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L1 NO. 67, 24 PAGES, `12 (PATNA & RAIPUR `12, SRINAGAR `15) 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 WWW.FINANCIALEXPRESS.COM READ TO LEAD SENSEX: 82,059.42 ▼ 271.17 NIFTY: 24,945.45 ▼ 74.35 NIKKEI 225: 37,498.63 ▼ 255.09 HANG SENG: 23,332.72 ▼ 12.33 `/$: 85.40 ▲ 0.12 `/€: 96.32 ▼ 0.58 BRENT: $65.29 ▼ $0.12 GOLD: `93,428 ▲ `720 IN THE NEWS Govt may tighten norms for foreign ownership THE GOVERNMENT IS planning to tighten foreign ownership rules, two sources told Reuters, in a move that may have significant implications for businesses ranging from e-commerce to pharma. ■ PAGE 3 Shareholders deny IDFC First board seat to Warburg SHAREHOLDERS OF IDFC First Bank rejected a proposal to allow Currant Sea Investments BV, a Warburg Pincus LLC affiliate, nominate a non-executive director on the board, reports Mahesh Nayak. ■ PAGE 6 Apple partner injects $1.5 bn into India unit HON HAI PRECISION Industry, the main manufacturer ofApple’s iPhones, will inject $1.5 billion into its India unit as production shifts away from China, reports Bloomberg. ■ PAGE 4 VODAIDEA’S SURVIVALATSTAKEAFTERVERDICT SC rejects telcos’ call onAGR relief ● Won’t interfere if govtwants to help, says top court COURT RAP `83,400 cr We are really shocked by these petitions...It is not expected of a multinational company URVI MALVANIA Mumbai, May 19 THE SUPREME COURT on Monday dismissed pleas by telecom majors Vodafone Idea, Bharti Airtel and Tata Teleservices seeking waiver of interest, penalties and interest on penalties related to adjusted gross revenue (AGR) dues, shutting the final judicial door on a dispute that has lingered for years. The combined relief sought by Vodafone Idea and Bharti Airtel alone amounted to over `80,000 crore. After the verdict was announced, shares of Vodafone Idea slumped 8.68% to close at `6.73 on the BSE . It fell 12.21% to `6.47 in intra-day trade. While refusing the relief, the apex court, however, said that it would not stand in the way if the government wished to extend assistance to Total AGR dues* SUPREME COURT Vodafone Idea 12 8 4 0 Relief sought: `45,457 cr 8.02 Vodafone Idea Jan 01, 2025 *as of March 6.73 May 19, 2025 Total AGR dues: `43,980 cr Bharti Airtel the telecom companies. “If the government wants to help you, let them. We are not coming in the way,” the bench said. Industry analysts said the apex court’s refusal to provide relief squarely places the burden on the government to act, especially as it confronts conflicting imperatives. Relief sought: `34,745 cr On the one hand, the governmentmustensurefaircompetitionandavoidappearingto favouroneplayeroveranother. On the other, it needs to acknowledge the structural vulnerabilities of Vodafone Ideaandthepotentialsystemic risk its collapse could pose. Continued on Page 10 RBI mulls cap on Sebi issues warning AIFinvestments to Mauritius funds shares bybanks,NBFCs withAdaniUNDER LENS Threatensfines, MAHESH NAYAK Mumbai, May 19 THE RESERVE BANK of India (RBI) has proposed new guidelines for investments by regulated entities in alternative investmentfunds(AIFs),aiming to mitigate potential risks and prevent overexposure. According to the latest draft guidelines,thecontributionofa single regulated entity, including all commercial andco-operativebanks, financial institutions andnon-bankingfinancial companies’ (NBFCs) to any AIF schemewillbecapped at 10% of its corpus. Meanwhile, a collective ceilingof15%willbeapplied for investments by all regulated entitiesinanAIFscheme. “ConcernsforRBIhavebeen evergreening practices,which candistortassetvaluesandlead tohiddenlossesinthefinancial system,” said an investment bankerrequesting anonymity. The banker added that the financial system is currentlyon a solid footing with balance sheets of banks and financial DRAFT GUIDELINES ■ Contribution of a single regulated entity to any AIF scheme to be capped at 10% of its corpus ■ A collective ceiling of 15% to apply for investments by all regulated entities in an AIF scheme ■ Investments of up to 5% of corpus of an AIF scheme to not be subject to restrictions institutions stronger than ever before and India standing tall compared to many economies due to its robust and vibrant banking and financial infrastructure.“Therefore, to avoid any mishap, the regulator is taking all possible measures to prevent future risk,” he said. Continued on Page 10 ● licencecancellation overnon-disclosure JAYSHREE P UPADHYAY Mumbai, May 19 THE SECURITIES AND Exchange Board of India (Sebi) has threatened two Mauritiusbased funds with investments in Adani Group that they could face penalties and cancellation of licences for not sharing shareholding details despite repeated requests over two years,according to a document reviewed byReuters. Adani Group and its 13 offshoreinvestorshavebeenfacing aninvestigationbythemarkets regulator since Hindenburg Research in 2023 alleged improper use of tax havens by thegroup,triggeringastockselloff. The group has repeatedly denied wrongdoing, and its shareshave since recovered. Regulations require that at least25%ofthesharesoflisted companies be held by public shareholders, but Hindenburg alleged Adani Group breached those rules since some offshore ■ Elara India Opportunities Fund, Vespera Fund haven’t shared shareholding details, shows a Sebi document ■ The two funds are registered with Sebi as FPIs, bringing them under compliance norms and scrutiny of the markets regulator ■ Adani Group and its 13 offshore investors have been facing a Sebi probe since Hindenburg allegations fundswithAdaniholdingswere related to the conglomerate. The two Mauritius-based Elarafunds—ElaraIndiaOpportunities Fund andVespera Fund —had been asked since 2023 to provide"granulardisclosures"of all theirshareholders since they had“concentrated positions”in AdaniGroup,accordingtoaSebi documentdatedMarch28. Continued on Page 10 Lenders see resistance building up, say may take a few quarters to normalise SmallborrowersinTNstartdelaying repayments,citedraftlendingBill NARAYANAN V Chennai, May 19 MICROFINANCE LENDERS IN Tamil Nadu are beginning to see early signs of stress, with borrowers in certain pockets delayingorwithholdingrepayments citing the state’s draft money lending Bill. A senior official from the microfinance industry told FE that borrowers in some areas are showing newspaper clippings to collection staff and claiming that the government has asked them not to repay. Anotherindustryexecutive pointed to a shift in borrower behaviour at the grassroots level. “It’s not alarming yet, but some kind of resistance is definitely building up. It will take at least a quarter or two for things to normalise,” the person said requesting anonymity. The signs of stress come less than a month after the MONEY MATTERS ■ Tamil Nadu govt's draft money lending Bill aims to protect borrowers from economically weaker sections and other vulnerable groups from coercive recovery practices state government introduced the Tamil Nadu Money Lending Entities (Prevention of Coercive Actions) Bill, 2025. The draft legislation is aimed at protecting borrowers from economicallyweaker sections, vulnerable groups, farmers, and women self-help groups from coercive recovery practices employed byunregulated and digital lenders. ■ Bill ■ Lenders, excludes regulated entities such as banks, NBFCs registered with RBI, co-operative societies and co-operative banks however, point out that borrowers are unable to distinguish between regulated and unregulated entities Neighbouring Karnataka had also brought a similar Bill to curb coercive lending practices ■ The Bill explicitly excludes regulated entities such as banks, non-banking financial companies (NBFCs) registered with the Reserve Bank of India (RBI), co-operative societies and co-operative banks. However, lenders point out that the distinction is often lost on the ground. “The real challenge is at the ground level — people won’t distinguish betweenregulated and unregulated lenders,” George Alexander Muthoot, MD,Muthoot Finance,told FE. Belstar Microfinance, a subsidiary of Muthoot Finance, is headquartered in Tamil Nadu with assets under management (AUM) worth `7,970 crore as of March. Continued on Page 10 New Delhi