POLITICS | PAGE 16 COMPANIES | PAGE 4 PM inaugurates 6.4-km Z-Morh tunnel in J&K INTERNATIONAL | PAGE 10 Telcos may further hike tariffs this year Tesla overtakesAudi in global sales for first time KOLKATA, TUESDAY, JANUARY 14, 2025 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 34 NO. 63, 24 PAGES, `12 (NORTH EAST STATES `12.00 & ANDAMAN `20.00) 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: 76,330.01 ▼ 1,048.90 NIFTY: 23,085.95 ▼ 345.55 NIKKEI 225: 39,190.40 ▼ 414.69 HANG SENG: 18,874.14 ▼ 190.15 `/$: 86.58 ▼ 0.61 `/€: 88.26 ▲ 0.29 BRENT: $80.38 ▲ $0.62 GOLD: `77,971 ▲ `187 No RBI clearance needed for Zepto’s reverse flip to India QUICK COMMERCE UNICORN Zepto will no longer require a no-objection certificate (NOC) from the Reserve Bank of India (RBI) to become an Indian company by merging its domestic and Singapore entities. This is a crucial step for its IPO planned later this year. Govt’s direct tax collections rise 15.9% to `16.9L cr THE CENTRE’S DIRECT tax collection, after refunds, grew 15.9% on year to `16.9 lakh crore till January 12 in the current financial year, data released by the finance ministry on Monday showed. ■ PAGE 2 Pixxel to launch India's first private satellite network PIXXEL IS SET to launch three of its six hyperspectral imaging satellites aboard a SpaceX rocket from California on Tuesday, the first such network in the country's nascent private space sector, Pixxel's chief told Reuters. ■ PAGE 20 UP looks to privatise two power discoms 6.85 77,378 6.77 8 bps Jan 10 12.7 ` lakh cr Jan 13 (close) Continued on Page 16 all gains since the post-exit poll rally on June 3 ■ BSE MidCap falls 15% from its peak in late Sept 2024 ■ BSE SmallCap falls 12.4% from its peak in mid-Dec 2024 1.36% 76,330 (Inverted scale) THE RUPEE TANKED 61 paise, or 0.71%, against the dollar on Monday—itssteepestdropinnearly two years—to close at a fresh low of 86.58, after better-than-expected US jobs data fuelled concerns about fewer interest rate cuts by the FederalReservethisyear.Surging crude oil prices also added to the woes. Almost all Asian currencies plunged against the greenback as thedollarindexhitanovertwo-year high of 109.98. The rupee, which touched an intra-day low of 86.60 on Monday, had fallen 90 paise, or 1.10%, on February 6,2023. “The rupee is discovering competitive depreciation as the higher dollar yield strengthens the dollar against all peer currencies. Lack of interventions along with the onesided position due to subdued volatilityofthepost-Covideraiscon- tributing to the sharp decline. In addition, heightened uncertainty overtheTrumpadministration’spolicymakingisalsoresultinginaflight to safety,” said Nilesh Shah, managing director,Kotak Mutual Fund. Kunal Sodhani, vice-president treasury, Shinhan Bank, said: “The strong US employment metrics reduce the need for imminent easing, while fresh developments in growth, inflation and fiscal policy remain key variables. Markets are increasingly pricing in no additional cuts in the near term, reinforcing the dollar strength.” Sodhani further said that elevated treasury yields, geopolitical risks, and concerns over US President-elect Donald Trump’s tariffpolicieshavecontinuedtobolster the dollar. Continued on Page 16 INDIAN EQUITIES TANKED on Monday, with investors unnerved by the damage that a plunging rupee and rising crude oil prices could do to an economy that has been losing momentum. The Sensex fell 1.36%, or 1,048.90 points, to close at 76,330.01, while the broaderNiftylost 1.47%,or345.55 points,to end the day at 23,086. Will we ever see 85 again? Shell out more to study, go abroad Rupee may hit 87 Shadow over in near term: Poll RBI rate cuts THE RUPEE HAD slipped from a wobbly 83+ before Trump’s election through 84 and accelerated through 85, and finally, fell screaming through 86 to the dollar.The Trump dollar,withtheDXYshootingfor110 andbeyond,midwifedthisprocess,as didthenewRBIgovernor...Theburning question is where do we go from here? Will we ever see 85 again? We will,writes JamalMecklai. ■ PAGE 6 WITH THE RUPEE sliding to a lifetime low against the dollar, students studying overseas, especially in a university in the US, individuals planning to travel abroad, or those planning to buy imported items would be affected, reports Saikat Neogi. However, non-resident Indians repatriating money home will gain from the depreciating rupee. ■ PAGE 6 THERUPEEISlikelytohit87against the dollar in the near term, said a majorityofexpertsinanFEpoll,with almostone-thirdpredictingitwillbe closerto the 88-mark byMarch end, asRBImaynotintervenetooaggressively,reportsAnuprekshaJain.Earlier,RBIwasaggressivelyintervening in the currency market,but this drained the liquidity in the system and led to a dropinFXreserves. ■ PAGE 6 1.47% Nifty 23,400 23,250 23,100 22,950 22,800 1.42% Bank Nifty 48,800 48,400 23,431 Jan 10 48,000 23,086 Jan 13 FE BUREAU Mumbai, January 13 47,600 47,200 48,734 48,041 Jan 10 Jan 13 Relentless selling by foreign portfolio investors (FPIs),who have offloaded stocks worth $2.7 billion in Januaryso far,has furtherdampened the sentiment. Tepid consumer demand,unexciting corporate performances,and expensive valuations have prompted the Street to pare earnings growth estimates.The chances of a shallowrate cut cycle in the face of strong dollar yields have also added to the gloom. ■ PAGE 7 A SIGNIFICANT DEPRECIATION in therupeecoulddeferratecutsbyRBI, as it fuels inflation by making imports more expensive, report AnuprekshaJain&SachinKumar. This will create additional obstacles for RBI in its efforts to control rising prices,say experts.According to RBI estimates, a 5% depreciation could leadtoa35bpsriseinheadlineinflation overseveral quarters. ■ PAGE 7 ● PILGRIMS' PROGRESSATPRAYAG Devotees take a dip at Sangam on the first day of Maha Kumbh Mela 2025, in Prayagraj, Uttar Pradesh, on Monday, with more than 16.5 million people taking the first 'snan' or holy bath in their quest for 'moksha'. An estimated 400 million people, many from abroad, are expected to visit Prayagraj over the next 45 days FE BUREAU New Delhi, January 13 IN WHAT SIGNALS the Union government’s resolve to revive lossmaking electricity distribution entities (discoms),the BJP-led Uttar Pradesh government has started the process to privatise two of its five discoms. Private companies are invited to either form partnerships with or take over state-owned Dakshinanchal Vidyut Vitran Nigam (DVVNL) and Purvanchal Vidyut Vitran Nigam(PUVVNL),Reutersreported, citing a state government tender dated January 12. The move comes amid higher powerlosses and a lack of sufficient transmission infrastructure in the state. Privatisation is seen to be desirable also because states that have private discoms in Maharashtra, Gujarat and NCT of Delhi have performed relatively better in reducing distribution losses. Evenaftertherecentreductionin the aggregate technical & commercial (AT&C) losses of the country’s distribution companies,most stateowneddiscomsremainloss-making, as per analysts.This is primarily due todelaysinrealisingpaymentsfrom state government departments for power supply which constrain the discoms’finances. DVVNL and PuVVNL are each responsible for power distribution in 21 districts of Uttar Pradesh. DVVNL’s AT&C losses stood at 24.04% in 2022-23, while that of PuVVNLstoodat27.27%,asperlatest data available from PFC. In FY23, DVVNL reported a loss of `5,074 crore against a loss of `2,959 crore in FY22. ■ Markets give up Jan 13 (close) 86.58 SACHIN KUMAR Mumbai, January 13 $5 trillion of market cap wiped out Sensex Jan 13 capitalisation drops to below PTI ■ PAGE 20 ● Cloud over Feb rate cut,given threat of imported inflation PRICE POINTS (% change, y-o-y) CPI Consumer Food Price index CPI Core PRIYANSH VERMA New Delhi, January 13 RETAIL INFLATION, BASED on the Consumer Price Index (CPI), eased to a four-month low of 5.22% in December, mainly on the back of a decline in prices of vegetables and pulses, official data released on Monday showed. However, a sharp fall in the exchange value of rupee, and a recent rise in prices of crude oil have »INSIDE« cast a cloud over expectations of FOOD a rate cut by INFLATION the Reserve Bank DECLINES TO 8.34% of India (RBI) in February. PAGE 2 Factoring in the December reading, CPI inflation in Q3FY25 averaged 5.6%, 10 basis points (bps) lower than the RBI’s estimate for the quarter. For the full year FY25, however, economists expect retail inflation to average 4.6%, in line with the RBI forecast, as inflation could be higher in the near term due to a “sudden increase”in oil prices and a rise in imported inflationary pressures due to constant depreciation of the rupee. “While the RBI’s projection forinflation forQ4 is 4.5%,the current depreciation in the rupee will 10 8.7 8.4 4 4.8 5.2 2 3.1 8 6 3.6 6 0 2024 Dec 0.71% % 6.88 6.84 6.80 6.76 6.72 Jan 10 (close) ■ Market Oct 85.97 7 (%) NOSEDIVE Nearly Nov Jan 10 (close) 10-y 10-yr govt bond yield Sep TAKING A PLUNGE Mondaycrash course forbenchmark indices Aug Rupee sinks 61 paise; sharpest drop in 2yrs Jul HCLTECH ON MONDAY reported a sequential growth in its revenue, net profit, and Ebitda for the December quarter, but fell short of Bloomberg estimates across key metrics, reports Padmini Dhruvaraj. Revenue grew 3.6% q-o-q to `29,890 crore, while net profit rose 8.4% to `4,591 crore. ■ PAGE 4 December retail inflation cools to four-month low Jun HCLTech misses estimates; profit up 8.4%, revenue 3.6% May THEBIGFALL IN THE NEWS Source: Mospi be an additional concern as this can lead to higher imported inflation, especially on oil products,” said Madan Sabnavis, chief economist, Bank of Baroda. The rupee closed at 86.58 a dollar on Monday, down 0.71% from its previous close of 85.97 a dollar. In the past three months,the rupee has depreciated against the dollar by 2.9%, in the backdrop of strengthening of the US currency. Continued on Page 16 IDBI Bank sale may spill overto FY26 PRASANTA SAHU New Delhi, January 13 TAKING TIME THE FINANCIAL BIDS for the strategic sale of IDBI Bank will likely be received by March, but the conclusion of the transaction may extend to the next financial year, sources told FE. In December, the Reserve Bank of India (RBI) issued the ‘fit and proper’ certificate to the shortlisted bidders. Since investment bankers were on an extended leave for Christmas and New Year, the due diligence process is only beginning now and will take some time, the sources said. The bidders would get access to the banks’ data room for assessment and clarifying doubts. The government had received multiple expressions of interest (EOIs) on January 7, 2023, for a 60.72% stake in the bank, including 30.48% (approximately `21,690 crore at current prices) from the government and 30.24% from promoter Life Insurance Corporation (LIC), along with the transfer of management control in the bank. The bidders include Fairfax India Holdings (promoter of CSB Bank), Emirates NBD, and Kotak Mahindra Bank, according to reports. The next phase is finalising the draft share purchase agreement (SPA) in consultation with the bidders, a senior official said. 110 IDBI Bank 95 80 84.60 66.18 65 50 Jul 01, 2024 ■ RBI's ‘fit and proper’ certificate of bidders came in December Jan 13, 2025 ■ Due diligence by bidders to start now ■ Financial bid expected by end-March The bidders would go through the draft SPA in which the government and promoter LIC would work towards satisfying a set of conditions, including various regulatory approvals. In the event of a bank winning the bid to acquire IDBI Bank, the promoters would be given reasonable time to merge both entities to comply with the RBI’s norms that a promoter/promoters could have one bank licence only. Continued on Page 16 Global iPhone sales fall 5% in holiday quarter; Samsung also gives up share Chinese rivals gain ground asApple playsAI catch-up VLAD SAVOV January 13 APPLE SOLD 5% fewer iPhones globally and lost ground to Chinese rivals in the final quarter of last year, reflecting the absence of Apple Intelligence in its largest market outside the US. The iPhone slipped a point to 18% worldwide market share in 2024, according to Counterpoint Research data.Archrival Samsung Electronics also gave up share to faster-growing Android device makers from China, led by Xiaomi and Vivo. Apple marked a 2% sales LOSING OUT ■ iPhones slipped a point to 18% worldwide market share in 2024, as per Counterpoint Research data ■ Apple’s AI additions are not yet ■ Apple marked a 2% sales drop for full year, while the wider market grew 4% globally ■ Apple started rolling out AI enhancements in stages after iPhone 16 launch in Sept decline for the full year,according to the research, at a time that the wider market grew 4% globally. Cupertino, California-based Apple has been playing catch-up on artificial intelligence (AI), with its suite of AI enhancements rolling out in stages following the available in any form in China ■ Rival Samsung also gave up share to Chinese Android device makers led by Xiaomi & Vivo launch of the iPhone 16 in September. Those AI additions are not yet available in any form in China,as the company is still working to secure local partners who can help provide features like AI writing assistance and image generation. Analysts last quarter also began warning that some investors harbored overly optimistic expectations of AI features. “Apple’s iPhone 16 series was met with a mixed response, partly due to a lack of availability of Apple Intelligence at launch,” Counterpoint director Tarun Pathak said.“However, Apple continued to grow strongly in its non-core markets like Latin America.” While it sold fewer units in China,Apple saw an increased proportion coming from its pricier Pro and Pro Max models, which accounted for more than half of all sales in the country. Lenovo Group’s Motorola and Shenzhen-based Huawei Technologies and Honor Device were the fastest-growing brands in the top 10, the researchers found. China’s smartphone makers are all developing their own in-house AI tools and agents, including services that can perform tasks on a user’s behalf. —BLOOMBERG Kolkata