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XLV 62, 20 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: 80,716.55* ▲ 51.69 NIFTY: 24,613.00* ▲ 26.30 NIKKEI 225: 41097.69 ▼ 177.39 HANG SENG: 17739.41 ▲ 11.43 `/$: 83.59* ▲ 0.01 `/€: 91.10* ▲ 0.13 BRENT: $84.66 ▲ $0.93 GOLD: `73,320* ▲ `309 ASIAN PAINTS ON Wednesday reported a higher-thanexpected fall in its June quarter net profit amid subdued demand, reports Viveat Susan Pinto. Its consolidated net profit stood at `1,170 crore, a drop of nearly 25% year-on-year. ■ PAGE 5 ADB RETAINS INDIA FY25 GROWTH FORECASTAT 7% THE ASIAN DEVELOPMENT Bank (ADB) on Wednesday retained India’s GDP growth forecast for FY25 at 7%, reports fe Bureau. ■ PAGE 2 EXPLAINER Why Centre has cut off school funds to ■ PAGE 9 three states KIRAN MAZUMDAR-SHAW, EXECUTIVE CHAIRPERSON, BIOCON THERE MUST BE CAVEATS THAT EXEMPT HIGHLY SKILLED RECRUITMENT FROM THIS POLICY terming the private sectorjob quota“illegal” and “draconian” – something that could compel businesses to relocate and deter future investments. “If you want to promote Kannadigas for jobs, spend more money on higher education,” Pai said in a post on X. Continued on Page 7 Bajaj sets sights on Eicher turf SWARAJ BAGGONKAR Mumbai, July 17 BAJAJAUTOISuppingtheanteinthehighmargin premium motorcycle space now controlled by Royal Enfield with its niche range. StartingthisfesINSIDE tive season, the TVS to bring Pune-headquartered firm will roll Norton out multiple mod- in India els across three ■ PAGE 4 brands – Pulsar, KTM, Triumph – Eicher’s probably in the 300cc and above Guerrilla launched segment. Siddhartha Lal■ PAGE 5 promoted Royal Enfield has a commanding 86% share of thebikesegmentpoweredbyenginesranging between 250-500cc,according to data PREMIUM BATTLE ■ Honda,TVS Motor and Mahindra & Mahindra (throughJawa andYezdi) launched several motorcycles in this segment ■ BajajAutowill roll out multiple models across three brands – Pulsar, KTM,Triumph – probably in the 300cc and above segment ■ Royal Enfield has a commanding 86% share of the bike segment powered by engines ranging between 250cc and 500cc from the Society of Indian Automobile Manufacturers (SIAM).This near-monopoly position drives the 25%+ Ebitda margins for Eicher Motors, the company that owns Royal Enfield. RajivBajaj,managingdirector,BajajAuto acknowledges that Royal Enfield is a great brand in this space. “It is a company we ■ India’s premium bike (250cc and above) segment grew 19% to nearly 946,000 units in FY24 admire and respect.Butwe have nowcome to a position where we can very soon hope torecordalmosthalfthevolumesthatthey dointhisspace.”Bajajwasspeakingtoshareholdersatthecompany’s17thannualgeneral meeting onTuesday. Continued on Page 7 Byju's to appeal against BCCI’s insolvency plea ADITYA KALRA New Delhi, July 17 BYJU'SWILLCHALLENGE insolvencyproceedings initiated against it in an attempt toblocktheprocessthisweek,asthestartup oncevalued at $22 billion tries to tide over the crisis,two sources said onWednesday. The National Company Law Tribunal in Karnataka on Tuesday ordered insolvency proceedings against the company after a complaint by the Indian cricket board fornot paying `158 crore in dues.A court-appointed professional is currently running the company. Byju’s has suffered numerous setbacks in recent years,including boardroom exits and a tussle with investors who accused CEO Byju Raveendran of corporate governance lapses, job cuts and a collapse in its valuation to less than $2 billion.Byju's has denied anywrongdoing. Anappealwillbefiledinthecompanies law appeals tribunal this week,the sources said.Settlement talks are ongoingwith the Board of Control forCricket in India (BCCI) but the company wants to block the insolvencyprocess,said one of the sources. Byju'sdidnotimmediatelyrespondtoa request forcomment. Byju's,which operates in more than 21 countries,becamepopularduringthepandemic by offering online courses. It also offers in-person coaching classes. Thecompany'sassetswillremainfrozen during the insolvencyprocess. The company has previously said it wishes to"reach an amicable settlement" with BCCI despite the insolvency proceedings. -- REUTERS Growth, % y-o-y 21.6 42.5 31.7 FY24 FY23 FY22 FY21 3.4 0.4 22.2 37.4 Private PSUs 49.5 60.0 4.6 -26.0 FY20 28.8 20.3 21.2 5-year avg FY24 FY23 -3.9 -7.9 19.3 35.2 74.0 43.8 PSUs 110.2 M-cap* FY22 FY21 FY20 37.5 10.8 -12.3 19.9 45.1 70.7 48.1 49.1 22.4 17.6 5-year avg STATE-RUN FIRMS OUTPERFORMED their private peers in most financial parameters in the last five financial years,which included the pandemic and its aftermath, according to data reviewed by FE. This was even as these firms weighed in with a stronger capex pace to offset the sluggish private-sector investments. The combined market capitalisation (M-cap) of 80 listed central public sector enterprises (CPSEs) rose 2.56 times to `59.5 trillion in the five years to July 12, 2024,while theirprivate-sectorpeers (82 firms in the BSE 100 Index excluding PSUs FY24 TAKING A U-TURN, the Karnataka government put the controversial job quota Bill on hold following a huge backlash from industry. The state government is likely to conduct wider consultations and introduce a new draft at a later stage. The state government’s proposed Bill to reserve private sector jobs for Kannadigas sparked widespread outrage among industry leaders, who said it will hinder talent acquisition and discourage investment in the state. On Tuesday, the Karnataka Cabinet approved a Bill mandating 50% reservation for locals in manageINSIDE ment roles and 70% in non-management posiEditorial: A welcome tions within private companies.Additionally, U-turn it proposes a 100% ■ PAGE 8 quota for locals in“C&D” grade government jobs. In a late evening statement on X on Wednesday, Karnataka chief minister Siddaramaiah said,“The Bill intended to implement reservation for Kannadigas in private sector institutions, industries and enterprises is still in the preparation stage.Afinal decision will be taken after comprehensive discussion in the next cabinet meeting.” Earlier in the day,industrywas unrelenting in its criticism of the Bill.Mohandas Pai, formerchief financial officerof Infosys,criticised the Congress government in the state, THE BILL IS STILL IN THE PREPARATION STAGE. A FINAL DECISION WILL BE TAKEN AFTER COMPREHENSIVE DISCUSSION IN THE NEXT CABINET MEETING Dividend Private 8.5 8.0 SIDDARAMAIAH, CM, KARNATAKA Net profit Private FY23 ASIAN PAINTS Q1 PROFIT FALLS 25% AMID LOW DEMAND BISWAJIBAN SHARMA New Delhi, July 17 KISHOR KADAM & PRASANTA SAHU Mumbai/New Delhi, July 17 SHINING ON ALL FRONTS FY22 THE OVER-A-DECADEOLD SME platform may need to undergo significant changes in regulations to deal with manipulation and liquidity issues, according to experts, reports Vivek Kumar M. ■ PAGE 6 Combined M-cap of listed CPSEs up 2.6 times in 5 years FY21 STRICTER PROCESS, HIGHER TICKET SIZE LIKELY FOR SME IPOs Karnataka halts Bill reserving jobs for locals State-run firms outperform private peers on most fronts -10.2 14.7 19.2 NEWS MOVE FOLLOWS HUGE BACKLASH FY20 IN THE *Prv close 5-year avg CHENNAI/KOCHI, THURSDAY, JULY 18, 2024 *as of July 12 each year; Source: Capitaline; compares 82 BSE 100 private firms with 80 listed PSUs including banks and financial institutions CPSEs and firms listed in recentyears) saw a combined M-cap growth of 159% to `219.35 trillion. The CPSEs being reviewed also posted an average net profit growth of 37.5% between FY19 and FY24 compared with just 17.6% by their private counterparts. In FY24,these CPSEs’profit growth was a robust 45%,double the rate shown bythe private companies. Continued on Page 7 Power projects worth `44K cr delayed,may hit plan to boost supply ARUNIMA BHARADWAJ New Delhi, July 17 BEHIND SCHEDULE INDIA'S PLAN TO pre-empt a crisis of electricity shortage by expediting the capacity addition across the value chain is facing a hurdle, with as many as 32 transmission projects entailing investments of `44,254 crore beingalreadyorlikelyto be delayed. According to data from the ministry of statisticsandprogrammeimplementation, as of April 2024, of the 50 large projects worth`60,439crorebeingimplementedby thePowerGridCorporationofIndia(PGCIL), 18 with a total value of `29,300 crore are facing an average delay of 32 months. Anothereightprojectsawardedbythestaterunentitythroughthetariff-basedcompetitive bidding (TBCB) routewith a totalvalue of `8,755 crore are reporting an average delayof 12 months. Analysts feel the delay in transmission projects and the inefficiency in supply are likelytowiden the country’s powerdeficit by 2032. “Delaysinimplementationoftransmission projects would render new generation capacity ineffective.This would in turn hit the country's ability to meet peak power demand,particularlyinthecurrentscenario where climate change is leading to longer heatwaves,” said Indu Shekhar Chaturvedi, director general, Electric Power TransmissionAssociation. As perthe Central ElectricityAuthority's draftplan,thecountryrequiresinvestments there are 50 large projectsworth `60,439 crore being implemented by the Power Grid Corporation of India (PGCIL) ■ As ofApril 2024, ■ Out ofthese, 18with a totalvalue of `29,300 crore are facing an average delay of32 months The delay in projects and the inefficiency in supply are likely to widen the country’s power deficit by 2032 ■ ■ PGCIL holds over 80% of the country's transmission projects of `4.75 trillion by 2027 for developing its transmissioninfrastructure,includinglines, substations,andreactivecompensation.The plan includes 170 transmission schemes withatotalestimatedcostexceeding`3.13 trillion for inter-state transmission and around`1.61trillionforintra-statesystems. Continued on Page 7 CHENNAI/KOCHI