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 MUMBAI, TUESDAY, MAY 14, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXIV NO. 114, 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: 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 3.2 CPI Core May 2023 NFO launches set to hit a new record this year 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 Shah tips: Buy before June 4 Sensex swings as volatility continues POLLJITTERS NSE India VIX Index 20.60 11.51% 101 45 56 2021 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 ■ Rise in NFO 118 112 79 39 2022* 44 68 2023 67 33 34 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, 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 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 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. nerves bysaying marketswill shoot up Asked about rumours that the after the election results. He also share market crashes indicated a poor advised investors to “start buying performance by the BJP, Shah before June 4”, when pointedout themarkets election results will be have made bigger corAMIT SHAH, announced. rections several times HOME MINISTER In an interview to prior to this. NDTV, Shah was, howMeanwhile, foreign A STABLE MODI ever, quick to add that minister S Jaishankar GOVT WILL BE the stock markets also expressed confiIN POWER...THE shouldn’t be linked dence that markets SHARE MARKET with elections, but a would stabilise afterthe stablegovernmentdoes poll results.Speaking at WILL CERTAINLY help it perform better, an NSE seminar,he said SHOOT UP implying that the peoplearefreetodebate Bharatiya Janata Party on the exact numbers (BJP) is supremely conbutheissurethemarket fident of getting a comvolatilitywillgodownas fortable majority. more rounds of elecExperts have attribtions take place. uted the latest correcJaishankar also said tions to heavy offloadforeign investment ing by foreign portfolio will pick up, “but investors and rising right now, investors US bond yields. The are waiting for the behaviour of Dalal June 4 outcome Street’s volatility and then theywill indicator, India take a call.” Equity/hybrid NFOs (no.s) Passive/ETFs Active AI-Vistara merger: 7K staff to be integrated by June ● HOARDING COLLAPSE KILLS 8 IN MUMBAI FE BUREAU New Delhi, May 13 MUCH MORE ON OFFER AJAY RAMANATHAN Mumbai, May 13 numbers signals market maturity and growth, say experts ■ Introduc- tion of new indices by BSE, NSE also served as a booster Warburg to buy Shriram Housing Fin for `4,630 cr ■ 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 Zomato gives up payment aggregator licence 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 LARGESTdeal in the 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