COMPANIES, P4 MARKETS, P7 NATION, P12 TO AUCTION OR NOT SEBI PROPOSAL GROWING INTERNATIONAL PRESENCE Satellite spectrum: Tech firms united, telcos divided Cap on MF fees would impact fund houses' profit, says Chris Wood As Ajay Banga takes over as World Bank chief, what’s in it for India? KOLKATA, SATURDAY, JUNE 3, 2023 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 32 NO. 182, 14 PAGES, `10.00 (NORTH EAST STATES & ANDAMAN `13.00) 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: 62,547.11 ▲ 118.57 NIFTY: 18,534.10 ▲ 46.35 NIKKEI 225: 31,524.22 ▲ 376.21 HANG SENG: 18,949.94 ▲ 733.03 `/$: 82.30 ▲ 0.11 `/€: 88.62 ▼ 0.36 BRENT: $76.26 ▲ $60.099 GOLD: `29,250 ▲ `201 PRIME MINISTER NARENDRA Modi will address a joint session of the US Congress on June 22 during his official state visit to the country. He will share his vision of India's future and speak on the challenges facing the two countries. Cyber resilience norms for PSOs RESERVE BANK OF INDIA has released draft master directions on cyber resilience and digital payment security controls for non-bank payment system operators, reports Ajay Ramanathan. ■ PAGE 7 Vedanta raises $450 mn from rivals VEDANTA RESOURCES, THE parent company of mining major Vedanta, has raised a total of $450 million from commodities firm Trafigura Group and its rival Glencore , reports Rajesh Kurup. ■ PAGE 4 Salil Parekh sees 21% dip in remuneration SALIL PAREKH, CEO and MD, Infosys, saw his remuneration down by 21% in FY23. His remuneration was `54.7 crore, against `71 crore in FY22. Mohit Joshi, president, Infosys, topped the chart, reports Sameer Ranjan Bakshi. ■ PAGE 5 EXPLAINER Neuralink & brain implants’ potential ■ PAGE 12 FE S P E C I A L S STATUS QUO DBS Bank Bank of Baroda Standard Chartered YES Bank CRISIL Prabhudas Lilladher Ind-Ra PIYUSH SHUKLA Mumbai, June 2 Emkay Global Icra CAREEdge HDFC Securities IDFC First Bank Kotak Securities THE COUNTRY'S LARGEST airline, IndiGo,whichhasadomesticmarketshare of over 57%, has embarked on a massive international expansion. The overseas market is currently dominated by Tata Group’s Air India and its low-cost carrier Air India Express together. IndiGo on Fridaysaid itwill start direct flightstosixnewdestinationsinAfricaand Central Asia. This is the first major international push by CEO Pieter Elbers who joined IndiGo in September2022with the aimto expand the airline internationally, as it is not widely known outside India. Thedevelopmenttieswellwiththecivil aviation minister Jyotiraditya Scindia’s recent suggestion to domestic carriers to increase their international operations. The airline will start direct flights to Nairobi and Jakarta from Mumbai. Delhi will be connected to Tbilisi in Georgia and Baku (Azerbaijan), Tashkent (Uzbekistan) and Almaty (Kazakhstan). All these new connections will commence in the September quarter. Direct flights between Delhi and Hong Kong, which were suspended three years ago during the pandemic, will resume in August. Once these routes become operational, the budget carrier will have 32 internationaldestinationsinits kittyfrom thecurrent26with174newweeklyflights during the September quarter. IndiGoalsoplanstolaunchmoredirect international services by connecting Dammam to Lucknow, Chennai, and Kochi; Abu Dhabi to Goa, Lucknow, and 6.5 6.5 6.25 7.8 Sept 7.4 4.7 7 Source: RBI Feb 8 2023 Apr 6 Dec 7 Sep 30 5 vote as the doves prefer to close the door on further tightening as inflation beats a retreat. We feel 2QFY23 inflation will undershoot RBI’s forecasts,”Rao said. WhiletheMPChadvotedunanimously in favour of a pause in the previous MPC meeting, external member Jayanth Varma had dissented on leaving the stance unchanged at “withdrawal of accommodation”. IndiGo takes on AI with overseas push SWARAJ BAGGONKAR Mumbai, June 2 8 (% chg, y-o-y) 6 Aug 8 7 6 5 4 3 2 5.9 9 5.4 CPI (%) 4.9 Repo rate 4.4 AT ITS MEETING on June 8, the Reserve BankofIndia's(RBI)monetarypolicycommittee (MPC) will likely vote to keep its benchmark repo rate unchanged at 6.50%,14 economists polled by FE said. A higher-than-expected gross domestic product (GDP) growth of 6.1% in the fourthquarterofFY23,retailinflationeasing to an 18-month low of 4.70% in April and expectation of further correction in retail inflation in May are the key reasons cited by economists for a rate pause.After raising the repo rate cumulatively by 250 basis points since May2022,the MPC had voted unanimously for a pause in April. Another reason why the RBI may keep thepolicyrateunchangedinthenearterm is the scaling down of rate hikes bycentral banksinadvancedcountriesandthelikely policy rate pause in these countries in the near future, Sujan Hajra, chief economist and ED,Anand Rathi,said. Radhika Rao, executive director & senior economist at DBS Group Research, expectsthemonetarypolicycommitteeto vote unanimously for a pause.“The decision to extend the stance could see a split Anand Rathi Jun 8 PM to address joint US Congress session FE POLL OF ECONOMISTS May 4 AT LEAST 50 people died and more than 350 were injured in a horrific triple train crash on Friday in Odisha’s Balasore district and involving the Bengaluru-Howrah Superfast Express, the ShalimarChennai Central Coromandel Express and a goods train, officials said. ■ PAGE 12 MPC to opt for pause 4 At least 50 dead, 350 hurt in Odisha triple train crash 'WITHDRAWAL OF ACCOMMODATION' LIKELY TO STAY Apr 8 2022 IN THE NEWS ROUTE EXPANSION ■ Direct flights from Mumbai to Nairobi (Kenya) andJakarta (Indonesia) 174 newweekly international flights between June and Sept Dec 5.7 4 3 April 2022 Source: MoSPI April 2023 “I am unable to reconcile the language of the stance with the simple fact that no further “withdrawal of accommodation” remains to be done since the repo rate has already been raised to the 6.50% level prevailing at the beginning of the previous easing cycle in February 2019,” he had said. Continued on Page 2 Coal India OFS subscribed 1.4 times, fetches govt `4,170 cr FE BUREAU New Delhi, June 2 Ahmedabad; Ras Al Khaimah to Hyderabad; Bahrain to Kochi and Jeddah to Ahmedabad over the next few months. Inaddition,theairlineisincreasingfrequencies between Mumbai-Dhaka, in August followed by direct international connectivity from Bhubaneshwar and North Goa (Mopa).Bhubaneshwarwill get exclusive flights from and to Singapore and Bangkok from June. Continued on Page 2 Continued on Page 2 (Georgia), Baku (Azerbaijan),Tashkent (Uzbekistan) andAlmaty (Kazakhstan) PIETER ELBERS, INDIGO CEO The additions …will help us expand our footprint across four continents with Africa and Central Asia being penetrated for the first time SWARAJ BAGGONKAR Mumbai, June 2 TATAGROUP HAS outlined an investment of `13,000 crore ($1.58 billion) to set up a giga factoryforlithium-ion cell manufacturing in Gujarat. The group on Friday signed a memorandum of understanding (MoU) with the Gujarat government, which will create a domesticsupplychainforthemanufactureof electric vehicles. Inthefirstphase,theproposedfactorywill setupandoperateIndia’sfirstlithium-ioncell manufacturing plant with a production capacity of 20 GWh. The plant is expected to create direct and indirect employment opportunities for over 13,000 people, a joint statement by Tata group and the Gujarat government said. Vijay Nehra,CEO of Tata group subsidiary Agratas Energy Storage Solutions, and the Gujarat government’s secretary of science and technology signed and exchanged the MoU in the presence of Gujarat chief minister Bhupendra Patel. An EV battery cell plant within the group augurs well forTata Motors as this will eliminate the company’s dependence on thirdparty suppliers based in China and South Korea. These often expose the company to geopolitical tensions, supply chain disruptions and demand spikes by competition. Tata group is also believed to be exploring the idea of setting up an EV battery plant in the UK or Spain to support the electrification plans of British luxury unit Jaguar and Land Rover.The UK government has offered £500 million in subsidies to build a batteryplant in the UK for the group. In2021,TataMotorscarvedoutaseparate CHARGING AHEAD 20 GWh 13,000 direct, indirect employment opportunities to be created capacity lithium-ion cell manufacturing plant to be set up in first phase ■ Plant would eliminate Tata Motors' dependence on Chinese, South Korean suppliers EV company called Tata Passenger Electric Mobility, where it brought in external funding of $1 billion from TPG and Abu Dhabi state holding companyADQ,giving it a valuation of $9.1 billion.Tata Motors has pledged to invest more than $2 billion in its EV business over five years. The group is already the market leader in the passengerEVspacewith a market share of more than 85%, and is among the leading players in the electriccommercialvehicle categorywith buses and small trucks. SBI Life to take over Sahara insurance biz THE GOVERNMENT NETTED around `4,170 crore from the sale of 3% stake in Coal India through a two-day offer for sale (OFS),which concluded on Friday. “The second day of CIL OFS closed with goodinterestfromretailinvestorswith1.4 times subscription.We thank all investors for their participation,” department of investment and public asset management secretaryTuhin Kanta Pandeytweeted. The government sold 184.88 million sharesitheldinthecoalmineratanindicativepriceof`226/shareasagainstthefloor price of `225 apiece. OnThursday,institutionalinvestorsput in bids for over 287.62 million shares. On Friday, institutional buyers put in bids for another 51.24 million shares while retail buyers bid for25.89 million. Thestate-runminer’ssharepriceclosed at `230.9 on Friday, up 0.15% from the previous closing price. TheCoalIndiaOFSwasthemaidenpublic offer of shares as the government steps up its efforts to garner a targeted `51,000 crore during FY24. Among other disinvestments planned this fiscal,the governmentwill sell a major partofitsstakeinIDBIBank,alongwithLife Insurance Corporation’s stake.On January 7,the Centre received expressions of interestfromdomesticandforeigninvestorsfor the 60.72% stake in IDBI Bank. ■ Delhi to be connected toTbilisi Tatas plan `13k-cr EV cell plant in Gujarat MITHUN DASGUPTA Kolkata, June 2 INSURANCE REGULATOR IRDAI has asked SBI Life Insurance to acquire the business of Sahara India Life Insurance (SILIC) to protect the interest of 200,000 policyholders. “…SBI Life shall take over the policy liabilities of around 2lakh policies of SILIC,backed by policyholder’s assets, with immediate effect,”Irdai said in a statement on Friday. Sahara India Life Insurancewas granted a certificate of registration in 2004.But due to concerns over financial propriety and governance,theinsuranceauthorityhadtoappoint an administrator to manage the insurer’s business in 2017,and barit from underwriting any new business. The administrator had flagged concerns such as a diversion of `78.15 crore in the name of security deposits and shareholders and board of directors not being keen on recovery. The report had said the company was surviving with release of reserves,which was not sustainable since new premium had decreased significantly,and the affairs of the company were being managed by the nonexecutive chairman rather than the board. “Despite being provided ample opportunities and sufficient time to ensure compliances, SILIC has failed to comply with directions of the authority and take any affirmativestepstoprotecttheinterestsofits policyholders.Further,thepolicydataofSILIC reveals that the company’s portfolio is show- SHIELDING POLICYHOLDERS ■ Sahara Life has failed to comply with directions to protect policyholders' interest, as per Irdai Insurer was granted certificate of registration in 2004 ■ ■ Administrator appointed in 2017 after concerns over financial propriety and governance ing run-off trend,”Irdai said in its statement. It said the company’s financial position has been deteriorating with rising losses and higher percentage of claims to total premium. “If the trend is allowed to continue, the situation will worsen and lead to erosion of capital and SILIC may not be able to discharge its liabilities towards policyholders…” the regulator added. According to Sahara Life’s annual report, theinsurer registeredalossof`18.62crorein FY22.Irdai,in its order,has observed that the insurer has been incurring losses on a posttax basis since 2019-20. MAY ARGUE HEALTH MINISTRY HAS NO POWERS OVER OTT PLATFORMS HowAltroz iCNG reclaimed the boot space in CNG cars It isn’t just a petrol-to-CNG conversion, but a very well thought CNG version. ■ MOTOBAHN, P8 Rebalance portfolio to reduce market risks Get the right asset allocation mix to align with your life goals ■ PERSONAL FINANCE, P7 Netflix, Disney,Amazon to challenge new tobacco rules ADITYA KALRA & MUNSIF VENGATTIL New Delhi, June 2 STREAMING GIANTS NETFLIX, Amazon and Disney on Friday privatelydiscussedapossiblelegalchallenge and other ways to stall the Unionhealthministry’snewtobacco warning rules, amid fears they will need to edit millions of hours of existingweb content,sources said. The new rules are the latest headache for streaming giants in India,a top growth market.Companies often face legal cases and police complaints their content sometimeshurtreligioussentiment, and many have self-censored content overtheyears. The health ministry this week orderedstreamingplatformsshould within three months insert static health warnings during smoking STREAMING HURDLES Industry contention New norms ■ 3 months given to OTT platforms to insert static health warnings during smoking scenes 50-sec anti-tobacco disclaimers, including an audio-visual, at start and middle of each programme ■ scenes. It also wants at least 50 seconds of anti-tobacco disclaimers,including an audio-visual, at the start and in the middle of each programme. In first signs of industrydistress, executives of the three global streaming companies, and India's 60% of 15 most popular streaming shows expose 25 mn young people to tobacco imagery, as per Truth Initiative Viacom18 which runs billionaire MukeshAmbani’s JioCinema,held a closed-door meeting,where Netflix said the rules would hit customer experience and push production houses to block their content in India, according to two sources familiarwith the discussions. ■ Rules could push production houses to block content in India ■ Millions of hours of existing content will have to be edited ExecutivesinIndiaalsodiscussed ways of a possible legal challenge to assertthatotherministries—ITand information & broadcasting — have powers over streaming giants, and not the health ministry, said one of the sources. The companies, and the health ministry, did not respond to a Reuters request for comment. Reuters is first to report the industry's planned pushback. Already, all smoking and alcohol drinking scenes in movies in cinemasandonTV,underthelaw,require healthwarnings.Sofar,therewereno regulationsforthestreaminggiants, whose content has become increasinglypopular. In 2013, Woody Allen stopped his film ‘Blue Jasmine’ from being screened in India after learning that mandatory anti-tobacco warnings would be inserted into its smoking scenes. Activists have welcomed new anti-tobacco rules by India, the world's second largest producer of tobacco that kills 1.3 million people each year in the country. India also has stringent cigarette pack warning rules. Truth Initiative, a public health non-profitgroup,inMarchsaid60% of the 15 most popular streaming shows among 15- to 24-year-olds it analysed contained depictions of tobacco, “effectively exposing 25 million young people to tobacco imagery”in 2021. But in India, companies from Netflix to Amazon to Disney, also have popular local content which often shows actors smoking, something activists say encourages tobacco use. India is a hot market for streaming giants,and executives fear businessimpactandhighercosts.JioCinema has just in recent weeks signed multiple content deals with NBCUniversal and Warner Bros, bringing popular shows like ‘Succession’ and ‘The Office’on its platform. Continued on Page 2 Kolkata
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