Solar company identified in Energy; price Hindenburg revised to `247 cr from report `2,015 cr under scanner stage will not be appropriate given the ongoing investigations by Sebi andtheexpertcommitteeappointed by the Supreme Court. Deloitte’s qualification this year, as we summarise it, is owing to the pending conclusion of these investigations. Continued on Page 6 TCS, RELIANCE & INFOSYS MOST VALUABLE ON INTERBRAND RANKINGS Brand value of India Inc’s top 50 soars past $100 bn AKANKSHA NAGAR Mumbai, May 31 Phone is designed for seamless multitasking THE COMBINED VALUE of India’s top 50 brands has crossed $100 billion (`8.31 trillion) according to a report by global brand consultancy firm Interbrand. This marks an increase of 167% over the past decade,the report released on Tuesdaysaid.Interbrandmeasuresbrand value on the basis of trust, distinctiveness,and empathy. Tata Consultancy Services (TCS) topped the brand value chart for 2023 with a value of `1.09 trillion, while Reliance Industries came in second with `65,320.80 crore. RoundingoutthetopthreeisInfosys. TCSsawa153%riseinbrandvaluein the last decade. ■ GADGETS, P7 6.5 3.9 FY16 Construction 9.1 Vedanta-Foxconn JV fails to get subsidy for chips unit ■ EFE, P7 POCO F5 (5G) is capable processor drives the music, games, and more 6.8 Key performers in Q4 FY23 GVA in Q4 (% change y-o-y) Contribution to total value TOP 10 VALUE MAKERS 153 121 197 224 New 58 1 TCS 2 3 4 5 6 Brand value (` millions) 10-year change (%) 73 155 65 113 7 8 9 10 Infosys Jio LIC SBI RIL HDFC Airtel Mahindra Other brands in the top 10 includeHDFC,Jio,Airtel,LIC,Mahindra & Mahindra,State Bank of India and ICICI.The top five brands alone account for a staggering 40% of the 259,153 No easing of curbs on FDI from neighbours 8.3 300,552 THE UNION CABINET on Wednesday approved a `1 trillion programme to create the world's largest grain storage capacity in the cooperative sector to reduce crop damages and prevent distress sales by farmers. ■ PAGE 19 Continued on Page 6 6.4 8 16.1 15.9 15.4 18.4 Real GDP Nominal GDP 311,364 Cabinet okays `1 trn for grain storage 10.6 (% growth, y-o-y) 337,920 THE CENTRAL ELECTRICITY Authority on Wednesday notified the National Electricity Plan (NEP) for 2022-32 with a planned investment of `33,60,594 crore, reports Manish Gupta. ■ PAGE 19 10.5 11 465,535 NEP plans `33.6 trn power investment 11.8 490,273 BANKS AND CREDIT card issuers are expecting to see a rise in compliance costs as they implement the 20% tax collection at source (TCS) on international credit card spends from July 1, reports Ajay Ramanathan. ■ PAGE 10 INDIA'SGROSSDOMESTICproduct (GDP) in real terms grew at 6.1% in thefourthquarteroflastfiscal,apace significantly higher than what most analysts expected, official data showed onWednesday. A solid farm sector, buoyant services, a moderate pick-up in manufacturing,robust government capex and a favourable base pushed the quarterly growth. More than anything,net exports boosted the headline figure. INSIDE Withthis,the National StatisCEA: Risks tical Office’s to FY24 provisional estiforecast mates of the balanced economic growth in FY23 ■ PAGE 2 cameinat7.2%, as against the advanceestimatesof7%.Thepaceof growth was slower as compared to 9.1% recorded in FY22,but it represented a growth of 10.1% over the pre-pandemicyear,FY20. The latest data has given some credencetothenotionofthegovernment and the Reserve Bank of India, that after a sequential slowdown for the two quarters through Q3, the growth momentum may have returned to an extent, weathering external headwinds. However, most independent economists feel the growth could slowdown in the current fiscal. GROWTH PICTURE 502,910 TCS: Banks brace for higher costs SURABHI New Delhi, May 31 533,238 THE SECURITIES AND Exchange Board of India cancelled the certificate of registration of Karvy Stock Broking for misuse of client funds through an order issued on Wednesday, reports Ashley Coutinho. ■ PAGE 10 Q4 booster shot for GDP 653,208 Sebi cancels Karvy Broking’s registration to 6.1%; FY23 figure slows to 7.2% geopolitical tensions key worries 1,095,766 INDIA, UNDER PRIME Minister Narendra Modi, has transformed, gaining a position in the world order and becoming a key driver for Asia and global growth, Morgan Stanley said in a report on Wednesday. ■ PAGE 19 ● March quarter growth quickens ● Dull pvt consumption, El Nino, Rank IN THE NEWS India transformed in less than a decade: Morgan Stanley ICICI Top sector (%) 2014 2023 Diversified 21 34 Technology 20 31 Financial Services 19 22 list’s overall value. The combined value of the top 10 brands stands at `4.94 trillion, which is more than that of the remaining 40 on the list. Thetechnologysectorleads, con- tributing 31% to the total brand valueofthelist.Itisfollowedbyfinancial services and diversified industries.Fastmovingconsumergoodsis the fastest-growing sector over the last 10 years with a compound annual growth (CAGR) of 25%, followed by home building & infrastructure at 17% and technology at 14%. With nine companies on the list, the financial services sector has the highest numberof brands. Ashish Mishra, CEO, Interbrand India & South Asia, said this year’s report highlighted the remarkable concentrationofbrandvalueamong the top three and top five brands, demonstrating their strong impact on the overall landscape. “It is an extraordinarymomenttowitnessthe ascent of technology brands, securing prominent positions in the top five aftera decade,” he said. The report said that JSW, Asian Paints, and Tanishq are among the fastest-growingbrandsoverthepast decade.In the report’s last edition in 2019,Tata topped the list, followed byRelianceIndustriesandAirtel,and Infosyswas ranked 7th. Sandeep Goyal,MD,Rediffusion, saidthatconsistencyingrowth,focus on the future and a vision beyond todayiskeytothetopscores.Hesaid, “These companies reflect consumer confidence,consumertrust,andconsumersatisfaction,thefactorswhich arecriticaltobrandsuccessintoday’s dayand age.” Samit Sinha, managing partner, Alchemist Brand Consulting, said that any brand that aspires to be among the most valuable brands in Indianeedstobuildalarge,solid,reliable,andprofitablebaseofcustomers withoutspendingdisproportionately on marketing to acquire them. Kolkata
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