BACK PAGE | PAGE 18 IIM-C and two others enter FTexecutive course rankings MARKETS | PAGE 6 INTERNATIONAL | PAGE 7 Unsecured retail book of ARCs zooms 50% in FY25 BENGALURU, TUESDAY, JUNE 3, 2025 Musk facedTesla query for ‘killing’ $25,000 EVproject FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVIII 40, 18 PAGES, `12 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 81,373.75 ▼ 77.26 NIFTY: 24,716.60 ▼ 34.10 NIKKEI 225: 37,470.67 ▼ 494.43 HANG SENG: 23,157.97 ▼ 131.80 `/$: 85.39 ▲ 0.20 `/€: 97.55 ▼ 0.61 BRENT: $65.06 ▲ $2.28 GOLD: `96,153 ▲ `1,095 IN THE NEWS Manufacturing activity in May at three-month low THE RATES OF increase in new orders and manufacturing output retreated to a threemonth low in May as competition, inflation and the India-Pakistan conflict reportedly weighed on growth, according to a survey by HSBC Holdings. The manufacturing PMI fell from 58.2 in April to 57.6 in May, highlighting the weakest improvement in operating conditions since February, reports fe Bureau. ■ PAGE 2 State-run firms asked to pay 25% more dividends in FY26 THE CENTRE IS asking state-run companies to increase dividend payouts by about 25% this financial year as it seeks to bolster finances in a volatile global environment, reports Bloomberg. The government wants to garner about `90,000 crore through dividends in FY26 compared with nearly `74,020 crore in FY25. ■ PAGE 3 GOVTUNVEILS FINALGUIDELINES FOR EVMANUFACTURING SCHEME Tesla not keen to make in India ● Mercedes,Hyundai among5firmswilling tostartproduction NITIN KUMAR New Delhi, June 2 TESLA HAS DECIDED not to manufacture electric vehicles in India, Union heavy industries minister HDKumaraswamysaidonMonday. While the Elon Musk-led company mayexploreopeningshowroomsin the country, it has conveyed no intent to establish a production base under the government’s EV manufacturing scheme,the minister said while unveiling the final guidelines for the scheme to promote manufacturing of electric passenger cars in India (SPMEPCI). This announcement puts an end tolong-standingspeculationaround Tesla’s plans for India. Despite early interest and indirect participation, viaitsadvisorygroup,TheAsiaGroup (TAG)India,inthefirstofthreestakeholderconsultationsheldbytheministryof heavyindustries (MHI),Tesla opted out of the subsequent two meetings.Thegovernment,however, stillhopesthecompanymightreconsiderits plans in the future. Several other major global EV POLICY AT A GLANCE $500 million (`4,150 crore) Minimum investment required by OEMs 15% customs duty On import of EVs for participating OEMs (down from 70–100%) 40,000 EVs Production deadline OEMs must start production within 3 years or face penalty (bank guarantee forfeiture) Land cost Not counted toward committed investment Main plant buildings/utilities Eligible up to 10% of total investment Charging infrastructure Eligible up to 5% of total investment Can be imported over five years Localisation targets 25% DVA in 3 years, 50% in 5 years automakers have however shown interest in manufacturing in India. According tothe minister,fivecompanies — Mercedes-Benz,Volkswagen,Skoda,Hyundai,andKia—have shown interest in the scheme during consultations with the government.Officialsexpectmorecompanies may follow once the application process formallyopens. The SPMEPCI,notified on March 15lastyear,isdesignedtodrawglobal EV manufacturers into the country by offering substantial import duty concessions in exchange for firm investment commitments. The detailed guidelines, announced on Monday,pavesthewayforcompanies to beginapplyingsoon. Under the scheme, approved applicants will be allowed to import up to 40,000 electric vehicles at a significantly reduced customs duty rate of 15%,down from the current 70-100%. However, this benefit comes with clear con- Upswing in thermal power investments PM BATS FORVALUE CHAIN LEADERSHIPATIATASUMMIT after long stagnation A RENEWED PUSH to thermal power seems to have finally ended a decade-long phase of sluggishness in the sector. While the pace of construction has accelerated for a clutch of units, state-run NTPC and private players such as Adani Power and Tata Power have scaled up their thermal portfolios, reports Arunima Bharadwaj. ■ PAGE 2 ■ INVESTOR, P9 Why monsoon core zone holds the key to IMD forecasts It offers a clue to the monsoon estimates for the entire country ■ EXPLAINER, P9 SWARAJ BAGGONKAR New Delhi, June 2 INWHATCANbeviewedasastrong defence of the the government’s standonbilateralflyingrightsanda pointed rebuttal to Emirates president Tim Clark’s demand a day ago forexpandedseatallocationstoGulf carriers,IndiGoCEOPieterElberson Monday supported the current approach of preserving balance in international air traffic rights. Speaking at the International Air TransportAssociation’s(IATA)annual general meeting,Elbers emphasised thatbilateralagreementsaremutual and must serve the interests of both countries involved,not just one. PIETER ELBERS, CEO, INDIGO If one side makes more and more noise, it does not mean that side is more and more right “If one side makes more and more noise, it does not mean that side is more and more right,”Elbers said, responding to growing pressure from Gulf carriers.“Bilateral means two sides have to agree on something for the benefit of both.” His remarks come a dayafterthe Vi to restart fundraise talks this month for capex needs Continued on Page 7 Continued on Page 7 AdspotratesforIPLfinalsurgeby30% AS ROYAL CHALLENGERS Bengaluru take on Punjab Kings in the Indian PremierLeague(IPL)finalon Tuesday,broadcasterJioStariscashing in on advertiser frenzy.Ad spot rates are up by over 30% compared to last year’s finals, with JioStar nearly selling out its ad inventory. A 10-second TV ad spot is around `25 lakh,while digital rates are up by20-30% to `400 permille (thousand impressions). The demand is unprecedented, say industry observers. At the start of the season, FE had reported that JioStar was eyeing an ad revenue of `5,000 crore this season, around 20%higherthantheestimatedrev- Continued on Page 13 Emirates president renewed calls for increasing seat entitlements between India and the Gulf, citing rapidly rising demand. “We have been stuck with 65,000 seats (per week) in each direction forjust over 11years.Foreveryseatwe sell,there are probably 10 who want it,” Clark said on Sunday. The seat entitlements between India and the UAE have remained unchanged since 2015. Under the current bilateral agreement, both Indian and UAE carriers are allowed to operate 65,000 seats perweek in each direction. These quotas are already fully utilised. IndiGoCEObacksIndia’sflying rightsstance,countersEmirates Over 190 brands advertised in the first 70 games this year, up from 150 last year CHRISTINA MONIZ Mumbai, June 2 ditions: applicants must invest at least $500 million (`4,150 crore) in local manufacturing and commence production within three years of approval. To discourage speculative applications and ensure accountability, the scheme requires a bank guaranteeequivalentto thehigherof $500 million or the total customs duty waived over five years. CASH-STRAPPED VODAFONE IDEAwillrestartitsdiscussionswith banks this month to raise funds throughdebt,asitlookstomaintain its capital expenditure intensity beyond the first half of FY26. The proposed fundraise will be crucial for Vodafone Idea to continue investing in its 4G network and expanding its 5G footprint. “Currently, we have got capex under implementation in the ballpark of about `5,000- 6,000 crore.A largepartofitwouldbeimplemented in the current quarter and some of it mayspillovertothenextquarter,” its chief executive Akshaya Moondra said, adding fundraise will be required for the remaining quarters oftheyear.“Afterthe(debt-to-equity) conversion (by the government),we have started re-engaging with the banks. There are some activities which we have to finish, which are currentlyinprogressandwewillstart discussions with the banks somewhere in this month,” Moondra said in the fourth-quarter earnings call. He, however, did not specify what these actions and activitieswere. He reiterated that while banks want clarity on the adjusted gross revenue(AGR)issue,itisnotcausing an impediment to Vodafone Idea’s discussions regarding fundraise. VodafoneIdea’sAGRliabilitiesas on March 31, 2025 were `76,000 crore.Its total payment obligations to the government stood at `1.94 lakh crore as of March 31,2025. Prime Minister Narendra Modi being greeted by (from right) IndiGo CEO Pieter Elbers, IndiGo MD Rahul Bhatia and IATA DG Willie Walsh at the industry body’s annual general meeting in New Delhi on Monday. India should be perceived as not just a large aviation market but also as a value chain leader, Modi said ■ REPORT, P4 Company to expand rapid delivery model to more metro cities AFTERBAJAJAUTO,TVSMotor — the country’s largest electric two-wheeler maker — has warned that China’s export curbs on rare earth magnets could triggermajorproduction cuts and potentially bring India’s electric two-wheeler manufacturing to a grinding halt, reports Narayanan V. “This EV supply chain disruption is certainly going to pose a short- to medium-term challenge,” Sudarshan Venu, MD, TVS Motor,said in an interview with a news channel. ■ PAGE 5 URVI MALVANIA Mumbai, June 2 FE S P E C I A L S Fashion’s back in vogue for Nykaa China’s export curbs a worry enues of `4,000-4,200 crore last istantensions,Guptasaystheimpact year across TV and digital. Media on advertising was minimal.As per estimates indicate that the broad- data from TAM Sports (division of caster may close this season with TAMMediaResearch),thenumberof `4,700-4,800 crore. brands that advertised on the IPL in Sajal Gupta, CEO of Kiaos Mar- the first 70 games this year grew by keting, said the IPL bucks 28% to cross 190.The top »INSIDE« the overall advertising fiveadvertiserscontributed trend. “Regardless of the 29% of the overall ad volWHO WILL cautious advertiser sentiumes, with Parle Biscuits CLEAR THE ment in the market, we’re taking the lead,followed by FINAL FRONTIER? seeing tremendous interVimalElaichi,RelianceConRCB OR PBKS est from new categories sumer Products, Dream11 because of the sheer reach andKPPanFoods.Together, PAGE 18 of the tournament, which the top five categories is why there has been a significant accountedformorethan40%ofthe hike in ad rates for the last few total TV ad volumes, it says. There games,”says Gupta. were27newcategoriesthisyeartoo, Althoughthetournamentsawan including real estate, textiles and unexpectedsuspensionforaweekin apparel and 141 new brands. May on account of the India-PakKushal Bhuva, associate direc- tor at White Rivers Media, remarks,“For the final matches of the IPL, digital advertising rates experienced a measured rise, fuelled by robust demand following the initial inventory release and before the brief geopolitical pause. Brands clearly prioritised IPL placements, given the limited alternative marketing options available during this period.” On the viewership front, JioStar targeted one billion viewers this season. While the total viewership has not been made available, the first three games alone saw a 40% higher viewership with a peak concurrencyof34millionondigital.On TV,viewership surged by22% from last year in the opening weekend to draw 253 million viewers. Adani underfresh scrutinyin US over Iranian LPG supply ● Group denies IN THE DOCK allegations,says WSJ report based on speculation RAGHAVENDRA KAMATH Mumbai, June 2 US PROSECUTORS ARE investigating whether Adani Group companies imported Iranian liquefied petroleum gas (LPG) into the country through their Mundra port in Gujarat, the Wall Street Journal reported on Monday. A WSJ investigation found tankers travelling between Mundra andthePersianGulfexhibitedtraits experts say are common for ships evading sanctions,the report said. USPresidentDonaldTrumpsaid in Maythat all purchases of Iranian oil orpetrochemical products must stopandanycountryorpersonbuying any from the country would be immediately subject to secondary sanctions. Any investigation into Adaniwould come months afterUS authorities indicted Adani and his nephew Sagar Adani, alleging they paid bribes to secure power supply contracts, and misled US investors during fundraising in the US. When contacted,a Adani Group spokesperson said,“The WSJ story appears to be based entirely on incorrectassumptionsandspeculation.Adani categoricallydenies any deliberateengagementinsanctions ■ A company spokesperson has said, “Adani categorically denies any deliberate engagement in sanctions evasion or trade involving Iranianorigin LPG.” ■ The new scrutiny comes months after US authorities charged Adani and his nephew Sagar Adani with paying bribes to secure power supply contracts evasion or trade involving Iranianorigin LPG. Further, we are not aware of any investigation by US authorities on this subject.” Any suggestion that Adani Group entities are knowingly in contravention of US sanctions on Iran is strongly denied. Any assertion to the contrarywould not only beslanderousbutalsodeemedto be an intentional act to injure the reputation and interests of the Adani Group,the spokesperson said. Continued on Page 13 ECLGS defaults to be lower than expected ● May cost govt just CREDIT SCORE a third of estimate PRASANTA SAHU New Delhi, June 2 LOAN DEFAULTS UNDER the Emergency Credit Line Guarantee Scheme (ECLGS) are seen at just 23%, much lower than what was anticipated when it was launched with the aim to rescue micro,small and medium enterprises (MSMEs) andotherbusinessesfromthehardship during the Covid-19 period. Therefore, the Centre’s cost to meet loan defaults may be around `25,000crore,orathirdof`75,000 crore estimated initially during the five-yearrepaymentperiodthrough FY28,official sources told FE. The default level for ECLGS is broadly in line with the gross nonperforming asset (GNPA) ratio of scheduled commercial banks (SCBs),which stood at 2.3% of gross advances as of March 31,2025. The scheme,which was unveiled in 2020,was extended in phases till March2023.Underthescheme,11.9 millionguaranteesworth`3.68lakh crore were issued to MSMEs and otherbusinesses.Theloanrepayment moratorium period was one or two years depending on different versions of the scheme. So,while some repayments of the early part had ■ Emergency Credit Line Guarantee Scheme was launched in 2020 to rescue MSMEs and other businesses from the hardship during the Covid-19 pandemic ■ Under the scheme, 11.9 mn guarantees worth `3.68 lakh crore were issued ■ ECLGS defaults are seen at 2-3%, in line with the GNPA ratio of banks begun,repayments for the full spectrum loans commenced from April 2025.“Loan repayments for all versionsoftheschemehavebegunnow. Mostoftheborrowersarerepayingas per the initial trends. Defaults are seen at 2-3% as of now,and we have to see how it evolves over a period of time,” a seniorofficialsaid. Continued on Page 13 IPL 18 Top categories (% share) Top advertisers (% share) 8 Parle Biscuits Vishnu Packaging (Vimal Elaichi) 7 6 Reliance Consumer Products Sporta Technologies (Dream11.Com) K P Pan Foods (Rajshree Silver Coated Elaichi & Kamla Pasand) 4 4 13 Mouth Freshener 10 Biscuits 7 E-comm, gaming Aerated soft drink Corporatefinancial institute 6 5 Source: TAM Sports BENGALURU