BACK PAGE | PAGE 24 BRANDWAGON | PAGE 9 INTERNATIONAL | PAGE 5 Bajaj Auto rides high on Chetak e-scooter Foxconn revenue beats estimates onAI demand AHMEDABAD, MONDAY, JANUARY 6, 2025 Digital & legacy firms jostle for space at Maha Kumbh FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XIX 184, 24 PAGES, `12 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 IN THE NEWS ARCs face fresh hurdles in resolving retail bad loans ASSET RECONSTRUCTION COMPANIES (ARCs) are facing new challenges with the rise of retail non-performing assets (NPAs). While ARCs have a proven track record in resolving corporate NPAs, they are finding it increasingly challenging to handle retail bad loans, reports Sachin Kumar. ■ PAGE 6 Subscription models gaining traction in ride-hailing sector SUBSCRIPTION-BASED MODELS are gaining popularity in the ridehailing sector, with major players like Ola, Uber, and Rapido reconfiguring strategies to stay competitive, reports Anees Hussain. Under such models, drivers pay a fixed fee to platforms instead of sharing a commission per ride. ■ PAGE 4 IITs seeing a silent revolution, courtesy quota for women FROM MORE HOSTELS and washrooms for female students to their own sports teams — a silent revolution has been taking shape at the Indian Institutes of Technology (IITs) over the last six years, ever since a supernumerary quota of 20% was set aside for women, report Vidheesha Kuntamalla & Pallavi Smart. ■ PAGE 3 INDUSTRYSEEKSTAX PARITYWITH LISTED BONDS Debt MFs may get tax reliefon capital gains RUN-UP TO THE BUDGET 2025-26 PRIYANSH VERMA & AKSHATA GORDE New Delhi/Mumbai, January 5 THE MUTUALFUND(MF)industry’s demandforrestorationoftheindexation benefitwhen capital gains are computed on the sale of debt-oriented funds may be considered favourably by the government. An announcementtothiseffectislikely to be made in the Budget FY26. The case for reintroduction of thebenefit,whichwaswithdrawnin the Finance Bill 2023,has strengthened in recent months as post-tax real rate of returns for investors in debt MF schemes has turned very low or even negative due to sticky inflation, sources said. This has resulted in debt funds losing any INDUSTRY WISH LIST ■ Industry wants LTCG tax rate on redemption of debt MF units held for more than one year to be 12.5% ■ Alignment in holding periods while calculating LTCG for gold-based investments sought competitive advantage relative to fixed deposits in banks.Indexation is designed to adjust the cost of a capital asset to the inflation rates since its purchase. The MF industry has also urged thefinanceministrytoalignthecapital gains tax rates of debt MF schemes with that of listed bonds. ■ Since April 1, 2023, capital gains on debt MFs are taxed at investors' respective tax slabs, irrespective of holding period ■ Over the past 3-5 years, debt funds gave returns of around 7%, while inflation hovered around 5.5% ■ According to Amfi, total assets under management for debt funds stood at `16.86 lakh crore as on November 30 The government is closelylooking at both the proposals,the sources said. The industry wants the tax rate for long-term capital gains (LTCG) on redemption of debt MF units held for more than one year to be 12.5%,asapplicabletolistedbonds. Continued on Page 5 ● PMTAKESARIDE ON NAMO BHARATTRAIN Prime Minister Narendra Modi interacts with staff members as he takes a ride on a Namo Bharat train during the inauguration of a 13-km stretch of the Delhi-Meerut Regional Rapid Transit System (RRTS) between Sahibabad in Ghaziabad and New Ashok Nagar in Delhi on Sunday PTI DPDP RULES ■ Many hits, a few misses ■ A step forward but not without concerns Opinion, P8 FE S P E C I A L S ● E-commerce & SaaS ALTERNATIVE drive demand amid FUNDING muted equitymarkets ■ Under RBF, ■ In AYANTI BERA Bengaluru, January 5 $900 mn Centre releases Agri credit to top Renault charting `4.15Lcrvia DBT `28Lcr in FY25 a comeback THE CENTRALGOVERNMENT has released about `4.15 lakh crore in assorted subsidies and sops to beneficiaries through the direct benefit transfer (DBT) so far in the current financial year, reports Prasanta Sahu. ■ PAGE 2 CREDIT TO THE agriculture sector by commercial banks and regional ruralbanksislikelytocross`28lakh croreinFY25duetoariseinformalisation of the rural credit structure, Nabard chairman Shaji KV said, reports Sandip Das. ■ PAGE 2 RENAULT IS PREPARING a strong comeback in India with a compact electricvehicle(EV)andthenext-generation Duster leading its product strategy,reports SwarajBaggonkar. The French automaker is also planningtwonewSUVs. ■ PAGE 4 firms access funds in exchange for 5-20% comparison, venture debt made an estimated ■ The model’s appeal lies in its flexibility, speed and alignment with revenue cycles in investments in 2024 STARTUPS, ESPECIALLYIN e-commerce and B2B software-as-a-service (SaaS), leaned heavily on revenue-basedfinancing(RBF)in2024 as equitymarkets remained muted. The trend marked a shift in how businesses sought capital for growth, inventory management, and market expansion. RBF platforms such as Velocity and GetVantage experienced a surge in activity, with Velocity reporting a 50% increase in disbursals and GetVantage doubling its investments. These platforms, which offer non-collateralised loans repaid as a percentage of a company’s gross revenue, have emerged as critical funding sources for startups navigating tough funding environments. “A lot of brands are looking for capital to grow in quick commerce and manage inventory effectively,” said Atul Khichariya, co-founder and COO of Velocity. “We’ve also observedrisingdemandfromcloud kitchen startups over the past few months,”he added. RBFoffers a flexible and accessible funding option for startups and No check-in for unwed couples at Oyo hotels Application window for specialty steel PLI reopens today ROOPASHREE NAIR New Delhi, January 5 Tighter anti-spam regulations likely in a month: Trai TIGHTER NORMS FOR curbing spam and new consultation on authorisation regime for telemarketers are expected in coming weeks, reports PTI. Trai will also start a pilot this month to onboard users' past permissions onto the digital system. ■ PAGE 4 Fast & flexible: Startups turn to revenue-based financing TRAVEL BOOKING MAJOR Oyo has launched a new policy for partner hotels, starting this year from Meerut in Uttar Pradesh, whereby unmarriedcoupleswillnolongerbe welcomed to check in. Under the revised policy,all couples will be asked to present valid proofofrelationshipduringcheck-in, including forbookings made online. Oyo has empowered its partner hotels to decline couple bookings based on their judgement, aligning with local social sensibility, it said. Oyohasdirecteditspartnerhotelsin Meeruttoimplementthepolicywith immediate effect. Based on ground feedback,the company may expand thistomorecities,peopleintheknow said.“Oyo has received feedback in the past from civil society groups especiallyinMeeruturgingactionto address this issue,” theysaid. Pawas Sharma,region head,Oyo North India, said,“Oyo is committed to upholding safe and responsible hospitality practices. While we respect individual freedom and personal liberty, we also recognise our responsibility to listen to and workwith the lawenforcement and civil society groups in the micro markets we operate in.We will continue to review this policy and its impact periodically.” —PTI of gross revenue as monthly repayment, along with a fixed fee on the principal ■ Collectively, Velocity and GetVantage have deployed around `1,000 crore in RBF since their inception in 2019-20 MUKESH JAGOTA New Delhi, January 5 THE GOVERNMENT WILL reopen the window for applications under the production-linked incentive (PLI) scheme for specialty steel, in viewof the high investorinterest in the sector. The PLI 1.1 scheme will be launched on Mondaybyministerof steel and heavy industries H D Kumaraswamy,officials said. The reopening of the scheme for fresh applications will benefit companieswhoaren’texistingplayersin the fast-growing sector but plan to make a foray into it. It will also ensure that the targets set for the schemeintermsofincrementalproduction and disbursement are met. There is also a demand from the industry to expand the list of speciality products under the scheme. Major steel companies such as SAIL, Tata Steel, JSW, JSPL and ArcelorMittal Nippon Steel (AWNS) were among the applicants in the previous application window. Specialtysteelissuperiortoconventional alloy, with its higher strength,betterphysical and chemical properties, better biocompatibility, and improved process characteristics. The PLI scheme for specialtysteelwas notified in October 2021. In all, 67 applications have been approved under the small and medium enterprises (SMEs) that often struggle to secure institutional capital or traditional bank loans. Companies can access funds in exchange for 5-20% of gross revenue as monthly repayment, coupled with a fixed fee on theprincipal.Thefeerangesfrom66.5% for a six-month term to 1012% for up to a year. Continued on Page 5 GROWTH PUSH ■ Under PLI scheme for specialty steel, 67 applications have been approved so far ■ Scheme has an outlay of `6,322 cr and is expected to bring in investments of approximately `40,000 cr ■ SAIL, Tata Steel, JSW, JSPL and ArcelorMittal Nippon Steel are among applicants ■ Initiative is expected to generate about 525,000 jobs scheme — 66 in 2022-23 and just one in 2024-25. It has an outlay of `6,322 crore and is expected to bring in investments of approximately `40,000 crore and capacity addition of 25 milliontonneforspecialtysteel.The scheme is expected to generate about 525,000 jobs, of which 68,000will be direct employments. Continued on Page 5 From using Harshad Mehta’s broker-banker-promoter template to front-running, Parekh continues to keep regulators busy Awin-win solution Platform becomes matchmaker for India Inc & startups AKSHATA GORDE Mumbai, January 5 ■ eFE, P10 OLD HABITS DIE hard, and Ketan Parekh seems intent on proving that he is the poster boy of that phrase.Forthe‘Pentafourbull’,who was convicted in a stock market scam over two decades ago, stock market manipulation is an addiction he just can’t give up. In less than a decade after his 2003-2017 ban from the stock marketended,Parekhmetthesame fate again last week — this time for front-running. Even in these two decades since his first debarment, his brush with the law has continued. Parekh allegedlyremainedactiveinmarket Whywe are seeing the hottest years As the planet heats up, a look at the causes & impact ■ Explainer, P6 Ketan Parekh: Dark side of markets manipulation, operating through proxies and front accounts, which led to trading bans for26 entities in 2009. In 2020, his name surfaced yet again in connectionwith a fresh rigging scandal,but he was eventuallyconvictedin2023fordupingan investorof `2 crorewith the help of a female associate. Parekh’s first shot at infamywas in the late 1990s — almost a decade after big bull Harshad Mehta’s broker-banker-promoter nexus had eroded investor confidence in the stock market. The timing was perfecttoo.Thedot-comboomwasraging, and Parekh replicated Mehta’s model to drive up stock prices. His K-10 stocks, including names like Pentamedia Graphics, Global Tele-Systems, and HFCL, were much sought after by fellow brokers and investors. Stock prices of scrips like Visualsoft rosefrom`625to`8,448per share and Sonata Software from `90 to `2,150. Parekh controlled the entire show from behind the scenes using benami accounts,proxytraders,and loans fromvarious banks,to orchestrate a huge pump and dump scheme. He generated artificial demand for these K-10 stocks through circular trading, wherein he along with his team executed similar sell orders in the same price in the same number at the same time which spiked trading volumes. Gullible retail investors rushed to invest in these stocks seeing the pumped up demand in hopes SHYAM KUMAR PRASAD of windfall gains,but little did they know that they were falling into a trap. But then the dot-com bust came at the beginning of 2001,and the bear cartel began hammering his favourite stocks.The sharp drop in the shares’valuations prompted banks, who were holding these stocks as pledges,to call in formore securities and repayment of loans. Parekh’s most infamous associationwaswith Madhavpura MercantileCooperativeBank(MMCB),from which he borrowed nearly `800 crore to fund his market operations, using inflated stock prices as collateral.After the crash, MMCB was left clutching worthless shares, triggering a financial crisis, followed by a payment crisis at majorexchanges. As the market turbulence coincided with the Budget session of 2001, the government was pressuredtolookintothecrash,andsubsequently a probe was initiated by theSecuritiesandExchangeBoardof India (Sebi) and a joint parliamentary committee into Parekh’s dealings.Consequently,hewas jailed. Investigations revealed that this wasn’t Parekh’s first crime — he was alsoinvolvedintheCanbankMutual Fund scam of 1992,whereinvarious entities had siphoned off `47 crore. Interestingly, despite working with Mehta in GrowMore Investment, Parekh had initially came out of the scam relativelyunscathed. Continued on Page 5 Ahmedabad