ECONOMY, P2 COMPANIES, P4 INTERNATIONAL, P7 RECIPROCAL APPROACH DAVOS PITCH GARNERS 51% VOTES India will retaliate against non-tariff barriers: Goyal Mahindra MD Anish Shah calls for EV level-playing field Easy win for Trump in Iowa; Ramaswamy opts out of race MUMBAI, WEDNESDAY, JANUARY 17, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXIV NO. 15, 22 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 SENSEX: 73,128.77 ▼ 199.17 NIFTY: 22,032.30 ▼ 65.15 NIKKEI 225: 35,619.18 ▼ 282.61 HANG SENG: 15,865.92 ▼ 350.41 `/$: 83.08 ▼ 0.19 `/€: 90.44 ▲ 0.29 BRENT: $78.89 ▲ $0.74 GOLD: `62,334 ▲ `156 IN THE NEWS CARMAKERS MAY POST ROBUST Q3 NUMBERS RECORD VOLUMES ACROSS categories could likely shore up the financial performance of automotive companies during the December quarter although increase in input costs became a challenging factor, reports Swaraj Baggonkar. ■ PAGE 4 FITCH AFFIRMS INDIA’S SOVEREIGN RATING AT 'BBB-' GLOBAL RATING AGENCY Fitch on Tuesday affirmed India’s sovereign credit rating at ‘BBB-‘ with a stable outlook citing robust economic growth prospects, moderation in core inflation and sound fiscal management. The Fitch investment rating for India was the lowest investment grade & similar to the ratings assigned by its peers S&P and Moody’s. ■ PAGE 2 LARGE CAP IT STOCKS RUN UP, STREET CAUTIOUS TOP TIER IT stocks have run up sharply over the past few trading sessions with investors seemingly more confident about their prospects, report Sameer Ranjan Bakshi and Kishor Kadam. There has been less enthusiasm seen for mid-rung IT firms. ■ PAGE 6 EXPLAINER Towards parity between deposit-taking HFCs and NBFCs ■ PAGE 9 Internet-free video stream on mobiles next year JATIN GROVER New Delhi, January 16 THE DIRECT-TO-MOBILE (D2M) technology,which would pave the way for streaming television and video content directly to mobile phones,without an internet connection, is expected to hit the devices of Indian smartphone usersbynextyear,accordingtotop government officials. Once implemented, users will not only be able to stream video contentwhetheritislivechannels, sports etc,without having a SIM card on their phones, but also be able to get emergency alerts,public safetymessages,social services, amongotherthings,withoutneeding to rely on the telecom networks.The technology will also be usefulinprovidingeducationcontenttoruralareasandbridgingthe digital divide in the country. The government’s immediate plan is to start a pilotproject of the D2M technology in 19 cities,with Tejas Networks-owned wireless communicationandsemiconductor solutions company Saankhya Labs. “Whenwe talk of the data consumption on the telecom networks,the video content is taking most of the data. If this can be offloaded to D2M or let's say, 2530% of it goes directly to the mobiles through the broadcasting network…it will reduce tremendous load on our 5G networks,4G networks and address the issue of (network) clogging which takes place,"Apurva Chandra,secretary, information and broadcasting (I&B)ministrysaidonthesidelines of an industryevent onTuesday. Continued on Page 10 $800-MILLION DEAL LIKELY Dr Reddy’s eyes UK’s mega brand Nicotinell is the world’s second-largest nicotine replacement product ACQUISITION SPREE say Nicotinell could be worth about $800 FE BUREAU New Delhi, January 16 DR REDDY'S LABORATORIES (DRL) is believed to be in talks to buy Nicotinell brand of nicotine gum, from Haleon, the world's biggest standalone consumer health business. Haleon was spun out of GlaxoSmithKline two years ago, according to a Sky News report. DRL has emerged as the frontrunner to acquire the brand, the report said, while describing the talks between the two sides as "ongoing" and cautioned that there was no guarantee that a deal would be reached. Nicotinell, which is sold in patch, gum and lozenge form, is said to be the secondlargest nicotine replacement therapy product globally. Its prospective sale comes as the UK government prepares to phase out the sale of cigarettes. It was unclear how much DRL might pay for the brand,but earlier media reports had said Nicotinell could be worth about $800 million in sale. Haleon declined to comment, while Dr Reddy's has been contacted for comment, Sky News said. If DRL does proceed with a deal,it would mark the latest in a string of acquisitions for the Indian and US-listed company. Its ■ Media reports million in sale ■ Nicotinell is sold in patch, gum and lozenge form and its prospective sale comes as the UK government prepares to phase out the sale of cigarettes ■ DRLhad earlier launched overthe-counter Nicotine Polacrilex Lozenges in the US market ■ Haleon is the world's biggest standalone consumer health business and was spun out of GlaxoSmithKline two years ago most recent purchase came earlier this month when it announced that it was buying MenoLabs, a portfolio of women's health and dietary supplements. A number of private equity firms, including Inflexion, had also explored offers for Nicotinell, although it was unclear which other suitors remained in contention should the DRL deal fall through. Continued on Page 10 HDFC Bank profit up 34% to `16.3K cr HDFC BANK onTuesdayreported a33.5% year-on-year jump in its net profit to `16,372 crore for the December quarter, drivenbyahigherinterestincomeandloan growth,reports Sachin Kumar.It beat the Bloomberg estimate which pegged the profit at `15,763 crore. The country’s largest private lender reported an increase of nearly 24% in the net interest income (NII), the difference between interest earned and paid.The NII cameinat`28,470crore,upfrom`22,990 crore in Q3FY23. Thebankearnedanetinterestmargin(NIM) of 3.6% forthe quarterunderreview,a contractionoverthe4.3%reportedinQ3FY23. However, the margin was protected when seen sequentially. ■ Page 6 Indian stocks valued at 157% premium over China peers At 22 times forward earnings estimates versus China’s 8.6x ABHISHEK VISHNOI January 16 INDIAN STOCKS ARE trading near their most expensive levels against battered Chinese peers, underscoring a growing divergenceininvestorpreferencebetweenthetwo emergingmarketleaders. The MSCI India Index trades at a 157% premiumovertheChinagaugeonvaluations based on forward earnings estimates,just 3 percentagepointsshortoftherecordreached inOctober2022,accordingtodatacompiled byBloomberg. India—longdubbedthe“next China” — has emerged as an investor favourite, powered by its fast economic growth, a growing middle class and rising manufacturing prowess.Its ascent came on OUTPERFORMER AMONG EMERGING MARKETS MSCI India Index forward PE/ MSCI China Index forward PE (in ratio) 2.6 Earnings outlook (in %) MSCI India Index - EPS MSCI China Index - EPS 15 2.4 2.2 10 2.0 5 1.8 0 1.6 -5 Dec 2021 Jan 2024 Source: Bloomberg thebackofasluggishChinesemarket,where problems ranging from rivalrywith the US and deflationary pressures led to a third annualdeclineintheMSCIChinagauge.The Indian measure has continued to advance followingafifthyearofgains. The contrasting performance demon- Jan 2023 Jan 2024 Normalised as of Jan 16, 2023 strates how investors favour India,with its improving profit prospects,despite China’s extraordinarily cheap valuations. It also shows Beijing’s efforts to stem the downtrendhavesofarfailedtomakeadifference. Continued on Page 10 New CAT III runway at IGI by Jan 26 RISHI RAJ New Delhi, January 16 GMR-LED DELHI INTERNATIONAL Airport (Dial) onTuesdayinformed the civil aviation ministrythatthefourthrunwayattheairport, which is CAT III-enabled and under refurbishment,willbefunctionalbyJanuary26. InalettertotheministryonTuesday,Dial said that the company is targeting to complete all activities by January 19 for inspectionbytheDirectorateGeneralofCivilAvia- INSIDE Showcause notice to IndiGo, Mumbai airport PAGE 22 Six metro airports to have war rooms: Scindia PAGE 22 tion(DGCA). Asreportedearlier,civilaviationminister JyotiradityaScindiahadonMondaydirected Dialtoexpeditetheoperationalisationofthe CATIII-enabledfourthrunway,inadditionto theexistingCATIII-enabledrunway,toavoid delaysduetodensefoginDelhi. Currently,there are four runways at the Delhi airport. Of these, two are CAT IIIenabled.Oneoftheseisoperational,whilethe other is under refurbishment.Post-January 26,therewould be two CATIII-enabled runways. Dial plans to turn one more runway CATIII-compliantbythesummerthisyear. Continued on Page 10