ECONOMY | PAGE 2 INTERNATIONAL | PAGE 7 COMPANIES | PAGE 4 FM for reforms in multilateral banks, fairer credit rating JSWtargets No. 3 spot in paints afterAkzo buy Trump threatensTesla, SpaceX support; Musk says 'cut it all' HYDERABAD, WEDNESDAY, JULY 2, 2025 VOL. NO. XXII 52, 34 PAGES, `12 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD 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: 83,697.31 ▲ 90.85 NIFTY: 25,541.80 ▲ 24.75 NIKKEI 225: 39,986.33 ▼ 501.06 HANG SENG: 24,072.28 ▼ 211.87 `/$: 85.54 ▲ 0.22 `/€: 101.05 ▼ 0.52 BRENT: $66.98 ▲ $0.24 GOLD: `96,900 ▲ `1,224 FE S P EC I A L S Sweet success How Pulse Candy gave the big spenders in the `4,000-crore market a run for their money ■ BRANDWAGON, P9 How electricity futures will aid price discovery Electricity futures can play a crucial role in hedging against price risk ■ EXPLAINER, P9 manufacturing sector ■ Funds to be in form of ■ Aims to incentivise 50-year interest-free loan to Anusandhan National Research Foundation creation of over 35 mn jobs in 2 years aims to incentivise the creation of over 35 million jobs over a two-year period. Out of these, 19.2 million beneficiaries will be first-time employees. These benefits will be applicable on jobs created by organisations betweenAugust 2025 and July 2027. Another `1-lakh-crore scheme was approved to support research & development and innovation (RDI) in sunrise domains and finance technology projects, with an overarching objective of achieving self-reliance. The funds will be allocated from Continued on Page 18 India trade deal CCI to probeAsian Paints ‘veryclose’, says on Birla Opus complaint Primafaciecaseof PAINT WARS White House abuseofdominance, ● MUKESH JAGOTA New Delhi, July 1 THE MUCH-EXPECTED IndiaUS bilateral trade agreement is “very close”, US treasury secretaryScott Bessent said onTuesday, even as a visiting Indian team of negotiators remained engagedwith theirUS counterparts in Washington for the sixth straight day to hammer out an interim deal. WhiteHousepresssecretary Karoline Leavitt also said the agreementisbeingfinalisedand “you will hear from the President and his trade team very soonwhen it comesto India”. Meanwhile, external affairs minister S Jaishankar said at an event in New York on Monday that the two nations are“in the middle—hopefully more than the middle—of a very intricate trade negotiation”. TheIndianteamledbychief negotiator special secretary Rajesh Agrawal had gone to the US for the final lap of negotiations that were to last two days. Officials here said the team might stay in Washington even longerif required. A deal will help India avoid extra levy imposed by the Trump administration rising sharply next week, while an additional baseline tariff of 10% that was imposed by the Trump administration for almostallofitstradingpartners could still stayforIndia."We are very close with India," Bessent EXTERNAL AFFAIRS MINISTER Weareinthemiddle —morethanthe middle—ofatrade negotiation.Wehave tofindameeting ground.Watch thisspace overthe nextfew days Birla Opus had filed an interlocutory application with CCI seeking urgent intervention against Asian Paints MANU KAUSHIK New Delhi, July 1 THE COMPETITION COMPETITION of India (CCI) has ordered an investigation againstAsianPaintsforalleged abuse of its dominant position in the decorative paints market, following a complaint by Birla Opus Paints, the paints division of Aditya Birla Group. The competitionwatchdog said it prima facie foundviolations of the various sections of the Competition Act by Asian Paints and ordered the director-general (investi- ■ It said Asian Paints is reducing credit limit for dealers engaging with Birla Opus ■ Asian Paints told CCI “no other paint firm” has been able to scale up like Birla Opus gation) to probe the matter in detail. “Asian Paints, by way of restraining its dealers from dealing with its competitors like Birla Opus Paints by enforcing exclusivity upon such dealers is imposing unfair conditions upon them, which is found to be in the nature of exploitative conduct,”the CCI said. Continued on Page 18 2022 2021 10.7 2023 11.3 2024 4.8 Source: Tracxn H1 2025 that during 2020-2022, investorswere in risk-on mode as the ecosystem was flush with liquidity and interest rates at historic lows. “That reflected in both deal velocity and check sizes,” Ashar said, pointing out that today’s benchmarks are where they should always have been”. Industry watchers vouch for the fact that everyone’s demanding better performance. Many, like Kedia, are unwilling to back businesses that don’t have a revenue track record. “Earlier, strong narratives and pedigree could get founders through the door, but that’s less likely now,”he said. Continued on Page 18 Top carmakers see sales skid in June »INSIDE« FARM, ANIMAL HUSBANDRY MINISTRIES WARN AGAINST DUTY RELIEFS ■ PAGE 2 told Fox News in response to a question about progress on the trade negotiations. India is pushing for greater access to labour-intensive exports and ensuring that any deal on the agriculture sector hassufficientsafeguardsforthe farmers in India. However, any tariffcutsforIndiabytheUScan be implemented only after the US Congress approval, which maytake more time. Continued on Page 18 CARMAKERS WERE FORCED to cut back supplies to their dealer partners in June due to poor retail demand, resulting in a 7% drop in despatch volumes compared to the same month last year, reports Swaraj Baggonkar. Three of the top four brands saw their sales drop yearon-year. Maruti Suzuki, the country’s biggest carmaker, recorded its worst-ever domestic monthly sales in over 18 months. Among two-wheelers, TVS Motor Company's sales rose 10% y-o-y, while Bajaj Auto witnessed a 16% drop. Company Jun-2024 Jun-2025 Maruti Suzuki JSW MG Motor 18 43,524 37,083 3 21,300 20,625 Jun-2025 10 -3 4,817 5,829 21 Source: Companies ompanies Domestic sales only ■ REPORT ON PAGE 4 7 -15 25,752 26,453 Toyota Kirloskar Jun-2024 -12 40,022 47,306 Tata Motors Kia India -13 50,103 44,024 Hyundai Motor India Mahindra & Mahindra % Change 137,160 118,906 -16 % Change 16 4 73,934 day; Indian team may stay longer ■ In Dec last year, saysregulator S JAISHANKAR, ening dealers against stocking the paints of the competitors 25.4 37.2 71,086 ● Talks enter sixth ■ It alleged Asian Paints is threat- Total funding ($ billion) Suzuki Motorcycle APOLLO HOSPITALS’ PLAN to spin off its pharmacy distribution and digital health businesses into a separate listed entity is expected to unlock value in its high-growth segments, reports Narayanan V. ■ PAGE 4 ■ Special focus on THE MESSAGE FROM India’s venture capital ecosystem over the last couple of years has been clear: inadequate scale and frothyvaluations are no longer acceptable. The bar is getting higher now. Even two years ago, a consumer-tech startup with `8-10 crore in annual recurring revenues (ARR) could raise a Series A round of `30-50 crore. Today, the same company would need to show more than double of that in ARR just to get investors to the table. It’s not just traction in revenues. Investors are now raising questions about productmarket fit, profitability and cash-flow visibility. They are also evaluating capital efficiency, customer stickiness before theywrite out a cheque. In the first half of 2025, Indian tech startups saw a 25% decline in funding yearon-year at $4.8 billion. In 2024, they had raised $11.3 billion,slightlyhigherthan the $10.7 billion raised in 2023. Prior to that, tech startups bagged $25.4 billion in 2022 and $37.2 billion in 2021. “We’re now a lot more painstaking and structured in howwe assess product market fit,” Ankit Kedia, founder and lead investor at Capital-A, an early-stageVC,told FE.“It’s not just about a few customers or early adopters, we look for depth: are they coming back, are they paying, and are they talking about it positively? Referenceability matters as much as retention.” Avik Ashar, principal at Riverwalk Holdings, observes 76,957 Apollo demerger may unlock value, streamline capital from Union Budget over 6 years; private sector to supplement support MONEY MATTERS 66,117 PHARMA MAJOR LUPIN on Tuesday said it would spin off its consumer healthcare business, LupinLife Consumer Healthcare, into a wholly owned subsidiary. ■ PAGE 4 ■ Funds to be allocated AYANTI BERA Bengaluru, July 1 Royal Enfield Lupin to spin off consumer healthcare biz Employment-linked incentive scheme to support jobs generation and improve employability across sectors Bajaj 177,207 Auto 149,317 THE GOVERNMENT HAS for the first time allowed private motorcycles to ply bike taxi services on ride-hailing aggregator platforms across India, with the road transport and highways ministry notifying the revised Motor Vehicle Aggregator Guidelines 2025, reports Anees Hussain. ■ PAGE 3 to support research & development and innovation in sunrise domains and fintech projects ELI scheme 281,012 Now, private vehicles also to ply as bike taxis RDI scheme 255,734 MANUFACTURING SECTOR GROWTH rose to a 14-month high of 58.4 in June, marked by improved trends in output and new orders, alongside a record upturn in employment, a monthly survey said on Tuesday. ■ PAGE 2 TWO MAJOR SCHEMES aimed at giving an impetus to the economy's growth potential and its employment intensitywere approved bythe Cabinet on Tuesday. An employment-linked incentive (ELI) scheme worth `99,446 crore was cleared to support jobs generation and improve employability across different sectors,with a special focus on the manufacturing sector.Divided into two parts, the ELI schemewill benefit the professionals planning to enter the workforce in addition to the existing employees. Through the scheme, first announced by finance ministerNirmala Sitharaman in the FY25 Budget,the government the Union Budget over six years, while the private sector will supplement the effort, a senior official told FE. The RDI fundswill be in the form of 50-year interest-free loan to the Anusandhan National Research Foundation (ANRF),whichwillbeleveraged for a multiplier effect. The scheme is expected to play a key catalytic role in augmenting domestic R&D, which is crucial for technology assimilation for the manufacturing industry and improving overall economic productivity. As per the ELI scheme, a wage subsidy of up to one month’s wage—subject to a maximum amount of `15,000 —will be given to the first-time employees registered with the EPFO. TVS Motor Company Factory sector growth hits 14-month high MANU KAUSHIK & PRASANTA SAHU New Delhi, July 1 525,136 GROSS GOODS AND services tax collections grew 6.2% on-year to `1.85 lakh crore in June (May transactions), much lower than 16.4% growth reported in the previous month, reflecting conservative consumer spending and geopolitical uncertainties. ■ PAGE 2 Funding dips Jobs, R&D get `2-lakh-cr booster in H1 asVCs CABINET CONSENT `1-lakh-crore raise the bar `99,446-crore 491,416 GST mop-up rises 6.2% to touch `1.85L cr in June SCHEMESTOSPUREMPLOYMENT,PROJECTSINSUNRISEDOMAINS&FINTECHGETNOD Hero MotoCorp IN THE NEWS In first 3 months, 10 lenders have announced plans to raise `72,000 cr Banks set sights on record QIPfundraise in FY26 MAHESH NAYAK Mumbai, July 1 BANKS ARE POISED for highest-ever fundraise through qualified institutional placements (QIPs) in FY26. Within the first three months, banks have announced plans to raise astaggering`72,000crore,surpassing the previous high of `48,000 crore in FY21. Of the 10 banks that announced raising equity capital, some of the notableonesincludeStateBank of India (`25,000 crore), Axis Bank (`20,000 crore), Union Bank (`6,000 crore), Indian Bank and AU Small Finance Bank (`5,000 crore each). “The capital infusion is aimed at strengthening bank balance sheets,enabling them to increase their lending capacity and maintain a competitive edge,”said the head of a private sector bank. With improved capital buffers, banks will be wellpositionedtosupportrenewed optimism in the Indian economy,which is expected to drive credit growth by 13-13.5% in FY26, according to India Ratings.“When global trade is in a flux and protectionism is gaining traction across nations,India is poised to handle global and local turmoil with good balance sheets and the ability to kick-start economic cycles,”a banker said. “We expect credit to fuel consumption and showstrong growth in the second half of the year,” said Nimesh Chandan,CIO of Bajaj FinservAMC. He expects the growth to be ISSUES SO FAR QIP issues by banks 25,000 20,000 10,994 2 2,475 9 FY24 FY26* 48,046 8 FY22 FY25 ` crore 10 FY21 FY23 No. of issues Top QIP issues announced by banks since April 2025 (` crore) 6 6,000 5,000 5,000 24,890 14,656 10 *announced; up to June 30 broad-based,with sectors such asrealestate,consumerdiscretionary, manufacturing, MSME, and infrastructure benefiting from increased availability of credit at lower 71,950 SBI Source: primedatabase.com interest rates. “QIP is a bull market product. Rich valuation has seen companies, including banks, diluting stakes in the rising market,” said Pranav Haldea, Axis Union Indian AU Small Bank Bank Bank Finance Bank managing director at Prime Database Group. He believes the fresh capital raised is for expansion and diversification. “It’s a great time for banks to build a war chest, considering bank stocks are trading at an all-time high. Banks are raising capital for strengthening the balance sheet so that whenever there is demand, they are well-placed to take advantage of emerging opportunities and support India’s economic growth.” On Tuesday,the Bank Nifty ended at an all-time high of 57,459.45. Being well-capitalised also helps banks take care of contingencies, added Haldea. “While we haven’t seen any trend of companies going belly-up, being well-capitalised also supports banks in times of stress.” In FY25, the gross non-performing assets of the banking sector stood at a multi-decade low of 2.3%. Meanwhile, the require- HYDERABAD ment to bring down state-run bank stakes to meet regulatory compliance has also seen a few PSU banks — Indian Overseas Bank, Bank of Maharashtra, UCO Bank, Punjab & Sind Bank, and Central Bank of India — raising equity capital to bring down government stakes in these banks. As per Sebi regulations, by August 2026, the government needs to bring down their stakes below 75% in PSU banks. Banks raising capital reflectsapositiveoutlook,with strong balance sheets and increased lending capacity; banks are poised to play a key role in India’s economic story, with hopes that it kick-starts credit growth and doesn’t just flood the already well-capitalised system.