ECONOMY, P2 COMPANIES, P4 INTERNATIONAL, P9 FIVE YEAR EXTENSION LIKELY RATINGS RISE 32% AIDING TRANSITION Budget for electronic components scheme may be raised to `10k cr Disney Star breaches half a billion in TV viewers for IPL UK to lead way on AI safety with first global summit, says PM Sunak MUMBAI, FRIDAY, JUNE 9, 2023 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. LXIII NO. 135, 20 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: 62,848.64 ▼ 294.32 NIFTY: 18,634.55 ▼ 91.85 NIKKEI 225: 31,641.27 ▼ 272.47 HANG SENG: 19,299.18 ▲ 47.18 `/$: 82.57 ▼ 0.02 `/€: 88.60 ▼ 0.30 BRENT: $77.20 ▲ $0.25 GOLD: `59,391 ▼ `410 Refiners likely to cut fuel prices STATE-RUN OMCs ARE likely to cut fuel prices soon, as the government expects them to start passing on the benefit of lower crude oil prices to the customers. ■ PAGE 2 EXPLAINER Sugar substitutes face a bitter future ■ PAGE 20 FE S P E C I A L S Rasna’s recent moves: Recipe for growth Challenges mount for the brand as demand for drink pre-pixes wane ■ BRANDWAGON, P7 Lock in bank FDs at highest rates When interest rates are high for FDs, it is best to opt for longer tenures ■ PERSONAL FINANCE, P7 CPI (% chg, y-o-y) 7.28 7.04 6.12 6.21 5.4 5.2 4.6 5.2 NEARLY 1.8 TRILLION or 50% of the outstanding `2,000 denomination notes in circulation as of March 31 have come to banks since May 19,when RBI called for withdrawal of the currency,governor Shaktikanta Das said on Thursday.Das said broadly on a provisional basis,about 85% of the `2,000 note are coming back as deposits into bank accounts ■ Page 18 Rules for compromise settlements issued Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 Q2 Q3 Q4 FY24 (P) FY24 (P) FY24 (P) FY24 (P) P: RBI projections quent communications becoming more dovish. “The vigilance on inflation has been reiterated, indicating that the MPC is not ready to lower its guard onpricesdespiterecentpositivesurprises,” said Anubhuti Sahay, South Asia chief economist at Standard Chartered.RahulBajoria,MD&Head of EM Asia (ex-China) Economics, Barclays, said he expects the RBI to remain on hold for the rest of fiscal FY2023-24, with an emphasis on macro stability. Continued on Page 2 RBIHASISSUEDaframeworkfor governingcompromisesettlements andtechnicalwrite-offs,reportsAjay Ramanathan.Regulatedentities shallputinplaceboard-approved policiesforundertakingcompromisesettlementswiththeborrowers aswellasfortechnicalwrite-offs. Compromisesettlementrefersto anynegotiatedarrangementwith theborrowertofullysettleclaimsof theregulatedentityagainsttheborrowerincash. ■ Page 18 IBBI proposes preferential voting for CoCs Move to increase chances of nod to resolution plans PRASANTA SAHU New Delhi, June 8 THE INSOLVENCYAND Bankruptcy BoardofIndia(IBBI)hasproposedthe adoptionofsystemofsingletransferablevoteforcreditorstodecideonresolutionbidsforbankruptcompanies, in a move aimed at maximising the chances of the plans getting approved. In a discussion paper floatedbyit,theregulatorsuggesteda preferential voting method wherein the creditors can rank their preference on bids received, rather than merelyvotefororagainstoneormore bids,asatpresent. Effectively,thiswouldresultinan eliminationprocess,andincreasethe chances of plans securing the 66% votingthresholdforapproval. Experts,however,called the proposedsystemnotonly“complicated”, but also“bad in law.” “It amounts to forcing the creditors to approve one of the plans on offer.The proposal is alsonotinconformitywiththeInsolvency and Bankruptcy Code,”said a source familiarwith the evolution of bankruptcy law and regulation in MIDDLE WAY OUT ■ The regulator ■ The proposal would result in an elimination process, and increase the chances of plans securing the 66%voting threshold suggested a preferential voting method wherein the creditors can rank their preference on bids received, rather than merelyvote for or against one or more bids, as at present Experts say the proposed system is not only complicated, but also bad in law India,askingnottobeidentified. “Inordertoensurethatpreference of plan is captured,and creditors are abletovotefreely,itisproposedtouse systemofvotingwithpreference,”the IBBIsaidinthepaper. Thepapersaid:“Itisobservedthat thecreditorsvoteinfavourofallavailable compliant resolution plans to avoidbeingadissentingcreditor. Continued on Page 18 Delayed monsoon hits Kerala THE INDIA METEOROLOGICAL Department (IMD) on Thursday announced the onset of southwestmonsoonoverKerala,ending uncertainty over the start of the annual phenomenon, which still plays an important role in India's agricultural prospects, reports Sandip Das. This marked the most delayed arrival of monsoon in the last fouryears. “While this arrival over Kerala is delayedbymorethanaweekcompared to its normal date of June 1, it fallswithin the errorwindowof IMD's initial onset predictions, whichlasteduntilJune8,”according to a Met department statement. ■ Page 3 DGCA to Go First: Get CoC Altman, PM talk AI regulation approval for revival plan ROHITVAID New Delhi, June 8 THE DIRECTORATE GENERAL of Civil Aviation (DGCA) has asked the interimresolutionprofessional(IRP) ofGoFirsttosubmittheairline'sservices resumption plan after receiving the approval from the committee of creditors (CoC).Onlywhen the CoC approves the plan forrestarting the services, the aviation regulator will examine it,sources said. The CoC is likely to hold its first meeting on Friday. Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank are the main lenders to the airline, which owes `6,521 crore to its financial creditors,according to its filingswith the NationalCompanyLawTribunal.Of this, `1,300 has been drawn under the government's emergencycredit TAKE OFF DELAYED As first reported by FE, the IRP submitted a six month revival plan totheDGCA,aroundaweekago,statingthattheairlineisreadytoresume operations with 26 operational aircraft in its fleet and 400 pilots on its rolls. It said that once the DGCA approvestherevivalplan,itcanstart charteredflightsbetweenDelhi-SrinagarandDelhi-Lehimmediatelyby deploying two aircraft.Within the nextfewdaysitwillbeabletoresume scheduled services, mainly on the Pune,Bagdogra and Goa routes.The airline has said that it will be able to deploy 8-10 aircraft for the scheduled services. Apart from seeking several queriesrelatingtoitsfinancialviability to restart operations, the DGCA has also sought the nod of the CoC. ■ The airline owes `6,521 crore to its financial creditors, according to its filingswith NCLT ■ The IRP submitted a six month revival plan, around a week ago The CoC is likely to hold its first meeting on Friday line guarantee scheme (ECLGS). Upon including the dues of thevendors, the total dues of the airline stands at `11,463 crore. Continued on Page 18 OpenAI looking to fund Indian startups JATIN GROVER New Delhi, June 8 OPENAI CHIEF EXECUTIVE officer Sam Altman on Thursday said there is a need to think about regulations aroundartificialintelligenceinorder to prevent anydownsides. SpeakingattheDigitalIndiaDialogues at the Indraprastha Institute of Information Technology, Delhi, Altmansaidduringhismeetingwith Prime Minister Narendra Modi, the two talked about the opportunities thecountrypresentsandtheneedto think about global regulations to ensure that some of the downsides are prevented. With regard to investments in Indianstartups,theOpenAICEOsaid thecompanyislookingtofundthem and has held discussions. PM Narendra Modi and OpenAI CEO Sam Altman Altman described his meeting with Modi as enjoyable and said that he specifically asked about India's earlyandextensiveadoptionofChatGPT,towhichthePrimeMinisterprovided great answers. Accordingtosources,Altmanalso met communications and IT minister,AshwiniVaishnawandministerof stateforelectronicsandinformation technologyRajeevChandrasekhar. The government's focus during the discussion with Altman was on regulatingAI,opportunitiesandchallenges,sources said. Altman also underlined the challenges in regulating AI, as it is constantlyevolving.Healsoflaggeddeep fake and plagiarism as the two main threats.Hesaidthatdeepfakeswillbe available in the next 1-2 years in audio and video that could wreak havoc in the world, according to sources.InIndia,thegovernmenthas beenpushingforregulationofAIonly from the prism of userharmand not hindering anyinnovation. OnWednesday,whilespeakingat an event by Economic Times,Altman playeddowntheriskofthousandsof jobs being at risk and said there will be newer and better jobs going forward. Altman who co-founded OpenAI in 2015 and has been its CEO since 2020,saidhedoesn'tthinkcurrentAI systems are dangerous."GPT4 doesn'tposeanexistentialriskbutGPT10 might be a completely different thing,"he said. TIAGO EV GETTING 50% BOOKINGS FROM OUTSIDE TOP 20 CITIES First-time buyers driving Tata EV sales with 23% share SWARAJ BAGGONKAR Mumbai, June 8 NEARLY ONE IN every four buyers of Tata Motors electric cars has never owned a car before.This kind of interest in EVs by first-time buyers is in quite contrast to the common apprehension about lack of charging infrastructure and range anxietylimitingadoptionofelectric mobility. Though at 23%, the share of first-time carbuyers is less than the 36-42% share in the non-EV market nationally,market watchers say given that the penetration of EVs is at a minuscule level of 2%, the number is impressive. Tiago, the compact electric hatchback from Tata Motors, TATA MOTORS EV SALES 2022* 2023* % change 5,805 AROUND HALF OF the asset monetisation programme of NHAI could be done through InvIT this financial year (around `23,000 crore), a senior official said Thursday, reports Mukesh Jagota. ■ PAGE 2 MARGINALLY LOWER FORECAST 3,505 NHAI to raise `23k cr via InvIT route Nearly 50% of `2,000 notes back at banks 6,516 HDFC BANK HAS shortlisted veteran Arvind Kapil, its current retail assets head, to spearhead the home loans business post its megamerger with India’s biggest mortgage financier Housing Development Finance. INFLATION SHOULD ALIGN WITH 4% TARGET ON A DURABLE BASIS, NOT A ONE-OFF BASIS. IT IS ALWAYS THE LAST LEG OF THE JOURNEY WHICH IS THE TOUGHEST 2,333 HDFC Bank’s Kapil to lead home loan biz RBI ON THURSDAY issued first loss default guarantee (FLDG) guidelines for digital lenders, reports Ajay Ramanathan.Subject to certain guidelines,RBI has decided to permit arrangements between regulated entities and lending service providers or between two regulated entities involving default loss guarantee. The guidelines apply to all banks and non-bank lenders. ■ Page 8 6,509 ZOMATO HAS GIVEN a boost to investor appetite, delivering 11.6% returns in the past one week, reports Siddhant Mishra. It has recorded five straight sessions of gains, with market capitalisation surging by `6,760 crore. ■ PAGE 17 THE MONETARY POLICY Committee (MPC) of the Reserve Bank of India kept the benchmark repo rate unchanged at 6.50% and retained its tightening stance, signalling a longertimeframeforratecuts.While the rate pause decision was unanimous, the decision to retain the stance as“withdrawal of accommodation” had one dissenting voice – that of external member Jayant Varma – in the six-memberMPC. "Itisapauseinthismeetingofthe MPC and I have not said anything about the pivot. WhateverIsaidin EDIT thelastmeetingInflation that it is not a warrior (policy) pivot - I reiterate that," ■ PAGE 6 governor Shaktikanta Das told reporters after the monetarypolicyannouncement. "Our goal is to achieve the inflation target of 4% and keeping inflation within the comfort band of 26% is not enough," Das said.“Inflationshouldalignwith4% target on a durable basis, not a oneoff basis,”he said aftertrimming the RBI’sinflationforecastto5.1%from 5.2%.“It is always the last leg of the journey which is the toughest,” he added. Analysts,however,do not expect inflation to fall to the RBI’s 4% medium-term target in a sustainable mannerforsome time.Abheek Barua, chief economist at HDFC Bank, said “any rate cut expectations in 2023 that were being built up in the market are likely to be pushed forward fornow”. He added the RBI seems to be building in a bufferforanyfoodpricesspikesdue to weather related disturbances during the monsoon season. If indeed these risks do not pan out, inflation could be lower than the RBI’s projections leading to subse- RBI issues norms for digital lenders SHAKTIKANTA DAS, RBI GOVERNOR 3,452 Zomato in sweet spot, nears IPO price PIYUSH SHUKLA Mumbai, June 8 5,318 HIRING ACTIVITIES HAVE slowed down by 7% in May compared to the same month last year mainly due to companies adopting cautious approach to cut expenses on the back of economic slowdown, a Foundit report said on Thursday. TRIMMED, GDP’S RETAINED RBI signals long pause 2,934 Hiring slows down 7% y-o-y in May ● FY24 INFLATION FORECAST STANCE UNCHANGED 4,133 AIR INDIA ON Thursday said that it will fully refund ticket prices paid by passengers on the Delhi-San Francisco flight which landed in the Russian city of Magadan due to a technical issue with the aircraft, reports fe Bureau. ■ PAGE 17 ● REPO RATE, TIGHTENING 2,982 IN THE NEWS Air India to refund full fare for Delhi-San Francisco flight 39 81 89 179 66 Jan Feb Mar Apr May *Includes international sales launched a few months ago, has accelerated the adoption of electric vehicles with its sub-`10 lakh range, enticing the first-time car buyers. Source: Tata Motors Led byTiago EV and followed by the Nexon EV,electric cars are finding more interest in smaller towns than larger cities. The Tiago EV has penetrated deeper into the market compared to the Nexon EV with nearly 50% of its bookings coming from outside of India’s top 20 cities. Tier-3 towns like Bilaspur, Satara, Shimoga and several small towns of Kerala have adopted the TiagoEV,asperapresentationmade by Tata Motors. The company has extended its EV network to 165 cities with 250 dealerships. About 78% of India’s electric carmarket is controlled byTata Motors. Group company Tata Power has installed more than 5,000 public chargers across the country. Home charging facilities have been provided in more than 170 cities while more than 900 community chargersaredeployedin175+societiesin the top five metros. Electric option now leads the share in the Tiago model with nearly two in every five units being sold are powered by batteries.With prices starting at `8.49 lakh, the modelgot20,000bookingsinthree months, including 10,000 in the first 24 hours of the opening of the bookings. India’s surge towards electric mobility is also notably led by women with nearly one in four Tata Motors electric cars being bought by the fairer sex.The share is twice the national average level in the non-EV market nationally, according to the Mumbai-based company. “The charging is done either at home or at their office, which women find very convenient. Plus, the maintenance cost is negligible compared to a petrol or diesel car,” said a Mumbai-based Tata Motors dealer. Continued on Page 2
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