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APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXIV NO. 134, 18 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: 74,382.24 ▲ 2,303.19 NIFTY: 22,620.35 ▲ 735.85 NIKKEI 225: 38,490.17 ▼ 347.29 HANG SENG: 18,424.96 ▼ 19.15 `/$: 83.38 ▲ 0.15 `/€: 90.68 ▲ 0.15 BRENT: $77.90 ▲ $0.38 GOLD: `71,696 ▼ `273 SEBI RELAXES DISCLOSURE TIMELINES FOR FPIs THE SECURITIES AND Exchange Board of India (Sebi) has relaxed the timelines required for foreign portfolio investors (FPIs) to disclose material changes. For this purpose, material changes have been categorised into two types. ■ PAGE 6 CREDITORS WANT MORE BYJU’S UNITS IN US BANKRUPTCY A GROUP OF lenders asked a court to impose bankruptcy oversight on multiple units tied to the struggling education technology company Byju’s, claiming millions of dollars are being “siphoned” out of the companies, reports Bloomberg. ■ PAGE 5 MODI 3.0: AGENCIES FLAG CHALLENGES TO REFORMS GLOBAL RATING AGENCIES Moody’s and Fitch on Wednesday said the weakened majority of the Bharatiya Janata Party (BJP)-led government in its third term could pose challenges to key economic reforms. ■ PAGE 2 SERVICES PMI FALLS TO FIVE-MONTH LOW OF 60.2 IN MAY DESPITE FALLING TO a five-month low, the HSBC India services PMI stood at a robust 60.2 in May against 60.8 in April, data released by S&P Global showed on Wednesday, reports Priyansh Verma. ■ PAGE 2 Top speed on govt formation NDA elects Modi, to meet Prez tomorrow to stake claim LIZ MATHEW & MAHENDER SINGH MANRAL New Delhi, June 5 A DAYAFTER the BJP lost majority and the NDA secured 293 seats in the new Lok Sabha,the alliance on Wednesday elected Narendra Modi as its leader and decided to stake claim to form the government. Modi, on his part, assured partners that the NDA will work with greater strength to attain its goal of a Viksit Bharat. Led by Modi, the NDA is expected to go to Rashtrapati Bhavan on Friday to stake claim. On Wednesday, President Droupadi Murmu dissolved the 17th Lok Sabha on the advice of the Union Cabinet, according to Rashtrapati Bhavan. Earlier in the day, Prime Minister Modi tendered his resignation to Murmu who accepted it and asked him to continue until the new government assumes office. The newly-elected NDA MPs will also hold a meeting on Friday. It’s not clear yet when the new government will be sworn in. While there were reports that the swearing-in may take place on Saturday, sources in the security establishment indicated that no event has been planned yet for June 8-9. June 9 is also the day ministers of the TDP government in Andhra Pradesh will be administered the oath of office in Amaravati and it is possible that Modi will attend the ceremony. FE S P E C I A L S Tackling India’s e-waste challenge Smart tech to aid in collection and sorting methods ■ EFE, P9 High retail food inflation was one of the prime reasons for the NDA’s losses in the Lok Sabha election ■ EXPLAINER, P9 Prime Minister Narendra Modi with key allies — TDP president N Chandrababu Naidu and JD(U) chief Nitish Kumar (far right) — during the National Democratic Alliance’s meeting in New Delhi on Wednesday PTI Naidu, Nitish eye plum Cabinet posts SREENIVAS JANYALA & SANTOSH SINGH Hyderabad/Patna, June 5 Sources said details of government formation at the Centre will be discussed between leaders of the NDA parties, especially TDP leader N Chandrababu Naidu and Bihar chief minister and JD(U) leader Nitish Kumar, ahead of staking claim. According to sources,Modi has assigned defence minister Rajnath Singh, home minister Amit Shah and BJP chief JP Nadda to conduct the talks with leaders of partners for finalising details of government formation. A SPECIAL CATEGORY status for Andhra Pradesh, Cabinet berths including for his son in the new government, and funds for the Amaravati capital city he had originally planned, will be among the key demands that N Chandrababu Naidu's Telugu Desam Party (TDP) will make as talks commence over the formation of a BJP-led coalition government in the Centre. Meanwhile, Nitish Kumar’s Janata Dal (United) — second only to TDP in its heft in the National Continued on Page 14 BULLS RETURN AFTER TUESDAY’S CARNAGE, which saw indices correct by over 6%,Wednesdaywitnessed a smart recovery, with investors entering defensives such as the fast-moving consumer goods (FMCG) sector and financials. The market was listless at the start of the trading session. INSIDE However, after Biggest National decline for VIX in 4 yrs Democratic Alliance's (NDA) ■ PAGE 6 biggest coalition partner, ChandrababuNaiduoftheTDP,said “TDP is firmly with the NDA”, it gained momentum. Overall, the Sensex jumped 2,303.19 points or 3.2% to close at 74,382.24, while the Nifty rose 74,382.24 3.20% Mumbai, June 5 LIKELY DEMANDS ■ To seek ■ Naidu's TDP may seek special category status for Andhra ■ May demand Cabinet berths, including one for his son additional funds to restart development ofAmaravati as state capital Democratic Alliance (NDA) — plans to leverage the 12 Lok Sabha seats it won to negotiate plum portfolios in the new Cabinet, including the coveted railwayministry, it is learnt. Sources said the TDP supremo is likely to seek a special category ■ Nitish's JD(U) eyes railways, rural development and Jal Shakti ministries ■ May also seek transport and agriculture status (SCS) for Andhra, an issue over which he had walked out of the NDA in 2018. The SCS will ensure the state gets most of the Central funds in the form of grants (which do not carry any interest) and industrial incentives, including tax exemptions, duty waivers, and GST concessions. The TDP chief is also likely to seek additional funds from the Centre to restart the development of Amaravati as the state capital, a project which was stalled after Jagan Mohan Reddy’s YSR Congress (YSRCP) stormed to power in 2019.Several buildings and apartment complexes built during Naidu’s regime between 2014 and 2019 lie vacant today, while civic infrastructure decays. Naidu,who will take oath as the Andhra chief minister on June 9, intends to start developing the capital city. Continued on Page 14 Close, June 5 2,303.19 points 22,620.35 SENSEX $945-million IPO Top sectoral gainers RAJESH KURUP Mumbai, June 5 % gain 4.41% BSE Smallcap 42,585.97 Close, June 5 Close, June 5 40,788.10 Close, June 4 BSE Midcap NIFTY 3.36% 72,079.05 21,884.50 Close, June 4 Close, June 4 735.85 points or 3.4% to 22,620.35. Domesticinstitutionalinvestors bought shares worth `4,555.08 crore, while foreign portfolio 735.85 points 46,277.65 Close, June 5 investors sold shares of `5,656.26 crore,according to provisional data. Despite the bounce-back, experts said uncertainty and volatility will remain in the market 44,958.48 2.93% Close, June 4 until the full Budget comes in July, as itwould paint a clearerpicture of the new government’s focus. Continued on Page 14 NOVELIS, THE US subsidiary of Hindalco Industries,has put off its plans to raise up to $945 million through an initial public offering (IPO),citing adverse market conditions. If launched, this would have been the biggest IPO by an Indian company in the US. TheAditya Birla Group firmwill “continue to evaluate” the timing of the offering in the future,it said in a regulatory update without providing any details. In May,Novelis finalised a price band of $18-21 per share for its proposed IPO, under which it intended to raise about $810-945 million. With a greenshoe option, the proceeds were estimated to be in the range of $931.5 million to $1.08 billion. The company’s sole shareholder, AV Minerals (Netherlands) NV, a wholly-owned subsidiary of HITTING A PAUSE ■ Novelis says will evaluate timing of offering ■ In May, it finalised price band of $18-21/share for proposed IPO ■ US arm of Hindalco Industries aimed to raise $810-945 mn ■ Sole shareholder AV Minerals (Netherlands) NV was to offload 45 mn shares Hindalco Industries,was to offload about 45 million shares. Continued on Page 14 ESTIMATED AT $400-600 MILLION IN FY25 Domestic airlines’ losses to soar despite traffic take-off FE BUREAU New Delhi, June 5 How food prices hit Modi 2.0 politically BOLSTERED BY THE gains in the 2024 Lok Sabha elections, top leaders of the Opposition INDIAblocmetonWednesday andindicatedarestraintrather than a proactive push to explore government formation. Calling the mandate a reply to the BJP government, the coalition resolved to“continuetofightagainstthefascist ruleoftheBJPledby(Narendra) Modi”.“We will take appropriatestepsatappropriatetimeto realisethepeople’sdesirenotto be ruled by the BJP’s government,” Congress president Mallikarjun Kharge said. ■ P7 Markets get back to winning ways Novelis postpones Sensex, Nifty ALL OUR CLIENTS surge over 3% ARE INVESTING IN GENAI: LTIMINDTREE VIVEK KUMAR M AN OVERWHELMING MAJORITY of LTIMindtree's clientele — 9095% — are planning to invest in GenAI within next 12-18 months, and is currently engaging in over 140 GenAI projects, Nachiket Deshpande, COO of the IT company, told FE, reports Padmini Dhruvaraj. ■ PAGE 4 Message from INDIA: Will keep watch 6.01 5.74 5.36 4.52 4.50 NEWS Telecom Services Metal FMCG Auto IN THE DOMESTIC AIRLINES ARE likely to widentheirlossesto$400-600million in FY25 despite a likely rise in traffic, CAPA India CEO Kapil Kaul said on Wednesday. InFY24,thelossesofthedomestic airlines are estimated to be around $300-400 million, excluding IndiGo which is profitable, according to the top aviation consultancy.The number also excludes those of cash-strapped SpiceJet, whichisyettodeclareresultsforthe last two quarters. InterGlobe Aviation, which operates IndiGo, reported a profit of `1,894.8 crore for the January-March quarter, its sixth straight quarter of profit. INSIDE FLIGHT PATH ■ Airlines expected to add 84 aircraft this year up to 812 by FY25 end from 728 in previous year ■ Fleet size to double by 2030 ■ Domestic fares rise 1.3% in FY24, 34% higher than FY20 SpiceJet plans to raise additional $250 mn PAGE 5 ■ Fleet count to go ■ 25 more airports expected to be privatised in the next fiscal One of the reasons for the losses would be on account of capacity shortageduetothegroundingofaircraft.At present,around 130 planes aregroundedduetovariousreasons, AI to start retrofitting 100 aircraft in 2025 PAGE 5 Airline costs seen rising 3.8% in FY25 andthenumberwouldbeabout180, including the aircraft of Go First, CAPAIndiasaid.GoFirststoppedflying last year.However,domestic airlines are expected to add 84 aircraft thisyear,takingthefleetcountto812 by the end of FY25 from 728 in the previous year. The fleet size would double by2030,Kaulsaid. The domestic traffic and cargo volumes have,however,reached the pre-Covid levels in 2023, and are likely to grow at 6-8% in FY25 to 161-164 million.Similarly,international traffic is estimated to grow by 9-11%to 75-78 million. Domesticfaresrose1.3%inFY24 andwere34%highercomparedwith FY20, Kaul said. He was speaking at the CAPA India Aviation Summit. However,airlinecostsareexpectedto rise 3.8% in FY25. CAPAexpects25moreairportsto be privatised during the next financialyear,coupledwithaninvestment of $4 billion by the Airports AuthorityofIndia(AAI)inthenexttwoyears to betterthe airport infrastructure. Kaul also highlighted that the shortage of pilotswill continue to be a concern for Indian aviation in the near future. Pilot shortage is a key shortcomingoftheindustryinFY25 and with the new FDTL (flight duty time limitations) norms likely to be imposedsoon,thepilotshortagewill be even more severe. Lastyear,AirIndia,AkasaAir,Vistara and Air India Express faced pilot-rostering issues due to the FDTLnormsandwereforcedtocancel flights due to protests and agitation by employees.