MONDAY, 16 MARCH 2020 16 pages in 1 section MUMBAI (CITY) ~9.00 VOLUME XXIV NUMBER 150

How markets performed last week % Chg over Dec 31, ‘19 Index on *One- --———————————————————————————————————————————————————————— Mar 13, ‘20 week Local currency in US $ Sensex 34,103 -9.2 -17.3 -20.2 Nifty 9,955 -9.4 -18.2 -21.0 BACK PAGE P16 COMPANIES P3 Dow Jones 23,186 -10.4 -18.8 -18.8 Nasdaq 7,875 -8.2 -12.2 -12.2 Hang Seng 24,033 -8.1 -14.7 -14.5 MODI MOOTS SAARC FUND REVENUES OF MULTIPLEXES Nikkei 17,431 -16.0 -26.3 -25.9 FTSE 5,366 -17.0 -28.9 -34.1 DAX 9,232 -20.0 -30.3 -31.0 TO TACKLE CORONAVIRUS MAY BE HIT BY UP TO 25% *Change (%) over previous week Source: Bloomberg PUBLISHED SIMULTANEOUSLY FROM AHMEDABAD, BENGALURU, BHUBANESWAR, CHANDIGARH, CHENNAI, HYDERABAD, KOCHI, KOLKATA, LUCKNOW, MUMBAI (ALSO PRINTED IN BHOPAL), NEW DELHI AND PUNE

CENTRE TO REWORK LONG-TERM POWER Sebi considers ban Rate cut on SALE AGREEMENTS Long-term power purchase agreements (PPAs) small savings between power generators and states could soon go. The power ministry is planning to on short selling rework the PPA regime to address issues of states not honouring the pacts and, at times, in the offing reneging on the contract. PPAs are typically of a Circuit filters, trading curbs being IN FREE FALL 25- to 30-year duration. The ministry is discussed in view of high volatility The Nifty has plunged about 2,000 ARUP ROYCHOUDHURY designing a policy paper on the alternative. 6 > points in less than a month New Delhi, 15 March CURRENT SAMIE MODAK RATES & SHRIMI CHOUDHARY ED summons The finance ministry may cut ECONOMY & PUBLIC AFFAIRS P11 Mumbai/New Delhi, 15 March interest rates on small savings schemes for the April-June Aramco profit falls 21% he Securities and Exchange Board of India (Sebi) is Anil Ambani quarter, Business Standard has on lower oil prices working on a plan to arrest the deep market sell-off learnt, as it looks at reducing T and reduce volatility, which has spiked to record lev- in YES case the cost of credit and, hence, 4.0% Savings deposit Saudi Aramco posted a 21 per cent drop in els owing to the damage caused by the coronavirus pan- providing more liquidity for a full-year profit and cut planned 2020 capital demic. A ban on short selling, mandatory delivery-based SHRIMI CHOUDHARY financial system stung by a 6.9% 1-year time deposit expenditure. The oil giant cited lower crude oil trading, and invoking the so-called additional surveillance New Delhi, 15 March global slowdown owing to the 2-year time deposit prices and production for the decline in profit. mechanism (ASM) for highly volatile stocks are among the coronavirus pandemic and 3-year time deposit It’s the first time Aramco reported results as a proposals being considered, said people in the know. ARRESTING THE SLIDE The Enforcement Directorate (ED) has another banking crisis at home. listed firm since its $29 billion IPO in December. If the market continues to fall, Sebi would announce at summoned Reliance Group Chairman Anil The govenment last cut the 7.7% 5-year time deposit Capital expenditure will be between $25 billion least some of these measures to reduce | Spain, Italy, and South Korea are Ambani in connection with the ongoing small savings rates for the July- among countries that have banned 7.2% 5-year recurring and $30 billion in 2020. excessive speculation and prevent traders money-laundering probe against YES Bank September 2019 quarter, except deposit from exacerbating the fall, they added. MARGIN short selling co-founder and former chief executive offi- for one scheme. For the Last week, the finance ministry CALLS, | Sebi plans similar action if markets cer Rana Kapoor. The Group is among the October-December 2019 and 7.6% Monthly Income Account hauled up the market regulator, seeking LEVERAGE continue to fall largest borrowers from the bank, with an January-March 2020 quarters, immediate action to curb the free fall in LOWER exposure of around ~14,000 crore. the rates remained unchanged. Kisan Vikas Patra ON | Coronavirus pandemic has triggered the market, sources said. THAN 2008 Confirming the development, an ED The government also National Savings MONDAY On Friday, the Nifty50 index plunged one of the worst sell-offs in history official said the agency was examining all hopes that the Reserve Bank 7.9% Certificate SPECIALS 10 per cent, triggering a halt in trading for Page 6 | Pressure on Sebi to rein in volatile the big borrowers of the bank, and the of India’s (RBI's) Monetary the first time since the 2008 global finan- market moves stressed loans sanctioned during Kapoor’s Policy Committee will go for a Public Provident BANKERS’ TRUST cial crisis. However, after trading resumed, the index saw a tenure. Ambani has been asked to join the rate cut in its next meeting, Fund Scheme Dear governor, why save | Sebi says “prepared to take suitable dramatic 16 per cent rebound. The recovery happened on probe on Monday (March 16). He will have helping reduce the cost of Sukanya Samriddhi the bullet? Use it now 8 > actions as may 8.4% the back of measures announced by central banks and to provide the details regarding the loans capital even more. Account Scheme Beyond perking up the economy, the RBI authorities around the world to stop the market slide. be required” disbursed to his group, the terms and con- “Leaving aside the regula- needs to ensure proper functioning of the If India introduces steps such as a short selling ban, it ditions and side agreements, if any, with tors, there are a few things that 8.6% Senior Citizen Savings bond market, the credit market, and the will join other countries, including South Korea, Spain, the private lender, said the official. a government can do to Scheme larger financial system, writes and Italy, which have announced measures to bring sta- The official said a significant portion of improve lending activity in Note: Rates unchanged since July 2019 TAMAL BANDYOPADHYAY bility to the markets, which have undergone their worst the bank’s loans to the construction sector order to boost growth and Source: dea.gov.in rout since 2008 on fears that the spread of coronavirus was accounted for by the Anil Ambani- ensure the transmission of rate BUSINESS LAW would push the global economy into a recession. led group and the investigative agency cuts. Small savings is one of them,” said a senior government Deal-making in the time Short selling is a trading strategy that bets on a decline wanted to understand the process of dis- official. The person confirmed that the possibility of a rate of pandemic 13 > in the share price. Either traders borrow shares for short- bursing the loans. Turn to Page 6 > cut for small savings scheme was being discussed. Experts say buyers and sellers may need to ing or use the derivatives market, which allows shorting “There are steps being taken to clean up the financial sec- reassess the impact of COVID-19 on the without having the underlying security. Page RANA KAPOOR’S FIRM EXPANDED tor, but a short-term impact of that is some avenues of credit business, assets, valuation, and future Turn to Page 6 > 2 AGGRESSIVELY THROUGH LOANS are blocked,” said a second official. Turn to Page 6 > cash flows, writes SUDIPTO DEY PERSONAL FINANCE Cryptocurrency back, but be cautious 10 > It faces regulatory risks and is highly Air India valuation volatile. Limit your exposure to this asset class, writes SANJAY KUMAR SINGH THE SMART INVESTOR set to take a knock Europe slowdown to hit auto sector hard 12 > DEV CHATTERJEE Motherson Sumi, Apollo Tyres, and Tata TURBULENT Mumbai, 15 March Motors to be among the worst affected because of high exposure, writes TIMES The valuation of Air India may decline RAM PRASAD SAHU significantly due to the coronavirus pan- demic, which is expected to hit the rev- POLITICS & PUBLIC AFFAIRS enues and profits of all airlines in the com- ing months, according to bidders. Potential Sharp fall in airline bidders for Air India said they were going back valuations across the to the drawing-board and would submit a bid world after taking into account the peer valuations in United Airlines and the stock markets in India and overseas. Lufthansa share prices are The impact of the pandemic is showing in the share prices of top airlines worldwide, with down 58% and 36%, the United Airlines and Lufthansa share prices respectively, since falling by 58 per cent and 36 per cent, respec- January tively, since January this year. “There are sev- Aviation industry could eral airlines listed in India as well as overseas make a loss of $67 billion and that’s a good indicator of Air India’s valu- in 2020 owing to ation,” said a bidder, asking not to be named. Shivraj isn’t running solo The aviation industry is expected to make > coronavirus impact for top job 14 a loss of $67 billion in 2020 and several airlines Narendra Tomar, Narottam Mishra, and Potential bidders for Air are expected to file for bankruptcy in the com- Kailash Vijayvargiya are among his India may scale down ing months. challengers in CM race, writes their bids Citing an example, the bidder said both SANDEEP KUMAR More airlines will seek United Airlines Holdings and Deutsche investors at lower Lufthansa AG were profit-making, with United STATSGURU flying to 369 destinations and having a fleet of > valuations The global sell-off 4 more than 1,250 aircraft. Turn to Page 6 >

CASES ZOOM TO Busy office hubs fall silent OVER 100; MUMBAI IN SEMI-LOCKDOWN as virus noise gets louder The number of coronavirus cases in the country rose to BS REPORTERS 107 on Sunday. With 12 new Gurugram/Bengaluru/Mumbai/Chennai/Kolkata, 15 March cases in Maharashtra, the state government put the Two security guards, wearing N95 medical city in a semi-lockdown masks, screen the temperature of every mode. Executives at Inorbit visitor with infrared thermometers. A Mall said their Malad and placard announcing ‘temperature scanning Vashi properties were in progress, please cooperate’ stands closed and would remain between them. A dozen more men, their PHOTO: SAGGERE RADHAKRISHNA shut for a few days.The faces covered with protective masks, clean Mumbai police issued an the premises. order to prohibit all group This is the scene that greets you as you tours till March 31. Those enter One Horizon Centre tower in A security guard screens employees at the flouting the order can Gurugram’s Golf Course Road, which, Brigade World Trade Centre in Bengaluru, face penal action. together with its sister tower, Two Horizon which houses Amazon India headquarters as VIVEAT SUSAN PINTO & Centre, houses such large multinational well as offices of several other MNCs ANEESH PHADNIS report 16 > corporations (MNCs) as Apple, Coca-Cola, Samsung, and GSK Consumer Healthcare. about half in the past 10 days, the staff said. The usually bustling complex — it also has a At Cyber Hub, a popular hangout in AMID PANIC, HYUNDAI SEES number of showrooms and restaurants — is Gurugram and home to an array of A SILVER LINING P2 now deserted. restaurants, most eateries are going empty, as IT COMPANIES DRAW BUSINESS The coronavirus outbreak is exacting a Business Standard finds out while on a recce EXIGENCY PLANS P2 heavy toll on businesses everywhere and this to assess the impact of the virus. commercial complex is no exception. Over The offices of many MNCs are equally POULTRY FIRMS, FARMERS the past few days, it has witnessed a sharp vacant these days. To protect their employees HIT DUE TO CULLING P2 decline in footfall. Popular restaurants like from the coronavirus pandemic, several have EDIT: Delhi Club House have not seen their regular given their employees the option of working POLICY AFTER COVID-19 P9 patrons in recent days. Sales have declined to from home. Turn to Page 3 > 2 COMPANIES MUMBAI | MONDAY, 16 MARCH, 2020 > How Kapoor’s firm expanded aggressively through loans SURAJEET DAS GUPTA company incurred a net loss of ~48.76 realised in the current year. These Ramani is the vice-chairman of New Delhi, 15 March crore on revenues of ~59 crore — a sharp DOIT URBAN VENTURES went up from a mere ~92 crore in 2016- NCube. According to sources, the contrast to 2017-18 when it had profits (in ~crore) 17 to a staggering ~729 crore in 2018-19. Kapoor companies invested around Former YES Bank managing director of ~2.7 crore on revenues of ~43 crore. FY17-18 FY18-19 This money was invested in the $10-11 million in Awfis but their share- Rana Kapoor and his family’s In the RoC filing, the company jus- Total turnover 43.55 59.36 equity as well as in acquiring shares holding got diluted as new investors labyrinth of firms, in particular DOIT tified the loss like this: “The company in its 10-11 subsidiary and associate came in. Urban Ventures, are under close has made strategic non-current invest- Net loss/profit 2.7 -48.7 companies which included DOIT The co-working business has scrutiny by the Enforcement ments through subsidiaries/step down Total assets 715 853 Smart Hospitality, Ambience grown in size, despite competition Directorate and the Central Bureau of subsidiaries in businesses across var- Total liability 415.6 602.5 Hospitality, and NCube Planning, from US giant We Work and has over Investigation. ious sectors such as hospitality, infras- among others. 35,000 seats in 63 centres and nine Borrowings, 300 600 The CBI has alleged that Dewan tructure, tourism, co-working spaces non-current DOIT Smart Hospitality, which is cities. It has also been able to rope in Housing Finance Corporation's and so on. Some of these businesses, in the business of canteens, restau- other private equity players, which (DHFL’s) promoter Kapil Wadhawan which are in the early stages of their Source: Reports rants, and bars, received a huge infu- include ChrysCapital and Innoven, gave kickbacks in the form of builder lifecycle, have a longer gestation peri- sion of over ~512 crore — a large part to invest. loans to DOIT Urban Ventures. The od before they become profitable and 2016-17 to ~415 crore the next financial of the total investments made by the According to Ramani, it is planning quid pro quo: YES Bank’s investments hence their financial statements as on year and ~602.57 crore in 2018-19. As a company. The hospitality company an initial public offer in 2022. Through in its ~3,700 short-term debentures. March 31, 2019, have significant accu- result, the debt servicing cost (finance also has the Kapoors as key directors. NCube, in which the Kapoor family Business Standard has accessed the mulated losses.” cost) almost doubled from ~34 crore That’s not all. The Kapoor family, companies invested under ~10 crore, Registrar of Companies (RoC) docu- To fund these aggressive invest- to ~63 crore during the same period. through its family office, the Three Ramani has executed over 200 pro- ments on the firm and they tell an ments into its subsidiaries in 2018-19, Meanwhile, the total value of the Sisters Institutional Office, have also jects across the country. interesting story. DOIT used debt which doubled to assets also rose sharply from ~224 put money into many start-ups. One The RoC documents also say that The RoC documents show that the ~600 crore in 2018-19 from the previ- crore in 2016-17 to ~715 crore in 2017- such investment has been with US- key managerial persons and their rel- company is into commodity trading ous year. Investigating agencies say 18 and ~853 crore in 2018-19. returned Delhi based entrepreneur atives in DOIT exercise significant with additional businesses in hospi- that DHFL gave a loan of ~600 crore A substantial portion of the Amit Ramani who set up two compa- influence in Seven Rivers Capital tality and infrastructure, both in India to DOIT which is under scrutiny. increase from 2016-17 was due to the nies: a co-working firm Awfis Space Advisors. The company specialises in or abroad. DOIT’s total liabilities, according increase in non-current assets, which Solutions and NCube (formerly early-stage growth capital invest- DOIT’s fortunes changed dramati- to the RoC, rose from a mere ~1.86 included investment in companies Nelson India), an interior designing ments in small and medium-size PHOTO: KAMLESH PEDNEKAR cally in recent years. In 2018-19, the crore (as it had not taken any loans) in and others whose full value was not and building solutions company. companies. IN BRIEF Amid panic, DoT units seeking bulk call Virus scare: IT firms draw data record on routine basis Hyundai sees Some units of the telecom department are seeking huge call business exigency plans data records of people in some a silver lining circles on a routine basis which is DEBASIS MOHAPATRA alleged to be in deviation from the Bengaluru, 15 March PRESS TRUST OF INDIA standard operating procedure laid New Delhi, 15 March down by the government, n the wake of coronavirus outbreak, according to sources. Industry players have raised concerns over most IT services firms have invoked Amid the gloom surround- such practices in a communication to the Telecom Secretary, the I their exigency plans, which include ing coronavirus pandemic, sources said. They claimed the DoT unit of Delhi demanded call data adoption of practices like work from South Korean auto major records (CDRs) of entire state for February 2, 3 and 4, 2020 and home, virtual meetings and preparing Hyundai sees a silver lining separately for specific routes in Delhi with residences of Ministers, strategies to conserve cash. for the slowdown-hit auto Members of Parliament, Judge, important offices etc following As social distancing emerges as the industry in India as con- which industry players gave representation before telecom secretary most viable option to contain the spread sumers seek isolated mode Anshu Prakash to raise concern on such practice. PTI< of this virus, IT companies have started of transportation at a time chalking out plans in case the fallout of when it is also preparing to this pandemic lingers beyond two quar- ramp up online sales of Ferns N Petals eyeing Rentals in Pune for ters. “The current business continuity vehicles, according to a to double turnover to coworking space plans include providing means for extend- senior company official. ed work from home arrangements, con- The spread of coronavirus ~1,000 crore in 3 years is 33% lower: Study ducting as many meetings online, and has heavily impacted travel, limiting travel. Measures are also being tourism and other manufac- Coworking spaces in Pune are taken to protect existing cash reserves of turing sectors, adding to available at 33 per cent lower the companies,” said Hansa Iyengar, ana- HOW IT AFFECTS THEM the already low customer “EVERYBODY WANTS rentals than traditional offices, lyst at global consulting firm Omdia. n n n sentiment due to uncertain- TO HAVE A SAFE while the cost advantage of Conserving cash is one of the widely Buyback Most IT firms have Second half of the year ty of economic downturn, flexible workspace is lowest in adopted ways by any companies during a programmes from IT started plans to conserve may not give big boost to according to Hyundai Motor PLACE, SOME Gurugram at 6 per cent, demand slowdown. Experts are of the firms are likely to cash in the wake up likely demand because of the India Managing Director and KIND OF SOCIAL Ferns N Petals is looking to according to consultant opinion that most IT services firm are come down this year demand slowdown US elections CEO S S Kim. ISOLATION. HOME double its turnover to ~1,000 Anarock. In its report, the preparing themselves for long haul, given “At the same time, there crore in the next three years consultant said flexible the uncertainties arising from the global might be some positive, MIGHT BE from ~500 crore in the current workspaces in Pune offer the pandemic, coupled with upcoming US down and pricing pressure, most IT firms Some of the large investment plans by the green area from automotive THE FIRST PLACE financial year, on the back of its highest rental difference PTI< elections in the second half of this year. are looking at cash conservation mea- IT firms are expected to take a backseat manufacturers’ perspective. AND CAR MIGHT innovative services and entry “The timing of COVID-19 outbreak and sures. Traditionally, the top four IT firms in the near future. Everybody wants to have a into more markets across the its associated impact have stalled the first — Tata Consultancy Services, Infosys, Amid all the gloom, some safe place, some BE THE SECOND” globe. Ferns N Petals completed Telcos must disclose half catalysts and by the time it passes, HCL Technologies and Wipro — have well analysts also see a silver lining kind of social isola- S S KIM 25 years of operations with an we will be in the midst of pre-existing sec- laid-out capital allocation policy, which for the industry. “While mega tion. Home might be data used to arrive at Managing Director and CEO, estimated top line of ~500 crore ond half challenges, such as the US elec- includes giving back most free cash flow deals will be less, secular busi- the first place and Hyundai Motor India in 2019-20. PTI< AGR dues: Report tions, post-Brexit trade negotiations to investors. In the past two years, all four ness drivers (deals relating to car might be the sec- among others,” said Peter Bendor-Samuel, IT firms had conducted big buyback pro- modernisation in new technolo- ond,” he said. founder and chief executive officer of out- grammes, giving back excess cash reserve gy areas) will make a comeback “What we heard P R Jaishankar's sourcing advisory firm Everest Group. He to their shareholders. Even after this pay- soon after the threat of COVID- CORONAVIRUS from our colleagues to handle the situation? We name suggested also said IT firms would face severe pric- out, both TCS and Infosys have more than 19 subsides. A prepared service PANDEMIC is that people who are ready for the situation," ing pressure this year even if situation $3 billion of cash reserve each. provider, with ample resources didn't want to buy Kim said. for IIFCL MD post arising from the outbreak was contained. With uncertainties around growth out- to handle irregular pent-up cars till recently, When asked how soon Bharti Airtel and Vodafone According to experts, given this year look, most companies are likely to go slow demand, will emerge as a big market share they have changed their the programme will be The Banks Board Bureau (BBB) Idea must disclose workings (2020) is likely to see both demand slow- on their payback plans to shareholders. gainer this year,” Bendor-Samuel added. mind because they want to ready, he said, “It is being has been able to find a suitable highlighting areas of differ - have their own isolated pilot tested in Delhi area candidate to head India ence as minority shareholders space even on the road.” and it will be introduced in Infrastructure Finance deserve to know, a report by When asked how the the coming few weeks peri- Company (IIFCL). The BBB, Kotak Institutional Equities Poultry firms, farmers hit due to culling company is looking to od. We are preparing some- headed by former Secretary said. "While we appreciate the address concerns of those thing, but considering the Department of Personnel and matter is still sub judice, once VIVEAT SUSAN PINTO & When I last checked, the price maize production in India. The cost of production of who do not wish to visit coronavirus situation we Training B P Sharma, has the legal chapter is over, Bharti DILIP KUMAR JHA of chicken was down to half of Industry estimates peg the chicken in India is pegged at crowded showrooms to buy think we should hurry up zeroed in on P R Jaishankar, the and Vodafone Idea could Mumbai, 15 March its cost of production. It could loss to the market at ~1,000 ~75-80 per kg. The average cars, he said Hyundai has implementing those plans.” executive director at National disclose... minority be lower now,” Nadir Godrej, crore. Losses could mount price at which chicken is sell- issued advisories to its deal- In terms of impact on Housing Bank, for the post of shareholders deserve to India’s $14-billion (or ~1-tril- chairman, Godrej Agrovet though as chicken prices hit ing stands at ~15 per kg. ers over safety hygiene, component supplies due managing director of IIFCL. PTI< know," it said. PTI< lion) poultry market has said. The latter has a joint ven- rock bottom and sale of chick- “Poultry farmers with including temperature to coronavirus, he said begun a massive culling exer- ture with the US-based Tyson en products come to a stand- around 1,500 birds will vanish checking, sanitisation and that at the company level, cise as consumers keep off Foods, which mar- still, experts said. from the market,” said keeping physical distance of it has not had such a prob- chicken products for fear of kets brands such as “There are abso- Ramesh Khatri, president, 5 metres to ensure its con- lem. However, some tier-I Tata Motors asks staff catching coronavirus. While Real Good Chicken lutely no sales hap- Poultry Federation of India. sumers feel secure. component suppliers which the Food Safety and Standards and Real Good pening for the past “The bigger worry is that we Hyundai Motor India have supply chains spread to work from home Authority of India (FSSAI) has Yummiez. one month,” said K could now see job losses in the also plans a nationwide across countries like China, said there is no scientific evi- Weak demand G Anand, general market. Some companies launch of its ‘click to buy’ Vietnam or Thailand Tata Motors has asked its staff in office-based roles at dence to prove the virus from the poultry manager, Venkat - could also see a sharp erosion programme, introduced as a have some impact, but that headquarters and regional offices to work from home with spreads through consumption sector has resulted eshwara Hatch- in working capital,” he said. pilot project for the National hasn’t affected the compa- effect from Monday, in the wake of the coronavirus pandemic, of non-vegetarian food, this in a sharp decline eries, which mar- Sanjeeb Chintawar, busi- Capital Region at the Auto ny's production. according to an internal memo by the company’s Managing has had no impact on people, in feed prices too, with both kets the Venky’s chicken. ness manager, National Egg Expo last month. He said the company has Director and CEO Guenter Butschek. The company has executives at some of the top soybean and maize prices “Many farmers have shut Coordination Committee, said “This might be a great made up for any constraint constituted a team to monitor and initiate actions to reduce poultry firms said. falling by nearly 25 per cent in operations. As long as the culling had also been under- alternative solution to the on supply of parts for any risk to employees and has developed a three tier response plan “It is difficult to change the past two months. The coronavirus scare remains, taken by farmers since it is customers who want to buy one particular model by based on incidence of infection in cities it operates it or has people’s minds. Consumption poultry market consumes demand will be muted, impossible for them to contin- a car but do not want to go ramping up others which do manufacturing sites. PTI< of chicken has fallen a lot. around half of soybean and impacting business,” he said. ue feeding birds indefinitely. to any crowded area. So how not have such issues. MakeMyTrip works on app upgrades, wider positioning NEHA ALAWADHI It is also going to raise the focus on age section. It already offers a visa-at- New Delhi, 15 March premium and ultra-luxury properties, AIMING FOR your-doorstep facility for Malaysia and apart from the five-star hotels it already A NEW LOOK Singapore and plans to expand that to

Gurugram-based MakeMyTrip is has on the platform. “Our sweet spot was n n other destinations. To ensure these planning a host of changes and features the mid-segment and premium. The five Expanding To tie up changes reach the customers, it is going to its existing app, includ- stars will be there but the focus on trains, with airports, to change the design of its home page. ing a landing page redesign ultra-luxury kind of including shopping centres and a section on new vaca- Group chief says properties...we’re working Hyderabad and and food joints Coronavirus effect tion destinations. they wish to on it,” said Magow. Mumbai metros Due to the ongoing COVID-19 pandemic n On path to From being a primarily graduate from According to Magow, n effect, the company is on wait-and-watch flight and hotel booking being only a MakeMyTrip has been a Offers visa-at- break even but work is on to upgrade the app with app, MakeMyTrip is booking site to transaction site but now your-doorstep unless there is a better features. For now, MakeMyTrip rethinking its positioning handling every wishes to cater for the facility for major impact app has widgets on safe travel, including in all types of travel — other issue a customer even before the Malaysia from the COVID- protective measures against COVID-19, whether by road, train or traveller could face latter begins planning a and Singapore 19 situation government updates on travel issues, air. It is also going to expa - destination. “With the and information on date changes and nd focus on the type of ‘Trip Ideas’ section, we are cancellations. properties it lists on the platform. going one step before the funnel. The (such as) points of interest, well Eafter a customer makes a booking. “If giving you an opportunity to book a cab, Last week, the company in a In its alternative accommodation idea there is, when you start planning presented, which will help you take a call you’ve done a flight booking, we will your e-ticket. Then, as you reach there, statement said: “We are seeing a demand space, said Rajesh Magow, co-founder your trip, and you’ve come to transact on on the destination,” he added. The fim is remind you just before your travel, we are trying to get the data on which slowdown for the coming summer and group chief executive, MakeMyTrip, us, this is the guidance you need to start working on adding user-generated through a push notification. We will belt you have your luggage on, and then holiday season, especially for is looking at villas, service apartments from. If you want to explore the pictures and video content as well. start giving all the information, airport transfer,” Magow said. international travel. The situation and hostels, especially those based in destination, you can see recent trending Another feature being worked on is including the departure gate, if there is MakeMyTrip is also trying to tie up remains dynamic, making it hard to pilgrimage sites, such as Varanasi. As of destinations... You will have all the Trip Assist. This will be like a chatbot, to any change in the flight schedule, which with airports, shopping centres and food quantify the actual impact on our now, it has 17,000 such properties. curated content and all the information help with various types of travel issues means delays, etc, baggage details, joints to offer a deal on a food and bever- business and industry at large.” MUMBAI | MONDAY, 16 MARCH 2020 COMPANIES 3 . <

> FROM PAGE 1 CORONAVIRUS IMPACT Busy office hubs fall silent as virus noise gets louder Multiplexes’ revenue likely to be hit by up to 25%

SOHINI DAS tion houses to release their movies. Mumbai, 15 March Sources said Reliance Enter- tainment and Phantom Films’ upcom- he COVID-19 virus outbreak has ing biopic on Kapil Dev, 83 is also get- caught the country’s entertain- ting postponed. “At least 20-days of T ment industry off guard with March would see no business for the multiplexes shutting down across sev- multiplex owners. This would mean 20- eral states and big releases like 25 per cent loss on a sequential basis,” Sooryavanshi getting postponed. said a Mumbai-based media analyst. Analysts expect the revenues to dip Box office revenues in Q3 were around by 20-25 per cent in the March quarter ~453 crore for PVR, while its total rev- compared to the previous one. enues were at ~924 crore. Inox had post- One of the most awaited releases, ed revenues of ~518 crore for the same. Angrezi Medium, which featured the While the listed firms did not wish to return of ailing actor Irrfan Khan, man- comment on revenue loss, they admit- aged to collect only ~4.03 crore on its ted business was seriously impacted. opening day last Friday. Inox Group Director Siddhath Jain Trade analysts like Taran Adarsh said, “We are optimistic that big releas- A security guard screens employees at the Brigade World Trade Centre in Bengaluru, which said the film’s business had been severe- es will bring people back to cinema houses Amazon India headquarters as well as offices of several other MNCs SAGGERE RADHAKRISHNA ly affected because of the closure of cin- halls. It is not just Sooryavanshi, but ema halls in several states movies like Gulabo Sitabo and Gunjan Coca-Cola India, which has Flipkart employee. icy will be in operation till the According to sources, the box office Theatres have been asked to shut down in major cities such as Delhi Saxena will also play an important role its offices on the 16th and 17th “Functions where physical threat of the virus has passed collections of Angrezi Medium dropped and Mumbai PHOTO: SAGGERE RADHAKRISHNA in bringing the cinema routine to nor- floor of One Horizon, is one meetings are key, such as ven- or reduced substantially, said by 25 per cent on Saturday. The film has malcy, whenever they get released.” such. At the office’s reception dors and supplier meetings, Rajendran Dandapani, direc- done business mostly in Uttar Pradesh, Kashmir, Kerala, Goa are also follow- There are around 6,600 single Multiplexes are expecting the gov- on the 17th floor, another are the only ones that are get- tor of technology, Zoho. Haryana. Tiger Shroff starrer Baaghi 3, ing the same. screens in the country. SBICAP Secu- ernment to help the industry after the round of temperature scan- ting affected,” he added. IT firm Cognizant has sus- too, has seen a similar drop in numbers A multiplex chain owner said there rities had noted in a recent report high- scare is over, he said. “I am hopeful that ning takes place, followed by At B2B unicorn Udaan, all pended non-essential busi- on Saturday. were around 3,000 screens in India. At lighting that single scre-ens had seen a we will come out with some plan soon- hand sanitisation. The office employees will be working ness travel. Employees are Theatres have been asked to shut present, more than 50 per cent of mul- negative CAGR of 4 per cent in the past er or later to alleviate the sector. This is is almost 25 per cent empty. from home till March 20. being directed to seek med- down in major cities such as Delhi and tiplexes are closed and he expected nine years. These are also shutting a very important sector of the econo- A few kilometres down Meetings are taking place on ical attention and stay home Mumbai. Karnataka, Odisha, Jammu & more to follow suit. down, making it unviable for produc- my,” he said. National Highway 8, Nestle Google hang-outs. Employees if they feel ill or experience India is closely tracking who need to attend office flu-like symptoms. employees with any recent have to wear a mask. They “Cognizant’s facilities in health issues and those who also have to give a declaration India and elsewhere are fully have recently returned to the that they do not have any flu operational and it is business Cine bodies to halt productions from Mar 19 country from abroad. It is also symptoms. Udaan’s office as usual. A dedicated, cross- conducting hygiene-related canteen has been shut and functional team is engaged PRESS TRUST OF INDIA a statement here. Pandit said the move comes awareness drives in its offices those who are attending in daily contingency plan- Mumbai, 15 March "In the coming days, we will at a time when there are rising across India. office have been asked to get ning with various stakehold- discuss the details with our health concerns over novel Facebook has asked its home-cooked food. ers to ensure continued serv- To contain the spread of novel members on the modalities of coronavirus and the employees to compulsorily Uber India, which has ices for our clients around coronavirus, film bodies in postponing our production associations collectively work from home, as has advised work-from-home till the world. These plans India including Federation of plans, keeping in mind the on- decided that the health of TikTok parent, Bytedance. April 6, has also shut down include preparations to Western Indian Cine Employees going threat of COVID-19. We workers is paramount. "We Starting Monday, work-from- the office canteen. enable some associates to (FWICE), Indian Film & will continue to monitor the have also decided that all our home will also be in opera- work remotely if necessary Television Directors' Association situation and take further sets, despite not being used, tion at two prominent public Travel history check in and appropriate,” said a (IFTDA) and Producers Guild of decisions accordingly," will be sanitised, cleaned. Every relations agencies in Mumbai Cognizant spokesperson. India on Sunday decided to put Makkar said. production house, with their Gurugram, Weber Shandwick In the financial capital of It has enhanced cleaning shootings of films, TV shows Various events, award members, will constantly take and Genesis BCW. Mumbai, absence of crowd in processes at its offices in and web series on hold from functions, interviews, shooting care of the sets. The daily wages But everyone realises that local trains is the biggest India and around the world, March 19 to March 31. schedules have been called off of the workers will be affected working from home is not giveaway of things gone terri- and have increased the num- The meeting of the film in view of the novel coronavirus so we have decided that they fail-safe either. “No matter bly wrong. “You are safe, Sir,” ber of hand sanitisers in high- bodies was also attended by outbreak. "Important bodies of will be taken care of by all the how much you distance your- declares the receptionist at traffic and common areas. the representatives of Indian film and entertainment producers associations and self socially, our houses are Embassy 247, a complex belo- However, another Chen- Motion Pictures Producers' industry met today to deal with federations. We will take care of porous. The domestic help, nging to Embassy Office nai-based IT products com- Association (IMPPA), Western the issue of coronavirus. After a them," he added. delivery people and others, Parks in the Vikhroli area of pany said that the infection India Film Producers' lot of discussion, we came to JD Majethia, chairman, TV come in contact with so many Mumbai, after doing a body was currently at the first lev- Association (WIFPA) and Indian this conclusion that from this wing, IFTPC, said they are in people. There is only so much temperature check with a el on their distress scale, since Film and TV Producers Council coming Thursday, all shootings talks with broadcasters and all you can do,” said an employ- thermal gun thermometer. no coronavirus-positive case (IFTPC). “The health and safety will stop till March 31. After that, have been sensitive in dealing ee of a technology major in Questions on whether one had been reported from the of our colleagues is of we will take a call," Ashoke with the pandemic. Gurugram. has visited China, Italy and city’s companies so far. But paramount importance to the Pandit, president of IFTDA, told "Precautions were duly Korea in recent weeks follow. those who have returned Producers Guild of India. The reporters here. taken and more precautions Masks all over in Embassy Office Parks, from other countries are industry's united decision to "We have given a gap till will be out in place till Bengaluru which has complexes in being asked to work from suspend shooting between the Thursday so that people get Wednesday. We have put up More than 2000 km away, in Bengaluru, Mumbai and home for the stipulated quar- period March 19 to 31 is the need ready accordingly, pack up and posters to spread awareness, the Silicon City of India, the Pune, has taken a number of antine period. of the hour and we fully return from outstation. Our TV have provided masks and even mood is similar. With most of precautionary measures. An official from Intellect support it," Kulmeet Makkar, industry is an important one given the option of paid leaves its employees working from “Isolation rooms have been Design Arena, another IT Chief Executive Officer, and even they will get time to for anyone who feels sick. All home, Amazon India's head- created across all our parks, products company, said that Producers Guild of India, said in organise things," he added. measures are in place." quarters in the 32-storeyed ambulance facilities are it is monitoring the situation World Trade Center (WTC) in available, and a list of hospi- and has designated flu man- Bengaluru, wears a deserted tals affiliated for treating agers in offices, who will be look. At the building’s entry Covid-19 has been prepared,” the go-to persons if an point, four people wearing a company spokesperson employee has some health masks check the temperature said. issues. Meetings and discus- of every person who wants to The company is creating sions are being done via video come in. awareness about the disease conferencing. “If the temperature through educative messages Vinod AJ, general secre- exceeds 37 degrees celsius, the via video, social media, tary of the Forum for IT person is immediately taken WhatsApp, posters, and so Employees (FITE), however, to the neighbouring Columbia on. It has also trained over said there seemed to be little Asia Hospital for a check-up,” 2200 vendor-employees on awareness about the pan- an Amazon personal hygine demic and not many compa- employee told this Facebook has and protection, nies were allowing employ- newspaper. asked its symptoms and ees to work from home. Tamil The office’s lob- employees to response requ- Nadu has not reported many by, which normal- compulsorily work irements, the cases so far. ly swarms with em- from home, as has spokesperson ployees, is vacant TikTok parent, added. Kolkata on guard as no one is being Bytedance Co-working At Kolkata’s IT hub in Salt allowed to gather space provider, Lake Sector V, it’s mostly in the common areas. WeWork, has asked any business as usual. Of course, Almost 90 per cent of employee who has recently the area’s roughly 100 IT and Amazon’s employees operat- returned from a high-risk ITeS companies are following ing out of the WTC tower are country to mandatorily work precautionary protocols. now working from home on from home for at least 14 “My office has instructed Amazon Chime, the compa- days. The same goes for any- us to avoid any gathering or ny’s communications service one who exhibits flu-like public meetings as well as that lets employees meet, symptoms. public places,” an employee chat, and place business calls “We have also introduced at Cognizant said. However, inside and outside the organ- mandatory temperature the area's cafes and eateries isation, on a single applica- screenings at our locations,” a continue to be full. tion. The same communica- WeWork spokesperson said. Like Cognizant, most of tion infrastructure is also It will also temporarily the IT biggies, like Wipro and being used for audio calls, suspend all events in the TCS and other large office video calls, and screen-shar- common areas across all loca- complexes have kept hand ing capabilities. tions until further notice, the sanitisers on every floor, Apart from regularly sani- spokesperson said. including the washrooms, tising its offices, the company and have instructed employ- is also working with medical Chennai IT corridor ees to maintain personal experts to "ensure that we buzzing still hygiene. Those with cough take the right precautions as But, the IT corridor in the Old and cold or with flu symp- the situation evolves,” said an Mahabalipuram Road (OMR) toms are being discouraged Amazon India spokesperson. is buzzing as usual. While from attending office. Walmart-owned e-com- most companies in Chennai Most of those who work at merce major, Flipkart, which are watching the virus out- the city’s IT hub feel West has extended the work-from- break closely, not many have Bengal is a relatively safe home facility for all 10,000 asked their employees to place as far as the coronavirus employees at its Bellandur work from home. The excep- outbreak is concerned. Not a office in Bengaluru till March tion is Software as a Software single positive case has been 20, fumigated its premises (SaaS) major Zoho. reported here so far, although over Thursday and Friday. The 8500 employees at its the state government has Flipkart’s internal com- facility in Chennai have been directed all schools, colleges munications teams are send- advised to work from home and universities to remain ing regular mailers about the unless it’s absolutely neces- closed till March 31. ethics related to working from sary for them to be present in home. “Heads are advising office. (With inputs from Arnab Dutta, teams to be active on Zoho has, in fact, adopted Samreen Ahmad, Raghavendra WhatsApp groups while inter- work-from-home at all its Kamath, Gireesh Babu, Avishek nal meetings are happening offices worldwide as a pre- Rakshit, Yuvraj Malik and on Google Hang-outs,” said a cautionary measure. This pol- Neha Alawadhi) 4 ECONOMY & FINANCE MUMBAI | MONDAY, 16 MARCH 2020 1 >

N YES BANK CRISIS N MFs to approach Sebi on lock-in YES Bank plans Over ~2,100 crore of retail to cut slippages requesting anonymity. Nifty, Bank Nifty IN LIMBO While YES Bank is being money could be locked funds will have YES Bank lock-in could lock up ~3,400 cr of non-promoter funds excluded from Nifty and Bank Apart from MFs, other existing Current value* 75% locked in Nifty, new stocks are being shareholders stand to see a sig- to 5% in FY21 to sell stock after Investor category Stake (%) ~ crore added to these indices. “Bank nificant share of their funds get- Nifty-linked funds could find it ting stuck in YES Bank, if the ABHIJIT LELE index exclusion 2,840 IDFC First to invest Retail 43.66 2,130 difficult to have enough room current government notification Mumbai, 15 March to include Bandhan Bank, is not amended or clarified. 986 ~250 cr in YES Bank JASH KRIPLANI FPIs 15.17 which is a YES Bank replace- Retail investors (individuals After adding ~23,000 Mumbai, 15 March 740 ment, while still holding YES up to ~2 lakh of investment) hold crore to its gross non-per- 492 Bank shares partially. Similarly, ~2,839 crore worth of shares in forming assets (NPAs) in orried over the 75 per Mutual funds 5.09 369 Shree Cement is replacing YES YES Bank; calculated based on the December quarter, cent three-year lock- Bank in Nifty,” said a fund man- current share price and share- ailing YES Bank now says W in for YES Bank HNIs 4.3 280 ager. According to industry holding as of December 31, 2019. it hopes to contain this shareholders, mutual funds 210 sources, MFs and exchanges can While it is difficult to gauge slippage to around Value for other categories based on current share price and December 31 holdings (MFs), along with stock excha- Source: Exchanges, MF data as of February 29, 2020 from RupeeVest propose to Sebi that index re- the impact on retail investors as ~8,500 crore in the com- nges, will approach the Secu- balancing date be deferred from the provision is applicable to ing financial year (which rities and Exchange Board of March 27 to another month so only investors holding more begins April 1). IDFC First Bank on Sunday said it wo- India (Sebi) on how the impact held YES Bank into their On Friday, the government investors that lent shares in that government can clarify the than 100 shares, 75 per cent of Its standard advances uld make an equity investment of of government’s notification can schemes as of February 29. notified the YES Bank scheme. stock lending and borrowing issue in meantime. retail investment getting locked- after subtracting net NPAs ~250 crore in beleaguered YES Bank, be mitigated on index funds and “Some of the exposed In section 8 of the gazetted mechanism might not be able Further, industry partici- in could amount to ~2,129 crore were about ~1.75 trillion at to acquire 250 million equity shares. exchange-traded funds (ETFs). schemes are large in size with notification, it has been stated to get back all shares, hedged pants say creation of segregat- worth of shares. Overall, more end-December. Advances “...duly authorised committee of From March 27, YES Bank assets of between ~40,000 that there shall be a lock-in positions or cash-future arbi- ed portfolio to hold YES Bank than 1.6 million public share- were ~1.86 trillion and net the Board of Directors of IDFC FIRST will be excluded from both the crore and ~60,000 crore. For period of three years from the trage strategies can face losses. exposure separately and giv- holders have investments in NPAs at ~11,114 crore. Bank had at its meeting held on Nifty and Bank Nifty indices. them, the issue can be much commencement of scheme to To be sure, an index or ETF ing separate units of the bank, as of December 31, 2019. The slippage ratio March 14 accorded approval Index funds and ETFs need to larger. We will be taking up the extent of 75 per cent. Industry needs to have 95 per cent of schemes to unitholders can be Among other investor cate- (standard advances for an equity investment of up to exit from the bank shares once matter with Sebi,” said senior participants are worried, as this assets replicated in-line with the a workable solution. gories, foreign portfolio inve- becoming NPAs) will be ~250 crore comprising up to 250 the lender is excluded from executive of a fund house. means both existing and underlying index. “However, “However, Sebi will have to stors hold ~986-crore invest- brought to 5 per cent in million equity shares at a price of indices. According to the data “We are in talks with investors coming in with fresh typically index and ETFs use allow exemptions for such an ments in the bank, while high 2020-21, from 11.98 per ~10 each and face value of ~2 each, from RupeeVest, MFs’ equity exchanges and industry body capital will not be able to sell remaining 5 per cent room for exercise as under current regu- net-worth investors (HNIs) hold cent in the December under the proposed Scheme of exposure to YES Bank stood at Association of Mutual Funds in more than 25 per cent of hold- cash holdings to deal with any latory framework, side-pocket ~280 crore worth of shares. quarter, according to a Reconstruction of YES Bank ~492 crore as of February 29, India. Both will seek clarity from ings for at least three years. redemption pressures. Also, can only be created in a debt A 75 per cent lock-in on invest- presentation for analysts. under the Banking Regulation Act, with 62 per cent of the exposure the Sebi on this issue,” said an Lock-in is also expected to holding YES Bank shares for scheme when there is a rating ment would amount to The vulnerable portfolio, 1949, subject to regulatory and held in various index and ETFs, industry official, part of the hurt investors’ faith, who three years, after it is out of downgrade to below-invest- ~209 crore for HNIs. Similarly, loans that have high government approval(s), if any,” the which track underlying index. industry body’s committee on bought bank’s shares on indices, can lead to huge track- ment grade,” said chief execu- the lock-in for FIIs could be ~739 chance to slip into NPAs, bank said in a BSE filing. As many as 50 index and ETFs ETFs and index funds. Thursday or Friday. Institutional ing error,” a fund manager said, tive officer of a fund house. crore worth of investments. is ~13,911 crore at end of The Centre on Saturday notified December 2019. These are the YES Bank Reconstruction special mention accounts Scheme, 2020, a day after the (SMA) categorised in Cabinet approved a reconstruction terms of duration. In the plan proposed by the Reserve Bank Fresh blows to investors of crisis-hit bank case of SMA -1, the over- of India for bailing it out. PTI due period is between 31 Auditors cast doubts on bank’s ability to remain a going concern, investors holding more than 100 shares barred from selling stock and 60 days. An overdue between 61 to 90 days will Outstanding term HAMSINI KARTHIK the form of its disastrous Dec- HOW ASSET QUALITY themselves for another round make an asset SMA -2. Mumbai, 15 March ember quarter (Q3) results. Wh- of capital infusion, elevated Gross NPAs at end- loan is zero: IHFL ile the net loss of ~18,564 crore WORSENED (%) NPAs and probable losses,” the December were ~40,709 Indiabulls Housing Finance (IHFL) It was an unprecedented on the back of the ~24,766 crore Q2 Q3 analyst added. crore, up from ~5,159 crore on Sunday said the company as well weekend, filled with many provisioning cost was some- “The bank will need further a year before (and ~17,134 as its promoters did not have any disappointments, for investors thing investors saw coming, Gross NPA 7.39 18.87 capital infusion to grow, strip crore at end-September outstanding term loan from of YES Bank. the magnitude of these num- Retail 1.03 1.36 off assets to release capital and 2019). With the huge provi- YES Bank. The company was clarifying on “some rumours” in As the first blow to bers took them by surprise. MSME 1.29 1.63 mop liquidity to meet liabili- sioning for bad loans, the shareholders, both retail and It doesn’t stop at that. ties,” analysts at Emkay Global bank posted a loss of social media in this regard. institutional, the reconstruction Deposits have shrunk by 21 Corporate 11.07 29.3 Financial noted. ~18,564 crore in the “Outstanding terms loans from scheme has imposed a per cent since Q2 to ~1.65 tril- Net NPA 4.35 5.97 The auditors also said the December quarter. YES Bank to IHFL are zero,” it said. three-year lock-in for 75 per cent lion, hinting at a likely run- assumption of YES Bank Provisioning for NPAs It also said that the outstanding of shares held by all those with down. While on expected PCR 43.05 72.70 being a going concern was and write-offs rose about term loans from YES Bank to the more than 100 shares. lines the loan book has Slippages* 2.58 11.98 dependent on the degree of 10-fold to ~22,238 crore in promoter of Indiabulls Housing The second blow crushed reduced to ~1.86 trillion, down *Not annualised; Slippages guidance at 5% for FY21 success of the final recon- that quarter, from ~2,214 Finance or any of his promoter the hopes of additional tier-1 17 per cent sequentially. Source: Investor presentation struction scheme, the amount crore in the earlier one. companies / family members (AT-1) bondholders, The worst, of capital infused into it, and It had provided ~507 companies are Zero. In a separate whose exposure to though, is the subse- and it may cast significant and 13.6 per cent, respectively, YES Bank itself in the past had its ability to stabilise deposit crore on this account in filing, Karnataka Bank also rejected YES Bank was ~8,415 quent impairment to doubts on the bank’s ability to would have been next to classified ~30,000 crore as balances after withdrawal of the December quarter of some news reports that had raised crore. The bank’s its capital position. continue as a going concern,” impossible. stressed. To that extent, the moratorium. 2018-19. doubts on the safety of some banks administrator indi- Common equity stated the bank’s auditors in While ~29,594 crore of pro- ~40,709 crore of NPAs in Q3 For investors, while the fresh The Provision Coverage using an "absurd and flawed so cated these instru- tier-1 (CET-1) fell to their Q3 report. visioning or ~40,709 crore of seems a smaller number. infusion of capital is positive for Ratio (PCR) increased to called m-cap to deposit ratio”. PTI ments had been ful- 0.6 per cent in Q3, These numbers are even gross non-performing assets “Perhaps the capital now, the Q3 results have added 72.7 per cent for the ly written down and were way below the statutory mark worse than Lakshmi Vilas (NPA), including gross slip- constraint was a barrier to to their woes. What the bank December quarter, from extinguished. of 7.375 per cent, while ~86 Bank’s, another small-sized, pages (loans turned bad) of recognise the full extent of would do to prevent a further 43.1 per cent in the September quarter. The higher PCR would The bondholders were con- crore of penalty was levied in capital-starved bank. ~24,587 crore, isn’t a small pain,” said an analyst with a meltdown in deposits and low- enhance the ability to offload these assets from the balance sheet, fident these would be converted Q3 for breaching the minimum Save for State Bank of India number, analysts say it might foreign brokerage. While the er costs, whether after the Q3 to further release capital, YES Bank stated in the presentation. into shares even if they should statutory liquidity ratio and (SBI) and a clutch of private not entirely capture the extent provisioning coverage ratio clean-up it remains attractive While determining NPAs and related provisioning require- take an 80 per cent haircut. liquidity coverage ratio. lenders agreeing to infuse of asset quality mess in the improved from 43.1 per cent to foreign investors for another ments for October-December, it considered slippage in NPAs While the matter is being lit- “These conditions, along ~10,000 crore into the recon- bank. Brokerages such as UBS, in Q2 to 72.7 per cent in Q3, round of capital raise, and how after this date till that of the publication of financial results igated, the AT-1 bonds, mean- with other matters as stated in structed bank, bringing the JP Morgan, and Macquarie analysts were expecting a the new management revives (March 2020), it said. This change resulted in recognition of addi- while, become valueless. the said note, indicate that a CET-1 and capital adequacy were factoring in ~60,000 higher number. “To that YES Bank’s business are some tional loans of ~5,150 crore as NPAs and related provisioning The biggest blow came in material uncertainty exists ratio numbers to 7.6 per cent crore of stressed loans, while extent, investors need to brace unanswered questions. requirement of ~772 crore for the quarter.

TMB to seek 1: CORONAVIRUS TRAVELS OUTSIDE CHINA 3: MASSIVE STOCK SELL-OFF STATSGURU Italy, Iran and South Korea have the highest number Nifty has dropped over 17% in just 15 sessions of cases after China shareholders’ China Outside China approval for The global 44,067 IPO again sell-off 1,073 T E NARASIMHAN Chennai, 15 March LAST WEEK, stock markets 80,981 around the world saw 74,675 2,121 3,173 Ninety-nine-year old Tamil- significant volatility with nad Mercantile Bank (TMB) is benchmark indices 1,440 to again seek shareholders’ dropping to multi-year 8 approval to become a public lows. The coronavirus Cases Deaths Cases Deaths listed entity. It had done so in (COVID-19) outbreak and a sharp plunge in Feb 20,’20 Mar 12,’20 2016, too, at its 93rd annual global crude oil prices triggered the fall. Source: WHO Source: Bloomberg general meeting (AGM). How- On February 20, there were about 1,000 ever, the shareholders, largely reported coronavirus cases in 26 countries from the Nadar community, outside of China with only eight deaths. 2: OIL PRICE FALL TRIGGERS GLOBAL GROWTH 4: LOSING CURRENCY Rising dollar demand is putting pressure on rupee ~/$ rejected the proposal for an The number has now soared to over CONCERNS (Inverted scale) Initial Public Offer (IPO) of 44,000 cases with 1,440 deaths across Brent crude ( $/barrel) equity by a majority. 117 countries, according to the World The bank has since not Health Organization (Chart 1). Fears that held any AGM and is now the spread of COVID-19 would push the scheduled, on April 9, to hold global economy into recession have led to its 94th to 97th AGMS all extreme risk aversion among investors. together, for years 2015-16 to This, coupled with the rift between 2018-19. This is a sequel to last Saudi Arabia and Russia to gain market month’s high court order, share by keeping oil prices low, has which allowed the conduct of further exacerbated these worries. In just 15 all the pending AGMs, subject trading sessions, Brent crude has declined to specified conditions. 42 per cent (Chart 2). The slump in oil TMB has 20,600 share- prices has been accompanied by downward holders. A majority reportedly revisions in global economic growth voted against an IPO last time, estimates due to the spread of COVID-19. so that the door is not opened As a result, since February 20, the Source: Bloomberg IMAGING: AJAY MOHANTY Source: Bloomberg to “outsiders” (non-Nadars). benchmark Nifty has dropped 17.5 per cent Their argument is TMB was (Chart 3), while the rupee has weakened 5: FLIGHT TO SAFETY 6: THE VALUE DESTRUCTION 7: INDIA IS NOT ALONE meant for Nadars and should by 3 per cent against the US dollar (Chart FPIs have sold in both equity and debt markets (~ crore) Investor wealth worth over ~29 trillion wiped out Other markets have also seen a significant correction be owned by Nadars. Its earli- 4). Volatility in the financial markets has India’s market capitalisation in ~ trillion er name was Nadar Bank. been amplified by selling pressure from The community has foreign investors (Chart 5). made significant strides Until a month ago, the Indian markets through an emphasis on both were hovering close to their record highs, education and entrepreneur- belying weakness in the economy and ship. The existing top man- poor earnings growth. Many analysts agement is from the same had turned sceptical about the markets community. It had earlier prospects due to lack of fundamental said it was educating the support. The spread of COVID-19 and oil shareholders on the need for price slump proved to be perfect storm for additional funds, for both the market, wiping out over ~29 trillion faster growth and for the ben- of Market capitalisation (Chart 6). efit of all shareholders. If The fall in the Indian markets has been share value rises (with an in line other global markets (Chart 7). IPO), exit routes will be avail- SAMIE MODAK Source: Bloomberg Source: Bloomberg Source: Bloomberg able; it is currently not easy to sell the shares, it had said. StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines Compiled by BS Research Bureau 6 ECONOMY & PUBLIC AFFAIRS MUMBAI | MONDAY, 16 MARCH 2020 1 > Margin calls, leverage lower than 2008 Fuel sales tax hike on their collateral and relationship For a stock like Reliance double whammy Regulatory tightening with them. Industries (RIL), for instance, a bro- helps avert mishaps In 2018, Sebi had asked exchanges ker would offer 10 times leverage to collect initial margin, exposure until a few years back. So, for buying for transporters ASHLEY COUTINHO margin or extreme loss margin, ~1 crore worth of shares, an investor Mumbai, 15 March mark-to-market settlements, and had to pay ~10 lakh. That has risen to Only hope is bumper rabi crop output calendar spread margin from trad- about ~23 lakh today. Brokers he steep market crash over the ing members in the F&O segment. further increased the margin past few sessions has triggered Additional surveillance margin was requirement last week to as high as T margin calls, albeit on a far later introduced in addition to SPAN 50 per cent, implying the same lower scale than seen during the (standard portfolio analysis of risk) investor would have to shell out financial crisis of 2008. and exposure margins. ~50 lakh to purchase ~1 crore worth Market participants attribute this Derivatives trades require a of RIL shares. to regulatory tightening and stan- mandatory cover for volatility over The froth in the market is lower dardisation of margin requirements, two days. So, one lot of Nifty futures, than in 2008. “During the five-year stringent reporting for brokers, and which needed about ~50,000 of SPAN bull run between 2003 and 2008, the segregation of client funds. Wealthy to hold the position overnight, now Nifty 500 index delivered 48 per cent investors hold far fewer concentrat- requires ~1 lakh in the form of SPAN compound annual growth rate KEY TRUNK ROUTES ed and leveraged portfolios like they and exposure margins. (CAGR) returns. During 2015-2020, Round trip rental Feb 1,’20 Mar 1,’20 % change ( in ~) used to. The lacklustre performance Earlier this year, stock exchanges the same index delivered 8 per cent of midcap stocks over the past two MARGIN ON NIFTY STOCKS asked stockbrokers to collect margins CAGR. Similarly, midcaps delivered -2.2 -1.8 -1.9 -2.0 -2.0 -2.0 years has also reduced leverage in Price* Traded Total from their clients upfront even for lower than the broader index returns the system. value** margin# intraday trades. The regulator, how- from 2015-2020, highlighting lack of The recent fall led several brokers ever, has put the proposal on hold. euphoria,” said Vinay Paharia, CIO, 83,800 83,800 84,000 129,000 129,000 82,300 81,500 RIL 1,116.95 111,695 22,808 85,800 126,500 126,500 80,000 80,000 78,800 78,800 to reduce or block leverage products “The list of stocks where lending is Union MF. 80,500

for intraday trading over the past allowed has been brought down dras- He said the Nifty 500 total 110,600

TCS 1,820 182,000 31,285 108,400 week even though it was not man- tically by the regulator. Clients are market cap to nominal GDP ratio dated by the regulator. The funding HDFC 2,072.65 207,265 38,572 now required to pay margin based on had increased to 83 per cent as on for SBI Cards & Payment Services has Tata Motors 90.5 9,050 2,394 exchange calculations,” said Prasanth March 31, 2008. It is currently Delhi- Delhi- Delhi- Delhi- Delhi- Delhi- also locked up sizeable liquidity, as SBI 244.25 24,425 8,578 Prabhakaran, chief executive officer, around 60 per cent. Mum- Nagpur- Kolkata- Guwahati Hyderabad Raipur- the amount bid in IPOs stays blocked YES Securities. To be sure, brokers that lent Delhi Delhi Delhi -Delhi -Delhi Delhi Figures in ~; *Friday’s last traded price, **for quantity of 100, #includes VAR, ELM Source: NSE for seven to nine days. He said brokers had adopted a through their NBFC arms would still Source: IFTRT “Sebi now levies a short margin conservative approach during the have suffered some losses in the penalty where brokers can’t allow cus- such restriction. The margin require- Nithin Kamath, founder, Zerodha. current crash and refrained from recent carnage, said experts. Some SHALLYSETH MOHILE transporters to pass on the hike tomers to hold positions overnight ment as a percentage of the F&O con- Leverage is typically employed by lending against stocks outside the A want the regulator to impose a ban on Mumbai, 15 March to their customers, owning to without the minimum stipulated tracts has gone up as well, bringing high networth investors. Brokers category because of the steep VAR short-selling to reduce speculative weak demand. margin. Back in 2008, there was no down overall risk in the system,” said allow clients to leverage 15-20x based margins defined by the exchanges. activity, akin to China. The road transport sector, reel- Bal Malkit Singh of Bal ing from poor demand amid Roadlines agrees. “Prices of all COVID-19, and shrinking out- the other inputs— be it insur- put in the manufacturing sec- ance, toll, registration, or tyres tor and the capital goods indus- — have gone up sharply. Lack try, will be hit further with the of demand is a handicap in Centre to rework long-term power sale pacts hike on fuel sales tax. passing on the increase. Close Owing to reduced demand to 40 per cent of the trucks in Regulatory Commission units over the years and a drop in global crude oil the market are idling. The only The ministry is designing policy paper to (CERC) has studied several corresponds to the increasing prices, freight rates on key silver lining is the procurement dwell on alternative for long-term PPAs models across the globe to sup- share of renewable energy trunk routes came down 2-3 per of rabi crops, which has start- port a market-driven electrici- sources in the overall energy cent in February, according to ed.” He said cargo volumes, SHREYA JAI bank or financial institution ty supply model. mix during the same period. the Indian Foundation of under pressure due to slow- New Delhi, 15 March will finance the projects if there “States should be willing to However, the current fall in PLF Transport Research & Training down, would go up by 25-30 per is no long-term commitment take up such an initiative. A is also due to a drop in electric- (IFTRT), based in New Delhi. cent in the next 15 days. Long-term power purchase for sale of power. But the issue market-based approach would ity demand in the country. The only reprieve for trans- Forty per cent of trucks are agreements (PPAs) between is that prices get fixed but lead to overhaul in the tariff During January-December porters in the near to medium dependent on agri-produce. generators and states could cost escalation keep design. Coal supply allocation 2019, the growth in electricity term is a bumper rabi crop, the Bumper production will help soon go away. The power min- happening, and technology would also need to change demand was meagre 0.28 per harvesting of which has begun. in keeping their head above istry is planning to rework the gets depreciated.” accordingly,” said the executive. cent, the lowest since 2014. The government raised fuel water, he said. According to the PPA regime to address issues He said most of the state- Given the increasing share The standing committee taxes by ~3 per litre on Saturday second Advance Estimates of of states not honouring the owned power distribution Many states have gone back on their contracts with renewable of renewable energy in the report stated: “When the com- though global crude oil prices production of major crops for pacts and, at times, reneging companies (discoms) faced the power companies and have sought reduction in tariff energy mix and reducing oper- mittee pointed out the short- dropped 30 per cent, dashing 2019-20, released by the on the contract. conundrum of cost revisions ating ratio of thermal power ages (power demand), the min- hopes of fuel prices falling rap- Department of Agriculture, PPAs are typically of 25-30 due to market forces or tech- facing stress due to non-pay- the 40,000 Mw of stressed pow- plants, several experts believe a istry had stated that it has been idly over the next few days. grain production is estimated years duration. The ministry is nological changes but were tied ment by discoms. At the same er assets in the country, close to dynamic market supports a observed that despite avail- “Whatever price reduction at a record 291.95 million designing a policy paper to within the terms of the PPA. time, a lot of states lately have 11,000 Mw are the ones with no vibrant energy mix. ability of adequate power in the happened in the past fortnight tonnes, up by 6.74 mt over dwell on the alternative for “Discoms can’t be held reneged on their contracts or inadequate PPA. This has The average plant load fac- country, there is a marginal has been more than neu- 285.21 million last year. long-term PPAs. The policy will responsible for cost escalation with renewable power com- also caused build-up of non- tor (PLF) of thermal power mismatch in demand and sup- tralised. We were expecting A record production of agri- also address the issue of cost in power. If tariff increases, panies, including seeking performing assets for lenders. generation units is on the ply of power in various prices to come down by ~10-12 commodities will help opera- escalation within the contrac- then it’s up to the discom reduction in tariff. Senior sector executives decline in the country. At 57.61 states/Union Territories. The (per litre),” said S P Singh, sen- tors that are in the retail seg- tual clauses laid down by PPAs. whether it wants to buy that During this decade, no state said policymakers were look- per cent, PLF in January ministry stated that this ior fellow, IFTRT. ment and whose vehicles run In his submission to the par- power or not. If cost of power except Kerala has issued any ing into ‘market-based eco- touched a five-year low. PLF demand-supply gap is Transporters are struggling on routes that do not require liamentary standing commit- increases, why the new long-term PPA for procur- nomic dispatch’ of power. The during 2019 witnessed double- constraints in sub-transmis- because everything is in disar- national permits. “Unless tee on energy, the power min- discom should suffer?” said ing from private thermal pow- approach suggests dispatch of digit slump during most sion and distribution network, ray, he said, adding that the manufacturing and other core istry secretary said: “PPAs are a the secretary. er generators. The existing power based in demand avail- months of 2019, Business commercial reasons, financial government should have been sectors pick up and demand big issue. Generators enter The move comes at a time PPAs of private power genera- able in the market. Standard reported recently. constraints of the state utilities compassionate. What worries starts improving, there’s no long-term PPAs because no when thermal power sector is tors is also under a cloud. Of The Central Electricity The PLF decline of thermal (discoms), etc.” him more is the inability of respite for our sector,” he said.

4 Guj Cong MLAs Cong, BJP head for showdown in resign ahead of J&K statehood to be restored, MP as Guv directs floor test today Rajya Sabha polls no demographic changes: Shah Four Congress MLAs in PRESS TRUST OF INDIA ment for demographic change PRESS TRUST OF INDIA include 16 rebel MLAs whose whips to their MLAs. Gujarat have tendered their New Delhi, 15 March in the region and “all such talks Bhopal, 15 March resignations are yet to be accept- On Saturday night, Governor resignation to Assembly have no basis at all”. ed. The BJP has 107 seats in the Lalji Tandon wrote to the CM to Speaker Rajendra Trivedi Assurances of restoration of In a similar assurance as giv- The political drama in Madhya House, which now has an effec- seek a trust vote soon after the ahead of the election to the statehood at “early opportu- en by the prime minister to the Pradesh is set to shift to the tive strength of 222, with the governor address on Monday. four Rajya Sabha seats in the nity”, no demographic change delegation, Shah said the gov- Assembly after the governor majority mark being 112. To add He has directed that the vote be state to be held on March 26, and release of all political pris- ernment will work with all sec- directed Chief Minister Kamal to the Congress’ woes, it is yet held by division of votes and the prompting the opposition oners in “due course” were the tions of the society to realise the Nath to seek a trust vote on uncertain whether it will con- process be recorded on video by party to shift at least 24 takeaways from Union Home hopes of statehood for Jammu Monday. Speaker N P Prajapati tinue getting the support of four independent persons. The MLAs to Jaipur on Sunday. Minister Amit Shah’s meeting and Kashmir at an early oppor- said he would first give a ruling Independents, two BSP MLAs, Speaker on Sunday remained While the Congress said with a political delegation of tunity, an official statement said. on whether to hold the floor test. and MLA from the SP. non committal over the trust not a single “honest” MLA the Jammu and Kashmir Apni Kashmir”. The political delega- He referred to the prime As the rebellion led by The Kamal Nath-led Congress The week-long political dra- vote: “This will be known had resigned, state BJP pres- Party on Sunday. tion, which is the first one after minister’s address to the Jyotiraditya Scindia threatened government is fighting for ma saw both the Congress and tomorrow...” ident Jitu Vaghani said if the Expressing confidence that the abrogation of special status nation after the abrogation of survival of its government, the survival after Jyotiraditya the BJP herding their MLAs to There were indications that four legislators had indeed “visible changes will be seen on on August 5 last year by the Article 370 and said that and Congress appeared keen on Scindia joined the BJP, and resorts outside the state due to the Congress might seek to buy quit, the saffron party would the ground in the next few Centre, had called on the prime even he, himself in his speech putting off the vote and asserted 22 of his MLAs resigned fears of poaching. While the time from the Speaker to win win three seats in the months, the home minister also minister on Saturday. in Lok Sabha on August 6, 2019 it was the Speaker’s prerogative Congress MLAs returned on back some of its 16 rebels MLAs. RS elections. assured the delegation that the Engaging with the delega- expressed the same. to decide about the proceedings After the Speaker accepted the Sunday from Jaipur, the BJP Amid suspense on vote, sources Speaker Rajendra Trivedi NDA government under Prime tion on about 40-odd issues The home minister said this of the House, but a buoyed BJP resignation of six Congress was bringing back its members said both the were mulling legal confirmed said he would Minister Narendra Modi will raised by them, the home min- is also good for India’s interest, maintained that he was bound MLAs on Saturday, the party from Haryana to attend the ses- recourse in case the proceed- disclose the names of the take all steps for the overall ister emphasised that there is as the region is a border area, by the governor’s direction. now has 108 legislators. These sion. Both parties have issued ings do not go their way. four MLAs on Monday. development of Jammu and no intention of the govern- the statement said.

> FROM PAGE 1

domestic market has increased expo- navirus amid concerns that the slowdown Air India and Indian Airlines in 2007. Sebi considers... nentially. Many believe the 10 per cent from the outbreak could tip countries into Apart from Air India, the government ED summons... “As other countries have announced drop in the market on Friday was caused recession. The next meeting of the MPC is is also looking to sell Air India subsidiary An email sent to the Reliance Group measures to stem the market fall, there is by algo and HFT as stock prices fell on scheduled during March 31-April 3. The Air India Express and 50 per cent in Air spokesperson on Saturday went unan- pressure on Sebi to follow suit. Based on very low volumes. The finance ministry notification of the small savings interest India SATS Airport Services. swered. Sources said the federal agency the structure of the domestic market, has directed Sebi to report regularly all rates for April-June, which is reviewed Apart from the Hindujas, the Adani had prepared a list of the top five borrow- Sebi could use the tools at its disposal to the developments taking place in the quarterly, is expected on March 31 as well. group, and US-based fund Interups, the ers, which were extended large credit facil- ensure there is no panic among financial markets and measures taken to Tata group is expected to make a bid. The ities by the bank under Kapoor. investors,” said an exchange official. control market volatility. An email sent to government has extended the last date “Most of these borrowers have default- However, some say such measures Sebi on the issue went unanswered. Air India... for submitting expressions of interest to ed and the loans have turned into bad could do more harm than good to the April 30 after some entities cited the visa debts. So, each of these accounts is under market. “A ban on short selling should be ban till April 15 by the Indian government. the radar. Their management and pro- used only in extreme situations. It often Rate cut ... This, according to them, is preventing moters will be examined and questioned distorts the process of fair price discovery. their travel to India for valuation. Another in the coming weeks,” said the official. Also, it provide only short-term relief and “There is also coronavirus and the impact prospective bidder said it might opt out of Last week, Reliance Group had said it cannot alter the direction of the market,” it has had on the global economy. We the process because of the crisis. had no direct or indirect exposure to the said an industry expert. Instead of a blan- want to improve credit activity at this “We will take a final call in the last week Kapoor family or any entities controlled by ket ban on short selling, Sebi might ban time and hope that the RBI will also emu- of April on submitting the EoI,” it said. them. “The entire exposure to YES Bank is naked shorting in the derivatives seg- late action by central banks elsewhere,” The decline in Air India’s valuation is fully secured and is transacted in the ordi- ment, said experts. This means it will said the official. bad news for the government, which is nary course of business, and we are com- allow investors to go short only to hedge Officials admit that the latest episode trying its best to sell the airline after it had mitted to honour our repayments to YES their cash positions. A similar move is in in the financial sector — that of YES Bank to pump ~30,000 crore of taxpayers’ mon- Bank,” the statement said. Some of the oth- place for overseas investors taking the — may have eroded trust in the financial Lufthansa is flying to 220 destinations and ey into the airline since 2012. er defaulters to whom YES Bank had participatory notes route. A ban on intra- sector and that lowering the cost of capi- has 400-plus aircraft. The share price of In order to attract bids, the govern- advanced funds include Vodafone Idea, day trading and extending the scope of tal was one of the ways to get that trust Delta Air Lines is down from $58 on ment has transferred ~29,500 crore of Air DHFL, IL&FS, Essel Group, CG Power, and the ASM, which is currently used only on back. They hope that a cut in small savings January 1 this year to $38.36 on Friday India’s debt to a special purpose vehicle – Cox & Kings. IL&FS, DHFL, and CG Power small-cap stocks, are other tools that can interest rates will prompt banks to cut closing. The US-based airline has a fleet of Air India Asset Holding, with real estate are already facing probe from various agen- be used by the regulator, said people in their rates as well. Central banks of various 909 aircraft and flies to 325 destinations. assets. With this, Air India is left with cies for alleged irregularities. The ED is the know. Also, Sebi has asked the stock nations, including the United States Air India, a loss-making airline, has ~23,000 crore of debt. The government is probing Kapoor’s role in YES Bank’s bad exchanges to increase monitoring of algo- Federal Reserve and the Bank Of England, 103 destinations and, along with Air India selling its 100 per cent equity in the airline, debts of ~30,000 crore and whether the rithmic trading (algo) and high-frequen- have announced surprise interest rate cuts Express, around 146 aircraft. The airline unlike its offer of 76 per cent in the previ- money was siphoned off and laundered to cy trades (HFT), whose influence in the to deal with the economic impact of coro- has not made money since the merger of ous round of sale in May last year. the 78 entities controlled by the co-founder. 8 ISSUES AND INSIGHTS MUMBAI | MONDAY, 16 MARCH 2020 >

Economic output growth numbers are an important tool for policy makers CHINESE WHISPERS Problematic revision of data to assess the economy and recommend necessary policy measures. If these There is an urgent need to reduce the number of estimates on economic growth was revised upwards just a month later numbers are changed significantly in Poster war in UP to 6.6 per cent as the Second Advance six different estimates, the efficacy of Posters put up by Congress workers in Uttar and the time taken to release them Estimate. The Provisional Estimate such policy intervention will naturally Pradesh two days ago have intensified raised it again to 6.7 per cent, when it suffer. The problem arises not just from the political storm in the state. They new currency notes over the next few Second Advance Estimate was released was released in May 2018. And the the revisions, but also from the inordi- show Chief Minister (CM) Adityanath, months causing huge disruptions to the a month later by the end of February First Revised Estimate, released in nately long period of three years over Deputy CM Keshav Prasad Maurya, and economy and giving rise to fears of a 2017. The third estimate is called January 2019, revised it further to 7.2 which such changes take place. And other Bharatiya Janata Party (BJP) leaders, decline in the growth rate. Provisional Estimate and was released per cent. The Second Revised every time one of these six estimates and the criminal cases against them. The narrative on India’s economic in May 2017. And then there is a long Estimate, released in January 2020, undergoes a change, either way, the esti- These posters appeared right next to the growth during 2016-17, however, gap of about eight months and the scaled it down a bit to 7 per cent. The mates for the following years are also hoardings, put up by the Lucknow district changed quite completely after about fourth estimate, the First Revised Third Revised Estimate will be out necessarily revised. administration outside the UP BJP office in two years. The GDP growth number for Estimate, was released by the end of next January. And a new number may Of course, the CSO explains every the Hazratganj area of the city, showing that year was revised upwards to 8.2 per January 2018. Two more estimates for well be released then. time there is a variation in a fresh esti- anti-citizenship law protesters. A day cent. Economic policy makers in the 2016-17 GDP were released — after a gap For 2018-19, only the first four esti- mate. But that does not help tackle the before the Congress posters were put up, government bounced back with their of one year each. The Second Revised mates have been released so far. In a space challenges for policy makers. Questions the Samajwadi Party (SP) had emblazoned RAISINA HILL narrative on how growth had not only Estimate for 2016-17 was released on of one year, the GDP growth figure has on data reliability or integrity are also banners showing the rape accused ex- remained intact, but was even higher January 31, 2019, and the Third Revised already seen four different versions — not addressed. Additionally, such Union minister Chinmayanand and the A K BHATTACHARYA than the 8 per cent growth recorded in Estimate for 2016-17 was released starting with 7.2 per cent in January 2019, changes make the data release system Unnao rape convict Kuldeep Singh Sengar, 2015-16. As if to address the doubts of exactly a year later on January 31, 2020. it has gone down to 7 per cent in February vulnerable to political pressures to mod- both former BJP leaders. The district hen the Central Statistics the critics who were still complaining, Note that there were no changes in 2019, 6.8 per cent in May 2019 and further ify or tinker with numbers to suit a spe- administration had, however, removed Office (CSO) declared the economic growth figure for 2016-17 the first four estimates for GDP growth down to 6.1 per cent in January 2020. cific political narrative. While the CSO the SP banners and beefed up security India’s gross domestic pro- was further revised upwards, a year later in 2016-17, all of which placed it at 7.1 Unlike in the previous two years, the dif- must look into the methodologies of in the area. Wduct (GDP) growth figure for on January 31, 2020, to 8.3 per cent. per cent. The sharp variation began ferent estimates for 2018-19 have succes- arriving at its various estimates and 2016-17 on January 6, 2017, economic pol- What really happened? with the Second Revised Estimate sively brought down the growth rates. For examine necessary remedial steps to icy makers in the Narendra Modi govern- Welcome to the world of frequent released in January 2019 (8.2 per cent), the 2019-20 growth number, the first two make the system more robust, it must Virus unites brothers ment were disappointed. The GDP growth revisions of economic data in India! The followed by a further change in the estimates are out, both placing it at 5 per also evaluate the need for as many as six figure was only 7.1 per cent, less than what CSO releases as many as six estimates of Third Revised Estimate released in cent and without any variation. different estimates of the same output the government had hoped for and lower the country’s annual economic output January 2020 (8.3 per cent). It is not just the GDP growth numbers growth numbers and, that too, over a than what it was in 2015-16. Critics had growth. Believe it or not, these estimates The trend of sharp variations in the that have seen such variations in differ- period of three years. Surely, reducing noted that the figure was an early signal for the same year’s economic output are GDP growth was maintained in 2017- ent estimates, but also other parameters the number of estimates and the span of of the feared consequences of demoneti- released over a period of three years! 18 as well as in 2018-19, although the like the gross value added at basic prices, time over which they are released would sation. Demonetisation had nullified 86 Thus, the GDP growth figure for trajectories were a little different. For private final consumption expenditure, go a long way in addressing the growing per cent of the Indian currency notes in 2016-17 was first released in January 2017-18, the First Advance Estimate government final consumption expen- concerns over data reliability and its vul- circulation and had replaced them with 2017 as the First Advance Estimate. The put GDP growth at 6.5 per cent, which diture and gross fixed capital formation. nerability to political pressure.

The two, somewhat estranged, sons of Lalu Prasad put up a united front over the weekend to drive home the message of personal hygiene with the threat of Dear governor, why save the bullet? Use it now COVID-19 looming. Elder brother Tej Pratap Yadav (pictured left) tied a face mask on his mercurial younger brother Beyond perking up the economy, the RBI needs to ensure proper functioning unattractive for banks to borrow from Tejashwi Yadav and handed him a bottle the RBI at 5.15 per cent, its policy rate. of hand sanitiser, a gesture aimed at of the bond market, the credit market and the larger financial system Incidentally, in 2008, India was far spreading awareness of the pandemic better off — the economy was growing and ways to prevent/avoid it. The Malaysia, Hong Kong, Argentina, Saudi earlier this month, the benchmark ments and no signs of any pick up in at over 9 per cent, bank credit growth brothers, who have not seen eye to Arabia, Bahrain, Moldova, Macao, Fed-funds rate is now in the range credit demand. On top of that, the finan- was almost three times the GDP growth eye on many issues, posed for pictures Jordan, Kuwait, Mauritius and Iceland. of 1-1.25 per cent. The Fed will surely cial sector is not in the pink of health. and the financial sector was rock solid. with their face masks on outside their The central bank of China has cut the cut rate again when its rate-setting India’s retail inflation dropped to Now, we have problems on all three mother and former Bihar chief minister commercial banks’ cash reserve ratio to committee meets on March 17-18. 6.58 per cent in February, below the con- fronts. And, both the fiscal and the Rabri Devi’s residence. Tejashwi, the release $78 billion. Many say it may not wait till then and sensus estimates, and against the 68- monetary space is too limited to support politically weightier of the two Yadav At least two of them have gone for go for an emergency cut before the month high of 7.59 per cent in January. the economy. brothers, then urged the people of the out-of-turn rate cuts — the US Fed and meeting. They don’t rule out the The drop has been driven by a sharp fall Last week, the RBI announced six- state to remain vigilant, avoid crowded the BoE. benchmark rate dropping to zero over in food inflation; the so-called core month US dollar sell/buy swaps to pro- places, and follow the guidelines issued On March 3, the US Fed was the first the next few months. inflation too moved southwards. The vide liquidity to the foreign exchange by the government. central bank to take the emergency step Meanwhile, the Fed has launched a dramatic fall in crude prices will put market. The central bank also said it is BANKERS’ TRUST of half a percentage point cut to limit series of massive cash injections into the pressure on inflation further in the com- ready to take all necessary measures to the economic and financial fallout from funding markets and begun buying gov- ing months and the average retail infla- mitigate the effects of the coronavirus Everyone’s invited TAMAL BANDYOPADHYAY the coronavirus — its first such out-of- ernment bonds even as the 10-year treas- tion in 2021 could be 5 per cent or even pandemic on the Indian economy and Ever since the Rashtriya Janata Dal (RJD) turn action since late 2008, in the after- ury yield has plunged to its historic low. less. In its February policy, the RBI esti- ensure normal functioning of the finan- gave a Rajya Sabha ticket to political math of the collapse of Lehman The Fed is known to supply steroid mated 5.4-5 per cent inflation for the cial markets and institutions. greenhorn Amarendra Dhari Singh, party n March 8, Uday Kotak, Brothers Holdings Inc. to the stock market. What should the first half and 3.2 per cent for the third It’s time to walk the talk. An out-of- leaders have been on the back foot, trying executive vice-chairman and At a special meeting that ended on Reserve Bank of India (RBI) do? I don’t quarter of 2021. turn policy rate cut should accompany to explain the move to its main managing director of Kotak March 10, the Monetary Policy doubt that there will be a rate cut when The latest set of data on inflation and assurance of RBI’s bond buying from constituency, the Muslim-Yadav cohort. OMahindra Bank Ltd, tweeted: Committee of the BoE unanimously its Monetary Policy Committee (MPC) industrial production was released last both the primary and the secondary While many were surprised by the “Coronavirus roils global financial mar- voted for policy rate cut by half a per- ends its three-day meeting on April 3 but week. The MPC won’t have any fresh markets and the reopening of a short- announcement initially, it appears to be a kets, sparking chatter of coordinated centage point. It also announced a new shouldn’t governor Shaktikanta Das roll data on its table before the April policy. term repo window from where banks calculated move by party chief Lalu Prasad monetary easing by central banks. term-funding scheme to support small up his sleeves and call the meeting now? Why wait then? Let it go for a 0.40 per can borrow money from the central to woo the upper castes, especially the Reminds me of Mark Twain’s quote, 'To and medium companies and measures He can do so. Under Section 45ZI of cent cut and bring the policy rate down bank. There is about ~3 trillion excess Bhumihars, who are powerful and have a man with a hammer every problem to help commercial banks lend more on the RBI Act, there must be at least four to 4.75 per cent for now, the level of April liquidity in the system but banks are been National Democratic Alliance looks like a nail’.” a day the government presented the MPC meetings a year; the schedule 2009 — when we saw the last of a series cutting down risks; there could be loyalists. Lalu’s younger son and the It got a huge response — 15,700 likes budget, raising public borrowing. needs to be published at least a week of rate cuts that had started in July 2008 serious dislocations unless the RBI acts. party’s chief ministerial candidate, and 3,800 retweets. The only central bank that has met ahead of the first meeting. The dates to contain the impact of Lehman col- Beyond perking up the economy, RBI Tejashwi Yadav, termed the nomination of Clearly, there are many takers for recently but left its rate untouched is can be changed and the governor can lapse in India. needs to make sure proper functioning Singh as a befitting reply to critics who had Kotak’s belief. But central banks globally the European Central Bank (ECB). Last decide to have additional meetings for A rate cut is on the cards. The RBI’s of the bond market, the credit market been accusing the RJD of pandering to the don’t seem to care much about Mark week, it decided against a rate cut but “administrative exigencies”. first ~25,000 crore long-term repo auc- and the larger financial system. Why Muslim-Yadav interests alone. He, Twain. In March, at least 15 central announced measures to support bank Why should there be a rate cut? Like tion drew ~1.94 trillion bids on February save the bullet, Mr Das? Use it now. however, added that this was in no way a banks have cut their policy rates, start- lending and expanded its asset purchase most other nations, Asia’s third-largest 17; for the next, on February 24, the bids dilution of the party’s commitment to ing with the Reserve Bank of Australia. programme by $135.28 billion. Anyway, economy too is being affected by dropped to ~1.23 trillion and for the The writer, a consulting editor with Business social justice and the uplift of the backward The list includes the US Federal Reserve the ECB’s main rate remains in the neg- COVID-19. The service sector is bearing fourth and last auction on March 9, the Standard, is an author and senior adviser to castes, economically backward classes, (US Fed) and the Bank of England (BoE) ative zone (-0.5 per cent). the brunt and exports are being hit. bids were for ~48,000 crore. The swap Jana Small Finance Bank Ltd. and Dalits. besides the central banks of Canada, After a half a percentage point cut There has been no demand for invest- rates are also coming down, making it Twitter: TamalBandyo

INSIGHT LETTERS

his yet-to-be-born political party ferent parts of the country. The The coming turmoil in the capital markets Read the writing is a sagacious decision or not, it government's blanket ban on has only strengthened the per- tourist visas from all countries on the wall ception of him being reluctant to is a very sensible move. The In part one of a series, the author says the capital markets and the securities ecosystem take the plunge into politics with Delhi government has closed have remained broadly untouched by the progress in India’s payment infrastructure Jyotiraditya Scindia on March all the conviction and fortitude it down schools, colleges and 9 tendered his resignation demands. The actor's exhortation cinemas till March 31 as a pre- from the primary member- to his fans to usher in a change in cautionary measure. The gov- duced in 2003. The access that one investor has ulatory requirements designed to impart ship of the Congress party the existing political system and ernment's priority should be to to other investors is only through the exchange- further protection to the exchanges and clear- blaming the high command’s preference for youngsters in the restrict the mortality rate. clearing corporation-broker-depository partic- ing corporation. Needless to say, the existence negligence of his capabilities party's hierarchy and committee I second your concern that in a ipant framework and very few investors even of powerful intermediaries who control market and contribution to the party, of experts to guide the govern- month, the number of cases have an app- or web-based direct access to their access comes with its own set of complications, which, he said, helped the ment is nothing but a reflection has increased from three to 73. own demat accounts in the depository. This as was evident recently. party to form the government of his political thinking. What We also need to realise that it makes the transaction flow quite convoluted. Also, there is a cost associated with main- in his home state of Madhya needs to be understood here is was bound to increase as When investors wish to buy securities, they taining this elaborate ecosystem which is borne Pradesh. The writing, that the electoral battle in Tamil people were coming to India place an order with their broker who executes by investors. And while this elaborate structure however, was on the wall long Nadu primarily hinges and from these locations without the transaction on the exchange. The investor was needed at a time when neither current before the Scindia scion had revolves around chief ministerial being aware they were carrying then transfers money to the broker, who in turn technology nor the current payment ecosystem actually made his move. It was candidates of every political alli- the virus. The government RAJIV SHASTRI pays it to the clearing corporation. An even more existed, it has now clearly outlived its useful- evident from the beginning ance. Rajnikanth's decision of not must do a few things without complicated sequence is followed on the selling ness. As things stand, there is no reason why that the Maharaja would not being in the race for chief minis- delay. First and foremost, it o, this isn’t an article about where the side of the transaction. Sellers instruct their investors should not have a direct app or web- take the fact that he was kept tership will, in all likelihood, must try to stop panic as deaths equity or debt markets are headed in depository participant (DP) to transfer the shares based access to their demat account. away from power roles of the affect the electoral prospects of due to other reasons could also Nterm of valuation and returns. It’s about sold to the broker’s demat account through the But most importantly, there is no reason party lightly. his political party whenever it is be construed as death due to a bigger turmoil which will render many mar- broker’s DP. The broker then instructs its DP to why investors cannot link their bank and Unfortunately, this is a pat- launched. coronavirus. Clear communica- ket institutions and participants redundant. transfer them to the clearing corporation. demat accounts to a trading account with an tern and not an isolated inci- M Jeyaram Tamil Nadu tion is key and as far as wearing Recent years have seen fantastic progress The reason this is more complicated is that, exchange, such that when they transact dent for the Congress party. It masks, it should be clearly in India’s payment ecosystem. First with the unlike the payment of money which is now directly on the exchange, the settlement of has already seen players like Litmus test communicated through all out- real time gross settlement (RTGS) and then possible without the involvement of the bank, both securities and funds happens seamlessly YSR Jaganmohan Reddy in lets whether they serve any with the national electronic funds transfer the movement of securities still needs the full on a real time basis. the south to Himanta Biswa This refers to the editorial purpose or not. (NEFT), transferring money from one bank involvement of the DP and its processes. And In this transaction model there is no differ- Sarma in the northeast mak- "Coping with coronavirus" Bal Govind Noida account to another became a breeze during the transaction isn’t yet complete. ence between transaction and settlement. A ing a switch and being voted (March 13). Our country has a market hours. The role of instruments issued The clearing corporation then gives the purchase transaction is only possible if the to power thereafter. The ego- pathetic record in disaster by one’s bank, indeed that of the bank itself, securities received from the selling broker’s DP buyer has the funds available for transfer. A tism of the party’s high com- management. It is imperative Letters can be mailed, faxed or e- reduced sharply in managing payments when to the buying broker’s DP who, in turn, trans- sale transaction is only possible if the seller has mand seems to be its undoing. that the government handles mailed to: compared to the earlier cheque and draft era. fers it to the buyer’s DP and then to the buyer’s the securities available or, as is the case with The time is ripe for the the coronavirus outbreak as The Editor, Business Standard But this was just the beginning. demat account. The clearing corporation also derivatives, the ability and the funds needed Opposition to free itself from effectively as possible. Though Nehru House, 4 Bahadur Shah Zafar With the immediate payment service (IMPS) gives the money received by the buyer’s broker to create these securities. the clutches of a system that this virus has mainly spread in Marg and unified payment interface (UPI), the bank to the seller’s broker, who, in turn, transfers it Since no settlement failure is possible, the prioritises loyalists over young four countries — China, South New Delhi 110 002 itself has become irrelevant in payments. Even to the seller. need for a clearing corporation and brokers dis- talent. But if the party chooses Korea, Iran and Italy — in the Fax: (011) 23720201 · E-mail: if one’s bank doesn’t have an app or a net bank- The reason exchanges need clearing corpo- appears. Depositories acquire the nature of to put its dynastic ambition last few days, the patient count [email protected] ing facility, one can still transfer money from rations is to prevent any settlement failures banks by allowing investors direct access to over the need to repair the in India has increased, and cas- All letters must have a postal address one’s account to any other in the country round that may happen at any stage during this trans- their accounts, eliminating the need for DPs. fractures within, India might es are being reported from dif- and telephone number the clock without any involvement of the bank action process. It enters each transaction as a Exchanges provide an electronic platform soon find itself without a itself. While such transfers have a daily limit central counterparty, guaranteeing settlement directly to investors and continue to manage strong Opposition capable of of ~1 lakh per account, this limit is in excess of irrespective of what happens at the other end listing, ensuring that listed companies comply enforcing checks and balances that needed in an overwhelming majority of of the transaction. For example, if the buying with all the rules and regulations designed to on the government. HAMBONE transactions. More recently, with NEFT avail- broker fails to deposit the money required to protect investors. Gaurav Agarwal via email able round the clock for transfers of up to ~2 buy the securities, the clearing corporation will All of this is within the reach of existing lakh, banks have tried to claw back some of still pay the selling broker. Clearing corpora- technology. So the question isn’t whether this Superstar’s their lost relevance. tions and exchanges further manage the risk will happen. The question is when. However, if one looks at the capital markets of settlement failures by only allowing brokers (Concluding part, “Capital market disrup- reluctance and the securities ecosystem, it has remained to transact on their platform, thus restricting tion”, will appear on March 18) broadly untouched through the years. Taking the number of entities they deal with. In Whether actor Rajinikanth's the equity markets as an example, we still have addition, as a condition for this access, these The author is an economist, capital markets expert and unequivocal message to his fans the daily rolling T + 2 settlement system intro- brokers comply with various financial and reg- the former CEO of Essel Mutual Fund that he never aspired to be a chief minister and only intends to head OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 150 ILLUSTRATION: AJAYA MOHANTY MUMBAI | MONDAY, 16 MARCH 2020

that the key risks remain unchanged. Policy after COVID-19 There is no easy antidote to the income lost due to travel bans and cancellation of public events that Globally, economic policy could soon be in uncharted territory are necessary to slow down the initial spread of the he spread of COVID-19 across the world, apart from being a severe virus. It may be several weeks, if not months, before health crisis, can have wider economic consequences. This was reflect- it becomes possible to quantify the loss of income. ed last week in the heightened level of volatility in financial markets Unlike delayed purchases of items like cars and tele- visions, most of the income lost from services not and the flight to safety, which pushed US government bond yields to T consumed is income lost forever. Just lower interest record lows. The Indian markets also witnessed significant volatility. While the rates may not suffice to counter this. Very few coun- main focus at present should be on checking the spread of COVID-19, it is also tries would have the logistical ability to deliver the vital that the economic impact of the crisis is contained to the extent possible. type of stimulus that Hong Kong gave (10,000 Hong The present situation is being compared with the 2008 financial crisis. This isn’t Kong dollars to every adult), even if they were to strictly correct. It’s not only the nature of the problem that is fundamentally dif- arrive at political consensus to consider it. ferent, the available policy space to deal with the economic and financial dislo- The rising gap between the yields on Italian and cation is also far more limited. German sovereign bonds in the last few weeks also Along with a number of other central banks, the US Federal Reserve (Fed) points to markets fearing renewed debates on how has reduced policy rates, and is expected to do more. But it would soon hit the higher fiscal deficits in Italy, which may be inevitable, given the scale of the epidemic, would zero lower bound. Other central banks such as the European Central Bank and Stresses, known be perceived by other nations in the European Bank of Japan already have their policy rates in negative territory. Given the Union. The fact that past epidemics have driven nature of the crisis, while monetary easing by the Fed and other central banks political change would not be lost on investors. will not push up economic activity, it would help ease credit conditions and The sharp drop in oil prices adds another layer contain the damage. The Fed is also providing short-term liquidity support to and unknown of uncertainty. At a global level, the oil price is just the market. However, if the problem persists and results in a deeper global reces- a transfer price from the producer to the consumer, sion, which is a real possibility, the effectiveness of the monetary policy will be Global financial market stress driving market volatility; economic and though producers get hurt by lower prices, tested. It is possible that large fiscal interventions would be required despite consumers gain. A $30 drop in the price of Brent higher public debt. According to the International Monetary Fund, public debt impact of coronavirus and drop in oil prices remain uncertain crude, for example, can mean $42 billion of annual savings for India, which is nearly 1.4 per cent of in 90 per cent of the advanced economies is higher than the level before 2008. lobal markets are in turmoil. Some volatility acted on Wednesday last week, providing effectively gross domestic product (GDP). More than half Economic policy could potentially move to an uncharted zone with ineffectual is normal: Existential issues generally crop unlimited liquidity, there were tell-tale signs of stress could flow directly to consumers if taxes were not monetary policy, rapidly rising public debt, and uncertain outcomes. Therefore, G up every year or two, causing the “buy on reminiscent of the early days of the 2008 crisis, and raised, becoming the consumption stimulus that it is vital that the available policy space is used carefully. Globally, ensuring dips” philosophy to be questioned for long enough, last seen during the Greek crisis in 2011. For example, is needed to stem the downward spiral triggered smooth functioning of financial markets should be the top priority. Risk aversion to cause a sell-off in risky assets. But the speed and the gap between the price that a seller of US gov- by slowing credit growth in India; once sequestered could tighten credit conditions significantly with wider economic implications. quantum of price changes seen over the past month ernment bonds (USTs) asked for and the price that as taxes, it becomes challenging for the govern- Further, fiscal space should be used in a targeted manner. remind many of the turbulent months a decade the buyer was willing to pay (called the bid-ask ment to distribute it as widely. In India, while the government doesn’t have the fiscal room to support the back. There appear to be three big questions finan- spread) rose to record highs. For “liquid” (that is, However, for several oil-exporting economies, economy, the central bank has done well to proactively intervene in the currency cial markets are struggling to answer, and, as always, heavily traded) securities, this gap is generally low, the drop in income could be debilitating. The cuts it is the uncertainty in quantifying and USTs are the most liquid secu- in capital expenditure in further exploration and market. Apart from announcing sell/buy swaps to provide liquidity in the foreign their impact that is more troubling rities in the world. But the Fed’s extraction of oil, and the potential risk to lenders exchange market, it is reported to have intervened in the offshore market as than the problems themselves. The action so far does not help non-US exposed to oil producers or service providers, is per- well. Although currency depreciation will help the tradable sectors, it is important first is the impact of coronavirus on firms: For that, the swap lines used haps easier to quantify. The bigger risk is that several to avoid excess volatility. A number of market participants also expect the Reserve global economic output, the second during the 2008 crisis may need to of the smaller producers (but where oil revenues are Bank of India to cut policy rates. While the inflation rate is projected to come is the effect of the sharp drop in oil be opened up again. a very large part of national income) could see the down in the coming months, disruption in supply chains could induce uncer- prices, and the third is the stress in This lack of liquidity has been government losing its ability to provide even basic tainty on this account. Also, the state of the financial system would limit the global financial markets driven by the primary driver of the record high services like law and order and health, running the benefit. The decision of the rate-setting committee, to an extent, will be influenced the first two. outflows from emerging-market risk of a descent into anarchy. The larger producers by global developments between now and April 3. Meanwhile, the government Credit Suisse global economists equity funds: The last 30 days have have built up buffers over the past two decades, and has done well to increase tax on petrol and diesel. This would help contain the and money market strategists have seen $36 billion go out, significantly may not have this risk unless low prices sustain for flagged funding pressures created higher than that seen even during several years. fiscal deficit. A number of precautionary steps to contain the virus have also by disruptions caused by coron- TESSELLATUM the 2008 crisis. For markets like It may be a few months before the markets are been prudent. The government should continue to build capacity to treat infected avirus, first in China, and then in NEELKANTH MISHRA Brazil and Turkey, which have his- able to “draw a circle around these problems”, people. This will help limit the economic downside. the rest of the world. As activity lev- torically been susceptible to fund meaning that the costs are quantified, and the allo- els drop, the velocity of money slows: outflows, these are the worst on cation of these costs is broadly understood. In all Customers stay home, or production slows because record. For India, $4 billion stampeding out over the this global turmoil, the India-specific problems of of some parts being in short supply; some can take past month ($2 billion over the past week) is close to a financial system short of capacity, effective inter- Riot and riposte credit, but for many informal sector workers, income the worst seen in 2008, though as a share of market est rates that are still ahead of the nominal GDP and thence consumption drop immediately. Other capitalisation the ratio is a bit better. growth, and poor consumer and investment senti- The govt’s explanation in Parliament was disingenuous households and some firms have higher cash bal- There is a natural mean-reverting trend about ment, have slipped from headlines, but still need ndians seeking clarity from the government on the causes, responses, and ances, as they stay at home (no movies, eating out) short-term flows — after one burst, sellers balk at to be addressed. The coming weeks and months aftermath of the riots in north-east Delhi, in which 53 people died and over and generally spend less than normal (e.g. travel the sharply lower prices, and some new buyers begin will require cohesive and speedy action by policy- bans, cancellation of conferences). This happens at to get interested. Some regulatory actions like the makers: The challenges could very well be turned 500 injured, would have been confused by Home Minister Amit Shah’s a global level. While within countries the respective short-selling ban imposed by markets like Korea into opportunities. I explanations in the Lok Sabha on March 11. Mr Shah’s 50-minute speech central banks can address this, when it comes to also help in the near term. But these do not last long: can be best described as a model of mendacity. It apportioned the blame on global payments, which are primarily in US dollars, Even as the markets rebound from the sharp cor- The writer is co-head of Asia Pacific Strategy and India everyone but his ministry and the Delhi police, which report to him. According the US Federal Reserve (Fed) needs to act. Before it rection over the past month, one must remember Strategist for Credit Suisse to his version, the riots were pre-planned, financed, and mobilised externally (by implication the Muslim community) and the police were exemplars of law enforce- ment by restoring order in 36 hours. He presented detailed data on first information reports filed, arrests, and other investigations. The gaping contradictions and omissions in his speech were hard to miss. For instance, Mr Shah said he had What kind of bear market is this? been so fully engaged with the police during those two fateful days that he missed he Sensex on February 13 hit a high of 41,709, Along with the equity markets, crude oil prices Indian markets were locked in the lower circuit on US President Donald Trump’s visit. This apart, he said the Uttar Pradesh border, and was set to cruise higher on the back of a also crashed this time. Financial experts immediately opening and leading to a mandatory halt in trading through which alleged rioters were infiltrating, were closed on February 24. He T continued inflow of foreign and domestic chorused that falling oil prices will benefit India for 45 minutes. Just before they reopened, US index added the police limited their operations to 4 per cent of the affected area and 35 investment. Institutional investors, market commen- immensely. This is silly for two reasons. One, falling futures shot up on some flimsy government paramilitary companies were deployed in riot-hit areas, which is why there was tators, and, of course, retail investors were apparently oil prices are turned to good account by the govern- announcement, which reverberated across global no trouble after February 25. unworried. Economic growth hitting 2.5 per cent (yes, ment through higher taxes. They are rarely passed on markets. So the Indian market reopened to a massive All of this raises more questions. With such intensive effort, why did it take it would be 2.5 per cent in accordance with the old to the consumers. The Modi government did this in rally. It seemed like a bipolar market, depressed one the police 36 hours to restore order? If the presence of the paramilitary forces series even it is 4.5 per cent in accordance with the 2015, in 2018, and again this time. Two, to say that an hour and euphoric the next. This perfectly sums up new) seems to be a non-issue. The political leadership, oil crash will benefit India is a selective and self-serving human reactions to known unknowns, when we over- ended the trouble after February 25, why weren’t they deployed when the rioting (market players continue to think it argument because it only looked at react. We know that the epidemic will affect us all began? Why do victim and eyewitness accounts from both religious persuasions is visionary), is now focused on one part of the equation. Oil prices but don’t know how much. When we think it will speak of the conspicuous absence of the police? Why did the police records show social engineering and not economic crashed because of fears of a severe affect us severely (fear), we sell out of panic and when that thousands of emergency calls went untended? Why did the police prevent development; but that too appears global contraction and demand we think it will be contained (euphoria), we perceive ambulances and other transport to access better-equipped hospitals until ordered to be irrelevant. Record unemploy- recession. Surely, you cannot look at a buying opportunity. People hate uncertainty and to do so by the Delhi High Court? How do videos showing the police participating ment doesn’t seem to matter. The the fall in oil prices as a positive, with- react strongly to it. The greater the uncertainty, the decline in growth in sector after sec- out reckoning on the fact that entire stronger is the reaction. in the violence, destroying CCTV cameras, beating up injured men, and forcing tor — auto, capital goods, exports, businesses may shut down and There are three types of bear markets, according them to sing the national anthem square with Mr Shah’s picture of model law textiles — is considered temporary. many others get severely maimed to Goldman Sachs — one driven by a specific episode enforcement? Why did the Press Information Bureau on February 25 refer to An uninspiring Budget and the sub- due to demand contraction. or event, like war, an oil price shock, or an emerging- riots as spontaneous when he says they were pre-planned? Why do two BJP sequent fall in stock prices were rea- Businesses don’t care about input market crisis. It could also be events like demoneti- worthies, whose inflammatory speeches must be considered equal offenders as sons to buy, not sell. According to cost as long as there is demand. If sation in India or 9/11 in the US. The second is cyclical, the acts of the scheming rioters, remain at large even as an offending councillor analysts, the market is cheap, based there is a demand slowdown, lower caused by a changed economic cycle, due to factors on some fantasy earnings growth IRRATIONAL CHOICE input costs are irrelevant. such as rising interest rates, impending recession, from the Aam Aadmi Party has been arrested? figure of FY21, never mind that the DEBASHIS BASU The real issue is whether the and fall in profits. This kind of bear market can lop Though Mr Shah did not deign to address the many doubts raised by oppo- consensus earnings forecasts of ana- coronavirus contagion will be 30 per cent off the index value (already happened). sition MPs, he added another layer of ambiguity to the contentious National lysts have never been right. stopped or effectively contained. Cities and countries The third is a structural bear market, created by huge Population Register (NPR) exercise, due to begin next month. Anxious perhaps Then came coronavirus and this cosy complacen- are shutting themselves off one after another. Schools, imbalances in the economy and financial bubbles, by the unwillingness of allies in states to implement it — including, most recently, cy was shattered. Last Friday the Indian markets colleges, and leisure and entertainment centres are very often followed by a price shock and deflation. Tamil Nadu — he announced that no one would be marked a Doubtful Citizen crashed to hit the lower circuit breaker as panic closing, conferences are being cancelled, and inter- The decline in such bear markets is around 57 per gripped markets around the world initially. From the national travel has collapsed. Simultaneous global cent. Which kind is the current one? I am guessing under the exercise. This, too, is misleading. The NPR does not designate “D- high of February 13, till the lowest index intraday containment is the need, but in a globalised economy that institutional investors think it is event-driven or Citizens”; it is the National Register of Citizens (NRC) that does so. Under the print of March 13, the Sensex has fallen 29.5 per cent. it also means a simultaneous global contraction in cyclical. The fact is, we don’t know. If the epidemic is Citizenship Act, the NPR is the precursor to the NRC. Prime Minister Narendra This is surprising and even shocking to many, but trade, transport, and tourism — a sure recipe for reces- sharply contained in a month or two, we have a huge Modi had stated that there had been no discussion on the NRC, but did not rule not unprecedented. From an intraday high of 12,671 sion. The US government has tried to ease the pain buying opportunity. If not, we are staring at a serious it out. As a means to quell national misgivings on the troubling trinity of on May 11, 2006, the Sensex had crashed to an intra- by cutting interest rates and taxes, and loosening economic crisis, the contours of which we are totally day low of 8,799 on June 14 in the same year, a crash monetary policy. But, of what help are fiscal and mon- unaware of. Citizenship Amendment Act-NPR-NCR, the proximate cause of the February of 30 per cent in one month. I can bet that many sea- etary policies when there is no incentive to do more riots, Mr Shah has failed. His government has much to answer for still. soned market players may not remember that 30 per business and there are enforced hindrances? The writer is the editor of www.moneylife.in cent crash over one month, let alone what caused it. Are the markets overreacting? On Friday, the Twitter: @Moneylifers

penicillin. And they were eager to earn should be developed for people first, not for Sacklers’s aggressive, and often even more, Pharma explains, by patenting profit. Upstarts like John McKeen, the transgressive, marketing techniques Big Pharma’s addiction to profit broad-spectrum antibiotics that might be chairman of Pfizer, Mr Posner writes, took would radically remake the drug used for all kinds of health conditions. the opposite view, arguing that it was not industry, contributing over the decades potion for quieting colicky infants, scoured cannot really understand how firms like Mr Posner recounts how many doctors worth investing in drugs that would not to the overprescription of drugs like newspapers for birth announcements and Bayer, Merck and Pfizer evolved into came to view super antibiotics as their generate substantial revenue. Valium, menopause treatments, then sent mothers free samples. The “sprawling pharma conglomerates that drugs of choice — not only for proven uses In 1951, McKeen decided to use the painkillers and antidepressants, giveaway aimed at mothers was an early sell a trillion dollars of drugs annually” like treating bacterial infections, but “even launch of Terramycin, the company’s new ultimately resulting in untold health precursor of a consumer-influence without understanding their early prophylactically at the first signs of a fever, broad-spectrum antibiotic, to develop a harms. Indeed, Purdue Pharma, the drug technique known today as “targeted histories as pioneer peddlers of then- earache, scratchy playbook for creating company owned by the Sackler brothers, BOOK REVIEW marketing”. The mothers who received the legal heroin and cocaine. throat or runny PHARMA a blockbuster drug. adapted those influence techniques in “Baby Friend” freebies, however, did not The result is a withering and nose”. That over- Greed, Lies, and For that he turned to the 1990s to deceptively market NATASHA SINGER know that the formula contained alcohol encyclopaedic indictment of a drug eagerness drowned the Poisoning of Arthur M Sackler, a OxyContin, an opioid with a slow-release and morphine sulphate, ingredients that industry. Over 550 densely packed pages, out troubling reports America hard-charging mechanism, Mr Posner writes. He n 1900, Bayer, the German could be poisonous to babies. Dozens of Mr Posner tells a tireless and occasionally of allergic reactions Author: advertising executive blames the ensuing opioid abuse pharmaceutical company that had infants died. tiring tale that reads like a pharmaceutical to the drugs, fungal Gerald Posner who had trained as a epidemic, which has led to the deaths of developed aspirin, introduced a much Mr Posner draws on these incidents to version of cops and robbers. First, the infections and the doctor — and who tens of thousands of Americans, in part I Publisher: Avid stronger brand of pain killer in the United introduce the idea that, in the early days of author exposes how drug companies risks of antibiotic decades later would on “the addictive drugs that 150 years States. The new drug was called heroin, a the pharmaceutical industry at least, it pushed medical, ethical and legal resistance. But the Reader become known as one earlier were the core DNA of the name derived from the German word for could be difficult to distinguish drug- boundaries, often causing more public Food and Drug Price: $35 of the three brothers pharmaceutical industry.” “heroic.” The company promoted it as a makers from snake oil purveyors. harm than health benefit. Then he Administration, behind Purdue That is ultimately a reductive treatment for an array of ills: colds, coughs, The focus on drug industry describes lawmakers and regulators established in 1906 to oversee product Pharma, the developer of OxyContin, the argument. If Big Pharma is still addicted to asthma, epilepsy, multiple sclerosis, profiteering marks this book as the latest scrambling to catch up and rein in the safety, did not intervene, Mr Posner notes, painkiller at the centre of the current the century-old idea of producing stomach cancer, schizophrenia. It also entry in a growing canon of Big Bad drug-makers. And repeat. because its commissioner at the time did opioid abuse epidemic. “staggering profits from their highly advertised heroin as safe for children. And Pharma books. What distinguishes One of the most telling episodes not want to be seen as an obstacle to McKeen allotted $7.5 million for the addictive products,” it’s difficult to anyone over 18 could buy it, Gerald Posner Pharma from these earlier efforts is that involves antibiotics. The mass production lifesaving medications. Terramycin campaign, an unheard-of imagine a viable rehab for the industry. notes in a new book, Pharma: Greed, Lies, the author sets himself the task of writing a of penicillin during World War II helped By 1950, pharmaceuticals had become sum for medical marketing at the time. Perhaps that’s why Pharma devotes so and the Poisoning of America. bigger, more ambitious tome. pharmaceutical companies throw off their the most profitable industry in the United Sackler used the funds for a novel many words to industry malfeasance and Bayer was hardly the only company at Mr Posner envisions the book as a reputations as addictive drug pushers and States. But the mass adoption of antibiotic saturation-marketing campaign, adapting only one sentence at the end to a possible the time touting risky products as definitive history of the pharmaceutical rebrand themselves as producers of “wonder drugs” had opened a schism. Madison Avenue’s techniques for selling “multidisciplinary solution.” panaceas. Mr Posner describes how the industry “in its entirety” in a single innovative, lifesaving products. The drug- Industry veterans, including the chief consumer goods for his own “Medicine makers of Kopp’s Baby Friend, a popular volume. After all, he argues, people makers also reaped massive profits from executive of Merck, insisted that medicines Avenue” advertising methods. ©2020 The New York Times News Service 10 PERSONAL FINANCE MUMBAI | MONDA Y, 16 MARCH 2020 VALUE OF ~1 LAKH SENSEX GOLD SILVER FD (SBI) PPF INVESTED IN VARIOUS ASSET 1-YEAR 90,335 1,29,764 1,11,778 1,06,800 1,08,000 CLASSES 1-YEAR 90,335* 1,20,835 1,08,245 1,04,760 1,08,000 POST-TAX RETURNS *Note: Cumulative equity gains up to ~1,00,000 in a financial year are tax-free. 5-YEAR 1,19,648 1,61,579 1,19,003 1,48,641 1,51,757 All post-tax returns are calculated for an individual in the 30 per cent tax bracket, 5-YEAR 1,19,648* 1,55,421 1,17,103 1,32,408 1,51,757 without considering the indexation benefit POST-TAX RETURNS As on March 13, 2020, in ~; compiled by BS Research Bureau > . Cryptocurrency is back, but be cautious

It faces regulatory risks and is highly volatile. Limit your exposure to this asset class saw a very sharp correction,” says Vishal Dhawan, chief financial planner, Plan SANJAY KUMAR SINGH Ahead Wealth Advisors. SHARP PRICE FLUCTUATIONS ARE THE NORM No clear methodologies exist for deter- ith the Supreme Court over- Bitcoin Return Ethereum Return XRP Return mining the fundamental or intrinsic value turning the Reserve Bank of (price in $) (%) (price in $) (%) (price in $) (%) of this asset class. “In the case of stocks, W India's (RBI) April 6, 2018 circu- Current 5,403.59 128.02 0.152 you can do discounted cash flow analysis lar on cryptocurrencies, investors in this or use valuation multiples to decide asset class would be quite thrilled. 1 month 10,257.64 -47.32 265.63 -51.81 0.325 -53.16 whether it is under- or overvalued. No Through the circular, the central bank 3 months 7,112.73 -24.03 142.06 -9.88 0.216 -29.71 such method exists for valuing cryptocur- had banned banks from providing ser- rencies,” says Dhawan. Deciding when to vices to cryptocurrency exchanges. Since 6 months 10,302.19 -47.55 187.5 -31.72 NA enter or exit then becomes a matter of investors could not transfer money from 1 year 3,892.05 38.84 131.37 -2.55 0.310 -50.81 guesswork or speculation. their bank accounts to a cryptocurrency Figures are for the three biggest cryptocurrencies by market cap Source: Coindesk.com Despite the above-mentioned risks, if exchange or get their money back from you still decide to invest in cryptocurren- them, the decision had sounded the Pavan Duggal, cyber law expert and advo- India at the time of the banking ban with cies, make them a part of that portion of death knell of the industry. No wonder, cate, Supreme Court. He informs that about 70 per cent market share. Shetty of your portfolio where you engage in high- there is significant enrhusiasm after the Belarus, Malta, Estonia and Switzerland WazirX says he is in discussions with pay- risk activities, like day trading. And limit judgment and players are once again have come up with new legislation on cryp- ment gateways and these will get enabled the exposure to, say, 5 per cent of your preparing to launch exchanges and peer- tocurrencies and blockchain. “India has an within a couple of weeks. total portfolio. “Invest only that portion to-peer (P2P) platforms. opportunity to learn from their experi- Bear in mind that the number of of your wealth which you can afford to ences and see how best we can harness the cryptocurrency investors in India is not lose,” says Shetty. If gains in cryptocur- Aftermath of the ban: Some exchanges positive potential of crypto assets,” he adds. small — estimates say it could be 1.7 mil- rencies drive the weight of this speculative relocated to other countries. Some Banning cryptocurrencies altogether lion or above. portion higher, sell and rebalance. switched to offering crypto-to-crypto could be counter-productive. “Banning To counter valuation risk, Pagidipati trading. But C-2-C volumes were thin on them will drive these activities under- A high-risk asset class: There is a lot of suggests that you use the rupee-cost the Indian exchanges. Investors who ground. Instead, the government should concern among the authorities that cryp- averaging strategy. Also, have a long- wanted to engage in such trading pre- allow trading but with proper KYC (know tocurrencies are used for money launder- term investment horizon. “The total ferred international platforms that offer your customer) and anti-money launder- ing. Whenever Indian authorities crack- number of bitcoins that can be mined greater liquidity and better pricing. ing provisions in place,” says Nischal down on such activities, that could have is limited to 21 million. Demand will Some exchanges, like WazirX, shifted Shetty, founder and chief executive offi- an effect on prices. Investors in India will grow over time, so anyone who enters to the P2P model, which operates as fol- cer, WazirX. also be affected by how global, and not with a three-five-year horizon should lows. Suppose A wants to sell cryptocur- believed that the government had Regulation of Official Digital Currency just Indian, regulations on cryptocurren- earn good returns,” says Shetty. rencies and B wants to buy them. Both reg- declared cryptocurrencies to be illegal. Bill, 2019, exists that seeks to ban cryp- Exchanges going live again: Despite the cies shape up. Investors should also limit themselves ister on a P2P platform. A transfers his This was not true. But this misconception tocurrencies altogether. Even the RBI regulatory risks, many players are getting This is also a very volatile asset class. to the most reputed crypto currencies cryptos to the exchange, which provides caused many prospective investors to shy could come out with further regulations. ready to launch their services again. On March 12, bitcoin had plunged 48 per like Bitcoin and Ethereum. More than the escrow facility. B transfers money to away from this asset class altogether. Experts are hopeful the government “If you wait, you will give a head start to cent in 24 hours, wiping out $ 93.5 billion 5,000 of them exist today. Some are akin A's bank account. As soon as the latter will not take the draconian step of banning your competition,” says Ashish Agarwal, in value, according to media reports. to Ponzi schemes, hence avoid the less receives the money, the P2P platform trans- Regulatory risks remain: Banking ser- them completely. “Cryptocurrencies are CEO, BitBuddy, which plans to launch a Moreover, cryptocurrencies may not established ones. fers the cryptocurrencies to B’s wallet. This vices to cryptocurrency service providers here to stay. The bigger issue is, what mobile app for P2P transactions in provide diversification benefit. “Assets When selecting an exchange, compare model obviated the need for the exchange will resume at the SC's behest. But one should sovereign governments do to ben- Bitcoin. “We have already gone live,” says that are perceived to be risky tend to have the cost of trading. Go with those that are to have access to banking channels. more risk hangs over the industry. A Draft efit from their advantages, rather than Rahul Pagidipati, CEO, ZebPay, which was a high correlation. As the equity markets well capitalised and have robust KYC After the RBI ban, many people Banning of Cryptocurrency and completely turning their faces away?” says the largest cryptocurrency exchange in were melting down last week, bitcoin too mechanisms in place.

PAY LOAN AGAINST SECURITIES: RATES & CHARGES Don’t increase your Lender Interest rate Processing ADDITIONAL (%) fee* equity allocation MARGIN Axis Bank 10.5%-12.75% 0.15% MONEY IN UCO Bank 11.45% ~250 Better bargains may be available in the Federal Bank 12.5%-13% Up to 0.25% next few months FALLING IIFL 12%-18% 0.25%-1% Tata Capital 10.5% onwards Up to 1% settles down. The Nifty was trading MARKETS at a price-to-earnings ratio (PE) of Indian Bank 10.95% 0.308% about 28.6 in late January 2020, State Bank of India 9.75%-12.4% Up to 0.75% when it hit an all-time high of 12,430. Delay in On last Thursday, it closed at 9,590, Kotak Mahindra Bank 9.25%-13% Up to 2% where the PE was 21.8 and on Friday, repayment Citi Bank 10.75%-13.25% Up to 1% it hit a low of 8,550 before rebound- ing to just above 10,000. (The NSE carries a stiff BINDISHA SARANG Canara Bank 14.60% 0.10% calculates standalone earning per penalty nInvestors looking to raise money age are eligible for this loan. *Figures are percentage of loan amount, except where given in ~. Data as on March 11, 2020 Source: Paisabazaar.com share (EPS) for the past four quar- MARKET INSIGHT by pledging their shares should ters, weighted by the market capi- nWhen markets fall and the value delay repayment, the penalty falling, the limit up to which you know that banks give loans of up DEVANGSHU DATTA talisation). of the pledged shares declines, charged can be as high as can withdraw can be reduced. to 50 per cent of their value. Since The Q3, 2019-20 EPS growth was borrowers are required to put 2 per cent per month or 24 per cent stock prices fluctuate, the amount nMid- and small-cap stocks Amid the panic caused by COVID- 7 per cent year-on-year for the Nifty. up additional margin money in per annum. 19, crude wars and the YES Bank cri- It’s reasonable to assume Q4 EPS of loan you are eligible for will tend to be more volatile, so order to maintain the sis, one thing is certain: Q4 growth will be even lower. The rush also fluctuate. nMost loans against securities are the percentage of loan loan-to-value ratio. (January — March 2020) will be to safety has pulled down treasury given as overdraft facility. There is approved could be less if you nThose between 21 and 75 years of worse than Q3 (October-December yields to about 6 per cent as nIn case of some lenders, if you a risk that when the markets are pledge them. 2019). Corporate earnings will take investors have moved into govern- a hit across the board. It’s safe to ment paper. assume that Q1, 2020-21 will also be Investors use PE, the PE to EPS pretty bad. growth ratio or PEG, and compar- Even if the pandemic is con- isons with available risk-free yields tained soon, it has already done as valuation tools. At a PE of 23, the enough damage to knock the global index still looks over-valued if we Buy an AC that also acts as a purifier economy into a lower medium-term assume an EPS growth rate that’s trajectory. The impact of China’s around 7-8 per cent. The PEG would per cent more than a non- number of hours for which the lockdown was felt across global be roughly three – that is, thrice the Go for a unit with inverter AC. It runs at full unit is likely to be used. If you manufacturing. Now, with the EU “safe limit” of one. capacity until the optimal plan to run the AC for five-eight badly affected, cases in the US and A treasury yield of 6 per cent is higher star rating temperature is achieved and hours daily, go for a five-star unit other advance economies, and visa also roughly equivalent to the earn- then runs at part load to to save on power cost. If the unit cancellations everywhere, global ings yield of a PE of 17. That’s well NAMRATA KOHLI maintain it. According to Croma will operate for just a few hours services will be impacted. Demand below current discount. If we salesperson Harveer Singh, every week, go for a three-star will surely be hit as well. assume a Q4 slowdown in earnings With the summer season just “Normally a non-inverter AC unit. Prices range from ~25,000- A few good quarters in the future growth, the PE would rise, even if around the corner, it is time to consumes six-seven units of 70,000. Five-star models usually may compensate for the lost manu- the Nifty held static at around cur- think of buying an air- electricity in 10 hours. An come for above ~35,000. facturing output. For rent levels. The treasury conditioner for your house if inverter AC consumes 1-1.5 units Check whether the coil is example, fewer mobiles History never yield could come down you need one. Currently, with less per day, which can translate made entirely of copper or is a and cars are being manu- repeats exactly. if the RBI cuts rates, and some hard bargaining, you may into a monthly saving of around mix of copper and aluminium. factured this quarter. But, a yield of 5.5 per cent be able to get a discount at a 35 units.” Most people prefer copper as as and when demand But there will might justify a PE of nearby showroom. As Some of the newer models the ambient air in India is quite rebounds, and the virus eventually be 18-19. temperatures soar, not only do have built-in 'self-diagnosis' corrosive. threat recedes, produc- rewards for Obviously, many discounts disappear, even the codes to identify potential tion may increase and patient individual companies mechanics who install these problems. These codes are Indoor air quality is crucial: It make up for the current investors. are available a lot cheap- machines become harder to useful for self-repair. is believed that apart from production cuts. er in valuation terms. So find. cooling, an AC also circulates But quite a lot of the Valuations, value investors will find Take into account room size: bad air that spreads diseases. lost services activity will though, aren’t decent picks at these Energy-efficiency rising: The The capacity of AC you choose Says Barun Aggarwal, CEO, not be compensated. If compelling, yet index levels. But the government has introduced a should depend on a variety of BreatheEasy Consultants, a full- someone has missed out index could fall a lot fur- series of stringent standards of factors. Says Kapur of MEHO- service Indoor Air Quality (IAQ) on haircuts due to quarantine for ther. This crash is being compared efficiency and labelling. Says HCP Air Systems: “Capacity solution provider: “The AC itself example, he will not take multiple to the 2008 financial crisis in terms Chirag Baijal, managing selection for residences should does not produce bad air. With haircuts later! In the Indian context, of severity. The Nifty fell from a high director, Carrier: “The norms depend on room size, height, the older window air- given the vast army of day-labour- of 6,357 in January 2008, to a low of have had the effect of creating occupancy, exposed windows conditioners, one had the ers, there will be a lot of economic 2,252 in October 2008. If we see a awareness on the demand side. and walls, and whether it is the option of a toggle switch to bring hardship for lower income groups, similar situation playing out in 2020, A consumer today knows that a COST OF AN AIR-CONDITIONER top floor.” Most air conditioners in fresh air. This allowed the air somewhat like there was during the Nifty could slide till the 6,000- five-star AC is more energy- Brand Type Features Price (~) mention the area they can cool. in the room to be conditioned demonetisation. zone. The index quickly recouped efficient than a three-star For instance, the Hitachi (1.5- and it kept the carbon dioxide The pandemic will also change much of its losses, rising to 5,200 by machine.” Daikin Split AC Inverter 56,990 ton, 5-star, Inverter) cools 15 sq level down. However, the newer the functioning of the global econo- December 2009. Today's consumer typically Hitachi Split AC Inverter 49,490 m or 170 sq ft while the Bluestar wall-type ACs do not have the my. MNCs will diversify supply History never repeats exactly. looks for an air-conditioner that LG Split AC Inverter/ 47,990 brand cools 16 sq m or 180 sq ft. option of bringing in fresh air chains to avoid being caught in a sin- But there will eventually be rewards not only takes care of cooling copper condenser Says Singh of Croma: “A basic and that is where the problems gle-nation lockdown. Businesses for patient investors. The valuations but also works as a purifier and thumb rule is that a one-ton AC start. The air in the room will get will learn how to efficiently manage aren’t compelling yet. There’s a lack humidifier. "ACs are already Panasonic Split AC Inverter/ Nano G filter 47,990 is good for a 10x10 room, a 1.5- conditioned, but it will be stale, work-from-home paradigms. Travel, of clarity about the immediate serving the critical function of Haier Split AC Inverter 44,990 ton for 150 sq ft, and a 2-ton for with high levels of CO2 and hospitality, entertainment, sports, future that makes it hard to recom- humidity control. The high-end 225 sq ft.” volatile organic compounds conferencing, etc., will all take a hit mend a buying spree. The post- models now also come with Samsung Split AC Inverter 43,990 Window ACs are easier to (VOCs). With a high wall AC, along with labour-intensive indus- COVID-19 world may be different in purification technologies,” says Lloyd Split AC 4-star/Inverter 40,990 install or dismantle and hence open a door or window at tries like manufacturing, construc- many ways. Vishal Kapur, managing Costs are for 1.5-tonne ACs. All are five-star except Llyod’s. Source: Croma are preferred by people living on certain intervals to bring in tion, and public transport. These Equity investors need to follow a director, MEHO-HCP Air rent. However, the market is some outdoor air, though this changes will force investors to study holding pattern. Continue system- Systems. Various models today both sides, allowing for better cooling requirement mostly moving towards split will increase the load on the AC new business models too. atic investment plans. If you fancy are equipped with filters that circulation from both the left automatically. ACs as they do not block the during peak summer.” A more Figuring out what valuations are valuations of individual businesses, can handle PM 1-2.5. and the right side of the window window. They are also sophisticated solution is to reasonable will be hard in the buy. But don’t increase your equity Most good ones use a green AC. Some, like Daikin, have an Inverter technology: An aesthetically more appealing bring in controlled air from volatile situation that will prevail allocation yet. Better bargains may refrigerant, HFC 32. Some, such intelligent eye sensor that inverter AC technology uses a and less noisy. outside, after filtering and until the post-COVID-19 economy be available in the next few months. as Hitachi's, have twin-motor identifies a human body within variable speed compressor to The choice of machine cleaning it from the harmful technology, which has ducts on 20 metres and adjusts the save energy and power up to 50 should also depend on the outdoor pollutants. MUMBAI | MONDAY, 16 MARCH 2020 ECONOMY & PUBLIC AFFAIRS 11 . < Saudi Aramco to cut capital spending Coping during Profit slumped 21% in before the coronavirus pandemic imisation of this company’s became a factor for oil prices. returns,” said Hasnain Malik, head uncertain times 2019 on lower oil prices In recent weeks, Riyadh has of equity strategy at Tellimer. announced that it is ramping up Despite a drop in income, abroad could go down. and production production in an oil price war with Aramco said it paid a dividend of However, this need not neces- Russia that has sent global prices $73.2 billion in 2019 and intends to sarily adversely impact our bal- REUTERS plunging and contributed to the coro- declare a cash dividend of $75 bil- ance of payments, as the Riyadh, 15 March navirus rout on international finan- lion in 2020, paid quarterly. import bill will also be lower cial markets. The company said it Aramco, which is 98 per cent due to falling crude oil prices. audi Aramco on Sunday said it expects capital spending for 2020 to owned by the Gulf kingdom, report- On the public health front, had planned to cut capital be between $25 billion and $30 bil- ed a net profit of $88.2 billion in our government has assured S spending in the wake of the lion in light of current market condi- 2019, down from $111.1 in 2018. that all effort is on to contain coronavirus outbreak, and tions and recent commodity Analysts had expected Aramco spread of the virus. As of now, also posted a plunge in prof- price volatility, compared to to post a net profit of 346.6 billion there are no credible reasons to it for last year, missing fore- $32.8 billion in 2019. riyals ($92.6 billion) in 2019, accord- doubt that. The Reserve Bank casts in its first earnings Aramco has already tak- ing to an estimate of 15 analysts of India asked states not to pull announcement as a listed en steps to “rationalise” its polled by Refinitiv. EXIM MATTERS out funds from private banks company. planned 2020 capital spend- Aramco said the drop in earn- and offered dollars for six Saudi Arabia’s decision ing, Chief Executive Officer ings was mainly due “lower crude T N C RAJAGOPALAN months through sell-buy swaps last year to float shares in CORONAVIRUS Amin Nasser said in a state- oil prices and production volumes, to ensure supply at a time of its state oil company — the PANDEMIC ment. “The recent COVID-19 The oil company expects capital spending for 2020 to be between $25 billion coupled with declining refining and Last week, the World Health turmoil in global markets. most profitable company outbreak and its rapid spread and $30 billion, compared to $32.8 billion in 2019 chemical margins, and a $1.6 bil- Organization designated the At a time of such great in the world — was one of illustrate the importance of lion impairment associated with spread of Coronavirus (COVID- uncertainty and disruption, the the central elements in Crown Prince agility and adaptability in an ever- reached in January and had their with cheap oil has revived investor Sadara Chemical.” 19) a global pandemic. Italy government could let business- Mohammed bin Salman’s program changing global landscape,” he said. biggest one-day decline on March 9 concerns that the profitability of the “Assuming the price of $35 per locked down the entire coun- es cope with the evolving situa- for economic and political reform. Aramco listed its shares in Riyadh since the 1991 Gulf War. company would come second to barrel, Aramco’s revenue and Ebitda try, asking its people to avoid tion, rather than introduce The record-setting IPO was touted in December in a record $29.4 billion Brent crude futures last traded at government-led strategies to influ- (earnings before interest, taxes, non-essential travel, even as changes. That is what the as making the world’s biggest energy initial public offering that valued it at $33.85 per barrel on Friday, down ence oil markets. depreciation, and amortisation) other countries reported more Goods and Services Tax (GST) exporter more professional and $1.7 trillion. Its shares fell below the from about $64 when Aramco listed “Foreign investors may view could contract by 20-30 per cent cases. Many, including India Council did in its 39th meeting transparent. IPO price last week for the first time, as its shares. recent events as confirmation that compared to our previous forecasts and United States, restricted on Saturday — it decided to The 21 per cent decline in net prof- oil prices crashed after the collapse of the strategic direction of Aramco is and to the company’s performance inbound travel from affected defer implementation of the it for last year means it fell short of an output deal between Opec and Cash flow driven by its majority shareholder, in 2018-2019,” said energy analyst countries. The fear of a severe e-invoice system and new analysts’ forecasts for the period that non-Opec members. Oil prices have Saudi Arabia's strategy to gain mar- driven by national development and Dmitry Marinchenko at Fitch economic impact from the returns till end-September. culminated in the share sale, months fallen nearly 50 per cent from highs ket share by flooding the markets geopolitics, not simply value max- Ratings. pandemic hit the financial Remaining glitches in the GST markets that had ignored inter- Network could be fixed in the est rate cuts by central banks meantime and the trade in many major economies. encouraged to run trials for e- The better news included invoices and new returns, Coronavirus outspread hits Indian banks falling numbers of virus- something few have done so far. affected people in Asia, espe- Last Friday, the Union UCO Bank and IDBI Bank, which enable the payment mechanism for Indo-Iran trade, set to lose on a pool of low-cost deposits cially in China and South Cabinet approved replacement Korea. More factories are of the Merchandise Exports NAMRATA ACHARYA & over the past month due to ignated banks. exported about 1.4 million returning to normal activity in from India Scheme (MEIS) with AVISHEK RAKSHIT acute shortage of containers, Although, export had not tonnes of rice to Iran. This finan- China. The spat between a Reimbursement of Duties Kolkata, 15 March largely supplied from China proportionally fallen. cial year, says Kaul, it will not be Russia and Saudi Arabia result- and Taxes on Export Products (which accounts for nearly 30 According to government more than a million tonnes. ed in falling crude oil prices (RoDTEP) scheme. Broad con- The coronavirus scare has led to per cent of container supply data, our import from Iran was Tea exporters to Iran also say that would help its major tours of the latter are known a near-standstill of trade worldwide). nearly $13 billion in 2018-19; this shipment has frozen on account importing countries; India is but rates of reimbursement between India and Iran. For the banks, if both had come down to $1.35 billion on unavailability of containers; one. And, officially confirmed have yet to be announced. Apart from exporters, the export and import get halted, in the first 10 months (April also, due to shipping companies cases of the virus are still only The current indication is two lending entities — UCO the payment mechanism will 2019-January 2020) of the ongo- being unwilling to send con- in double-digits here. that MEIS will be phased out Bank and IDBI Bank — which turn redundant. The two banks ing financial year. In contrast, signments there. “More Iranians There is little doubt that gradually, as and when enable the payment mechanism did not reveal the extent of the fall in export was much less. are not able to come here to global demand for goods and RoDTEP rates are finalised by for this bilateral trade, will also deposits on account of the Iran From $3.5 billion in 2018-19, it place forward orders; neither services will fall in the coming an experts committee. be hit, since they will lose on a trade. However, its utility can was $2.8 billion this financial can we go to Iran to sign a deal. months, especially in devel- Taking advantage of the fall pool of low-cost deposits. A top be gauged from the fact that in year, in April-January. This crucial market is expected oped countries, people being in crude oil prices, the govern- official of UCO Bank said the the final quarter of 2018-19, Rice, tea, sugar and pharma- to be hit severely this year,” said advised to avoid travel, quar- ment has raised excise duties deposits on account of the spe- UCO Bank could trim its loss For the banks, if both export and import get halted, the payment ceutical products are key prod- a tea estate owner from Assam. antine oneself and stay at on petroleum products. It cial mechanism put in place for by 27 per cent since it got mechanism will turn redundant ucts exported from India to Iran. Usually February-April is a home. Oil producing countries, would be better if some of the trade with Iran had already sub- ~13,000-14,000 crore of an Rice has the largest share. Vinod major season for tea companies, especially in West Asia, are also gain is passed on to consumers stantially reduced — the bank interest-free floating fund from mechanism has been put in India to Iran. Kaul, executive director of the as forward contracts are signed likely to buy less with their low- of petrol products by way of would be able to extend the sup- Indian oil refiners. place. Under which, oil refiner- However, for about six All India Rice Exporters during this period. Based on er revenue. The falling demand lower prices. That will put more port till funds were available. In the wake of US sanctions ies from India deposit rupees months, India has stopped Association, says the segment’s these contracts, where prices is bound to negatively affect money in their hands and help This is a double whammy for on Iran, India cannot engage in designated banks for import importing oil from Iran. So, oil trade with Iran has nearly and export volume are negoti- our export and, in turn, revive flagging demand. exporters, struggling with a in dollar-denominated trade from Iran; the fund is used to companies have stopped stopped with the acute shortage ated, companies plan the sea- employment prospects. Even drastic fall in trade with Iran there. Hence, a rupee-rial trade clear dues to exporters from depositing money to the des- of containers. Last year, India son’s harvest. remittances from Indians Email: [email protected] 12 THE SMART INVESTOR MUMBAI | MONDAY, 16 MARCH 2020 0 BSE 200: TOP 5 GAINERS OF LAST WEEK QUICK TAKE: STRONG DOMESTIC GROWTH BODES WELL FOR DR REDDY’S “MARKET REMAINS IN PERIL’S PATH. EVERYONE IS BSE price in ~ Mar 06 Mar 13 % chg Dr Reddy’s continues to report strong growth in domestic business, HUGELY SHORT OR WELL UNDER-POSITIONED AND Vodafone Idea 3.3 5.6 70.1 which grew by 21.4% year-on-year in February, ahead of its large cap INVESTORS ARE NOW TRYING TO CATCH UP WITH YES Bank 16.2 25.6 57.7 peers. The 18.9% growth during April'19-January'20 is also impressive. Bharti Infratel 204.0 227.3 11.4 Efforts in domestic and other emerging markets bode well and so are THE ALGORITHMS” Whirlpool of India 2,123.5 2,204.4 3.8 its cost reduction moves despite challenges in the US. Analysts, thus, STEPHEN INNES, Mangalore Refinery & Petrochem 37.0 37.1 0.3 remain positive on the stock trading at 20x FY22 estimated earnings. Chief Asia market strategist, Axicorp

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STREET Europe slowdown to hit auto sector hard SIGNS Motherson Sumi, Apollo Tyres, and Tata Motors to be THE EUROPEAN IMPACT among the worst affected because of high exposure Stock fall in % since Liquidity boost for markets Price (~) one year yearly highs Feb 20, 2020 The market could get a shot in the arm with RAM PRASAD SAHU gency measures taken by Spain, ~2 trillion worth of liquidity entering the Mumbai, 15 March Italy, Hungary, and France, the Motherson Sumi Systems 64.0 -61.3 -62.2 -47.9 system, say market players. The gush of the worst-affected countries in Tata Motors 89.9 -50.5 -62.4 -43.3 money is on account of refunds to investors he auto sector, which Europe, was a sentiment neg- who applied in the ~10,300-crore initial has been affected by ative for investors. Varroc Engineering 237.0 -62.6 -63.8 -41.1 public offering (IPO) of SBI Cards, which saw the economic slow- The near-term outlook for 27 times more demand the shares on offer. Apollo Tyres 104.3 -53.7 -55.6 -34.0 T down at home, is now some of the top European auto- The SBI Cards’ IPO closed on March 5, and facing a double whammy, given makers, too, has been muted. Mahindra CIE 105.8 -56.2 58.7 31.4 since then the market has come off 11 per the demand concerns in key Daimler, for example, expects an cent. About ~1.05 trillion worth of geographies, such as Europe. impact on the supply chain and Bharat Forge 378.2 -29.6 -31.0 -22.0 institutional money and another ~90,000 Companies with a significant demand. The company expects Balkrishna Industries 1,009.6 8.7 -22.2 -20.3 crore worth of high net-worth individuals’ presence in the European sales for Mercedes-Benz cars in bets were riding on the IPO. “The refund for market have a seen a steeper fall 2020 to be below the 2019 level. NSE Nifty Auto Index 6,168.2 -29.6 -31.9 -19.9 SBI Cards issue has taken place on Friday. If in their stock prices, as com- Renault apprehends the supply NSE Nifty50 Index 9,947.8 -12.3 -20.0 -17.7 markets stabilise, some of these funds will pared to their peers who chain to be affected given the find their way into the market,” said an are largely confined to the share of components that come Market price on March 13 ‘20; Compiled by BS Research Bureau Source: Exchanges analyst. domestic market. from China’s Hubei province. SAMIE MODAK Even as the Nifty Auto Index Nissan Motor is looking at deep nues from the European market Balkrishna Tyres, would also be FY20 earnings before interest fixed costs could make the new is down by a fifth over the last cost cuts in its recovery plan. and counts Fiat Chrysler, affected given that about half of and taxes (Ebit) by a percentage plants unviable. Trading curb a blessing for DMart three weeks, stocks, such as Vehicle sales in China, its second- Peugeot, Jaguar Land Rover its exports of off-the-road tyres point, as compared to the earlier Besides the operational The move by stock exchanges to shift the Motherson Sumi, Tata Motors, biggest market, dropped 80 per (JLR), and Volkswagen as its cus- come from the European mar- guidance of 3 per cent. Given the worries, valuations for these scrip of Avenue Supermarts to the so-called Varroc Engineering, and Apollo cent in February because of com- tomers. ket. Mahindra CIE, in which debt on its balance sheet and companies have been higher trade-to-trade (T2T) category earlier this Tyres, are down between 34 per muting bans and road closures. Weak sentiment for Apollo Spain’s CIE Automotive has a 56 investments in JLR, it would than long-term averages. This month surprised the Street. However, this cent and 48 per cent during this These companies are among Tyres was on account of the per cent stake, gets over half of be difficult to sustain cash was above the street’s zone of was as a blessing for the company, which period. The sharper fall for these the largest clients for Indian auto warning by the Hungarian pre- its revenues from the European flows, if the demand situation comfort and thus a derating was operates the highly successful DMart retail companies is largely because of component makers and Europe mier about the dent to that econ- market and will be impacted as deteriorates. waiting to happen, he adds. chain. Since March 2, shares of Avenue demand worries in view of the is a key market. About 37 per omy because of the pandemic. clients scale back on production. In addition to Tata Motors, Given that there is demand Supermarts are down 6 per cent, as against coronavirus pandemic. cent of Motherson Sumi’s reve- Apollo’s greenfield plant in For Tata Motors, the impact most auto component players destruction, especially for com- a 11 per cent decline in the benchmark An analyst at a domestic bro- nues come from Europe (Spain Hungary was stabilising and will be multifold, given that with plants in Europe are lever- panies with significant overseas Nifty. Under the T2T segment, a stock has to kerage says that fear factor on and Germany), with global oper- analysts had expected it to con- Europe accounts for over 40 per aged. These plants generate sin- exposure, brokerages indicate be compulsorily marked for delivery. account of the outbreak would ations of European automakers, tribute to mid-single-digit cent of JLR revenues. In view of gle-digit return on capital that investors could look at Typically, stocks that see excessive weigh on the demand front, such as Renault Nissan, Audi, growth for the company’s the sharp 85 per cent decline in employed and muted Ebit mar- India-focussed players, such as speculative activity are moved to this leading to lower volumes and Volkswagen, BMW, and Daimler European operations going car retail sales in February in gins worsened by higher levels Hero MotoCorp, given the segment. Though Avenue Supermarts has falling utilisation of facilities. accounting for about a half of its ahead. Growth could slow down China, supply chain disruption, of debt, says an analyst. Without expected uptick in rural sales, outperformed the market this month, it Further, supply chain and sales revenues. Varroc Engineering instead of improving for the and demand drop in other mar- new contracts and scaling back cash on books, dividends, and has come off 17 per cent from its peak — the disruption because of the emer- gets about 46 per cent of its reve- company. Another tyremaker, kets, the company has cut its of existing orders, higher prudent capital allocation. same as the Nifty. SUNDAR SETHURAMAN MNC stocks seen as safe haven Shares of multinational companies (MNCs) MFs deploy cash in volatile markets have emerged as safer bets in the current Stocks that brought Sensex down market selloff. Since February 20, the Nifty has corrected 17 per cent, while an index SAMIE MODAK performance, given their high JASH KRIPLANI economic scenario where the of MNC companies has fallen about 12 per weightage. We analyse stocks which Mumbai, 15 March rupee could slip and infla- cent. Analysts say investors can look at The benchmark Sensex has dropped have made the biggest negative tion could be higher. In the MNCs with less debt and those that have 7,200 points, or 17.5 per cent, since contribution and how their Domestic mutual funds cautious markets, we see demonstrated good earnings growth in February 20, 2020, the day when the valuations compare now to their (MFs) have continued to buy opportunities and are the past three years. “MNC stocks have global sell-off triggered by the five-year average. Most of these 10 equity shares, even as foreign deploying cash,” said IV done well even in challenging spread of coronavirus started. During companies are now available institutional investors (FIIs) Subramaniam, managing environments. Also, the drop in stock this period, all the 30 index cheaper to their historic valuations, have pulled out large director and chief invest- prices might prompt foreign parents to up components have seen an erosion in but may not still be screaming amounts of equity invest- ment officer at Quantum their stakes in their domestic arm. Low their stock price. However, 10 stocks “buy”. “Unlike in 2008, quality and ments during the recent Advisors. interest rates globally makes buybacks or have contributed to 70 per cent of steady growth stocks are still far from market meltdown. Domestic fund managers’ open offers a very attractive proposition the losses. Reliance Industries, HDFC being cheap,” notes Sanjay Mookim, According to the data cautious optimism also to MNC promoters,” said an analyst. Bank, and ICICI Bank have been the India Equity Strategist, Bank of sourced from the Securities helped the markets stage a ASHOK DIVASE biggest drag on the index America Merrill Lynch. and Exchange Board of India strong recovery on Friday. (Sebi), MFs bought ~18,871 According to the provisional crore worth of shares in the data on exchanges, FIIs on AT THE EPICENTRE current calendar year. Friday sold shares worth over Contribution in Sensex fall P/E or P/B (x)** Meanwhile, FIIs have been ~6,000 crore. EVENTS THIS WEEK Chg* (%) in points in % Current Average net sellers to the tune of Tata MF. For investors like “Oil being one of the In contrast, domestic ~14,889 crore. This includes, us, it is a great opportunity largest items on the coun- institutional investors Date Particulars Reliance Industries -26 1,196 17 11.5 13.5 according to the provisional to use the cash we hold to try's import bill, such price bought shares worth ~5,867 16-Mar India - imports, exports & HDFC Bank -13 624 9 2.9 3.6 data, ~6,027 crore worth of deploy in the markets. We correction should translate crore. In the current calendar trade balance ICICI Bank -18 593 8 2.3 1.9 shares sold by FIIs on Friday. are closer to the bottom of into a favourable outcome year, FII sentiments towards India - WPI figures Infosys -20 563 8 14.9 16.8 Domestic fund man- the current correction phase for the country’s current the Indian markets have UK - Rightmove House Price agers say the market selloff and should expect a better account deficit,” said an gone through sharp highs HDFC -13 504 7 3.4 5.0 index has made valuations attrac- outlook over the next 12-18 analyst. and lows. By the second half Ex-dividend: Power Grid, TCS -18 387 5 19.1 20.0 tive and conducive for fresh months,” he said. Meanwhile, fund man- of February, FIIs had Havells India, Marico &, Adani Axis Bank -23 376 5 1.7 2.1 investments. “Valuations The sharp correction in agers are also considering pumped in over ~25,686 Ports & SEZ ITC -22 360 5 12.2 24.5 across the board have Brent crude prices has come making some changes in crore worth of investments 17-Mar US - industrial production & become attractive. India’s as a positive trigger, even as their portfolios to mitigate in Indian equities. Since State Bank of India -24 278 4 0.8 1.1 capacity utilisation figures macro data looks strong the coronavirus pandemic any fresh risks. “We are using then, constant FII selling US - NAHB Housing Market Larsen & Toubro -18 265 4 13.0 21.7 with balance of payment created uncertainty around the opportunity to reshuffle over the last 14 trading ses- index Sensex -17 7,191 100 15.5 17.2 surplus and sharp correc- global growth expectations. the portfolio towards com- sions — aggregating to over UK - employment change tion in crude prices,” said In year-to-date, Brent panies, which can sustain ~40,000 crore — has turned Price change since February 20; **One-year forward P/E (P/B in case of financial stocks); Average for last five years Ex-dividend: TVS Motor Source: Bloomberg Compiled by BS Research Bureau Chandraprakash Padiyar, crude is down 50 per cent, the slowdown in the econ- them into net sellers for the 18-Mar US - FOMC rate decision senior fund manager at trading at $33 per barrel. omy and a changed macro- current calendar year. Eurozone - trade balance Eurozone - CPI & CPI core data 19-Mar US - current account balance US - initial jobless claims US - leading index figures Ex-dividend: Ashok Leyland, ‘All asset classes are vulnerable as things stand’ Cipla, Eicher Motors, TCS & Coal India The global equity markets saw a major sell-off last week with the Dow Jones Industrial What about India? Is it a relatively So, what is your investment strategy? cent from the top, even gold prices will 20-Mar UK - public finances figures Average (DJIA) slipping into bear terrain. The Nifty50 index hit a lower circuit on Friday as safe haven in these times? I still own my long-term Treasuries, correct, but not as much. Maybe, they Ex-dividend: HDFC panic spread. MARC FABER, editor and publisher of The Gloom, Boom & Doom Report, tells I don’t think so. The Indian markets and believe that yields could still drop 10 per cent from the current levels Source: exchange/websites/Bloomberg Puneet Wadhwa that investors are too complacent about the impact the coronavirus have been expensive and they are not decline to possibly less than 1 per cent as all other asset classes see a sell-off. Compiled by BS Research Bureau pandemic might have on global economic activities. Though the markets may see a strong insulated from whatever is happening for the US 10-year note. The coronavi- rebound in between this slide, they will be unable to reclaim the highs. Edited excerpts: globally. India has just started to report rus pandemic is a watershed moment. coronavirus cases and I feel the country Therefore, I am continuing to reduce COMMODITY PICKS How do you see the global 19 a pandemic. I have always is under-reporting the number of my positions — even in European util- financial markets play out maintained that the global people infected with the virus. Once ities, which have done fantastically WHEAT in the backdrop of economy is slowing. For the more cases come out or are reported, well since late last year. I continue to coronavirus pandemic? last nine months, the statis- the markets will react. India is as vul- hold precious metals, although a cor- The global markets have tics from Asia have pointed nerable, if not more, as other markets. rection is overdue here as well. slipped quite a bit from the MARC FABER to a meaningful slowdown. The recent economic data has been What’s your view on gold and oil? top on the back of coronavi- Editor & publisher of Coronavirus is the health very disappointing. The Indian econ- rus fears and what it may do The Gloom, Boom & scare that became a trigger omy can worsen further. That’s Oil prices in the US have tumbled and to the economies. I think the Doom Report for the markets to tumble. because the global economy is weak- it is difficult to predict the bottom yet. market has significant down- The pandemic has come dur- ening and India is not decoupled. The stakeholders — Opec+, especially side risk. Most markets are already ing a highly speculative phase in the Russia and Saudi Arabia — can come Wheat prices in Indore market are trading at down 20 per cent from the top and US stock market which has been How do you see the response of global back to the table and renegotiate, but I ~1,837 a quintal. Prices are expected to trade there are chances that most will fall 40 characterised by extreme optimism. central banks to these developments? don’t see oil prices heading back to lower towards ~1,800 and ~1,750 a quintal per cent from the top. That said, there I find this optimism among investors Investors’ optimism rests on the belief the $70 a barrel mark any- following expected arrivals and estimates of can be a strong rebound in between to be misplaced, given that numerous that the worse the global economy is time soon. That said, a record wheat production. this slide, but we will be unable to economic indicators were already affected by COVID-19, the more central given the weakness reclaim the highs. weak before the late December 2019 banks will print money and the more in the economy, it All asset classes are vulnerable coronavirus outbreak. stocks will move up. However, when I is likely to remain MUSTARD SEED as things stand. Investors are far too look at economic indicators like Hong at the current complacent about the impact the So, is it all gloom and doom? Kong tourist arrivals, I have to ask levels or head coronavirus might have on global Stock investors must realise that we myself: For how long will investors even lower. When economic activity. In the context are dealing with the COVID-19 pan- ignore these dire fundamentals? The everyone sells of the current US stock market spec- demic at a completely different answer, of course, is: It depends on how everything, even ulation, I wish to emphasise that it phase of the stock market cycle. long the current pandemic lasts, gold will not be may be a huge bubble, as some Severe Acute Respiratory Syndrome and on whether there is any insulated. So, if pundits maintain, but this is nothing (SARS) occurred after a gruelling bear permanent damage. equities fall 40 per new since periods of excessive opti- market and provided a buying Prices at the benchmark Jaipur market are mism and speculation have been opportunity for stocks around the trading at ~4,011 per quintal. For the week a regular feature of capitalism and world — including Asia. Currently, THE INDIAN MARKETS HAVE BEEN EXPENSIVE AND THEY ahead, prices are expected to head towards free markets. we are at a totally different stock ARE NOT INSULATED FROM WHATEVER IS HAPPENING ~3,950 per quintal. New crop arrival pressure, market juncture. We are also at a dif- GLOBALLY. INDIA HAS JUST STARTED TO REPORT weak demand and broad-based sell-off across Do you expect global economies to ferent phase of the economic cycle. commodities and equities to weigh on prices. slow down further? I consider pricey markets, such CORONAVIRUS CASES AND I FEEL THE COUNTRY IS The World Health Organization as Hong Kong and New York, to be UNDER-REPORTING THEM. INDIA IS AS VULNERABLE, Prerana Desai, (WHO) has already declared COVID- vulnerable. IF NOT MORE, AS OTHER MARKETS Research Head - Edelweiss Agri Services and Credit MUMBAI | MONDAY, 16 MARCH 2020 BUSINESS LAW 13 . <

BRIEF CASE M J ANTONY A weekly selection of key court orders Deal-making in the time of pandemic Secured creditor’s claim above taxmen’s The income tax authorities cannot claim a superior right to attach a property already Buyers and sellers may need to re-assess impact of COVID-19 sold under the direction of the debt HOW EMPLOYERS recovery tribunal, the Supreme Court on the business, assets, valuation, and future cash flows, say experts stated in its judgment in Connectwell PHOTO: DALIP KUMAR CAN FIGHT Industries vs Union of India. “Unless there SUDIPTO DEY is preference given to the Crown debt by a CORONA CRISIS statute, the dues of a secured creditor have preference over he government recently Crown debts,” the court clarified. In this case, a firm took a extended the bidding dead- Employers are obligated to loan from Union Bank of India to buy a plot from line for Air India from March ensure a safe and healthy work Maharashtra Industrial Development Corporation (MIDC). T17 to April 30. That could well environment for their The loan was not repaid. The bank moved the tribunal, be a portent of the shape of things to employees, including temp and which asked the recovery officer to attach and sell the come in the deal-making world, stuck contract workers mortgaged property. It was sold through an auction. Then by the coronavirus (COVID-19) pan- came a note from MIDC that the income tax authorities had demic. Facing the heat are distressed WORKPLACE ENTRY: An employer already sent an attachment notice over the same property. M&A activities in projects going has legal right and obligation to When the dispute reached the Bombay High Court, it ruled through the Corporate Insolvency prevent an employee suffering in favour of the revenue authorities. The buyer of the Resolution Process (CIRP). from a communicable disease property appealed to the Supreme Court. It set aside the Travel restrictions and other from entering workplace for the high court judgment and lifted the attachment of the clampdown measures make time-crit- protection of other staffers taxmen. It further ordered MIDC to issue a no-objection ical deal-making a challenge, leading certificate to the buyer. to legal and regulatory complications, INSURANCE COVERAGE: Ensure that say experts. insurance coverage is in place for “The committee of creditors of virus-affected employees and Damages for death while on duty many companies undergoing the CIRP their family members The Supreme Court has extended the are contemplating approaching the LEAVE ENTITLEMENT: There is no meaning of the phrase “arising out of National Company Law Tribunal employment” to the benefit of (NCLT) for the extension of the time requirement under the Indian employees claiming damages under the limit, largely owing to delay in the bid- legal system to grant leave more Employee's Compensation Act. The Act der’s diligence process,” says Yogesh than what is mandated or provides for compensation for death or Singh, partner, Trilegal. The contractually agreed upon. injuries occurring in the course of Insolvency and Bankruptcy Code sets However, employers can allow employment. The employees are insured under the Act, as a maximum time limit of 330 days for affected employees to proceed in this case, Poonam Devi vs Oriental Insurance Co. The the completion of the CIRP. on paid leave death, in this case, was of the driver of a truck who went to With courts limiting their functions the River Yamuna to get water while driving from Ambala to to urgent matters, this may impact the RESPECT EMPLOYEE PRIVACY: Meerut in 42 degrees C. He fell into the river and drowned. approval of resolution plans, say Employers should keep an The commissioner under the Act granted the heirs ~4.45 experts. WHAT BUYERS & SELLERS SHOULD DO employee’s health information lakh. The insurer appealed to the Punjab and Haryana High M&A experts point out the impact confidential and ensure that Court. It ruled against the heirs holding that though the of the pandemic on supply chains n Both parties should signing and closing of a appropriate deal matters, the committee private data of those affected death occurred during the course of employment, it did not would have a cascading effect on the first assess whether deal, the buyer could ask allocation of creditors and the isn't breached arise out of the employment. The law says compensation value of assets, which were changing there has been any for walk-away rights n The committee of winning bidder have to WORK FROM HOME: While devising must be paid if the death occurred “arising out of and in hands or were set to change hands. “A material impact of the factor in a possible delay n creditors of companies a policy that allows employees to the course of his employment”. The heirs appealed to the massive re-look at valuations may pandemic on the In an ongoing deal, in the approval of Supreme Court and won. It said that “a truck driver need to be undertaken for various both parties should undergoing the CIRP work remotely, businesses business, assets, could approach the NCLT resolution plans should be able to hold them who would not keep himself fresh to drive in such heat deals which are currently underway,” valuation, and future consider having specific would be a potential danger to others on the road by says Rabindra Jhunjhunwala, partner for extension of the time n accountable for the completion cash flows warranties, indemnities Buyers would also reason of any bona fide errors of judgement by reason at Khaitan & Co. and disclosures limit, citing delay in the need to be mindful of the of assigned tasks of the heat”. So the death was in the course While going through M&A deals in n In case of a significant bidder’s diligence process regarding the impact of impact of travel RESPECT DATA PROTECTION RULES: of employment. such times, buyers should re-assess material impact on the n the pandemic to ensure With courts limiting restrictions on post- Ensure all employees working the financial assessment model of a business between deal certainty and their functions to urgent merger integration issues target for effects on account of the pan- from home adhere to Backdoor shut for blacklisted firms demic, say experts. Sellers, on their obligations under the The Supreme Court has foiled the attempt part, should weigh their business pro- company’s data protection of over 180 blacklisted rice millers of spects warranties and explicitly dis- appropriate risk allocation, valuation Legal, recommends proactive discus- must also work in close coordination regulations Punjab to enter through the backdoor to close any potential business impacts, and deal certainty aspects,” says Singh. sions with contracting parties, recog- with insurance providers to ensure supply goods to Food Corporation of they add. Buyers would also need to be mind- nising the importance of longer-term minimal loss in case deals go awry. TACKLING DATA BREACH: Have India. Agencies of the state government “To avoid landing in dispute situ- ful of the impact of travel restrictions relationships and reality of the chal- “It won’t hurt to come up with a policies in place to guard procured rice and allocated it to various ations, parties must devote time and on post-merger integration issues. lenges faced by many businesses in strategy to tackle any litigation that against any potential data millers for processing and supply to FCI. It attention to assessing the impact on Monali Dutta, principal, infrastruc- the current environment. comes their way either,” says breach by employees while was found that the rice supplied by many millers to FCI was relevant businesses and agree on ture & corporate practice at Advaita However, legal teams of companies Jhunjhunwala. working remotely inedible and adulterated. After a CBI investigation, many of them were blacklisted for seven years. FCI, which suffered huge losses, demanded dues from them with penalty and interest. Those millers then leased their units to new RAISING THRESHOLD FOR INVOKING INSOLVENCY entities to bypass blacklisting. FCI resisted the move. The new millers moved the high court arguing that they were clean. The high court agreed. FCI appealed to the Supreme Court. It allowed the appeal, FCI vs V K Traders, stating that Good for NCLT, bad for smaller creditors the blacklisted millers were standing in the shoes of the new ones. Moreover, the lease deeds were also not registered. AKANSHHA AGARWAL in threshold might be effective in DOUBLE-EDGED IMPACT reducing the number of maintainable Liability of insurance company extended The Insolvency and Bankruptcy PROS CONS cases in the beginning. However, this Code, 2016, (IBC) currently prescribes n n may not have a significant impact on The collapse of a building because of the threshold of ? 1 lakh for invoking De-clog the NCLT Adverse impact reducing the backlog in the long run. excavation carried out in the adjacent plot insolvency proceedings under the by reducing the on operational “There is a high possibility that cred- will be covered under general insurance, law. The Ministry of Corporate Affairs, number of filings creditors itors start inflating their dues so as to though it may not be explicitly excluded however, has been for some time con- nReduce frivolous nMay not qualify under the threshold. Such in the policy document. If there is sidering increasing the threshold disputes and have an impact action would only be detected later ambiguity in the terms of the policy, they requirement to reduce the number of maximise value on the backlog on in the proceedings when the NCLT should be interpreted in a way beneficial filings before the National Company of adjudged in the long looks into the merits of the matter,” to the insured, the Supreme Court stated in its judgment, Law Tribunal (NCLT). cases run she says. Sangrur Sales Corporation vs United India Insurance. In this While the Insolvency Law Several corporate law experts are case, a sanitaryware showroom collapsed as a result of the Committee has recommended approaching the suggestion to sub- work of excavation carried out in an adjacent plot. The increasing the threshold to? 5 lakh, the stantial increase in threshold might IBC,” says Diwanji. view. He notes this might lead to stantially increase the threshold scep- owner reported the incident to the police and then government is reportedly looking at affect certain sectors severely. “The Poornima Advani, partner at The favourable results for small creditors, tically. Diwanji is of the view that even approached the insurance company. It repudiated the raising the bar to? 50 lakh. Experts are impact of this may largely be felt by Law Point, too, feels that this move who will have to go to existing com- though clearing the backlog is much claim. The owner moved the district consumer forum, which of the opinion that any increase in entities engaged in the manufactur- will be discriminatory against small mercial courts or alternative dispute needed, increasing the threshold to directed the company to pay ~18 lakh with interest. That threshold needs a twofold analysis. ing, trading, and real estate,” says operational creditors as they will be mechanisms. “This will hopefully pro- such a high amount is not the way to order was upheld by the Punjab state consumer While they agree with the govern- Abhijeet Das, partner at law firm Cyril denied the ability to approach the vide an impetus for faster disposal of do this. “The way to reduce is litiga- commission. However, the National Consumer Commission ment’s view that the increased thres- Amarchand Mangaldas. NCLT for resolution. such disputes, without necessarily tion is for the courts to stop behaving ruled that the policy did not cover damage caused by hold will bring in efficiency and help Abizer Diwanji, head of financial According to Delhi-based advocate dragging the corporate debtor into in a liberal manner while granting a activities in the neighbourhood. Allowing the appeal of the de-clog the NCLT, some experts high- services at EY, notes that the change Shreya Prakash, in such cases, debt insolvency proceedings,” he adds. stay and actively work towards com- owner, the court stated that damage from a third party was light the adverse impact of the move will most severely impact operational enforcement may need to be done un - Experts are also divided over to mercial betterment,” he adds. also covered by the standard policy. The court cited its 2004 on businesses where the default creditors, who will not have a der other laws, such as the Recovery what extent this move will help de- Experts fear any substantial in- judgment, in which the same insurer raised the same amount is usually smaller. redressal with the increase in the of Debts Due to Banks and Financial clog the NCLT. “While this is a wel- crease in the threshold of default for argument in an identical case and lost. A view within the MCA is that in threshold. “Looking at the empirical Institutions Act (RDDBFI) and the Se - come move to balance various inter- initiating CIRP could make the Code cases where the amount of bad loan is evidence, small claims were raised by curitisation and Reconstruction of Fi - ests at stake, the revised threshold by lender-oriented. The government not significant, lenders should look operational creditors. This will most nancial Assets and Enforcement of itself may not lead to significantly nee ds to ensure that the considera- Farmer can sue seed distributor for other options before invoking the severely impact them as they do not Securities Interest Act (SARFAESI Act). fewer filings with the NCLT,” says Das. tions of all stakeholders are bal- A farmer who is offered seeds by a IBC. Experts are of the view that a sub- have any recourse apart from the Das, however, takes a contrarian But, Advani feels that the increase anced, they add. company with a promise to buy back the harvest at a higher rate is a “consumer”, according to the Consumer Protection Act, VIVAD SE VISHWAS SCHEME said the Supreme Court in its judgment in Nandan Biometrix vs Ambika Devi. Those who resell goods or indulge in commercial activities are barred from moving consumer Settlement, a fact-intensive decision courts. In this case, the company supplied seeds to the woman and agreed to provide technical support, guidance for settling pending litigation under the computing the quantum of disputed tax the multiplicity of issues involved with and insurance. Her complaint before the consumer district Income-tax Act, 1961. The FM has attempted payable, consequences under the VSV different level of confidence of success, the forum in Kerala was that the company refused to buy back to hit the bull's eye by trying to tackle two Scheme, certain procedural aspects, etc. potential impact of settlement in one year on the crop which was a breach of contract and negligence. prominent issues together -- to compensate The government has tried to make the past years, as well as future years, the The company argued that it was a resale and she was not a forgone tax revenue and to reduce direct tax Scheme flexible and easy to implement, multiplicity of fora where the issues are consumer as she cultivated seeds for commercial purpose. litigation pending in various appellate fora. providing equity in corresponding tax pending make the choice of settlement a The district forum agreed with the contention. But on her The VSV Scheme provides the taxpayer treatment which is notably reflected in very involved and fact-intensive decision. appeal, the National Consumer Commission and now the with an opportunity to settle pending amendments, such as the option to select Further, the issues that involve valuation Supreme Court rejected the argument and directed the litigations as on specified date i.e. January 31, particular appeal for settlement instead of aspects i.e. transfer pricing matters may be district forum to reconsider the complaint. 2020, by simply paying the tax on the all eligible appeals for a particular tax year, more amenable to a negotiated settlement disputed amount and getting a complete eligibility of deduction for the expense compared to a binary resolution under the RAJU KUMAR waiver of interest and penalty. The draft Bill, disallowed earlier because of non- Scheme. The APA (advance pricing Rly officials judges in their own cause which was presented on February 5, compliance with TDS tax agreements) mechanism has been a great The Calcutta High Court has set aside an Litigation is not a novel term when it comes 2020, contained the framework for provisions if the taxpayer chooses option for such matters. However, issues arbitration award delivered by the to the administration of taxes, and more implementation of the Scheme. The Given the to settle the TDS appeal, etc. that are unique or one time and TDS matters railway tribunal in which the presiding often than not it arises because of the government also did several short timeline Another significant proposal in will find a great place for resolution. arbitrator and his two co-arbitrators difference of opinion on the computation of stakeholder discussions to ensure provided in the revised Scheme is the The final Scheme appears to be very were officials of Eastern Railway. The the fair amount of taxes due from taxpayers. that the Scheme has wider the Scheme, it payment of 50 per cent of beneficial for both government and court stated that they decided the issues In the Indian context, according to the acceptance and has been very requires disputed tax in case of appeals taxpayers. It should enable a fair way of in a “unilateral manner”, gave no government’s data, an estimated amount of receptive to concerns raised by immediate filed by the tax department. It is settlement of cases which may otherwise reasons for some of their conclusions, and there was a approximately ~9.32 trillion as on November taxpayers in respect of the Scheme, consideration also worthwhile to appreciate the possibly take many years to attain finality. violation of public policy. “There is not an iota of evidence 30, 2019, was locked in direct tax litigation in whether on technical by taxpayers efforts being made by the revenue Given the short timeline provided in the in the discussion that the tribunal made the slightest around 483,000 direct-tax cases pending in interpretations or on practical authorities to make the most of Scheme, it requires immediate attempt to adjudicate on the rights of the parties starting various appellate fora. Taking cognizance of aspects of implementation. this scheme by allowing consideration by taxpayers and working from the legality of the termination,” the judgment this fact and the consequential impact these Accordingly, in addition to amendments continuous engagement with stakeholders with the field offices to expedite all pending remarked. In this case, BBR Construction Co vs Union of litigations have in the form of pressure on brought in the Bill at the time of bringing it to and being open to constructive feedback to administrative aspects in the preparation of India, a project to link some towns of Jharkhand with those the judiciary, the cost to the taxpayer and Parliament, the Central Board of Direct Taxes improve the Scheme. the resolution. in West Bengal was awarded to the contractor. The contract delay in collection of disputed tax liability, (CBDT) issued a Circular in form of FAQs From taxpayers’ point of view, this was terminated on the ground of delay leading to the the finance minister introduced a direct tax explaining various aspects of the Scheme. Scheme provides a good window of The writer is tax partner, EY India. Vishal Pandey, arbitration. The court found that there were “obvious amnesty scheme, named the Vivad Se The FAQs deal with the issues regarding the opportunity to reduce litigation and it must senior tax professional, EY, also contributed to discrepancies” in calculating the liabilities and Vishwas (VSV) Scheme, in the Budget 2020- eligibility of a taxpayer to opt for the VSV be evaluated positively. Having said that, the the article unjustifiable deductions. 2021. The scheme provides for a mechanism Scheme in different situations, the manner of complexities peculiar to direct tax cases like Views expressed are personal 14 POLITICS & PUBLIC AFFAIRS MUMBAI | MONDAY, 16 MARCH 2020 0 “JYOTIRADITYA SCINDIA FORGOT HIS “UNFORTUNATE TO SEE @JM_SCINDIA “I ADMIRE YOUR STRENGTH OF IDEOLOGY... HE WOULD NOT GET PARTING WAYS WITH @INCINDIA. I WISH CHARACTER AND COURAGE. IT’S RESPECT IN THE BJP, NOR WOULD HE THINGS COULD HAVE BEEN RESOLVED GOOD TO BE ON THE SAME TEAM “ FEEL SATISFIED THERE” COLLABORATIVELY WITHIN THE PARTY” VASUNDHARA RAJE, BJP leader and Scindia's aunt RAHUL GANDHI, Congress leader SACHIN PILOT, Rajasthan deputy CM > .

tain. Chouhan has proved himself time and again. Especially in the current political situation when everything is possible, the BJP’s brass cannot take the Shivraj isn’t risk to go with a new face. Chouhan has the charisma, which is appealing to his friends and foe alike.” He had replaced Babulal Gaur as chief minister on November 29, 2005, and remained in the saddle unchallenged running solo until the party's defeat in the November 2018 Assembly election. After the embarrassing Maharashtra episode, the BJP is If we go by taking time to the numbers, ensure things are for top job easier in Madhya Chouhan is the favourite. Pradesh. The BJP The BJP has central leadership Narendra Tomar, Narottam Mishra, and Kailash 107 MLAs in has also made it Vijayvargiya are among his challengers in CM race the Assembly clear to state leaders and he enjoys that they should not the loyalty of “rush”. SANDEEP KUMAR Modi and Shah, but the opinion of MLAs more than 70 At present, there and other state leaders is equally impor- of them are 228 MLAs in the mid the ongoing political dra- tant. The Union minister belongs to the MP Assembly (two ma in Madhya Pradesh, the Gwalior-Chambal region, a BJP strong- seats are vacant). million-dollar question is: hold. The only non-BJP leader from the The majority mark is 115. A Who are the strongest con- area until now was Jyotiraditya Scindia, The Kamal Nath government until tenders for the chief minister’s post, in who recently joined the party. Mishra, recently enjoyed the support of 121 case the Kamal Nath-led Congress gov- also from the same region, enjoys the MLAs, which included four ernment falls? Former chief minister support of 20-25 MLAs. Independent, two Bahujan Samaj Party, Shivraj Singh Chouhan is the front- “The prime minister, the home min- and one Samajwadi Party MLAs. After 22 runner, but if sources are to be believed ister and party President J P Nadda Scindia-loyalist MLAs parted ways, the he is not the only one eyeing the top job. would decide on whether to form a gov- Congress government is on the verge of Other names doing the rounds include ernment under the leadership of collapse. Union minister Narendra Singh Tomar, Chouhan,” a BJP source said. “Like the But some Congress leaders are hop- former minister Narottam Mishra, and Congress, the BJP’s Madhya Pradesh ing for a miracle. Party Spokesperson Bharatiya Janata Party (BJP) general sec- unit, too, is fragmented. That’s why the After 22 MLAs loyal to Jyotiraditya Scindia parted ways with the Congress, the BJP’s Shivraj Singh Chouhan has another shot at power Syed Jafar said: ''Kamal Nathji is in pol- retary Kailash Vijayvargiya. BJP’s top leadership wants a unanimous itics since the time when Chouhan and If we go by the numbers, Chouhan is leader in Madhya Pradesh.” goes in favour of Tomar? A BJP MLA sidered the most popular BJP leader in during his 13-year tenure as chief minis- Amit Shah were not even in the picture.” the favourite. The BJP has 107 MLAs in said: “Tomar sahab is not only a senior the state. He has a carefully cultivated ter, Chouhan transformed himself from On Friday, the chief minister met the Assembly and he enjoys the loyalty The top contenders leader but also has an unmatched mas- image of a “family man” and is easily a shy and simple leader into one with Governor Lalji Tandon and submitted a of more than 70 of them. But he Both Tomar and Chouhan are seasoned tery of election art. We should not forget approachable. deep political machinations. letter expressing his government's will- reportedly lacks the trust of Prime politicians. Their vast experience makes that under his able leadership the BJP The former chief minister loves to be Bhopal-based political commentator ingness to face a floor test in the Minister Narendra Modi and Home them perfect for handling a coalition won back-to-back Assembly elections in called “son of the soil”, is soft-spoken, Girija Shankar said: “If the BJP forms Assembly. The BJP has also sought a Minister Amit Shah. government and tough situations like 2008 and 2013.” and has often identified himself with the government in Madhya Pradesh, there floor test on March 16, the first day of Tomar appears to be the first choice the one in Madhya Pradesh. So, what On the other hand, Chouhan is con- concerns of commoners. Needless to say should be no doubt who will be the cap- the Budget session.

CONSIDER THE EVIDENCE STORY IN NUMBERS Polarising faces take BLASTS AREN’T UNCOMMON IN COUNTRY, YET n the last six years, not a single incident of blast EXPLOSIONS IN INDIA the lead in Delhi BJP “Ihas taken place,” Union Minister Prakash Javadekar said RADHIKA RAMASESHAN Party (AAP) ticket, but fell out with on March 7. This claim is false. Kejriwal. Mishra joined the BJP in More than 1,000 explosions For decades, the Bharatiya Janata 2019 but lost the 2020 election. The were reported in the country Party (BJP) struggled to identify, nur- BJP doesn’t take kindly to losers. over the past six years, an ture, and project a person to lead the Mishra is an exception — he was analysis of the data recorded by party in Delhi, which was one of its given Y+ security cover because of a South Asia Terrorism Portal bastions since the days of the Bha - “serious threat perception” to his life. (SATP) revealed. ratiya Jana Sangh. By the BJP’s own “What we had experienced 25* reckoning, Madan Lal Khurana was Tajinder Pal Singh Bagga: The for 10-25 years (before the Modi 212 174 191 178 138 153 the last leader of consequence, until Delhi BJP’s “social media warrior” government came to power)? he was done in by factional feuds. who registered his presence back in We saw bomb blasts taking 2014 2015 2016 2017 2018 2019 2020 When Sahib Singh Verma was 2013, when he protested outside L K place in Pune, Vadodara, *As of 8 March 2020 Source: South Asia Terrorism Portal picked to replace Khurana as chief Advani’s residence for opposing minister, it was regarded as an Narendra Modi’s candidacy as PM. Ahmednagar, Delhi, and “unconventional” move because Bagga was always the BJP’s cat’s paw. Mumbai. Every eight to 10 days, blast has taken place. This has March 8, 2020, in India, improvised explosive devices, or (NBDC) “data includes all major Verma was a Jat. It was recognised He once allegedly barged into law- blasts used to happen and not happened just like that but according to the data from SATP, IEDs, and 69 explosive as well as minor IED blast that Delhi’s demography yer-activist Prashant people used to get killed,” due to some strong measures a website that records and ordnance) took place in 2016, a incidents... including those had moved beyond the Bhushan’s chamber and Javadekar was quoted as saying undertaken by the PM.” maintains a database on government reply to the Lok which are accidental in nature”, Punjabi-dominated core roughed him up and in a Press Trust of India report in As many as 1,071 explosion terrorism and low-intensity Sabha on April 11, 2017, said. The the reply said. to newly empowered heckled author The Hindu. “But in the last six incidents have been reported warfare in the region. National Security Guard’s SOURCE: DATA SATP social groupings and the Arundhati Roy at her years, not a single incident of between January 2014 and In India, 406 blasts (337 National Bomb Data Centre ANALYSIS: INDIASPEND BJP’s command struc- book launch. As a tures should reflect the member of the 150 trend. KAPIL MISHRA “super-exclusive” club of The next significant media influencers, he predecessors like MGR, change in the population was invited to a private Karunanidhi and Jayalalithaa, composition was brought interaction with Modi in Looking to win hearts, MGR style EPS had been a “practising about by migrants, 2017. He lost the election farmer” and there was nothing largely from undivided from Hari Nagar. wrong in exhibiting his Uttar Pradesh and Bihar. T E NARASIMHAN background. “He is not showing The BJP could not take PARVESH SAHIB Abhay Verma: The off as a farmer,” he points out. advantage of the trans- SINGH VERMA Laxmi Nagar MLA grew If you want to win hearts and In 2021, EPS is expected to formation for want of a up in Bihar. He spear- connect with the voters, you give a tough fight to M K Stalin, suitable leader until it headed the Hindi San- need to be like actor-turned- who needs to prove his prowess chanced upon Manoj rakshan evam Samva - politician and former Tamil in the party after the demise of Tiwari, the North-East rdhan Samiti for the Nadu chief minister M G his father, DMK patriarch M Delhi MP. Tiwari’s appeal “protection and develop- Ramachandran (MGR). Karunanidhi. EPS has made the is sectional. ment” of Hindi on the During his travel to the next election a contest. A couple “At times, circum- TAJINDER PAL Delhi University campus hinterland in the 1970s, MGR of years ago, it was a foregone stances help instead of a SINGH BAGGA where he was a law stu- used to get out of his car into the conclusion that the DMK will win concerted search. The dent. He led a procession farmlands, hug workers, and the Assembly election in 2021. A recent Assembly election through East Delhi dur- play with children. This strategy lot can happen in the next one threw up an array of tal- ing the violence and rai - clicked and he remained chief year, but now it is going to be a ent,” a Delhi BJP source sed incendiary slogans. minister for 10 years until his contest, say analysts. said, adding, “If we apply death in 1987. A constant and silent our minds to it, we have Ragini Tiwari: She’s also The current chief minister, presence of the Bharatiya Janata enough time to foster a known as Janaki behen, Edappadi K Palaniswami (EPS), Party’s national leadership from new line-up.” ABHAY VERMA “Mithila ki beti (daughter is adopting a similar strategy. Delhi in Tamil Nadu politics, The choice of Tiwari’s of Mithila)”, and “Modi ki The self-proclaimed farmer according to them, added spice successor might indicate mausi (aunt)”. Do the stops his car and starts planting to his party, which was yearning the “high command’s” allusions to Janaki and rice, drives a bullock cart to for political stability. thinking. The line-up Mithila make her some public events and stops his car He has been doing a balancing being talked about is a kind of a Sita incarnate? occasionally to play with kids. “It act without looking totally diverse assemblage, Ragini didn’t contest the is a good ploy because it helps subservient to the Centre, and he which articulates the par- election but campaigned reinforce the rural base of the Chief Minister E K Palaniswami nowadays stops his car and starts planting rice, drives a bullock cart to tried to push through certain ty’s hardline ideology. RAGINI TIWARI for the BJP. Ragini’s com- AIADMK,” says political analyst public events, and occasionally halts his carcade to play with children as he looks to strengthen his rural base things for the state, they said. Meet the protagonists: bativeness was on dis- Sumanth C Raman. Analysts lauded his acumen in play when she egged on the cops and EPS is trying to strengthen his forerunner to the 2021 “He has come a could be considered a milestone saving the government that was Kapil Mishra: “Our chartbuster,” a mobs to lathicharge the women sit- rural base, which was once Assembly elections, long way from where in his political career is declaring expected to last for only few source remarked. Mishra’s commu- ting outside the Jaffrabad metro sta- strong for the AIADMK. He EPS said earlier. He he was three years ago. Tamil Nadu’ rice bowl Cauvery months . Now, not only is he nal statements against anti- tion to protest the CAA. To her, the undertook welfare measures for took over as chief EPS has rescued the Delta area a protected special stable but has also won accolades Citizenship Amendment Act (CAA) violence was a “religious war”. Ragini the poor, which had endeared minister in February party from the brink of agriculture zone. in terms of industry and protesters at Shaheen Bagh and other is a devotee of Narsinghanand the late J Jayalalithaa, and 2017, after a series of destruction and was A section of farmers from the governance rankings by the hubs were believed to be a “push fac- Saraswat, the mahant of Ghaziabad’s continued with the state’s political dramas and able to hold it together. delta presented the title of central government and various tor” for the cycle of violence in north- Dasna Devi temple who had called industrial development, which infighting in the He has emerged a ‘custodian of the Cauvery’ to organisations. east Delhi, to which he belongs. A for “cleansing” India of Islam. had declined for a while. AIADMK after the leader of some EPS, where he announced ~170- Whether he will be able to win former Greenpeace and Amnesty The strategy worked. He demise of Jayalalithaa significance. He has crore schemes to be the next election is something employee, Mishra was co-founder of Parvesh Sahib Singh Verma: The managed to win 11 bypolls of the in December 2016. made himself the implemented through the that time will tell. Would he be Youth for Justice, which worked on son of Sahib Singh Verma and West 24 despite uncertainties, and While he came to primary face of the agriculture department and able to keep the party together issues like farmer suicides and Delhi MP who conjured up scary helped the AIADMK government power as nominee of AIADMK before the ~6,650-crore schemes to be even if it loses the election? “encroachments” on the Yamuna images of Shaheen Bagh in the sustain a majority in the one of the most trusted public,” says Raman. carried out by the public works Analysts say it may depend on river bank. He was a natural candi- Assembly election and was banned Assembly in 2019. This cemented aides of Jayalalithaa, V Over the past three department. various factors one year down date for Anna Hazare and Arvind from campaigning for 96 hours. Yet his leadership in the party. The K Sasikala, who is in jail now, and years as chief minister, EPS had P R Pandian, president of the the line, including what kind of Kejriwal’s India Against Corruption. he was the BJP’s opening speaker in party had lost 38 of the 39 Lok her nephew T T V Dhinakaran, signed 16,382 files, which Tamil Nadu Federation of All strategy the party will adopt, the He won the 2015 election from the Lok Sabha for the motion of Sabha seats in the state in 2019. he later overthrew them and took focused on development Farmers’ Associations, told the alliances it will forge, and how Karawal Nagar on an Aam Admi thanks to the President’s address. The results of the bypolls are a control of the party. projects. Most recently, what media that unlike his many seats it manages to garner. MUMBAI | MONDAY, 16 MARCH 2020 STRATEGY 15 “INDIA WILL BE THE ONLY DESTINATION “WITH AI, IT’S NO LONGER ABOUT PROTECTING “TO TAKE THIS (CORONAVIRUS) ANXIETY AWAY AND MAKE WHERE THE SERIES 1600 ENGINES YOUR APPLICATIONS. IF DATA IS CORRUPTED, TRAVEL HASSLE-FREE, WE ARE WAIVING OUR NORMAL WILL BE MADE FOR ROLLS-ROYCE PERFECT AI WILL RUN ON WRONG DATA AND CHANGE FEE ON ALL TRAVEL DURING THE NEXT TWO WEEKS CUSTOMERS GLOBALLY” GIVE YOU THE WRONG RESULTS” AND FOR ALL NEW BOOKINGS MADE IN THE SAME PERIOD” KISHORE JAYARAMAN SANJAY SRIVASTAVA WILLIAM BOULTER President, Rolls-Royce India & South Asia Chief digital officer, Genpact Chief Commercial Officer, IndiGo > .

said a spokesperson. Documentation from a medical provider is required to return to work, the spokesperson added. Awfis, another player in the segment, Shared workspaces in battle mode says it has placed posters/tent cards in common areas with detailed information on the virus and how to prevent it. Since Better safe than sorry is the best strategy against the snowballing coronavirus or Covid-19 crisis the seats that the company offers are at PHOTO: DALIP KUMAR different centres, it has worked out local- SHUBHOMOY SIKDAR & NEHA ALAWADHI ised contingency plans besides following the World Health Organisation (WHO) void sharing, avoid meeting BEYOND guidelines and training the staff to han- anyone — these tips have a top dle basic queries. “We have a list of hos- of the mind recall when it GUIDELINES pitals and doctors handy for each of the n comes to preventive strategies Checking the body centres. We have adequate quantities of A temperature of against the snowballing coronavirus or hand sanitisers and masks for members Covid-19 crisis. But what happens when individuals entering and staff at all our centres. We have part- your business model itself is based on office premises and nered with vendors in case we require professionals, often not bound by a sin- advising users to go for additional quantities,” says Amit gle company code, congregating at con- medical consultation Ramani, CEO & founder, Awfis. fined spaces offered by you? The chal- if temperature crosses 100 Atul Gupta, founder and CEO at lenges mount as the risk intensifies. degree Fahrenheit CoFynd — that has presence in The real worry is reducing footfalls. Gurugram, Delhi and Noida — says it has Some workspaces sell space in bulk, for nEducating users on the advised its team to bring home-cooked longer terms, and against upfront pay- dos and don'ts through meals to avoid eating outside. “We have ments. They have less to lose compared digital signages, internal also provided the team with thermos to the many smaller outfits that operate posters and even flasks to have warm water through the on a per seat basis, and on monthly rent- informational videos on day,” he says. But that is more applicable als. Smartworks founder Neetish Sarda TV screens across centres to the staff. For those who come and says his brand works with enterprise work, the company has ensured that cof- clients on long-lease contracts and so he nCleaning coffee fee and tea machines in the office are doesn't foresee much impact on machines more cleaned thoroughly twice a day, increas- renewals or subscriptions. “While the frequently, twice a day in ing the frequency of the exercise from it average tenure in the co-working indus- some cases, monitoring was earlier. try today is about 11 months, our average vendor hygiene practices Two other crucial factors are screen- is close to about three years.” But he ing and communication and there also points at an upside: There has been a nUpdating the database more steps are being taken, assert com- spike in the number of inquiries and of hospitals and doctors panies operating in the co-working requests on a day to day basis. Could be in the vicinity of every space. For example, at all centres run by a fallout of individual employees looking centre to save time in case Smartworks, the temperature of every for infrastructure to link up with their of an emergency individual is being checked at the time offices as more and more organisations of entry. “All individuals entering urge employees to reduce commute and based professional whose company home is an essential step towards con- So how does one work around or miti- keeping their clientele and the nature of Smartworks office premises are checked work from home. works out of one of these shared work- trolling the spread of the virus. As an gate the threat? Players in the co-working their businesses in mind. for their body temperature (using an That said, co-working spaces like spaces. “Though there are measures engaged and responsible organisation, industry realise that they have to step up Take WeWork. The company now has infrared thermometer) as a precaution- Oyo's Innov8 and BHIVE in Bengaluru being put in place like better housekeep- we have also deliberately put a pause on the game to achieve the two-fold objec- a mandatory 14-day work from home ary measure and any person with a tem- have seen falling attendance over the last ing and cleanliness, people are wary and in-person site visits and have started to tive of managing day to day operations policy for every employee who has perature higher or equal to 100 degrees few weeks. “After the death of the 76-year don't want to take a risk,” he adds. explore the alternative route of virtual — ensuring better focus on hygiene by recently returning from high-risk is requested to go for medical consulta- old man from Karnataka, which was Some players say this threat would tours to ensure business continuity,” stocking up on and encouraging the use regions, as well as those who exhibit flu- tion,” says founder Sarda. reported last Thursday, the number has be limited to the short to medium term. says Akshita Gupta, co-founder and of soaps and sanitisers like everyone else like symptoms, such as respiratory dis- been even lower,” says a Bengaluru- “We believe that offering work from CMO, ABL Workspaces. — and taking customised approaches tress, fever, cough, shortness of breath, More on www.business-standard.com

Kohli leads the endorsement pack, while QUIZ 655 It first originated as B814 then 229E was discovered and 1 subsequently OC43 during the 60s. In the current form it seems to have caused massive damage to businesses and cricket dominates the sponsorship track humans alike. Name it. It helps that cricket is played Connect the game of Ice hockey where a flat ball is used round-the-year too and continues Cricket bagged the biggest deals in the ~9,000 crore sports sponsorship business in 2019, and BruceJay Wasserstein who was an American invest- to attract new players and viewers. 2 but history may not repeat itself in the year of Covid-19 According to Goyal, while cricket ment banker, businessman, and writer and what do you does get the maximum share of arrive at? ARUNDHUTI DASGUPTA the firmament, crossing the ~200 endorsements in the country, not all crore mark. Dhoni playing the last cricketers get a chance to rake in the Name the person who completing his PhD in military Brands ran a two-horse race with few matches of his career added five moolah. It is usually a case of the 3 occupied Berlin in 1949 and came back to India and Virat Kohli and M S Dhoni taking new brands to his list and was the captain getting it all, although launched a soap brand on the 15th of August in the early away 63 per cent of all endorsement second most valuable sports Dhoni is an aberration as he has con- 50s. Name the person and the brand that was launched. deals in cricket, while the sport endorser, while Sachin Tendulkar, tinued to attract brands even after bagged lions share in 2019. This is six years past his retirement, crossed giving up his captaincy. Who operates an online platform, called Community, in spite of the best efforts of sports the ~25 crore mark and was the third However, a senior sports profes- 4 for buying and selling consumer-centric digital leagues, marketers and athletes WINNER TAKES ALL most valuable sports brand in 2019. sional who preferred to stay anony- advertising? who have all tried to raise the pro- TEAM SPONSORSHIP Even as cricket refurbished its mous said that cricket’s ‘winner file of non cricket sports with kitty, attracting more brands and takes all’ syndrome demonstrates a In ~ crore 2018 2019 Manufactured by a British MNC, this brand was sold in brands and marketers for the past money than ever before and more singular lack of imagination on the 5 India with the byline “Hair’s Natural Food”. This brand is few years. Cricket 603 630 than any other game played in the part of the brands. They go looking still available in other variants. Name it. The big thrust for the sport in country, other sports saw a 10 per for cricketing stars, without any 2019 came from franchise cricket, Football 109 118 cent decline in revenues. Why does research on brand fit, need and pur- Whose Women’s Day campaign reads “She rocks when specifically the IPL that saw a 15 per Kabaddi 46 60 cricket continue to score while the pose. And as for the payers, he 6 she travels on an ___”? cent increase in its valuation and Other Sports 134 126 other games struggle? Sandeep believes, they are playing a short- the ICC World Cup, according to Goyal, brand strategist and founder term game. “Take Dhoni. The man Sporting Nation in the Making VII, Total 892 934 Mogae Media says, “The continued has so much going for him that can Who ran ads in the 70s and 80s in India, which read “Your a report by ESP Sports, a Group-M Source: ESP Properties ascendancy of cricket is not surpris- build himself into a legacy brand, 7 credit is better than a Millionaire’s”? company. However the year 2020 ing. It is the only sport in which we but he is representing every product may craft a completely new story as eters ruled the endorsement indus- tracts, the sports business in the are world class, and beat other big or service that comes his way. He Which 100-year-old company says that its vision the tournament has been postponed try that grew by 11 per cent. In 2019, country clocked 329 valid endorse- teams consistently. Winning brings probably thinks he has a limited 8 of “Passion, Artistry and Technology” are more than in the wake of Covid-19. of the 70 new brand endorsement ment deals last year, out of which fans and advertisers are smart window to cash in on,” he says. But buzzwords and they have been living up to it? Just as cricket dominated the deals being signed, 50 went to 228 involved cricketers. enough to know which way the Captain Cool can surely do better, sports sponsorship domain, crick- cricket players. With these new con- Kohli was the brightest star on wind is blowing.” he believes. Who uses this punch line in their ads “What are 9 you solving for”?

What profession does this Wunderman’s global capabilities into the 10 Egyptian Hieroglyphic domestic market as quickly as possible and represent? ‘Mergers take time to evolve’ scale it up for our clients. So we will look at a more organic way of filling need gaps within our portfolio and essentially simplify how The coming together of Wunderman and J Walter Thompson has allowed the we present ourselves to clients. Mark Read merged entity Wunderman Thompson to exploit new areas within digital (WPP’s CEO) has been speaking of not just COMPILED BY GAURAV SRI KRISHNA, www.facebook.com/gaurav.s.krishna an integrated solution, but also of the need marketing, Rai tells Viveat Susan Pinto for simplification. That is an important point he is making and something we ANSWERS TO THE STRATEGIST QUIZ 655 What kind of an impact will the ongoing It has been a year since the merged entity and started in 1929 out of a room at are working towards even as we add coronavirus issue have on the domestic its new identity was unveiled in the country. the Taj Mahal Hotel in Mumbai. new capabilities and strengths to our 1. Swiggy, emphasising on stiffened with advertising business? This happened within days of it rolling out first We were subsequently incorpo- offering in the country. using hand sanitisers in whaleback bones and From conversations around supply-side in New York. We effectively became the second rated as a company in India in the wake of Covid-19 steel rods disruptions three weeks ago, the discussion market after the US to be doing so, which was 1938. So our history is long and has Is the shift in services within your 2. The Bass beer brand 8. WhatsApp. It has now is about domestic demand taking a hit a big plus for us. Having said that, mergers take been reinforced over the years with portfolio pushing you to founded in 1777. It was introduced a dark mode due to the coronavirus. So yes, there is a time to evolve. We are building a new culture, the work we’ve done for big brands. change your hiring perfect storm brewing. But there has been which is predicated not only on our traditional It is understandable therefore policies as well? How originally known as India to reduce eye strain and no discussion with our clients on advertising strengths but also on harnessing when clients struggle to recall challenging is it for Pale ale because it was prevent bright light from postponing launches. The health data and technology. In many Wunderman Thompson when you to execute that? sent to the troops of East disturbing others around scare, of course, is respects, the merger has allowed us the’ve seen JWT all these years. We are changing the India company the user understandable because of the to step into areas we weren't explor- I don’t mind if clients take time lens in terms of the 3. Charles Schwab 9. Kemmons Wilson number of cases that are being ing much earlier. Marketing tech- getting used to Wunderman talent we are hiring reported every day. While it is a nology being a case in point. We Thompson. But what is impor- for the agency. 4. Triumph International, 10. It belongs to OEKO-TEX® gradual buildup, the fact that already have 250 people at Noida tant is that they understand the Apart from adver- makers of lingerie which first introduced TARUN RAI Covid-19 has arrived in India is a (near Delhi) for e-commerce-related difference between the two in tising profes- the STANDARD 100 as a worrying sign. In my view, the Chairman & group CEO work. We have a 100-member- terms of the agency’s offering sionals, we are also 5. P T Barnum label for textiles tested next couple of weeks will be strong team in Mumbai that focuses now versus what it was ear- looking at people Wunderman Thompson 6. The artist-turned for harmful substances. crucial. How fast the outbreak South Asia on technology. We are not only talk- lier. That has been our endea- with a non-agency It consists of 18 spreads and the government’s ing to existing clients but new ones vour over the last one year, background such as engineer Robert Fulton independent research response to it will determine the future as well in different areas. Our pitch today is not which will continue. data analysts, engi- 7. Corset, a precursor to the and test institutes in course of action of advertisers. For now, we just to chief marketing officers within com- neers and technol- brassiere. Corsets were continue to work towards meeting our panies but chief technology officers as well. Are you looking at ogists. Diversity is Europe and Japan deadlines as far as the launches for our This, to my mind, is a big shift. acquisitions now that your critical to our One lucky winner will receive a cheque for ~2,000. Send your entries clients go. The Indian Premier League (IPL) holding company WPP business and I’ve to [email protected]. All entries must carry the postal address of has been pushed to April 15, but not called Given the 90-year history of JWT in India, appears open to it? agreed with our the contestant. Last date for receiving entries is March 17 till 8 pm. off. The IPL remains a huge platform for are clients comfortable with Wunderman No, we are not looking leadership team Previous winners and employees of Business Standard and their brands. We are keeping our fingers crossed. Thompson? at acquisitions right to aggressively families are not eligible to participate. The winner is chosen on the A lot of our clients continue to refer to us as now. Instead, we pursue this. basis of the first correct entry received. From J Walter Thompson (JWT) to JWT. It is to be expected given our legacy in would like to get Wunderman Thompson. How has the India and the globe. We were the first multi- some of More on www.business- There was no correct entry to Quiz number 655 merger transformed the agency? national agency in the country when we standard.com 16 MUMBAI | MONDAY, 16 MARCH 2020 1 > PM Modi proposes SAARC Mumbai in semi-lockdown as cases zoom to over 100 fund to combat COVID-19 Police prohibits all group tours within India and abroad till March 31 Says region can best respond to pandemic by coming together, not growing apart VIVEAT SUSAN PINTO ARCHIS MOHAN Mumbai, 15 March New Delhi, 15 March The number of novel coron- haring details of India’s prepared- avirus cases in the country ness to prevent and contain the “I propose we create rose to 107 on Sunday. With S spread of novel coronavirus (COVID- a COVID-19 Emergency 12 new cases reported in 19), Prime Minister Narendra Modi on Fund. This could be Maharashtra on Sunday, the Sunday told leaders of SAARC member based on voluntary state government put countries that India recognised it was “still contributions from all Mumbai, the financial capi- in an unknown situation” and “cannot of us. India can start tal, in a semi-lockdown mode. predict how the situation will unfold”. Top malls, multiplexes, At a teleconference between the leaders with an initial offer of the Byculla zoo and the of SAARC member nations on Sunday $10 mn for this fund” Taraporevala Aquarium in evening, called at Modi’s initiative, suggest- Mumbai have been closed NARENDRA MODI, Prime Minister ed greater cooperation within the grouping, as the state government including sharing of experiences and best strives to contain the spread practices by their respective health experts. of the virus. Sri Lanka President Gotabaya So far, Maharashtra has Rajapaksa, his Maldivian counterpart financing. 150 cases, but it needed to remain vigilant reported 32 confirmed cases Ibrahim Mohamed Solih, and Bhutanese The Bhutanese PM said when the world as it was home to nearly one-fifth of all of COVID-19, ahead of PM Lotay Tshering, all three of whose coun- was fighting one common disease, it was humanity and densely populated. “We can Kerala's 22 cases. tries depend heavily on tourism sector that important to leave behind the differences. respond best by coming together, not grow- In a conversation with is hit the hardest in recent weeks, called for Rajapaksa said Sri Lanka’s economy, ing apart, collaboration not confusion, Business Standard, officials a common fight not just against COVID-19 particularly tourism, had taken a serious preparation not panic.” at Inorbit Mall confirmed but also its economic fallout. blow, which was just about recov- “As developing countries, all of us have that their Malad and Vashi Modi suggested SAARC ering after last year’s terrorist significant challenges in terms of access to properties were closed on member nations should set up attacks in his country. He asked healthcare facilities,” Modi said. Sunday, and that it would Security personnel outside a special isolation ward at Kasturba Hospital, in Mumbai, on Sunday. an emergency fund to combat SAARC leaders to formulate He said SAARC member countries’ remain shut for few days. R- Maharashtra has reported 32 confirmed cases of COVID-19, ahead of Kerala's 22 cases PHOTO: PTI COVID-19, and offered $10 mil- mechanism to assist “our “people to people ties are ancient, and our City Mall in Ghatkopar, lion as India’s initial contribution. economies to tide over the difficult societies are deeply inter-connected. Phoenix Market City in Kurla, in the city were down 50-60 at Bandra, a popular shop- meanwhile, issued an order SAARC, or South Asian period”. Therefore, we must all prepare together, and Infiniti Mall in Andheri per cent in the last one week, ping destination in the west- to prohibit all group tours Association for Regional CORONAVIRUS Afghanistan President Ashraf we must all act together, and we must all and Malad have all downed industry experts tracking the ern suburbs of the city, wore a within India and abroad till Cooperation, has seven member PANDEMIC Ghani suggested common frame- succeed together.” shutters to avoid congrega- retail market said, as con- deserted look as people March 31. "It is apprehended states, but has mostly been dor- works for telemedicine between The Indian prime minister said India’s tion of people. firmed cases began growing. stayed away from buying or that there is a likelihood of mant, especially over the past SAARC countries and flagged how guiding mantra in the fight against coro- The World Health Now, the complete eating out. spread of coronavirus six years, because of differences between the closing of borders would result in prob- navirus is “prepare, but don’t panic”. Modi Organization, monitoring the shutdown of malls and In a statement issued on through business and holiday India and Pakistan. New Delhi has instead lems of availability of food, medicines and detailed the steps that India has taken in COVID-19 pandemic, has multiplexes has meant that Sunday, Infiniti Mall said groups travelling together," tried to promote BIMSTEC, which does not basic goods. its fight. He said SAARC member states identified community trans- business has come to a grind- that the health of its patrons deputy police commissioner include Pakistan, to rival SAARC. However, Ghani also asked India, since it is a have made specific requests, including mission as one of the reasons ing halt, said Anuj Kejriwal, was important and that it Pranaya Ashok said in the the challenge of COVID-19 spreading in the key SAARC member and also a member of about medicines and equipment, which for the spread of coronavirus. managing director and chief would implement all direc- order. Those flouting the region seems to have forced South Asian China-led Shanghai Cooperation his team has noted. On Friday, the state gov- executive officer, Anarock tives and strictures issued by order can face action under neighbours to think of common strategies. Organisation (SCO), to coordinate Several members, including ernment had announced that Retail. "This has financial the government. Section 188 (disobedience of While the heads of state or government between SAARC and SCO and much of Bangladesh PM Sheikh Hasina, called for cinema halls, gyms, and implications since even a R-City Mall said that it was an order duly promulgated by of other SAARC member states participat- China’s experience in combating the virus a common research platform to coordi- swimming pools in cities short-term closure hits retail shutting all stores at its a public servant) of Indian ed in the teleconference, Pakistan was rep- is replicable in South Asia. nate research on controlling epidemic dis- including Mumbai, Navi hard," he said. property at Ghatkopar bar- Penal Code. However, the resented by Zafar Mirza, the special assis- In his opening statement, Modi said: eases within the region. She said health Mumbai, Pune, Pimpri Grocery stores, pharma- ring Big Bazaar, which would order said, tour operators can tant to Prime Minister Imran Khan. Mirza, “We fully recognise we are still in an ministers, secretaries and others should Chinchwad, and Nagpur cies, restaurants, and beauty stay open for those wanting seek exemption in case of who is also the state minister of health of unknown situation. We cannot predict have similar teleconferences. would be shut till further centres in Mumbai, however, to buy groceries and essen- exceptional circumstances. Pakistan, said it was a matter of concern with certainty how the situation will Modi offered to share the disease sur- orders. Schools and colleges were open on Sunday. At a tial commodities. In Maharashtra’s Satara, that COVID-19 had been reported from unfold despite our best efforts. You must veillance software that India has developed. would also be closed in all leading skin clinic in Bandra, Officials at Big Bazaar said five people were booked for Jammu & Kashmir. He said the “lockdown” also be facing similar concerns. This is He said a rapid response team of doctors urban areas within the state customers and clients walk- it had not shut any store but violating social distancing must be lifted immediately in view of the why it would be most valuable for all of us and specialists in India with testing kits and till March 31, Health Minister ing in were asked to sanitise had put in place standard rules in place to tackle the health emergency. Mirza also called for pool- to share our perspective.” Modi said other equipment would be at the disposal of Rajesh Tope had said. their hands at the entrance. operating procedures, includ- coronavirus outbreak by ing of resources, technical expertise and SAARC region had so far listed fewer than its neighbours. The impact on business Those using the clinic's serv- ing sanitisers for staff, tem- organising a religious event has been severe due to the ices were asked to fill a form perature sensors at entry on March 13 in which over lockdown. disclosing their recent travel points, disinfecting trolleys, 5,000 people participated. ELSEWHERE Footfalls across malls, history and health details. baskets, and toilets. IN INDIA... Recession risk calls for multiplexes and restaurants The Linking Road stretch The Mumbai police, With input from Aneesh Phadnis joint response: UN chief AFP/PTI Lisbon, 15 March “No country can face it alone...more than UN chief Antonio Guterres on ever, governments Sunday urged governments to must cooperate to  289 passengers of Dubai- work together to stop the coro- revitalise economies, bound flight from Kochi navirus pandemic from expand public airport offloaded after plunging the global economy investment, UK tourist tests positive into recession. promote trade and  West Bengal seals all “No country can face it ensure that people alone,” the secretary general and communities but one entry point wrote in an opinion article in with Bangladesh affected by the disease the Publico daily. are supported”  Pilgrimage to Kartarpur “More than ever, govern- Sahib suspended ments must cooperate to revi- ANTONIO GUTERRES talise economies, expand pub- UN chief  SC suspends guided lic investment, promote trade tours, closes museum and ensure that people and Civic polls put off in communities affected by the AP museum disease are supported,” he said. my next month, has said that plunging oil prices. The virus was “infecting the severity of the slowdown IHS Markit, an economics  Haryana shuts down the global economy”, he said. will depend on how long the research firm, this week cinemas, all schools The pandemic had created virus outbreak lasts and how slashed its forecast for global till March 31 a “real and growing risk of a governments respond. growth to 1.7 per cent.  All three old coronavirus- global recession,” the former In January the fund was Coronavirus has infected Portuguese premier said. still projecting world GDP close to 160,000 people world- hit patients cured in The International Monetary growth of 3.3 per cent, but wide and killed more than Rajasthan, one Fund, which releases its updat- that was before global dis- 6,000, according to the latest new case being treated ed outlook on the world econo- ruptions, shutdowns and AFP tally of official figures.

GLOBAL The virus has claimed at least 5,973 lives cases tick up Global oil demand globally and affected more than 161,048 heads for record annual drop Virus may be worse than financial crisis, says Japanese economy minister Australia, South Korea call for G-20 meetings amid market rout UK ramps up production of ventilators Walmart to cut store hours to give workers time to restock American Airlines cutting international flights by 75% New travel restrictions possible, says Trudeau Begona Gomez, Spanish Prime Minister Pedro Sanchez’s wife, Swiss soccer president has tested positive for coronavirus PHOTO: PTI Blanc tests positive for coronavirus Trump tests negative, reaches 724 Hong Kong issues red extends travel ban Malaysia reports alert against travel to to Britain, Ireland 190 new cases Ireland, UK and US Aramco 2019 profits China tightens Nike to close all stores plunge, to cut spending quarantine, airport in US and several Iran's death toll checks as imported other countries