COMPANIES, P4 BACK PAGE, P12 BACK PAGE, P12 STRONG TALENT POOL IN INDIA ASIAN GAMES HONOUR FOR KARIKO, WEISSMAN Open to collaborations for growing India presence, says Embraer’s Meijer Table tennis giant killers Sutirtha-Ayhika go down to N Korea Scientists behind mRNA Covid jab win Medicine Nobel BENGALURU, TUESDAY, OCTOBER 3, 2023 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVI 143, 12 PAGES, `12.00 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 WITH INTEREST RATES on the boil, customers are rushing to earn higher returns on fixed deposits, reports Sachin Kumar. Term deposits of banks surged 17.4% in the first quarter this fiscal — the highest quarterly growth in five years. ■ PAGE 5 IBBI PAPER CALLS FOR UN-MODEL INSOLVENCY LAW INDIA SHOULD consider adopting the UNCITRAL Model Law on Cross-Border Insolvency in the next version of IBC, says a paper by Insolvency and Bankruptcy Board of India, reports Priyansh Verma. ■ PAGE 2 FE S P E C I A L S ` crore 64 381 6,967 873 29 222 40 482 1,514 3,876 Source: Sebi Return in % 1-year 3-year 5-year 16.7 73.4 81.7 16.8 75.0 79.7 INDIAINC’STOTALsalarybillwent up by 14.3% to about `9.4 trillion in FY23,the fastestincreasein10years. Moreover,the average salary in the organised sector rose by nearly 10%, an eight-year high andmuchabovetherateofretailinflation in the country. A study of 7.5 million employees across 1,800 listed entities by Jefferies revealed the increase has happened on the back of substantial payhikes bythe IT sector.Excluding forsalaries in the ITsector,the rise in pay packets drops to 6.8%, which is in line with the 10-year average. The estimated increase in salaries per HIGHEST IN 8 YEARS Growth in average cost per employee (y-o-y %) 13.1 12.2 9.8 7.5 7.0 7.9 5.6 5.8 6.4 4.6 4.1 3.4 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Source: Ace Equity, Jefferies employee is even higher at an effective 15.6%,also an eight-year high,when the data is adjusted for the recruitment of juniors and retirees. In absolute terms,employee numbers rose by a reasonably good 4% to 7.5 mil- (Sample 1,800 companies) lion on the back of a 7% increase in FY22, a year in which the economy had not fully recovered from the effects of the pandemic. Continued on Page 9 Joblessness rate hits one-year low 118.2 14.1 Substantial IT pay hikes drove increase in Q3 FE BUREAU New Delhi, October 2 93 Oct 2021 to Sep 2022 Nos Oct 2020 to Sep 2021 RETURNS FROM SMALL and medium enterprise (SME) stocks, which reached stratospheric levelswhen theywere a part of the SME index, have fallen significantly after they migrated to the main platform of the Bombay Stock Exchange and National Stock Exchange. A sample of 25 stocks from NSE SME plaftorm shows that one year prior to migration, the average return of these stocks was 229.75%. However, after one year of moving to the main platform, the average return fell sharply to 86.4%. In fact, the growth rate in returns fell for 19 out of the 25 stocks.Only a few stocks have been able to maintain their momentum. SME stocks are in focus nowbecause of the frenzyin the initial public offering (IPO) market. In the past year,155 SMEs have raised as much as `4,000 crore — more than 50% of the `7,000 crore raised in the past five years. Between October21 and September22,a total of 93 companies raised `1,514 crore. While the advantage of migrating to the main board is that it allows more public reach and no precondition of trading in lots, the decline in performance has dissuaded many from making the move. Arun Kejriwal,founder,Kejriwal Securities and Investments said,“There are around 150 stocks currentlywhich qualify for movement to the main board.However,theyhave chosen not to do so because theyknowthat the rise in their stock prices is not sustainable once they enter the main board.” According to him,one of the main reasons forthis is the change in the lotsize.Usually,the issue price is `1-1.5 lakh per lot,which can be 155 Total Oct 2022 to Sep 2023 SME IPOs Oct 2019 to Sep 2020 TERM DEPOSIT GROWTH OF BANKS AT FIVE-YEAR HIGH JOYDEEP GHOSH Mumbai, October 2 Oct 2018 to Sep 2019 THE BIHAR GOVERNMENT on Monday revealed the results of its caste survey, putting the combined OBC strength in the state at 63%. This is a 10% leap over their share estimated by the 1931 census. ■ PAGE 2 Sensex OBCs, EBCs NEARLY TWO-THIRDS OF BIHAR POPULATION India Inc’s salary bill sees fastest jump in 10 years SME stocks slip after migration Nifty NEWS ONLY A FEW MAINTAIN MOMENTUM BSE IPO BSE SME Index IPO Index IN THE 2,434.9 1,964.3 60.1 161.7 revised only after a significant movement in the share price.Since the lot size iswaybigger, the difference between the bid and ask can be also be significant in the case of SME stocks. Continued on Page 9 PRIYANSH VERMA New Delhi, October 2 REINFORCING THE NOTION that economic activitieshavepickedupduetothe festive period, India’s unemployment ratedroppedtoa12-monthlowof7.09% in September. Joblessness in urban areas sawa sharp decline from 10.09% inAugust to 8.94% in September, indicating brisk hiring of field-level staff before the Diwali. According to data released by the Centre for Monitoring Indian Economy, the ruralunemploymentratewasalsoata12month low of 6.20% in September. The dropinruralunemploymentcomesonthe back of surplus rainfall in September.The country received 13% more rainfall than normalduringthemonth.InAugust,however,the rainfallwas 36% belownormal. Thefallinruralunemploymentratealso resulted in lower demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme, which hadremainedelevatedforseveralmonths. Continued on Page 9 UNEMPLOYMENT RATE 12 10 All India Urban Rural 8.94 10.28 8.54 7.09 8 6 4 7.71 6.20 Apr May June July Aug Sept Pension guarantee likely before polls ‘A large Indian consumption story is playing out’ Fireside Ventures partner Dipanjan Basu on current trends in the D2C segment ■ COMPANIES, P4 Behind J&J’s patent waiver for key tuberculosis drug The pharma major has waived its secondary patent for bedaquiline in 134 LMICs ■ EXPLAINER, P7 PRASANTA SAHU New Delhi, October 2 NEW FORMULA THE CENTRE IS likelyto unveil a newpension model for its staff before the start of state assembly elections in November, guaranteeing a decent amount of pension underaworkable formulation,a senior official said. The scheme will be jointly “funded” by the employees and the government, and the guarantee could depend on actuarial analysis factoring in the longevity of retirees and their contributions. Analysts believe that 35-40% guarantee would be feasible by tweaking the current structure of National Pension System (NPS), a nearlytwo-decade-oldschemethatisbasedon the concept of defined contribution. Aguaranteeoptionof50%ofthelastsalary drawn could also not be ruled out, the source said, but it might involve substantial additional cost to the government and employees. UnliketheOldPensionScheme(OPS)where benefitsaredefinedandfullyadjustedtoinflation on an annual basis, the pension for governmentstaffundertheproposedformulawill adjust for inflation only every five or 10 years, due to fund constraints,the source indicated. “The government may announce pension ■ NPS to be tweaked to launch a scheme jointly funded by govt and staff 50% of last salary ■ Pension may be adjusted for inflation only every five or 10 years, unlike on annual basis in old scheme drawn as guarantee option may be possible guarantee for its staff by November,” he said. Five states — Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram — are slated to go to polls in November-December. Continued on Page 2 EYES WIDER MARKET SHARE VIA RIVAL APPS WhatsApp changes tack on UPI AFTER UNSUCCESSFULLY TRYING to replicate the success of its messaging service in the payments space,WhatsApp Pay is changing tack. It is now banking on the person-to-merchant (P2M) route, instead of person-to-person (P2P), to drive the usage of its UPI (unified payments interface) service,analysts said. To achieve this, the company recently introduced an in-chat payment feature for consumers to pay businesses using any UPI app. Analysts, however, believe while this couldenableanincreaseintransactionsvia WhatsAppPay,thefeaturewouldbenefitits competitors like PhonePe and Google Pay more because of their huge penetration. The majorreason forWhatsApp Paynot being able to make a mark is the nature of its brand appeal.The platform is seenmore as a messaging app than a payments one. Since payment apps have a user interface designedaroundpayments,consumersare able to relate with them better when it comes to making UPI transactions. “IfeelprettyoptimisticaboutWhatsApp 14 Market share (%) 0.2 PhonePe Google Pay Transaction volume (billion) WhatsApp (` trillion) 5 3.8 Paytm Transaction value 5.4 THE UPI LANDSCAPE 7.75 JATIN GROVER & AJAY RAMANATHAN New Delhi/ Mumbai, October 2 35.2 1.8 46.6 0.016 1.5 0.019 *As on August 30; Source: NPCI Payasitisallaboutbuildinganexperience,” Sandhya Devanathan,head and vice presidentofMetaIndia,theparentfirmofWhatsApp,told FE in a recent interaction. WhatsApp first introduced its UPIbased payments service in India in 2020 as a pilot, which was later expanded to 100 million users.However,one of the reasons for WhatsApp Pay not getting much traction was that the company did not invest muchin popularisingits UPI solution even as its competitorswere offering cashbacks and other offers. (in %) AccordingtotheNationalPaymentsCorporation of India (NPCI),WhatsApp Pay's market share inAugustwas around around 0.2% in terms of volume of UPI transactions, compared to PhonePe's 46.6%, Google Pay's 35.2%,and Paytm's 14%. WhatsApp Pay processed 19.7 million UPI transactions worth `1,677.5 crore. This is significantly smaller than market leader PhonePe's 5 billion transactions worth `7.75 trillion. Continued on Page 2 BENGALURU
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