COMPANIES, P4 VERDICT, P6 INTERNATIONAL, P3 EARLY-MOVER ADVANTAGE LOK SABHA ELECTIONS CLOSE RACE No child’s play: FirstCry rivals have task cut out Phase 4 turnout tops 64%; highest polling in Bengal Trump leads Biden in 5 battleground states, poll shows KOLKATA, TUESDAY, MAY 14, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM VOL 33 NO. 164, 24 PAGES, `12.00 (NORTH EAST STATES & ANDAMAN `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 READ TO LEAD SENSEX: 72,776.13 ▲ 111.66 NIFTY: 22,104.05 ▲ 48.85 NIKKEI 225: 38,179.46 ▼ 49.65 HANG SENG: 19,115.06 ▲ 151.38 `/$: 83.53 ▼ 0.03 `/€: 90.06 ▼ 0.04 BRENT: $83.52 ▲ $0.73 GOLD: `71,995 ▼ `891 IN THE NEWS SENIOR BJP LEADER SUSHIL KUMAR MODI PASSES AWAY FORMER BIHAR DEPUTY CHIEF minister and senior BJP leader Sushil Kumar Modi, who was also a former GST Council member, passed away on Monday at the age of 72. He was battling cancer. INDIA INKS 10-YEAR CHABAHAR PORT DEALWITH IRAN INDIA ON MONDAY signed a 10-year contract to operate the strategic Iranian port of Chabahar that will help it expand trade with Central Asia. ■ PAGE 2 AIRTEL, GOOGLE TIE UPTO OFFER CLOUD, GENAI SOLUTIONS BHARTI AIRTELAND Google on Monday announced a partnership to offer cloud and generative artificial intelligence (GenAI) solutions to businesses in the country. ■ PAGE 4 EXPLAINER Taxation of digital transactions: Why plugging loopholes isn’t easy ■ P9 SHARP DROP IN FUEL, LIGHT PRICES CPI inflation at 11-month low in April VIVEK KUMAR M Mumbai, May 13 PRIYANSH VERMA New Delhi, May 13 RETAIL INFLATION FELL to an 11-month low of 4.83% year-onyear in April from 4.85% in March, mainly due to a higher deflation in fuel and light and lower core inflation, data released on Monday by the statistics ministry showed. On a sequential basis, the CPI index rose 0.5% in April, the highest rate in six months.The increase insequentialpricepressureswasled by higher food prices. This would be the last inflation datapointaheadoftheReserveBank of India’s monetary policy committeemeetinginearlyJune.Whileheadlineinflation,basedontheConsumer Price Index (CPI),is heading closerto the4%inflationtarget,expertspoint out food inflation remains high. Moreover, close to 25% of the total commodities in the CPI basket continue to see inflationof above 6%. Food inflation, represented by the Consumer Food Price Index (CFPI), rose to a five-month high of 8.7% y-o-y in April. In March, the CFPI inflationwas 8.52%y-o-y.RBI has projected CPI inflation to average 4.5% in FY25 and 4.9% in Q1 of the current fiscal.However,most economists estimate headline 8 7.44 7 CPI 6 5 4 3 (% change, y-o-y) Jul 2023 5 4.83 4.25 CPI Core May 2023 NFO launches set to hit a new record this year 3.2 Apr 2024 Source: MoSPI inflationinQ1wouldaverageabove 5% against the backdrop of elevated food prices. Aditi Nayar, chief economist at Icra, said inflation in the food and beverages group (46% of the CPI) inched up to 7.9% in April 2024 from 7.7% in March 2024. Continued on Page 18 MUTUAL FUND HOUSES launched 10-12equitynewfundoffers(NFOs) every month in the last three years. Thatthefloodshowsnosignsofsubsidingisevidentfromthenumberin 2024.Sixty-sevennewschemeshave already been launched so far this year, indicating an increase in momentum. Almost half of these schemes are activelymanaged. For the first time in three decades, that is, ever since the private sector mutual funds started operations in November 1993, the number of equity and hybrid NFOs crossed the 100-mark every year between 2021 and 2023,according to data fromValue Research. “The rise in the number of NFO launches overthe pastyears reflects thematurityandgrowthofthemarket. If you see that the market is expanding in terms of breadth of MUCH MORE ON OFFER Equity/hybrid NFOs (no.s) Passive/ETFs Active 101 45 118 112 79 44 67 33 56 2021 39 2022* 68 34 2023 2024 *Sebi banned NFOs for 3 months in 2022 Source: Value Research investors,itnaturallybecomesmore feasible for the industry to offer more choices,” said Ashwin Patni, head of product and alternatives, Axis Mutual Fund. What has also helped is the introduction of new indices by both the BSEandtheNationalStockExchange, ■ Rise in NFO numbers signals market maturity and growth, say experts ■ Introduction of new indices by BSE, NSE also served as a booster Warburg to buy Shriram Housing Fin for `4,630 cr AJAY RAMANATHAN Mumbai, May 13 ■ No. of equity and hybrid NFOs crossed the 100-mark every year between 2021 and 2023 allowingfundhousestocomeupwith exchange-traded funds.In addition, themeslikeinfrastructurewhichhad completely lost lustre after dismal performancesalmostadecadeagoare beginningtofindmoretakers. Continued on Page 18 AI-Vistara merger: 7K staff to be integrated by June Zomato gives up payment aggregator licence AROUND 7,000 EMPLOYEES ofAir India and Vistara have been assessed and their fitmentwill be complete in June as part of the merger process. Currently, the two together have over 23,500 employees,so upskilling, redeployment and placing in otherTata Group companies may also be considered, sources said. The 7,000-employeesassessedforfitment,donotinclude pilots,engineers,safetystaff,anddoctorswhowillcontinue to be part of the merged entity. ■ Page 4 ZOMATO HAS DECIDED to voluntarily surrender its online payment aggregator and prepaid payment instruments licences to RBI.For this,it has recorded an impairmentlossof`39croreforinvestmentinitsfintech arm Zomato Payment. The prepaid payment instrumentlicenceallowedZomatotoofferwalletand cashcardsservicestocustomers,whiletheonlinepaymentaggregatorlicenceallowedittohavehighercontrol overpayments on its platform. ■ Page 4 INTHE LARGESTdealinthe affordable housing finance space, the board of Shriram Finance on Mondayapproved the sale of its housing finance subsidiary Shriram Housing Finance (SHFL) toWarburg Pincus for `4,630 crore. Warburg Pincus will acquire the stake through its affiliate Mango Crest Investment. This is also the US-based private equity firm’s biggest deal in India.The proposed transaction isvalued forequityand convertible instruments of the housing finance company. Shriram Finance will receive `3,909 crore, along with certain additionalamountsbasedonoccurrence of identified events. Theproposedtransactionissubject to receipt of necessary regulatory approvals and fulfilment of other customary conditions. According to the company’s estimates, the transaction is expected to be completed byFebruary 7,2025. Shriram Finance holds a controllingstakeinthehousingfinance company,while private equity firm Valiant Partners LP (Valiant), Mauritius, holds the remaining ownership. As part of this transaction, Valiant will also completely divest its equity stake to Warburg Pincus. Continued on Page 18 ● HOARDING COLLAPSE KILLS 8 IN MUMBAI At least eight people were killed and over 60 injured on Monday when a 100-foot tall illegal billboard fell on a petrol pump in Mumbai’s Ghatkopar area, as unseasonal rains and dust storms lashed the city REUTERS Shah tips: Buy before June 4 VIX, which is also known as the fear index, has left stock market traders confused, and some have linked it to HOME MINISTER AMIT SHAH on the low turnout in the first few phases Monday sought to soothe investor of the elections. Asked about rumours that the nerves bysaying marketswill shoot up after the election results. He also share market crashes indicated a poor advised investors to “start buying performance by the BJP, Shah pointedout themarkets before June 4”, when have made bigger corelection results will be AMIT SHAH, rections several times announced. HOME MINISTER prior to this. In an interview to Meanwhile, foreign NDTV, Shah was, howA STABLE MODI minister S Jaishankar ever, quick to add that GOVT WILL BE also expressed confithe stock markets IN POWER...THE dence that markets shouldn’t be linked SHARE MARKET would stabilise afterthe with elections, but a poll results.Speaking at stablegovernmentdoes WILL CERTAINLY an NSE seminar,he said help it perform better, SHOOT UP peoplearefreetodebate implying that the on the exact numbers Bharatiya Janata Party butheissurethemarket (BJP) is supremely convolatilitywillgodownas fident of getting a commore rounds of elecfortable majority. tions take place. Experts have attribJaishankar also said uted the latest correcforeign investment tions to heavy offloadwill pick up, “but ing by foreign portfolio right now, investors investors and rising are waiting for the US bond yields. The June 4 outcome behaviour of Dalal and then they will Street’s volatility take a call.” indicator, India FE BUREAU New Delhi, May 13 Sensex swings as volatility continues POLLJITTERS NSE India VIX Index 20.60 11.51% May 13 (close) 13th consecutive session of rise in the volatility index ■ 18.47 May 10 (close) THE STOCK MARKETS continued to see high volatility on Monday, with the 30-share Sensex swinging1,000pointsduringintra-daytrade.Both Nifty and Sensex closed marginally up at 0.22% and 0.15%,respectively. TheIndiaVIX,themeasureofvolatilityexpected in the next 30 days, hit 21.This was the 13th consecutive session of rise in the volatility index amid nervousnessamonginvestorsaboutthenumberof seats that the incumbent government would garner and incessant sales by foreign institutional investors(FIIs).SinceMay2,FIIshavesoldsharesto the tune of `25,000 crore. ■ PAGE 10 Kolkata