THURSDAY, 5 MARCH 2020 16 pages in 1 section MUMBAI (CITY) ~9.00 VOLUME XXIV NUMBER 144

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ED FILES FRESH CASE ILLUSTRATION: BINAY SINHA AGAINST JET’S GOYAL Mega merger of SC lifts crypto The Enforcement Directorate (ED) has filed a fresh case against Naresh Goyal, former chairman of now-defunct Jet Airways, under ban, quashes the Prevention of Money Laundering Act. The move follows a recent complaint filed against Goyal in Mumbai’s economic offence wing. 10 govt banks On Wednesday, ED officials carried out RBI circular searches at his Mumbai residence. He was also summoned by the probe agency and RAJESH BHAYANI & ANUP ROY then brought to his residence late evening. Mumbai, 4 March The ED was earlier probing violations of forex gets Cabinet nod rules allegedly committed by him. The Supreme Court on Integration of balance sheets to be effective from April 1; 5K entities told to Wednesday set aside the ECONOMY & PUBLIC AFFAIRS P6 Reserve ’s (RBI’s) bank boards to meet soon to finalise the share swap ratio April 2018 circular asking banks Services activity at 7-yr avail of Vivad se and entities the central bank SOMESH JHA regulated to stay away from high in February: PMI New Delhi, 4 March Vishwas scheme dealing in crypto currencies, The services sector continued to ring in the including Bitcoin. good times in February as an uptick in he government on UNDER TAX NET The judgment said the cir- exports and rising new orders resulted in Wednesday approved a Appeals pending before various judicial forums cular had been “set aside on the growth touching a seven-year high, acco- scheme for the amalga- ground of proportionality”. STATUS CHECK rding to a monthly survey released on mation of 10 state- Cases Amount This has given a major relief to T pending involved (~ cr) 5 million: Indian users Wednesday. The widely tracked Nikkei India owned banks into four, putting exchanges dealing in these Services Purchasing Managers Index stood to rest any doubts about a possi- CIT (Appeals) 62,085 205,654 crypto currencies. It opens a engaged in virtual currency at 57.5 in February, up from 55.5 in January. ble delay in the process. ITAT 10,484 131,328 window for developing a mar- activities Effective from April 1, 2020, DRP 192 13,430 ket for crypto currencies, which ~100 crore: Worth of the balance sheets as well as are formally traded in deriva- High courts 6,995 79,255 trade Indian crypto THE SMART INVESTOR P10 stocks of these banks will be inte- tives markets in the US, with Supreme Court 427 20,343 exchanges were having per SBI Cards IPO subscribed grated, according to the scheme CME allowing trade in them. day till April 2018 of amalgamation approved by Note: Based on the latest data on direct tax litigation The 180-page Supreme complied by I-T department as of Feb 28; CIT- Commissioner over 15 times on Day 3 the Union Cabinet. Finance Minister Nirmala Sitharaman said the government I-T Appeals; DRP- Dispute Resolution Panel; ITAT- Income- Court judgment, by a three- 5,161: Number of The SBI Cards initial public offering (IPO) (PNB), weighed the benefits arising out of the BoB amalgamation tax Appellate Tribunal Source: I-T officials judge Division Bench, in a way cryptocurrencies globally, has got a thumbs up from institutional Oriental Bank of Commerce, and before taking a call PHOTO: PTI SHRIMI CHOUDHARY allowed trading and invest- whose combined market cap investors despite the turmoil in the will com- New Delhi, 4 March ment in crypto assets and is about $250 billion secondary market. The so-called qualified bine to form the nation’s second- latory ceiling for lending to indi- ward. The first step will be to exchanges offering this servic- 63.7%: Share of Bitcoin, the institutional buyer segment was largest lender. will vidual borrowers increasing by approve the swap ratio for stocks, The Income-Tax (I-T) Department has so far es in India. largest and first crypto; has subscribed 57x, with the cumulative bid take over ; Union over ~1,500 crore to ~3,000 crore,” with anchor banks expected to approached 5,627 entities, egging them on to Crypto currencies are virtu- amount crossing a record ~1 trillion. Bank of India is planned to be a senior finance ministry official hold board meetings in the com- avail of the offer under Vivad se Vishwas, or al currencies and are a digital market cap of $159 billion Overall, the IPO has been subscribed 15.2x. amalgamated with said, adding that the banks would ing days. PNB is scheduled to the direct tax dispute settlement scheme. representation of value. They | Govt committee had and ; and be able to support specialised hold its board meeting on Those approached include large taxpay- can be digitally traded and can proposed ban on will subsume loan products, such as supply Thursday. ers, mostly foreign banks that have disputes function as a medium of cryptocurrencies, and a draft . chain financing and cash man- The banks will set up an inde- relating to international taxes. exchange and/or a unit of Bill is ready ON “Businesses and industry will agement services. pendent committee to address Of these, 1,730 assessees, involving a tax account and/or a store of value, benefit through an increased The banks will swing into the grievances of minority share- demand of ~1,578 crore, have agreed to come though they do not have the WHERE OTHER THURSDAY lending capacity, with the regu- action to take the process for- holders. Turn to Page 15 > under the scheme, according to the prelim- status of legal tender. SPECIALS inary report prepared by the department. Rachit Sharma, deputy gen- COUNTRIES STAND Meanwhile, the Lok Sabha on Wednesday eral manager, Taxmann, said: Canada: Cryptocurrencies PERSONAL FINANCE: Direct foreign listing of NRIs allowed to own up passed the Vivad se Vishwas Bill amid din. “The Supreme Court’s order The Bill was passed with the amendments could be a temporary relief for permitted as a payment Small businesses should companies permitted to 100% stake in Air India system and as a form of > cleared by the Cabinet recently. investors and intermediaries. buy extra cover 13 The Union Cabinet on Wednesday approved 72 In order to shore up interest in the privatisation of The preliminary report was discussed on The government has a draft investment; income from A riot may be a low-probability changes to the Companies Act, 2013, with a thrust Air India, non-resident Indians, who are citizens of February 28 in a meeting called by an over- framework in place for regulat- them is taxed event, but the damage it causes can on decriminalising compoundable offences and India, have been allowed to own 100 per cent in the sight committee (an internal panel formed to ing cryptocurrencies. The draft Switzerland: Permitted as incapacitate you financially, writes allowing direct foreign listing for domestic firms to airline. The small tweak has now brought foreign supervise Vivad se Vishwas). Bill proposes to ban all cryp- a payment system SANJAY KUMAR SINGH boost “Brand India”. The nod for the Companies investment rules in Air India on a par with other The committee was apprised of various tocurrencies except state- (including consumer-to- amendment Bill, likely to be tabled in the ong- private carriers. This has been termed a landmark strategies, the latest numbers on pending issued ones. Until then, all government transactions) TECHNOLOGY: oing Parliament session, has been given to ease decision by Union minister Prakash Javadekar. He appeals in different judicial forums, and a fur- intermediaries and banks > and as a form of investment Engineering goes digital 14 compliance burden related to CSR by exempting said the move would increase the opportunity ther action plan to make the scheme a success, which were forced to shut Engineering and construction major firms with obligation to spend ~50 lakh or less. 6 > for gaining investment for the airline. 6 > said a tax official in the know. Turn to Page 15 > down platforms providing the Japan: Permitted and L&T is executing complex projects with trading of crypto currencies are regulated as a payment the help of connected machines free to operate in India.” system powered by the latest technologies. Former finance secretary TE NARASIMHAN reports Subhash Garg headed the China: Banned for all committee to propose action purposes L&T plans to become asset light, on virtual currencies. In its Source: PRS India report, the committee had rec- HDFC Bank recasts search ommended banning private cryptocurrencies in India, with federal digital currency be panel for Puri’s successor reduce debt by ~30,000 crore imprisonment of up to 10 years examined, and the government HDFC Bank has reconstituted the search for anyone dealing in them. should keep an open mind on PHOTO: KAMLESH PEDNEKAR panel instituted to find the successor to To sell off L&T IDPL, Nabha Power; The panel has suggested a the matter. Turn to Page 15 > Aditya Puri, MD and CEO of the bank. Keki DEBT BURDEN Mistry has been replaced by Renu transfer Hyderabad Metro to an InvIT Figures for FY19, in ~ crore Karnad of the bank's parent HDFC in the search panel. Mistry leaves the board of AMRITHA PILLAY & DEV CHATTERJEE already had a meeting with the Andhra Larsen & Toubro (C) NCLAT ASKS CCI TO PROBE FLIPKART the bank after completing eight conse- Mumbai, 4 March Pradesh chief minister, who has agreed 1,24,579 cutive years as a director — the maxim- to transfer the ownership of Hyderabad The National Company Law the order passed by the CCI in um tenure that regulation allows. PTI Construction and engineering major Metro to an InvIT. This will help us to Larsen & Toubro (S) Appellate Tribunal (NCLAT) this regard. Larsen & Toubro (L&T) is set to reduce reduce debt and cut finance cost at the 10,192 on Wednesday asked the Earlier, the CCI had absolved its debt by ~30,000 crore in the next SPV (special purpose vehicle) level,” L&T Finance Competition Commission of e-commerce major Flipkart COMPANIES P2 financial year by selling its entire Subrahmanyan told Business Standard 46,336 India (CCI) to initiate of the charge of Warburg may exit stake in L&T Infrastructure Devel- in an interview. L&T Metro Rail (Hyderabad)* again the probe unfair practices using opment Projects (IDPL) and Nabha L&T had a consolidated debt of ~1.24 11,398 against e-commerce its dominant JV with Embassy Power, and transferring its stake in trillion as of March 2019, with the major Flipkart for position. The US-based private equity fund Warburg Hyderabad Metro to an infrastructure finance cost of ~9,354 crore last year. The L&T IDPL alleged use of its appellate tribunal Pincus is looking to exit Embassy Industrial investment trust (InvIT). consolidated debt includes a debt of 11,232 dominant position. A has directed the CCI to Parks, its joint venture with Bengaluru- S N Subrahmanyan, chief executive ~46,336 crore of its finance company. Nabha Power three-member ask its probe arm to based Embassy Group, four and a half years officer (CEO) and managing director “We plan to bring down our stake in L&T 7,549 Bench of the NCLAT investigate the after it signed the $250-million deal to (MD) of L&T, said the plan for the next IDPL to zero and are talking to existing S N Subrahmanyan, CEO and MD, *For FY18 headed by Chairman allegations. Flipkart build industrial and warehousing spaces in L&T, said the company had no big C: Consolidated; S: Standalone Justice S J said it was waiting for financial year was to become asset light as well as new investors for sale of our Sources: Annual reports/Capitaline the country, said sources in the know. and reduce debt wherever possible. “We residual stake,” he said. Turn to Page 15 > capex plan for the next financial year Compiled by BS Research Bureau Mukhopadhaya has set aside the copy of the order. 3 > India Inc copes with coronavirus threat as cases jump to 29 Across the country, companies have stepped up their act to contain the crisis. IT and other new economy firms seem to have taken a lead

BS REPORTERS Italy. The company has asked Amazon confirmed its first Bengaluru/ Hyderabad/ New Delhi/ its staff to work from home for case of coronavirus in its FIGHTING THE ENEMY Mumbai, 4 March a couple of days while the Seattle office, the company’s office gets sanitised. India unit felt the ripple | Paytm asks employees in | Vendors getting Mindspace IT Park, Across the country, India effect. Amazon India has Gurugram office to work screened in Intel’s Hyderabad’s largest office Inc has stepped up its act to imposed travel restrictions, from home for a Bengaluru office couple of days after hub spread over several acres, contain the crisis. IT and new- advising employees to | Restriction on a positive case was a centre of panic on economy companies seem to prioritise health over international travel at GOLD PRICES Wednesday as a techie tested have taken a lead. efficiency. According to the | Many companies Amazon India, positive for coronavirus. The At the Manyata Tech Park advisory, all domestic travels at Mindspace IT Flipkart, TCS, HEADING TOWARDS complex, housing many in Bengaluru, a US-headqu- by the employees can be Park, Hyderabad, Godrej, RPG ~50,000-MARK marquee brands, caught on to artered software product undertaken only after send their staff Enterprises, and Titan the news in no time, company advised its consulting the manager home as a woman techie A sudden reversal in gold prompting employers to send employees to work from while approval from vice- diagnosed with virus | Monitoring teams price, which went up nearly their staff home. home till Friday, after an president is required for put in place at Wipro to ~1,000 on Wednesday, has | Work-from-home An employee of Dutch associate who had travelled international travels. assess the crisis again given rise to hopes that advisories in many offices company DSM Shared from an affected country Walmart–owned e- | Events cancelled at the yellow metal would soon Services, the software FMCG companies are also taking several precautionary showed flu-like symptoms. commerce firm Flipkart too at Manyata Tech Park in touch the ~50,000-mark Bengaluru , IPE Global professional had recently measures to minimise employee exposure PHOTO: PTI Even though the person was has imposed a complete ban (per 10 gram). Despite some returned from an assignment declared asymptomatic by on all business travels, both correction in India as well as in Italy. Hers was the second being treated in quarantine,” Delhi, another person tested medical experts, the domestic and international. INSIDE STORIES globally, the gold price confirmed case of the virus in the company said in an positive, this time in the company began disinfecting In case the travel is outlook looks quite bullish Telangana. “Our thoughts are internal e-mail. Paytm office, taking India’s the campus as a unavoidable, CEO Kalyan RESEARCHERS 10-YR BOND YIELDS AT now. Analysts say, technically, with our colleague, who is More than 1,000 km away, tally to 29. He too had precautionary measure. Krishnamurthy must give an P4 IDENTIFY TWO 39-MONTH LOW AS MARKETS the virus spread has set a doing relatively well and is in Gurugram, next to New returned from a vacation in While online major approval. Turn to Page 15 > VIRUS STRAINS BRACE FOR RBI ACTION strong bullish tone. 4 > 2 COMPANIES MUMBAI | THURSDAY, 5 MARCH 2020 >Sun Pharmaceutical Industries > SpiceJet > IndusInd Bank > Sterling and Wilson Solar > Asian Paints STOCKS Shanghvi Finance acquires Aviation stocks under Top loser among Tanks 51% in 1 month as Benign raw material IN THE NEWS 1.98 million shares pressure amid Sensex stocks coronavirus may impact prices led to margin via open market coronavirus fears business in near-term expansion

~405.70 CLOSE ~70.90 CLOSE ~1,066.25 CLOSE ~143.65 CLOSE ~1,849.85 CLOSE p 3.14% UP* q4.64% DOWN* q 3.85% DOWN* q4.36% DOWN* p 2.67% UP* *OVER PREVIOUS CLOSE

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IN BRIEF HC seeks reply on PIL seeking IOC’s gas pipelines to be Warburg looks grounding of A320neo aircraft to exit JV with The Delhi High Court on Wednesday sought responses of the Centre, aviation regulator DGCA, IndiGo, and GoAir on a part of proposed GAIL arm plea seeking grounding of A320neo Embassy Group aircraft with faulty engines. The Bench issued notices to the ministry of civil Cabinet to take a call aviation, directorate general of civil RAGHAVENDRA KAMATH aviation (DGCA), IndiGo, and GoAir on a soon; IOC product Mumbai, 4 March petition that contended the entire fleet of A320neo aircraft should be grounded “in larger interest of public safety”. PTI pipeline not to be US-based private equity fund part of new subsidiary Warburg Pincus is looking to exit Embassy Industrial ByteDance woos Sonata Software Parks, its joint venture with India’s Gen Z acquires Australian SHINE JACOB Beng-aluru-based Embassy New Delhi, 4 March Group, four-and-a-half years with Resso company GBW after it signed the $250 mil- ByteDance, which runs short- Sonata Software on Wed nes- he government is likely to carve lion deal to build industrial video platform TikTok, has day announced signing of de - out a separate gas transportation and warehousing spaces in launched a music streaming fi nitive agreements to acq uire company that will hold the exist- the country, said sources in service ‘Resso’ to take on GAPbusters (GBW), a Mel bo u - T ing natural gas pipelines of both the know. “WE ARE JUST competitors like Gaana, rne-head quartered firm in the GAIL India and Indian Oil Corporation The JV had an equity JioSaavn and Spotify in the Customer Experience sp ace. (IOC). The newly formed company will be commitment of $175 million CONSERVATIVE IN THE Indian market. Resso, which Financial details of the tra n- a fully-owned subsidiary of GAIL. from Warburg, while LAND DEALS WE DO, calls itself the world's first saction were not disclosed. PTI The Ministry of Petroleum and Embassy was to put in $75 AS THAT’S WHERE THE social music streaming app, is Natural Gas has already floated a Cabinet million. “Warburg is not also looking at expanding its Domestic passenger note for inter-ministerial consultation on NATURAL GAS PIPELINES GAIL FINANCES (~ cr) happy with the speed with MARGIN IS MADE” Figures in brackets indicate capacity (mmscmd) service to Indonesia in the the traffic rose by 2.5% the creation of a new gas transmission Turnover (LHS) PAT (RHS) which the land acquisition ADITYA VIRWANI, next few months. PTI operator. “According to the plan, GAIL ARN 215 (5) and development happened COO, Embassy in Jan, says IATA will have to pay the book value for the IOCL 80,000 6,026 8,000 in the JV,” said sources. RELIANCE 3,039 3,503 4,618 Tata Coffee launches existing natural gas pipelines of IOC. This 1,774 140 (10) 2,226 Though sources said will be integrated with the newly formed TOTAL 60,000 6,000 Embassy’s promoters could THE FINE PRINT e-com platform for (84) LENGTH (KM) subsidiary,” said an official, who is close 40,000 4,000 buy back Warburg Pincus’s Warburg was to put in premium offerings to the development. stake in the JV, this could not

16,981 52,003 $175 mn, Embassy $75 mn Tata Coffee, a subsidiary The official clarified that IOC’s petro- (387) 20,000 2,000 be independently verified. company of Tata Consumer leum product pipelines will not be part GSPL GAIL Warburg did not offer any The JV was aiming to 48,789 48,789 2,692 12,160 53,690 74,808 Products, announced on While the domestic air pass- of the proposed GAIL arm. The Union 0 57,292 0 comments. Aditya Virwani, build 35 mn sq ft by 2024 (43) (246) Wednesday the launch of its enger traffic in China fell down Cabinet is likely to take a call on this pro- FY15 FY16 FY17 FY18 FY19 chief operating officer at The JV was developing e-commerce platform. The by 6.8 per cent during January posal soon. Source: GAIL & PPAC Embassy, said they were sec- parks in Pune, NCR and website debuted with three due to the novel coronavirus According to industry experts, the con- ond biggest portfolio in scale Tamil Nadu variants of luxury single outbreak, Indian domestic struction cost of natural gas pipeline IOC owns and operates 140-km long lines include Gujarat State Petronet and deploying capital had origin specialty coffees passenger traffic rose by 2.5 per would be around ~3-3.5 crore a kilometre. Dadri-Panipat Natural Gas Pipeline (GSPL), Reliance, and Assam Regional not been an issue. “We are named ‘The Sonnets-The cent in the same time period, This would mean that GAIL will have to (DPPL). This pipeline, commissioned in Network (ARN). just conservative in land ongoing projects. He said the voice of our estates.’ PTI global airlines body IATA said pay around ~500-600 crore to buy IOC’s 2010, is also interconnected with GAIL’s GAIL’s pipeline division is set to expand deals we do as that’s where JV developed 2.7 million sq on Wednesday. “RPK (revenue natural gas pipelines. Hazira-Vijaipur-Jagdishpur Pipeline its foothold in the Northeast through the the margin is made,” he said. ft of space and plans to build Companies to give passenger kilometres) growth At present, the country has 16,981 km (HVJPL) and Dahej-Vijaipur Pipeline Jagdishpur-Haldia & Bokaro-Dhamra Jitu Virwani, chairman of 7 million sq ft more. The JV average 7.8% salary in the India domestic market of natural gas pipeline with a capacity of (DVPL) network at Dadri. Natural Gas Pipeline (JHBDPL) project, Embassy, could not be con- is planning to build 35 mil- was broadly unchanged in 387 million metric standard cubic meters The remaining 22 km pipeline network also known as the ‘Pradhan Mantri Urja tacted. lion sq ft of industrial and hike in FY21: Survey January compared to Dece - per day. Of this, GAIL owns 12,160 km, of IOC connects Ennore and Manali, where Ganga’ project. The venture is developing warehousing space by 2024. mber, at 2.5 per cent year-on- while IOC has around 162 km. IOC subsidiary Chennai Petroleum The first phase of the project, cover- industrial and warehousing Anshul Singhal, the first CEO year,” said a statement issued In February, GAIL Chairman and Corporation has a refinery. ing 753 km from Phulpur to Dobhi, con- parks in Pune, the Delhi of the JV, last year set up his by the International Air Trans- Managing Director Manoj Jain said the When asked about the plans, a GAIL necting Gorakhpur, Patna and Barauni, NCR, Sriperumbudur and own venture after quitting port Association (IATA). PTI government was working on a proposal to official said, “There is an immediate has already been commissioned along Hosur in Tamil Nadu, and Embassy Industrial Parks. set up a 100 per cent subsidiary of GAIL to requirement of creation of natural gas grid. with the six Geographical Areas (GAs) on Hyderabad in a phased Betting on the growing I-T finds ~3,500-cr comply with regulations that require trans- In addition, the supply side should be in this length. The second phase — of 901 manner. demand from e-commerce, TDS default by oil, portation and marketing of gas to be a sep- place with rising demand. Hence, a ded- km connecting Dobhi to Durgapur and Aditya Virwani, in an over $5 billion in funds have arate business. The new entity will be icated 100 per cent arm will improve effi- Dhamra to Angul — and the third phase interview last October, said been committed by PE firms telcos in Delhi formed within a year “once the Cabinet ciency in transmission sector and will — of over 1,000 km that will run across the JV had invested $80 mil- and pension funds such as Companies operating in India The Income Tax Department nod is in place”. The proposed arm is make the business more transparent.” Bokaro-Angul and Durgapur-Kolkata — lion since it set up operations CPPIB, Warburg Pincus, and are likely to give an average has detected Tax Deducted at expected to have around 15 per cent share Apart from IOC and GAIL, the other are expected to be completed by the end in 2016, and would invest Ivanhoé Cambridge, over the salary hike of 7.8 per cent to Source (TDS) default default of of GAIL’s revenue. companies that have natural gas pipe- of the year. $250-300 million to complete past five years. their employees for the more than ~3,500 crore after it financial year 2020-21, surveyed a major oil company according to a survey by and a telecom operator in the Deloitte India. The lower salary national capital, the CBDT said increment, as compared to the on Wednesday. In the case of preceding year, is in line with the oil firm, the CBDT said TDS Oyo to cut about 5,000 jobs in broad overhaul the higher margin pressure on default of about ~3,200 crore companies and economic was detected. PTI BLOOMBERG at Oyo was announced in January headwinds. PTI Bengaluru/Hong Kong, 4 March HANDING OUT 2020 and the recent developments in Stanza Living forays THE PINK SLIP China are in line with the same. Motilal PE invests into housing for Oyo Hotels plans to cut its global > The company intends to fire China is a home market for Oyo, and in diagnostics working individuals workforce by about 5,000 to 25,000 about half its 6,000 direct we will continue working with our people, with the deepest reductions full-time staff in China thousands of retained OYOpreneurs company Molbio Student housing start-up Sta- in China after business there crum- to deliver against our core mission of Motilal Oswal Private Equity nza Living on Wednesday said bled in the wake of the coronavirus > Of the remaining 4,000 so- creating quality living experiences for (MOPE) fund is investing the firm would enter into man- outbreak. called discretionary workers, millions of middle-income people ~240 crore in a diagnostic aged housing for working prof- The start-up, one of the largest in a portion will be temporarily around the world. During the tough services company called essionals with a planned inv - SoftBank’s portfolio, is reducing staff laid off but invited back once coronavirus situation, we will con- Molbio that has developed estment of ~150 crore in the in China, the US, and its home coun- business recovers tinue to support the benevolent and and commercialised a diag - coming quarters. The firm has a try as it seeks to boost profitability. resilient Chinese society, in every > The reductions are up nostic test which can diag nose combined capacity of 10,000 Oyo expanded rapidly after its found- possible way. We want to thank our sharply from an envisioned 22 infectious diseases. Of the 43 beds spreading across Benga- ing in 2013 and reached a valuation partners, employees and customers pipeline diseases, coronavirus luru, Hyderabad, Pune and of $10 billion, but investors have reduction of about 5% of for standing strong together,” said an is one. BS REPORTER . BS REPORTER soured on money-losing businesses Chinese employees prior to Oyo spokesperson. after WeWork’s meltdown and the coronavirus epidemic The restructuring in China is in SoftBank has pushed portfolio com- line with the global restructuring exer- Biyani to be Future Lifestyle’s panies to prioritise profitability. The coronavirus is contributing invited back once business recovers, us and in specific provinces, we are cise announced in January 2020, said “In our previous phase, we added to a dramatic retrenchment in China, one of the people said. trying hard to keep hotels open, as sources. Oyo had said it was stream- non-executive vice-chairman a lot of properties to our platform and a market once deemed crucial to The staffing reductions are up many as possible,” said Agarwal. “It’s lining operations and will focus on its Future Lifestyle Fashions on Wednesday built the brand and mindshare,” said Oyo’s global expansion. sharply from an envisioned reduc- a tough time for our hotel partners.” US and China markets. In China, a big said that its board had approved the founder and CEO Ritesh Agarwal in The firm intends to fire about tion of about 5 per cent of Chinese Hotel owners in China had pro- chunk of the restructuring exercise re-designation of Kishore Biyani, the an interview. “Our first focus of 2020 half its 6,000 direct full-time staff employees prior to the epidemic, tested in front of the company’s has been completed. In the next few company’s managing director, as is growth with profitability.” in the country, people familiar with which abruptly chilled travel across offices, accusing the startup of vio- weeks, our restructuring there would non-executive vice chairperson, with Agarwal said the global head- the matter said, asking not to be the world’s no. 2 economy. It also fol- lating contractual agreements. The have concluded. Overall, about 30 per effect from March 5. The re-designation count would fall by about 17 per cent identified. Of the remaining 4,000 lows the dismissal of 12 per cent of growing turmoil may complicate cent of Oyo’s Chinese workforce will is based on the recommendations of the from 30,000 in January. The com- so-called discretionary workers — its 10,000 staff in its home country SoftBank’s efforts to raise a successor be impacted by this restructuring nomination and remuneration pany is also prioritising improved hired in support areas such as call of India, people familiar with the to the Vision Fund, the world’s exercise. committee, the company said. relations with hotels and stronger centers and clients’ hotels —a por- matter have said. largest pool of start-up investments. BS REPORTER corporate governance, he said. tion will be temporarily laid off but ”In China, the coronavirus has hit “The global restructuring exercise Neha Alawadhi adds ‘We will continue to invest in India as long as we see opportunities’

Blackstone’s co-founder STEPHEN A SCHWARZMAN was in India recently to promote his first were down the same as if it never recession then it’s not so easy to get out, so What’s the secret to building a book, What It Takes: Lessons In the Pursuit of Excellence, in which he shares insights on how happened. it’s really an unknown economically, great company? he helped build the world’s largest private equity firm. Schwarzman spoke to Pavan Lall, except there’s not much of a positive spin. It’s all about culture. It’s a great place and fielded questions on concerns about the coronavirus outbreak, the next few quarters for Thoughts on the impact of the virus... where everybody is honest and helpful the world economy, and doing business in India. Edited excerpts: I think there’s little doubt that there will What is your take on the rise of and trust each other. We’ve all also be a significant impact on global growth. populism around the world? worked with people who are nasty and You mention India and great real estate So it’s a precondition for investment The question is how long it will continue In terms of our business, one thing that is those places do not tend to endure so the investments in your book. As of now, expansion for us. I understand that this is and there doesn’t appear to be any short- changing is that people in large key is how do you get any organisation you've invested around $16 billion in a time of inflection and we have term cure. There may be companies are being asked to join feeling small and intimate, where India. How is that working out? enormous flexibility in moving money to some existing medicines the political dialog, which wasn’t everyone’s dreams can be met where India has had so much growth for so India as long as we see interesting that have some impact, but the case and you cannot comment you’re responsible and people are excited long, and my objective assessment is that opportunities, we will continue to deploy almost all experts that we on every issue otherwise you’d to come to work and feel empowered. In we have remarkable people here and our large amounts of money because the consult say it would be become nothing but the bad TV the finance industry I’ve never seen any results in India have been the strongest of long term is very positive. between a year and a year- commentator. But it’s important bigger egos other than the entertainment any place around the world. The and-a-quarter before a STEPHEN A that business people take a stand business and so everyone thinks they’re economy has slowed a bit from historic What’s your overall view vaccine is developed. SCHWARZMAN because it reflects the value of the important. The people who work for us norms and there is less confidence in on coronavirus? Assuming that those people who work for you and the are super smart, everyone is smarter than Co-founder, business establishments, exacerbated by I don’t understand how rate cuts can experts are right, then we Blackstone stand you take so that’s a big me — we take 6/10 of a per cent of people issues surrounding the banking system. cure one of coronavirus. I think that the have a problem for a limited change. We have to make sure that who apply to us, so we hire 88 out of But, generally, we see these as things that markets were off afterwards, indicating PHOTO: KAMLESH PEDNEKAR period and the only question is how everyone in society has the chance to do 22,000 people. Those who join are really can be improved and India on a longer- that the attempt to stimulate an confidence. On the other hand, when deeply does it affect the global economy? well. The outcomes of the financial crisis bright. The way to do it is create a whole term basis has remarkable assets, economy in the context of supply chains you lower interest rates, you make it Nobody controls the population’s have affected politics in the developed series of basic principles that have to be namely its people, the education system, that aren’t functioning and people who more difficult for financial institutions response in each country and so in a way world and there is an enormous move for taught to everyone in the organisation the largest population of young people don’t want to get on airplanes or are and so it was an attempt at providing an it is difficult to assess how long it will climate change, gender equality and all and create an enduring institution. If I’m under 35 and is producing seven times as really quasi-panicked... The US Fed used underpinning of confidence, which, at panic and how deep this will drive global kinds of things that warrant more today not around, the business will go on many engineers as the USA, for example. their power to basically engender least yesterday, didn’t work. Markets growth. If it drives countries into than 15 years ago. without pausing for one second. MUMBAI | THURSDAY, 5 MARCH 2020 COMPANIES 3 . < NCLAT asks CCI to probe Flipkart Tata’s Mundra SBI-led CoC clears plant to stop PRESS TRUST OF INDIA New Delhi, 4 March power supply The National Company Law Appellate by March 11 sale of RCom, arms Tribunal (NCLAT) on Wednesday asked fair trade regulator CCI to initiate again SHREYA JAI the probe against e-commerce major New Delhi, 4 March Flipkart for an alleged use of its domi- nant position. Tata Power’s ultra-mega pow- A three-member Bench of the NCLAT er plant in Mundra will stop headed by Chairman Justice S J Mukho- supplying power to five states padhaya has set aside the earlier order from March 11, said Praveer passed by the Competition Commission Sinha, CEO and managing of India (CCI) in this regard. director of the firm. “We will Earlier, the CCI had absolved e-com- gradually start shutting units merce major Flipkart of unfair practices if no resolution is reached using its dominant position. The appel- with the states,” said Sinha. late tribunal has directed the CCI to ask its The extreme step is being probe arm Director General (DG) to inves- taken in the wake of buyer tigate into the allegations. states not agreeing to a tariff “We set aside the order passed by The CCI had earlier absolved e-commerce major Flipkart of unfair practices using its hike for the power being sup- CCI...,” the bench said adding that the fair dominant position plied by the ultra-mega pow- trade regulator “is directed to initiate er project (UMPP). Mundra probe against Flipkart”. ketplace Flipkart Internet Pvt Ltd. the market is commanding any dominant supplies power to Gujarat, The NCLAT said that the All India It had alleged that small vendors have position at this stage of evolution of mar- Haryana, Rajasthan, Punjab, The Jio-Brookfield duo will now have control of over 175,000 towers against the 165,000 towers Online Vendors Association (AIOVA) has become allies of the big vendors and sup- ket”. The AIOVA, as mentioned in the CCI and Maharashtra.The UMPP, of the proposed entity successfully made its case here. While, pliers to leading sellers such as Cloudtail, order, is a group of over 2,000 sellers sell- based in Gujarat, has been in Flipkart said it was waiting for the copy of WS Retail, etc on the Flipkart and Amazon ing on e-commerce marketplaces such as the midst of regulatory tussles SURAJEET DAS GUPTA & ABHIJIT LELE sell its tower business to duce from ~12,000 crore to the order passed by the NCLAT. platforms, rather than selling directly to Flipkart, Amazon, Snapdeal etc. over the escalated cost of New Delhi/Mumbai, 4 March Brookfield for ~25,000 crore ~4,000 crore. Taking this into “We understand that the NCLAT has consumers through the online e-com- Earlier in February, in a different mat- imported coal for seven years through an Invit structure, consideration, they said the issued an order in relation to the AIOVA merce marketplace sites. ter, the High Court of had now. In a judgment in April he committee of credi- under which it would remain realisation of the lenders would appeal. We are currently awaiting a copy However, passing an order on stayed the CCI investigation into allega- 2017, the Supreme Court den- tors (CoC), led by State the anchor tenant for 30 years. be as high as 70 per cent. of the order,” a Flipkart spokesperson said. November 6, 2018, the CCI had held that tions of anti-competitive behaviour by ied any compensation to Tata T Bank of India, on Wed- According to sources, under UVARC is not new in the In November 2018, the AIOVA had the business practices of Flipkart and two e-retailing majors Amazon and Power for the increased coal nesday voted unanimously (100 the deal, which was cleared on telecom sector. It is the highest approached the CCI alleging abuse of Amazon are not in violation of competition Flipkart for a period of eight weeks. cost. It also directed the per cent) in favour of selling R- Wednesday, RCom and Relia- bidder for Aircel, in which the market dominance by e-commerce major. norms and rejected allegations of abuse of The CCI had ordered a probe into Central Electricity Regulatory Com and its two subsidiaries, nce Telecom, which houses lenders have taken a hit of more The AIOVA had alleged abuse of market market dominance made by the AIOVA. Amazon Seller Services and Flipkart Commission to formulate and the panel’s resolution in- spectrum, real estate assets, and than 99 per cent hit. Currently a dominance against Flipkart India Pvt Ltd, The CCI had ruled that looking at the Internet, units of the two e-commerce relief for Mundra under the volved selling tower assets to the data centre and enterprise substantial portion of the spec- which is into wholesale trading/distribu- present market construct and structure of marketplaces, on January 13 after receiv- power purchase agreement Reliance Jio (Jio). business, will be sold for trum of around 58.75 MHz in tion of books, mobiles, computers and online marketplace platforms in India, “it ing complaints from trader body Delhi between Tata Power and the Under law, a resolution re- ~14,000 crore to Delhi-based UV the crucial 800 band is being related accessories, and e-commerce mar- does not appear that any one player in Vyapar Mahasangh. power procuring states. quires 66 per cent of the vote. Asset Reconstruction Company used by Reliance Jio as part of a With this move, Jio and Cana- (UVARC), which was the high- spectrum-sharing agreement. dian PE fund Brookfield togeth- est bidder. However, RCom and Reli- er will become the country’s The tower business, which ance Telecom have 188 MHz in largest tower operator with Jio also include fibre assets, is various bands such as 900, Macrotech may as its anchor tenant, racing housed in Reliance Infratel, for 1800, and 2100. This could be ahead of Bharti Infratel-Indus which Jio is paying ~4,700 crore, valuable to telcos looking at Towers, an entity whose merg- which again is the highest bid. more spectrum to power their er is being considered. The bidders have commit- data revolution. fend off near-term The Jio-Brookfield duo, ted that they will pay 30 per cent Analysts said it would make once the deals gets through, will of the proceeds within 90 days. sense for the asset management now have control of over The resolution professional is company to get into a compre- debt problems 175,000 towers against the expected to file the resolution in hensive deal with Reliance Jio 165,000 towers of the proposed the National Company Law for the spectrum, data centres, RAGHAVENDRA KAMATH and interest on its dollar bond entity. It will also give a big push Tribunal (NCLT) on Thursday. and even real estate as they Mumbai, 4 March maturing on March 13. to Jio in its fibre capacity, which According to banking sour- need these assets. UVARC will Around $118 million of that would go up from 450,000 km ces, however, the outstanding also have real estate of 132 acres The proposed bond issue by amount relies on proceeds to 600,000 km after the deal, dues of the banks stood at in Navi Mumbai. Macrotech Developers (MDL), from an inventory financing taking it far ahead of others. ~41,000 crore and based on the Banking sources, however, earlier known as Lodha facility, the transfer of funds The deal is a steal and less proceeds, the realisation for the say that there are some loose Developers, may alleviate its from its Indian operations and than half of what Brookfield was 38 lenders would be a mini- ends up. “The position the near-term debt problems. collections from existing sales, ready to pay in 2016 as part of an mum of 35 per cent. However, Department of Telecommunic- However, significant debt it said. The latter, in particular, agreement with RCom. At that other sources involved in the ations will take on spectrum maturities and unfavourable also remains subject to market time the US company had si- deal said it included lenders cla- usage is an issue. Also how industry conditions will keep conditions. Any delays in gned a non-binding agreement wing back the priority paym- UVARC will raise the money to its refinancing risk high and liq- receiving such proceeds will to buy 51 per cent in the tower ents of ~4,300 crore made to pay and also what kind of deals uidity weak, said a report by prevent the bond transaction business for ~11,000 crore. Chinese as well as Indian lead- they have in place for further Moody’s Investor’s Service. from progressing, increasing Last year, Mukesh Amba- ers. They pointed out that loans sale has to be watched,” said a “The proposed bond trans- the likelihood of default. ni’s Reliance struck a deal to to Chinese lenders would re- banker which is part of the CoC. action is subject to significant MDL does not have alterna- execution and market risk, tive financing arrangements in including the fulfillment of a place to repay the maturing condition precedent. This will bond, said Moody’s. create uncertainty around “Nevertheless, if Macrotech Govt detaches GAIL, OIL, MDL’s ability to complete the is successful in the issuance, bond transaction as planned,” near-term liquidity risk will said Sweta Patodia, a Moody’s ease, but refinancing risk will analyst. To proceed with its remain significant. An addi- other PSUs from AGR case proposed bond, Macrotech will tional $1 billion debt will be The government has detached gas utility GAIL Asks Airtel, Voda Idea to pay first have to raise about $118 maturing by March 2021 amid India, explorer Oil India and other PSUs from a million and deposit the pro- an overall weak operating envi- Supreme Court order that had led to ~1.47 trillion remaining dues: Sources ceeds in an escrow account. ronment,” added Patodia. as adjusted gross revenue (AGR) being sought The government on Wednesday asked Bharti Airtel, Failure to do so will prevent Tepid consumer confi- from telecom firms such as Bharti Airtel and Vodafone Idea and other telecom firms to pay re- the company from progressing dence, slowing economic Vodafone Idea in past dues, the Lok Sabha was maining AGR dues as per the Supreme Court order, with the proposed bond and growth and tight liquidity have informed on Wednesday. according to sources. The telecom department wr- may lead to a default on the hurt real estate demand in the Following the October 24 order of the ote to all the telcos asking them to pay balance du- existing bonds maturing on Mumbai Metropolitan Region Supreme Court asking inclusion of non-telecom es ‘without delay’ and also submit detailed bifur- March 13. This is because — Macrotech’s key operating revenues for calculating statutory dues such as cation of payments, which are necessary for proper Macrotech does not have alter- market. Project launches have licence fee and spectrum charges of telecom reconciliation of legitimate dues. The government native financing arrangements consequently continued to ex- firms, the Department of Telecommunications has so far received ~26,000 crore from AGR paym- to repay the bond. ceed sales, leading to inventory has sought a cumulative ~2.7 trillion from GAIL ents, including adhoc/ buffer amounts given by Even if MDL is able to fulfill build-up and price corrections. and other non-telecom PSUs. The demand was telcos to meet any reconciliation differences. PTI the conditions precedent, bond These subdued market challenged by state-owned firms. “Supreme execution remains subject to conditions will likely continue Court has detached the public sector undertak- from an appropriate forum,” Minister of State market conditions, said to constrain Macrotech’s earn- ings (PSUs) from the AGR judgment dated for Communications Sanjay Dhotre said in a writ- Moody’s. Macrotech needs to ings over the next 12 months, October 24, 2019, and directed them to seek relief ten reply to a question in the Lok Sabha. repay $343 million as principal Moody’s said. Allcargo gets Sebi nod for open offer to buy 26% in Gati

ADITI DIVEKAR Shares of Gati on Wednes- GATI ALLCARGO LOGISTICS has landed in a legal soup over Mumbai, 4 March day ended at ~66.55 per share dispute in ownership of the on the BSE. Meanwhile, shares Price in BSE (~) Price in BSE (~) shares within promoter fami- In the third and final phase to of Allcargo Logistics ended at 67.5 110.4 112 ly. “The acquisition is in line become the controlling stake- ~110.40 per share, up 1 per cent 67.05 66.55 with Allcargo Logistics’ long- holder in express logistics com- from previous close on the BSE. 67.0 111 term strategy to strengthen its pany Gati, Allcargo Logistics The open offer is expected to be 110 domestic business. It will fur- 66.5 on Wednesday said it had launched this month and will 109 ther synergize our efforts to received the Securities and close in April 2020, the compa- 66.0 offer end-to-end services to our Exchange Board of India (Sebi) ny said. 108 domestic and international 109.6 approval on its open offer to Allcargo, the multi-modal 65.5 107 customers. Apart from helping acquire nearly 31.7 million logistics firm, has already Mar 3,’20 Mar 4,’20 Mar 3,’20 Mar 4,’20 us consolidate our position as share or 26 per cent stake in deposited ~238 crore, equiva- the true end-to-end logistics Gati at ~75 per share. lent to 100 per cent of the cap- comprising preferential share of Gati. solutions provider, the acqui- Full acceptance of the open ital required to fund the open allotment and part purchase of Operating an asset-light and sition will catapult us into the offer will take Allcargo’s stake offer, into an escrow account promoter stake in Gati in hub and spoke model, Gati cur- market-leading position in in Gati to 46.83 per cent, mark- set up according to Sebi norms January. rently has presence in 727 dis- domestic express logistics seg- ing completion of the acquisi- for the open offer transaction. As a part of this process, two tricts in India. While Allcargo ment,” the release said quoting tion process, which was initiat- Allcargo also completed the directors of Allcargo Logistics Logistics is looking to take Shashi Kiran Shetty, chairman, ed on December 5, 2019. first two phases of the deal have been appointed on board majority stake in Gati, the latter Allcargo Logistics.

Volkswagen drives in BS-VI compliant Polo, Vento in India Volkswagen India on Thurs- day launched BS-VI complia- nt versions of premium hatchback Polo and mid- sized sedan Vento, priced bet- ween ~5.82 and ~13.29 lakh (ex-showroom). It has introduced the models with range of petrol powertrains. The Polo is powered by MPI and TSI petrol engines mated with both manual and auto- matic transmissions. PTI 4 CORONAVIRUS OUTBREAK MUMBAI | THURSDAY, 5 MARCH 2020 1 > COVID-19 spreading fast in India; 29 infected VIRUS WILL PULL GLOBAL INDIA TO SCREEN ALL PHARMACIES IN SEVERAL MORTALITY RATE IS NOW ITALY CLOSES ALL SCHOOLS, GROWTH BELOW THE 2.9% INTERNATIONAL PASSENGERS PARTS OF DELHI-NCR RUN OUT OF 3.4%; OLDER PATIENTS FACE UNIVERSITIES UNTIL MARCH 15 SEEN LAST YEAR, SAYS IMF CHIEF FOR VIRUS SYMPTOMS HAND SANITIZERS, FACE MASKS THE HIGHEST RISK, SAYS WHO AS DEATH TOLL JUMPS TO 107 Gold marches towards ~50,000  Sovereign gold bond  Physical gold as a precious metal. The ratio presently Bull cycle for the (Average issue price#) (FY average price) is 94-95. Historical data shows that this yellow metal has just Price (~/gm) % Return* is not a sustainable level and ratio will 2,733 57.4 correct from here. This means silver started, feel experts 2015-16 2,677 60.8 should outperform gold. But over 50 per cent silver is used in industry, which is RAJESH BHAYANI 3,030 42.0 passing through a bad phase. If that part 2016-17 2,983 44.2 Mumbai, 4 March improves, silver can outperform gold. 2,925 47.1 2017-18 But Arora said that it may take time. sudden reversal in gold price, 2,944 46.2 He added, “Under the foregoing sce- which went up nearly ~1,000 3,184 35.2 nario, silver may not do as well due to 2018-19 Aon Wednesday, has again given 3,133 37.3 its industrial use. However, silver is rise to hopes that the yellow metal 3,726 15.5 susceptible to a short squeeze which would soon touch the ~50,000-mark 2019-20 3,676 17.1 can cause a major rise quickly.” Fifteen Italian tourists (per 10 gram). #Average price for the bond issuance for the financial year As of now, gold bonds have proved tested positive on In Mumbai’s physical market on *Return over Mar 4, 2020 Gold (999) of ~4303.30 per gm the best among all forms of invest- exluding tax, 2.5 % interest per annum payable on gold Wednesday. The group has Wednesday, gold prices had risen after bonds is not considered in the table ments of the yellow metal. Sovereign been quarantined at an the US Federal Reserve announced Source: RBI, IBJA; compiled by BS Research Bureau gold bond (SGB), first launched in ITBP facility in New Delhi. one of its steepest cuts of 0.5 per cent November 2015, has outperformed This is in addition to the in interest rate on Tuesday evening to all-time high of $1,900 seen in 2011. in 11 years. Gold has been in another gold in terms of returns if interest paid Italian tourist who tested provide stimulus to the economy. “Gold has a fair probability to reach consolidation phase since November on that at 2.5 per cent is considered. positive earlier PHOTO: PTI Analysts, who are hoping for anoth- $1,900 by the year-end if coronavirus 2011 till May 2019. It has since broken Return in the yellow metal price for er rally, however, say that, “though the worsens, the central banks out to ~4,200 per gram. physical gold was 38 per cent for journey towards that level may not be act aggressively and there is This means that, if in the investment made in FY19 and 62 per easy, the current coronavirus epidem- a slow decline in stock mar- last bull run, price rises 6.5 cent in FY16. But considering 2.5 per Ready for meaningful ic may actually make that happen”. kets,” said Nigam Arora, an times, another 20 per cent rise cent per annum on SGB, annual Despite some correction in India expert who is also the author is very much possible. Even returns is much higher. For issues in intervention, says FM as well as globally, gold price outlook of the Arora report. What he $4,200 per ounce for interna- FY16, returns is almost 69 per cent. looks quite bullish now. said has started happening. tional gold during this bull cycle, Rastogi said his firm recommends The government is working intensively to Analysts say, technically, gold has Gaurav Rastogi, chief CORONAVIRUS as projected by Chris Wood of investors to have 10-20 per cent invest- ensure meaningful intervention, if needed, * (16 Italian tourists set a strong bullish tone. As coron- executive, kuvera.in, said, OUTBREAK Jefferies, also can’t be ruled out. ment in gold, preferably sovereign gold who travelled to to deal with the impact of the coronavirus Rajasthan and avirus spreads fast, it is keeping gold “Our analysis of the past sev- However, the initial phase of bonds, subject to their goals and age as crisis in the country, Finance Minister Nirmala later Agra in UP price elevated. To reach ~50,000, gold eral decades of gold price movement the gold bull run will certainly not be well as income profile. He said: “We and the driver who Sitharaman said as the number of cases shot accompanied price needs to rise around 16 per cent. has shown that the market cycle for smooth and volatility will be there. Arora like gold allocation in a portfolio for up to 29, with 15 Italian nationals testing them) In 2020 so far, gold price has the yellow metal is 8-10 years.” said, “If stock markets decline at a fast two primary reasons. It is a positive positive Wednesday morning. Three schools already increased 10 per cent in India. He also gave details of the last three pace, investors sell whatever they can, yielding asset which acts as a hedge in the national capital and adjoining areas 29 CONFIRMED From the year 2019, gold is already up decades movement. Gold was in a con- including gold, to meet margin calls and against rupee depreciation. Moreover, announced holidays for students and staff as CASES IN INDIA; over 30 per cent. solidation phase from July 1993 to other compliance rules.” Such selling in times of crisis, it has a negative cor- a precautionary measure to prevent spread of Market experts see a return of 16 June 2001. Then, it rallied from June and profit booking was seen last Friday relation with equity markets. It acts as coronavirus, while two schools advanced 17 INDIANS LIVING per cent or more from the current rate 2001 to November 2011 and the price and may be seen again. If gold rises, will a portfolio hedge when it is most need- spring break. PTI * (They have recovered) ABROAD INFECTED in a year’s time. However, for that to per gram of gold went from ~400 to silver follow? Gold-to-silver ratio reflects ed. Thus, we recommend 10-20 per happen, it has to cross the previous ~2,600, an almost 6.5 times increase strength of silver in comparison to gold cent allocation in gold.” $12-billion 94,000 80% Airlines seek relief aid package unveiled cases wordwide; drop in car Virus has two types, one is by World Bank toll rises to 3,220 sales in China more aggressive: Scientists package from govt US lawmakers agree to Hong Kong, Bank of ARINDAM MAJUMDER $7.8 billion emergency Canada follow Fed cut; Indian airlines. But with global REUTERS & ANEESH PHADNIS spread of coronavirus, airlines virus spending bill South Korea seeks Shanghai, 4 March New Delhi, 4 March are being forced to rejig their Los Angeles declares $9.8 bn extra budget network, cut flights and delay emergency, 129 confirmed Tokyo Olympics Scientists in China studying With travel dwindling after the new launches. & presumed cases in US could be postponed, the outbreak of disease caused coronavirus (COVID-19) out- Adding to the worry is a by the new coronavirus say break, Indian airline firms have reduction in inbound tourists Amazon confirms first says Japan minister they have found that two main sought a relief package from with multiple countries issuing case among US staff Iraq confirms strains of the virus are circu- the government, asking that it advisories to their citizens after Google cancels its first coronavirus lating in humans and causing include a waiver of landing and the communal riots in New death Hong Kong residents arrive at Chun biggest annual event; infections. parking charges and payment Delhi last month. Yeung Estate quarantine facility at Fo Xiaomi, Realme, Infinix Saudi Arabia suspends The researchers, from to oil marketing companies. IndiGo, SpiceJet and Air Tan from Wuhan PHOTO:REUTERS cancel launch events Umrah pilgrimage Peking University’s School of Airlines sought a limited India Express are all planning Life Sciences and the Institut period concession of the stand- to cut flights to Saudi Arabia as Pasteur of Shanghai under the ing rule of slot allocation, which West Asia has been impacted Chinese Academy of Sciences, mandates that firms must oper- by the outbreak. cautioned that their study ate at least 80 per cent of their Following Saudi Arabia’s Irdai: Design products for virus looked only at a limited range of Online travel firms Railways rings alarm allocated slots. If they fail, air- ban on religious tours, IndiGo data, and said follow-up studies lines lose their right to that slot and SpiceJet executives said SUBRATA PANDA Future Generali India Insurance, said: “Any per- of larger data sets were needed offer full refund bells over COVID-19 the next season. they were looking at places Mumbai, 4 March son who is hospitalised as a result of coronavirus to better understand the virus's Online travel companies have The Indian Railways on Sources aware of the devel- where the capacity could be and takes treatment will be covered as any oth- evolution. The preliminary started to fee the pinch of the Wednesday issued directives to all opment said that chief execu- diverted. Saudi Arabia is the The insurance regulator on Wednesday issued er illness. The subsequent claims will be study found that a more aggres- coronavirus outbreak. “There has the zones to take precautionary tive officers of Indian airlines second largest air travel mar- guidelines to health insurers on how to handle processed as per regular norms, provided the sive strain of the new coron- been a slowdown in outbound measures to deal with COVID-19. met Aviation Secretary Pradeep ket for Indians in West Asia coronavirus claims, and asked firms to design individual has been hospitalised for 24 hours. avirus associated with the out- travel bookings since the break of The steps that zones should take Singh Kharola on Tuesday and after the United Arab Emirates, products covering the cost of treatment. The government has issued advisories on coro- break in Wuhan accounted for coronavirus. Travellers are being include showcasing awareness said the relief package was and around 5.9 million passen- “In order to provide need-based health insur- navirus infection and the insurance companies about 70 per cent of analysed cautious in making their materials prominently in local important to sustain the health gers flew between the nations ance coverage, insurers are introducing prod- will be guided by that.” cases, while 30 per cent were (outbound) travel plans,” said a language, isolation of patients of the industry. in 2019. ucts for various specific diseases including vec- Claims should be thoroughly reviewed by the linked to a less aggressive type. spokesperson at MakeMyTrip. with fever, separate wards and “The meeting was a part of Vistara has already can- tor-borne diseases. For the insurers’ claims review committee The prevalence of the more “We do expect a potential impact medical staff, and also creation of the government’s stock-taking celled 20 flights between Delhi purpose of meeting health insur- before repudiating any, the regulator aggressive virus type decreased on the overall business if the isolation wards in railway measure of the impact of and Bangkok and eight ance requirements of various sec- pointed out. after early January 2020, they outbreak spreads westwards... hospitals. It also directed the COVID-19 on various sectors. between Delhi and Singapore tions, insurers are advised to Subramanyam Brahmajosyula, said. “These findings strongly Over the past two weeks, we have officials to inform the principal The secretary of civil aviation in March. It will also cancel 26 design products covering the head - underwriting and , support an urgent need for fur- noticed a spike in cancellations as chief medical directors if a had called the CEOs regarding flights between Mumbai and costs of treatment for coron- SBI General Insurance, said, “Claims ther immediate, comprehen- the outbreak spreads to new suspected case is identified in that and sought to know what Singapore. avirus,” said the Insurance due to coronavirus are payable pro- sive studies that combine markets.” NEHAALAWADHI hospitals. BS REPORTER could be done to reduce impact The Indian aviation indus- Regulatory and Development vided the concerned person is hospi- genomic data, epidemiological on airlines as we are the first to try could see an impact of 19.5- Authority of India (Irdai). talised for at least 24 hours. Most of data, and chart records of the get hit in times like this,” said a 23.8 per cent on international The regulator has also made it the health insurance policies in India clinical symptoms of patients Europe is ‘panicking’ over India’s person who attended the meet- passenger traffic growth, said clear that in existing products where the cost of do not cover outpatient treatment. However, if with coronavirus disease 2019 ing. The delegation was led by Kinjal Shah, vice-president at hospitalisation is covered, insurers have to make coronavirus is declared as a pandemic by the (COVID-19),” they wrote in a pharma export curbs: Industry body SpiceJet promoter Ajay Singh. rating agency ICRA. sure that cases related to coronavirus are dealt WHO or the Indian government, then claims study published on Tuesday in India’s top pharmaceuticals India , told Reuters: “I am GoAir CEO Vinay Dube and “This is negative for the with expeditiously. might not be payable as such claims are exclud- the National Science Review, the export group said the curbs on getting a huge number of calls Vistara CEO Leslie Thng also Indian aviation industry, which Moreover, the costs of admissible medical ed under many health insurance policies.” journal of the Chinese Academy some drug exports amid the from Europe because it is very attended the meeting. is already reeling under signif- expenses during the course of treatment, includ- Digit Insurance has already come up with a of Sciences. coronavirus outbreak has sizeably dependent on Indian Kharola on Wednesday icant passenger traffic slow- ing during the quarantine period, shall be settled product which will insure a person against the Experts not directly caused panic in Europe, and formulations and we control briefed the Prime Minister’s down, with international traffic in accordance to the applicable terms and con- virus, with a maximum coverage of ~2 lakh. involved in the study said its will severely impact businesses almost 26 per cent of the Office about his interaction growth for the first nine ditions of policy contract and the extant regula- However, one can choose from multiple sum findings were interesting, but in the sector. Dinesh Dua, European formulations in the with the CEOs. months of fiscal 2020 having tory framework. insured options starting from ~25,000, which cautioned against drawing firm chairman of Pharmaceuticals generic space. So they are Low fuel price was sup- witnessed a decline of 8.4 per Shreeraj Deshpande, chief operating officer, goes up to ~2 lakh. conclusions from it. Export Promotion Council of panicking.” REUTERS posed to bring back cheer for cent," Shah added. 10-yr bond yields at 39-month low as markets brace for RBI action ANUP ROY nor told the news agency. INDIA 10-YEAR G-SEC loans, according to Soumyajit Niyogi, Mumbai, 4 March The 10-year bond yield closed at Yield (%) associate director at India Ratings 6.227 per cent, lowest since December 6, and Research. India’s 10-year bond yield fell 12 basis 2016, while the five-year bond yield fell 6.35 However, it is unlikely that the RBI points (bps) on domestic rate cut 14 bps. 6.34 would want to rush into a decisive hopes as global central banks lowered Taking cues from the equity action. “Advanced economies and their their key rates to stave off an econom- indices, the rupee also recovered from 6.30 financial system have now been sea- ic slowdown caused by the coron- its intraday low of 73.64 a dollar to soned with the extremely low and avirus outbreak. close at 73.23 a dollar. 6.23 volatile interest rate regime. In the case (RBI) The RBI largely stayed away from 6.25 of India, it is not the case, moreover Governor Shaktikanta Das told the market, while the arbitrage oppor- average inflation is higher than the tar- Bloomberg in an interview on Tuesday tunity between offshore and onshore get, and that has become more unpre- that the central bank was ready to do markets in rupee shrank. The US 6.20 dictable with the black swan event,” whatever was needed to address a Federal Reserve reduced its policy rate Mar 3,’20 Mar 4,’20 said Niyogi. “For India, the risk of stabil- slowdown. by 50 bps, pulling down the 10-year US ity in the financial system is paramount “We’re ready for a response should treasury note to below 1 per cent for the there will be a rate cut, possibly before and credit flows, and those have started in his report. amid rising scope of capital flight and the situation warrant,” Das said in the first time ever. the next monetary policy committee showing desired effect,” Gautam said. On an immediate basis, the RBI can subsequent impact on the currency. interview. “And going forward, in the Following the US rate cut, Australia (MPC) meet scheduled in early April. According to Rahul Bajoria, chief continue with its long-term repo opera- Additionally India’s leverage consump- near future, I do expect some discus- and Malaysia also reduced their policy The MPC can meet out of turn if India economist at , those tions (LTRO) beyond the ~1 trillion it tion and interest rate elasticity of sion through video conference or tele- rates. South Korea unveiled a $9.8-bil- required and resolve to cut rates. measures are certainly having a materi- had planned. The central bank is left demand is quite low.” phone conference among the central lion stimulus package to fight coron- “It now is a matter of when, rather al effect on easing financial conditions, with only ~25,000 crore of LTRO opera- Therefore, the reaction from the RBI banks of the large economies, including avirus-led slowdown. Hong Kong and than if, a rate cut would happen,” said “though their end impact on overall tions. “Hopefully, there could be further is expected to be in a staggered manner India.” Singapore have already resorted to heli- Ashok Gautam, executive director and credit availability is still unknown”. tranches,” Gautam said. while ensuring adequate buffer in the In the case of India, options include copter drops of money to customers to head of treasury at IDBI Bank. “The RBI As sovereign bond yields drop, com- Among other measures, there financial system by putting more shock a rate cut and supporting the market stimulate demand. in the past has taken unconventional panies are seeing lower borrowing costs could be more relief on cash reserve absorbers, and a token cut for signaling through liquidity measures, the gover- The market is now convinced that measures to ensure adequate liquidity amid falling global yields, Bajoria wrote ratio and risk weight adjustments on effect, according to Niyogi. MUMBAI | THURSDAY, 5 MARCH 2020 ECONOMY & PUBLIC AFFAIRS 5 . < Moody’s cuts QS WORLD UNIVERSITY RANKINGS BY SUBJECT 2020 J&K administration lifts ban on social media Removing a ban on social media platforms, the allowed, as the service was restored for a week BoB’s baseline Jammu and Kashmir administration on on January 25 and subsequently extended from credit 26 Indian universities Wednesday allowed access to all websites on time to time, after being snapped on August 5 2G mobile data services and fixed-line internet last year when the Centre abrogated the special in the Union Territory till March 17. status to the erstwhile state and bifurcated it assessment Earlier, only access to white-listed sites was into two Union Territories. PTI ABHIJIT LELE Mumbai, 4 March in world’s top 100 list

Global rating agency Moody’s VINAY UMARJI Indian institutes. Moreover, there has been on Wednesday downgraded Ahmedabad, 4 March consistent Indian representation across ’s (BoB’s) academic disciplines, with 32 of the 48 baseline Credit Assessment ndian higher education institutes tables featuring at least one Indian pro- (BCA) from “ba2” to “ba3” improved their performance at the gramme. on weakening asset quality I global stage, with more institutes get- Overall, among 235 Indian programmes and further risks from deteri- ting ranked in the list of top-100 pro- included in the ranking, 53 improved their orating operating environ- grammes, according to the latest edition position while only 29 moved down. ment in India. of the QS World University Rankings by Compiled by global higher education ana- Further deterioration in Subject 2020. lysts QS Quacquarelli Symonds, the rank- asset quality poses risks to As against 21 institutions in 2019, 26 ings provide authoritative comparative BoB's profitability and capi- Indian departments have been ranked analysis on the performance of 13,138 indi- tal. It affirmed BoB’s domestic among the top 100 for their subject. three programmes each. vidual university programmes, taken by and foreign bank long-term Moreover, QS has also seen an increase in In the business and management stud- students at 1,368 universities in 83 loca- and short term deposit rat- the number of Indian programmes get- ies subject category, both Indian Institute of tions across the world, across 48 academ- ings of “Baa3”, stable/P-3. It ting ranked among the global top 50. Management (IIM) Ahmedabad and IIM- ic disciplines and five broad faculty areas. also affirmed Bank of Baroda Jointly at 41, (pictured) Indian Institute were ranked among the top 100. QS uses four key metrics to compile the (London)’s foreign currency of Technology (IIT) Bombay’s mineral and According to QS, the rank- rankings, including academic senior unsecured rating of mining engineering and the University of ings indicate India’s strength IIT-Bombay’s reputation, employer reputa- “Baa3”, stable. Two public Delhi’s development studies are the high- in the natural sciences, life sci- mineral & mining tion, citations per paper and the sector banks (PSBs) — Dena est-ranked programmes of the country. ences, and in engineering dis- engineering and h-index which measures how Bank and IIT-Kharagpur (46) for mineral and mining ciplines. Delhi University’s productive an institution’s merged with BoB in April engineering, IIT-Delhi (49) for electrical The subject tables featur- Development research faculty are. However, 2019. Funding and liquidity and electronic engineering, and IIT- ing the highest levels of Indian Studies are the the precise weighting of each remain key credit strengths Bombay (50) for chemical engineering also representation include chem- top-ranked metric varies by subject to reflect of the PSB. Like other PSBs, featured among the top 50. istry with 20 Indian universi- programmes differing publication cultures BoB’s funding franchise ben- Moreover, with nine of its programmes ties, along with computer sci- from India across disciplines. efits from government own- getting ranked in the upper echelon, IIT- ence and information systems Globally, Massachusetts ership, Moody’s said. Bombay emerged with more top-100 ranks with 20 Indian institutions. Institute of Technology emerged as the The Government of India than any other Indian university, followed Other top subjects included physics and world’s best-performing institution, (“Baa2 negative”) owned 71.6 by IIT-Delhi with five programmes. On the astronomy with 18 Indian institutes, bio- achieving 12 number one positions, fol- per cent of the bank as of other hand, IIT-Kharagpur, IIT-Madras, logical sciences with 16, electrical engi- lowed by Harvard University with 11 num- December 31, 2019, and plays and Indian Institute of Science (IISc) neering with 15, chemical engineering with ber one positions and the University of a key role in its management. Bangalore earned ranks in the top 100 for 14 and mechanical engineering with 14 Oxford with eight top-ranked subjects. The Centre has made signifi- cant capital infusions into all PSBs, over the last few years.

HDFC cuts lending rate by 5 bps

HDFC cut its lending rate by 5 basis points (bps) for salaried people with effect from March 9. The new rate would now be 8.05 per cent for salaried class borrowers with loans up to ~30 lakh. While loans above ~30 lakh till ~75 lakh have been priced at 8.30 per cent, loans above ~75 lakh have been pric- ed at 8.40 per cent. For wom- en borrowers in each category, the effective loan rate would be 5 bps lower. BS REPORTER 6 ECONOMY & PUBLIC AFFAIRS MUMBAI | THURSDAY, 5 MARCH 2020 1 > Services PMI at 7-yr high Cabinet nod for foreign listing of Exports zoom but reportedly left workforce num- bers unchanged amid suffi- firms, decriminalising offences job growth at cient staff to cope with current requirements. However, that had already been decriminalised. 3-month low employment figures still rose In ease of doing biz With respect to allowing domestic in four out of the five tracked push, 72 changes to EASING COMPLIANCE firms to list on foreign exchanges, SUBHAYAN CHAKRABORTY sub-sectors, the sole exception Corporate Affairs Secretary Injeti New Delhi, 4 March being finance & insurance. companies law okayed BURDEN Srinivas said the enabling provision “Positive gains in new work would be introduced in the Act and a he services sector con- across the manufacturing and RUCHIKA CHITRAVANSHI 23 7 detailed framework of rules would be tinued to ring in the service sectors suggest that pri- New Delhi, 4 March brought in the next few months. T good times in February PMI SERVICES PMI MANUFACTURING vate sector output will likely provisions to to be Currently, Indian companies only as an uptick in exports and ris- increase markedly again in The Union Cabinet on Wednesday be shifted to omitted from have the option of American ing new orders resulted in March, boding well for final quar- approved 72 changes to the Companies in-house companies Depository Receipt (ADR) or Global growth touching a seven-year ter GDP following expectations of Act 2013, with a thrust on decriminalis- adjudication law Depository Receipt (GDR) route to high, similar to the previous a flat growth rate in Q3FY20.” ing compoundable offences and allow- tap foreign investors. month, according to a monthly said Pollyanna De Lima, princi- ing direct foreign listing for domestic to be limited A press statement said the to fine only survey released on Wednesday. pal economist at IHS Markit and companies to boost “Brand India”. 11 move would increase the attrac- The widely tracked Nikkei author of the report. The nod for the Companies amend- tiveness of the technology sec- India Services Purchasing Firms, however, managed ment Bill, likely to be tabled in the ongoing tor, provide an alternative Note : A figure above 50 means expansion while below that means contraction Managers Index (PMI) stood at Source : IHS Markit to expand their profits signifi- Parliament session, has been given to ease 5 6 source of capital, and broad- 57.5 in February, up from 55.5 in cantly since high growth in new compliance burden related to corporate to be dealt to have en the investor base. January. In PMI parlance, the that streamed in, allowing domestic demand after a long business didn’t lead to equally social responsibility (CSR) by exempting with in an rationalisation The Bill extends exemptions 50-mark threshold separates firms to recuperate from the period of economic decline high input inflation. Average companies with obligation to spend ~50 alternative of penalties from filing certain resolutions to a par- expansion from contraction. high volatility in 2019, industry over 2018. As a result, sales input costs rose at a softer pace, lakh or less. Such companies will not be framework ticular class of non-banking finan- But despite growth in every insiders said. Exports have expanded for the fifth consec- down from February’s seven- required to have a CSR committee. cial companies and housing finance indicator, the sector saw the continued to grow for most of utive month in February. year high rate. Survey respon- Also, if a company spends more than companies to reduce compliance burden number of jobs created fall to a 2019 despite headwinds. But Surveyed firms pointed out dents mostly attributed higher the required 2 per cent of its average be added for prescribed classes of for routine lending activities. three-month low. in January, it had suffered a supportive economic conditions cost burdens to higher food, profit in any given year, it can carry for- unlisted companies, which will file It also proposes to allow payment of Services growth has contin- decline, after rising for 11 and accommodative public poli- labour, material and oil costs. ward the excess amount to the subse- results on a periodic basis in addition to adequate remuneration to non-execu- ued to strengthen since months on the trot. A number cies. Growth in consumer serv- But, average prices charged quent financial years. annual filing, to make “the periodic tive directors in the case of inadequate November when it came out of of panelists had mentioned ices growth was the most for services increased less dra- “We want to bring ease of doing busi- economic data more scientific”. profits, by aligning it with the provisions a two-month spell of contrac- weaker demand from China, marked, after transport and stor- matically. Charge inflation was ness for stakeholders. Our priority is to The government plans to re-categorise for remuneration for executive directors. tion. This has been in line with Europe, and the US. age firms had seen the biggest weaker than in January, with decriminalise by removing sections that 23 of the 66 compoundable offences, which The government will also exclude manufacturing activity, which In February, new work boost in the previous months. only 6 per cent of firms rais- result in criminality when it is not will be dealt with by an in-house adjudi- certain class of companies from the mirrored a steep upward move intakes also expanded at the Despite experiencing ing their fee, the survey said. intended,” Nirmala Sitharaman, finance cating framework. For 11 offences, the Bill definition of “listed company” mainly of the growth curve in January second-fastest rate in seven another increase in outstand- Overall, February saw the and corporate affairs minister, told proposes to limit the penalty and remove for listing of debt securities in consul- when the PMI reached 55.3, the years. Policymakers would be ing work halfway through the current run of inflation to 38 reporters. the imprisonment clause. The quantum of tation with Sebi, to reduce their com- highest in nearly eight years. happy to note that most new final quarter of fiscal year 2019- months. This meant that the A new section, 129A, is proposed to penalty will also be reduced for six defaults pliance burden. February’s growth in serv- work orders came from the 20 (FY20), service providers gap between rates of input cost ices has been largely because domestic market, thereby restricted hiring activity in and output charge inflation still of new international business hinting at resurgence in February. Some companies hasn’t closed. NRIs allowed to own 100% in Air India ARINDAM MAJUMDER ments. Passengers will contin- Ownership and Effective scheduled domestic carriers, I-T officials up New Delhi, 4 March ue to get better services and it norms. NRI investments subject to certain conditions. FRAUD AT IL&FS GROUP FIRM will also improve the business would be treated as domestic In the case of scheduled air- In order to shore up interest environment,” said investments. lines, 49 per cent FDI is per- in arms over in the privatisation of state- Javadekar. Under the sub- mitted through the automatic NCLAT junks pleas of Deloitte, BSR owned Air India, non-resi- In January, the The rule stantial ownership approval route and any such CBDT diktat dent Indians (NRIs) who are government had brings FDI and effective control investment beyond that Tax officials have threatened PRESS TRUST OF INDIA not be termed as “illegal”. The proper,”said the National citizens of India, have been invited expressions norms of (SOEC) framework, requires the government’s nod. to go for a series of protests New Delhi, 4 March NCLT had directed them to Company Law Appellate allowed to own 100 per cent of interest (EoIs) Air India on which is followed in As part of its attempts to against the Central Board of implead the auditors and Tribunal (NCLAT) bench head- stake in the airline. The small from investors for a par with the airline industry sell the carrier, the govern- Direct Taxes' (CBDT’s) demand The NCLAT on Wednesday dis- independent directors as party. ed by Chairperson Justice S J tweak has now brought for- its entire stake in private globally, a carrier that ment has changed multiple of bringing 100 per cent missed the pleas of auditors of The NCLT is empowered to Mukhopadhaya. The case eign investment rules in Air Air India, along airlines flies overseas from a conditions in the order to disputed cases under the debt-ridden IL&FS — Deloitte pass order to implead them relates to IFIN, a subsidiary of India on a par with other pri- with subsidiary, Air particular country sweeten the offer. These Vivad se Vishwas scheme, and Haskins & Sells and KPMG arm under Section 242 of the IL&FS. vate carriers. India Express, as should be substan- include selling 100 per cent linking the officials’ perform- BSR & Associates — along with Companies Act, 2013 in a peti- Rejecting the contention of This has been termed a well as 50 per cent stake in Air tially owned by that country’s stake against 76 per cent pre- ance with the success of the independent directors chal- tion under Section 241(2) if “it the auditors and others that landmark decision by Union India SATS Airport Services. government or its nationals. viously. scheme. It comes after the tax lenging their impleadment in forms opinion that the affairs they cannot be treated as part of minister Prakash Javadekar. SATS is a joint venture Currently, NRIs can acquire The others include reduc- body put out a directive the case of alleged fraud at a of the company have been con- the management, which is He said the move will increase between Air India and only 49 per cent in Air India. tion in debt — the successful asking officials to bring all the group firm IFIN. ducted in a manner prejudicial responsible for managing the the opportunity for gaining Singapore Airport Terminal Foreign direct investment bidder will have to take over disputed cases under the A two-member Bench of to the public interest”, the affairs of the company and investment for the airline. Services. (FDI) in the airline is also 49 debt worth only ~23,286.5 scheme, failing which they the NCLAT upheld the direc- appellate tribunal further said. therefore should not be charged “NRIs, who are Indian However, allowing 100 per per cent through the govern- crore. The liabilities would be would be assessed adversely tions of the Mumbai Bench of “Once such opinion is as per the said section, the nationals, will get permission cent investment (by NRIs) in ment’s approval route. decided depending on current and their future posting made the National Company Law formed by the Tribunal, it may NCLAT said that rules of natural to invest in Air India. This will the carrier would also not be in According to existing norms, assets at the time of closing the accordingly. BS REPORTER Tribunal (NCLT), saying it can pass any order as it deem fit and justice are to be followed. pave the way for fresh invest- violation of the Substantial 100 per cent FDI is permitted in transaction. 8 ISSUES AND INSIGHTS MUMBAI | THURSDAY, 5 MARCH 2020 >

industry dynamics by fixing a mini- new. Trai has had it in 2012 and 2017. In mum tariff either for calls or data, even 2012, after the consultation process, if that means helping the disruptor — Trai concluded that the policy of for- CHINESE WHISPERS Floor price ain’t good maths Reliance Jio — and turning down bearance should continue as it was Vodafone’s as well as Airtel’s distress based on economic rationale appropri- It’s avoided by regulators in developed countries as it is considered call. Here’s why. ate for the prevailing situation. Also, it Pay if you overstay Incumbent telcos (Airtel, Voda Idea) was in sync with international best anti-competitive and anti-consumer want to contain Jio’s continuous deep practices. The policy was reviewed in Opposition parties are planning to flag discounting through a floor price for 2017 following demands of floor price how the changes in visa rules are minister at this critical juncture is sake of international business confi- the industry, so that they’re able to raise to prevent predatory pricing and again harming India's diplomatic ties with its expected to be about the maths of doing dence, the government should say no tariffs without the fear of losing cus- a majority of the operators agreed it was friendly neighbours, particularly business in India. It could also be about to the request for a tariff floor. tomers to competition. However, that a complex exercise. Bangladesh. More than a year ago, India the maths of leaving India. The ball is in fact in the court of the may only offer a short-term gain to the Now that the issue is hot once introduced a visa regime that imposes Vodafone Idea, the joint venture Telecom Regulatory Authority of India debt-laden industry, while taking the again, the stakeholders should go back higher penalty on members of the operation in India, has already made (Trai) to take a call on tariff, which cur- spirit of ‘fair competition’ away from to the basics. First, it’s a complicated majority communities of Bangladesh, multiple representations to the govern- rently is under forbearance, letting the the telecom sector. True, the competi- process as the Trai’s latest consultation Pakistan and Afghanistan, that is the ment with a wish list so that its busi- market to decide prices. Trai chairman tion has not been fair along the way and paper points out. Second, it’s usually Muslims, if they overstay in India. ness can be sustainable. Besides asking R S Sharma, who has six months to go the regulator hasn’t helped much to get avoided by regulators in developed Sources said Bangladesh was upset over for a moratorium and long-term stag- before his term expires, had a thing or the equilibrium back. But setting a floor countries as it is considered anti-com- the way their cricketers Liton Das and gered payment of dues linked to two to say recently about fixing tariffs price is not the sign of a promising petitive and anti-consumer. Third, it Saif Hassan were treated when they NOT FOR PROFIT adjusted gross revenue (AGR), the after Vodafone as well as the Cellular economy and we should not fall for it. can delay the adoption of new technol- overstayed in India after the "pink ball" NIVEDITA MOOKERJI financially-stressed company wants Operators’ Association of India (which After all, tariff forbearance, in place for ogies. Finally, it not only makes the test between the two countries in the minimum tariff for mobile data to has Bharti Airtel and Reliance Jio as 16 years, has mostly served us well telecom services more expensive, but November 2019. The Foreigner Regional be fixed at ~35 per GB, almost eight members apart from Voda Idea) made despite Indian telecom rates being it can have a cascading effect on the Registration Office rules prescribe the obody quite knows why times of the going rate now, and voice a pitch for a floor price. Trai, which had among the lowest. other sectors of the economy. “penalty for overstay” for “minority Vodafone group chief execu- calls at 6 paise per minute from April in December floated a consultation Currently, except for the ceiling tar- Among the countries to have intro- communities from Pakistan, Bangladesh tive Nick Read wants to 1. It’s possible that Read may pursue paper on the subject, would not expedite iffs for national roaming, fixed rural duced floor price at some point or the and Afghanistan” is ~500 for more than N meet Telecom Minister Ravi the point about setting a floor price in the process for any reason whatsoever, telephony, international private-leased other are Turkey, Zimbabwe, Nigeria, two years, ~200 for 91 days to two years Shankar Prasad later this week. Read — his meeting with Prasad as Vodafone Sharma has indicated. He also said that circuits, domestic-leased circuits and Bangladesh and Sri Lanka. It will be and ~100 for up to 90 days. If the person earlier the chief financial officer at the has calculated its business viability telecom operators can themselves fix a mobile number portability charges, all poor maths for India to follow these who overstayed does not belong to UK-headquartered telco — is a numbers based on that premise. But, however floor price if they feel an urgent need other telecommunication services are countries on tariff floor, even if Read is minority communities, the penalty is in man with a degree in accounting and tempting it may be for India to retain a for it. That makes sense. Going forward under forbearance. able to argue his case well in the min- US dollars — $500 (roughly ~35,000), finance and hence his meeting with the multinational like Vodafone for the too, the regulator must not upset the Consultation on fixing tariffs is not ister’s office. $400 (~28,000) and $300 (~21,000) — for the same duration of overstay. Opposition sources pointed out it was unfair that the visa rules equated Bangladesh, which has been a friendly Why Centre’s fasal bima could wilt neighbour, and Pakistan. Kerala calling

Just before Congress leader Rahul Changes to the crop insurance scheme may raise issues of sustainability — unless states agree to share a larger financial burden Gandhi, along with a delegation of party leaders and Members of Parliament SANJEEB MUKHERJEE 2016 and 2018, the total number of AREA INSURED UNDER (MPs), on Wednesday embarked on his farmers enrolled for the scheme has fall- visit to the riot-hit areas of north-east (in million hectares) ver since the National en by almost 14 per cent from a high of PMFBY & RWBCIS Delhi, a statement by a Lok Sabha MP Democratic Alliance govern- 40.4 million to 34.80 million. kharif Rabi from Kerala, K Suresh, left the party red- ment launched the much-dis- Officials say this fall in enrolment 38.2 33.6 faced. Before the delegation left in a bus Ecussed Pradhan Mantri Fasal is largely due to the multitude of loan 30.1 for Brijpuri and other parts of north-east Bima Yojana (PMFBY) in kharif 2016, it waivers announced by various state 25.3 Delhi, Suresh said the Congress MPs had has seen numerous twists and turns to governments and mandatory so far not visited the riot-affected areas, make itself friendlier to the farmer. -linkage weening away dupli- 18.8 17.5 even as the Indian Union Muslim League Last week, the Union Cabinet cate claimants. (IUML) and the Left parties, led by the embarked on another such exercise by As a consequence of fewer farmers Communist Party of India (Marxist), had. announcing a host of changes in enrolling for the scheme, the actuarial "So we were under tremendous PMFBY. There are two principal premium under PMFBY in the rabi sea- pressure from our constituents (in changes. The first is the decision to son has steadily climbed to 12 per cent 2016-17 2017-18 2018-19 Kerala)," said Suresh. In Kerala, the make the scheme voluntary for non-loa- and 14 per cent for kharif season crops Source: PMFBY officials Assembly elections are due next year. nee farmers. Second, it imposes a limit in the last few years. The Congress’ principal rival in Kerala is on the premium subsidy to 30 per cent Now, if even fewer farmers opt for the incumbent CPI(M)-led Left for unirrigated areas and crops and 25 the scheme, the actuarial premium is MONEY MATTERS (in ~ cr) Democratic Front. There was immense per cent for irrigated areas and crops. bound to go further up. pressure from Kerala MPs on Gandhi to These two decisions together It is here that the Centre’s limit on Claims Reported Claims Approved Claims Paid visit the area. In the 2019 Lok Sabha could have a big impact on the scheme the subsidy will play a decisive role. polls, the Congress had won 15 of the and needs to be Under it, if the actuarial state's 20 seats, with Gandhi winning

closely monitored in the premium of any crop or area 23,176 from Wayanad, which has a significant 21,926 21,926 21,816 21,858 21,858 coming seasons. is more than 30 per cent 20,915 minority population. Its allies, including 20,015 20,015 Making PMFBY volun- under unirrigated con- the IUML, had won four seats. 16,774 16,774 16,774 tary for non-loanee farmers ditions and 25 per cent in 16,768 (it is already voluntary for irrigated conditions, the loanee farmers) will, Centre’s share of subsidy according to experts from burden will be limited to Short-lived celebration leading insurance com- TAKE that extent. 2016-17 2017-18 2018-19 panies, lead to a drop in the By way of illustration, Source: Parliament questions At a capital market seminar, number of farmers opting TWO suppose the actuarial pre- G V Nageswara Rao, MD and CEO of for the scheme since only ANALYSIS BEHIND mium of a crop comes to 40 National Securities Depository Ltd (NSDL), those who perceive their THE HEADLINES per cent in an unirrigated share this additional burden, farmers for agriculture, horticulture and annual amount of compensation under the cur- started his speech by saying “...amid all risk as significantly high area. In this, the farmer’s there might remain outside the ambit plantation crops, compensation to rent norms of SDRF,” Hussain notes. the gloom, I’ve got some good news. The will enroll for the scheme. share is capped at 2 per cent of a credible insurance product and small and marginal farmers is ~6,800 A way out for the states to ensure that total demat custody value with NSDL has In the short term, this opt-out provi- and the remaining 38 per cent subsidy rely on the usual crop damage com- per hectare (of sown area) in non-irri- their share of subsidy remains low and crossed the ~200-trillion mark for the sion could lead to drop in the area cov- is shared equally between Centre and pensation under State Disaster Relief gated areas and ~13,500 per hectare in farmers also get a good insurance pro- first time.” By highlighting the ered under the scheme. Reports said in states in a 50:50 ratio. From the coming Fund (SDRF) in event of crop loss. This irrigated areas. duct could be if they come out with their milestone right at the beginning, he the short term, top government officials kharif season (2020), however, the could cause serious damage to the In the case of farmers owning more specific single-peril products which wanted to bring cheer in the room as are seeing a 10-20 per cent drop in the farmer’s share in the actuarial premium scheme’s health. than 2 hectares of land, the assistance cover incidents such as hailstorm under sentiments were running low due to the area covered under PMFBY. The gross will remain at 2 per cent, but the Centre As former agriculture secretary, is limited to only 2 hectares. In contrast, PMFBY either with or without opting for market rout caused to an extent by the cropped area under PMFBY has on its part will bear the subsidy only up Shiraz Hussain recently noted in a piece the scale of finance in kharif 2018 in the base cover. spread of Covid-19 across the globe. That increased from 22 per cent to 30 per cent to 30 per cent, which means 14 per cent published in The Wire, the compensa- Gujarat’s Rajkot district was ~39,000 per The latest Cabinet decision has said, he went on to clear the air: “But we since its inception in 2016. in the 50:50 ratio. The balance, which tion under SDRF in the event of a crop hectare for castor, ~58,000 per hectare allowed these. Such a product in normal are no longer at ~200 trillion as the This apart, the total number of in this case comes to 24 per cent, will loss is far less than the scale of finance for irrigated cotton and ~42,000 per hec- course will have a lower premium to market has fallen but still... we went farmers enrolled under the scheme have to borne by the state if it wants to which is basis for claim settlement tare for groundnut. cover customised risk. Whether this there.” Someone in the audience could also see a fall from kharif 2020. participate in the scheme. under PMFBY. “So, in the absence of crop insurance, rejuvenates the PMFBY will need close quipped: “That’s the whole tragedy.” Already, data shows that between kharif Now, if any state does not want to Citing an example, Shiraz notes that the farmers will get a much smaller monitoring in the coming years.

INSIGHT LETTERS Welch and HRM side the organisation. rorism of the taxmen may In GE he experimented seem to bring in the moolah Apropos the report “Wall Street with his concept of “bounda- to a revenue-starved govern- In Covid-19 fight, it’s about fundamentals darling, management guru ryless organisation” aiming to ment, but in the long term, it who remade GE, dies at 84” do away with internal func- would dent India’s image on Administrative response to Nipah or even the quick evacuation of Indian nationals from (March 3), Jack Welch would tional silos and external bar- the “ease of doing business” also be remembered for his co - riers between the company front. A healthy economy is Wuhan shows the government can be responsive and effective when it wants to ntribution to the field of hu - and its customers and sup- one where the assessees, whe- impact of the disease. Those who are cuts by the RBI may not have an man resource management. pliers. For this “he initiated ther individuals or corpo- healthy have a much higher prob- impact. India’s short-term policy The performance appraisal sy- what became known as the rates, pay taxes according to ability of experiencing mild illness options are very limited compared to stem (2X2 Matrix) introduced GE Work-Out process — a simple laws. Having complex and full recovery without hospitali- China or the US. The economy may by him (which rates em ployees series of structured and facili- tax laws that provide ample sation. Those who have underlying yet rue the lack of deep structural on the basis of achieving cor- tated forums, bringing people scope for varied interpreta- health conditions are more likely to reforms which would have made the porate goals while adhering to together across levels, func- tions by the assessees and be severely ill. In India, the vulner- fundamentals much stro nger and the value system of the compa - tions, and geographies to so- their consultants, followed by ability is two-fold. At one end of the enabled a quick comeback from any nies) made ethical grounding lve problems and make deci- stiff de mands by taxmen spectrum, there are the many who black swan event-induced downturn. more important than outsta- sions in real time”. He was an leading to prolonged litiga- are malnourished and under-nour- But it isn’t all gloom. There are at nding performan ce. While an advocate of proper succession tion — not to speak of the ished in the low-income groups. At least two bright spots in India’s fun- employee high in value but planning and said that find- scope for corruption it pro- the other end, in the middle- and damentals story which could prevent poor in performance would be ing a capable successor would vides — are the precise rea- DHIRAJ NAYYAR high-income groups, there’s the other diseases won’t go away while Covid-19 from reaching epidemic pro- retained and trained, the one be his top most priority dur- sons why investors are shying growing burden of lifestyle disease, hospitals and doctors deal with portions. First, India is an open, dem- with high performance but low ing his tenure. away from considering India such as diabetes, hypertension and Covid-19. This would be an additional ocratic society with free flow of infor- in value would have to leave. Y G Chouksey Pune as their preferred destination. he novel coronavirus has coronary diseases. burden on an already stretched sys- mation and elected governments at He gave a push to the 360-de - V Jayaraman Chennai globalised. And it is play- India’s health system is ill-equip - tem. While governments over the the Centre and states that are respon- gree feedback system by using Earn vishwas ing havoc. It has killed or ped to even deal with the existing years must take a share of the blame sive to public pressure. The two coun- it along with a Six Sigma qual- T sickened people in 73 co - burden of disease. A highly conta- for under investing in the public tries which have borne the worst of ity programme to increase GE’s Apropos your editorial “Lice - Letters can be mailed, faxed untries. It has sent stock markets gious viral epidemic would expose it health system, the medical fraternity the pandemic are China and Iran shareholder va lue and em plo - n ce to harass” (March 4), or e-mailed to: shivering. It has paralysed eco- completely, especially the system of (through the Medical Council of where there is sufficient evidence to yed it to fire the bottom 10 per Vivad se Vishwas may be a The Editor, Business Standard nomic activity in China and parts of primary care. India is woefully short India) also bears responsibility for the suggest that prompt action was cent low-performing employ- scheme launched with the Nehru House, East Asia, the manufacturing engine of doctors. It is also terribly short of failure to train more doctors because delayed because au thorities sup- ees each year, thus reducing best of intentions, but the way 4 Bahadur Shah Zafar Marg of the world. It could potentially se - hospital beds. The number of doctors of restrictive regulations. pressed or denied the existence of a manpower by a third. He made to implement it is not to an - New Delhi 110 002 nd the global economy into a severe per 1,000 people in India was 0.62 in The consequences of an outbreak threatening pathogen until it had this forced distri bution of nounce ambitious Budget es - Fax: (011) 23720201 · E-mail: downturn or recession. At this stage, 2017, significantly less than the WHO- of Covid-19 in India will spread bey- already spread wide. Second, India employee perfo rmance (from timates and arm twisting tax [email protected] around two months after the first mandated minimum norm of at least ond those who get sick. If restrictions has a formidable bu reaucratic outstanding to poor) in spite of officials to bring in the reve- All letters must have a postal outbreak in Wuhan, no one can con- one per 1,000. India has 2.7 hospital need to be imposed on the move- machinery which is trained to “con- murmurs of protest in and out- nues. In the short run, the ter- address and telephone number fidently predict where this will end. beds per 1,000 persons, which is, ment of people, on the functioning trol” and can be effective when in However, what is clear is that fun- again, much less than the WHO- of offices, the working of fac to ri - Mission Mode. The administrative damentals matter — for individuals, mandated norm of at least five per es/call centres, there will be a quan- response to the recent viral outbreak HAMBONE health systems and for the economy 1,000. China has 1.5 doctors per 1,000 tum impact on growth. That would of Nipah or even the quick evacuation — even in the most unpredictable people and around five hospital beds be a body blow to an economy that is of Indian nationals from Wuhan circumstances. It’s a useful re- per thousand, but has struggled to growing at a sub-5 per cent level. shows the government can be respon- minder for India as the virus threat- manage the outbreak. India does not There is hardly any room for a stimu- sive and effective when it wants to. ens to make its presence felt. have the state capacity to build two lus. The government’s fiscal deficit is India has the capacity to prevent It may take some time before epi- massive hospitals in a fortnight and already beyond its target. The states an epidemic of vast proportions. It demiologists and clinicians fully to convert any large space like a sta- have no spare financial resources. On may have less capacity to battle a understand Covid-19. Initial evi- dium into a hospital at short notice the monetary side, there is probably full-blown one. The next fortnight dence suggests that an individual’s which is the strategy China adopted greater room, but given the perilous is crucial. fundamental health parameters may to deal with the sheer number of state of the banking system and the be critical in determining the final patients. It is important to note that lack of monetary transmission, rate The author is chief economist, Vedanta OPINION 9 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIV Number 144 ILLUSTRATION: BINAY SINHA tion can enable the use of spectrum immediately in MUMBAI | THURSDAY, 5 MARCH 2020 60GHz, 70-80GHz, and below 700MHz bands to be used by authorised operators for wireless connectiv- ity. The first two bands are useful for high-capacity short and medium distance hops, while the third is Way forward on coronavirus for up to 10 km hops. The DoT can follow its own Monetary accommodation may not help in India precedent set in October 2018 for 5GHz for Wi-Fi, i.e., use the US Federal Communications Commission olicymakers around the world are trying to contain the economic dam- regulations as a model.1 The one change needed is age being caused by the spread of coronavirus. In an emergency move, an adaptation to our circumstances that restricts their the US Federal Reserve reduced interest rates by 50 basis points on use to authorised operators for the middle-mile Tuesday. The central banks of Malaysia and Australia also lowered instead of open access, because of the spectrum pay- P ments made by operators. Policies in the public inter- interest rates, and a joint statement by finance ministers and central bank gov- est allowing spectrum use without auctions do not ernors of G7 countries committed to use appropriate policy tools to contain the contravene Supreme Court orders. downside risk. Reserve Bank of India Governor Shaktikanta Das also said there (b) Policies: Revenue sharing for spectrum was a strong reason for a coordinated policy action. A second requirement is for all licensed spectrum An emergency rate cut by the Fed is clearly a preemptive measure to contain to be paid for as a share of revenues based on usage the damage. However, the stock markets in the US fell after going up for a while as for licence fees, in lieu of auction payments. Legislation to this effect can ensure that spectrum in response to the rate cut. Bond prices went up and the 10-year US government India’s ‘self-goal’ for communications is either paid through revenue bond yield fell below the 1 per cent mark for the first time. The Fed’s policy sharing for actual use, or is open access for all Wi-Fi action and the reaction of both the stock and bond markets, in a way, reflect the bands. The restricted middle-mile use mentioned extent of uncertainty posed by coronavirus. The situation is evolving and it is above can be charged at minimal administrative costs still not very clear as to what extent coronavirus will affect the global economy. in telecom for management through geo-location databases to As things stand today, the supply chain disruption, originating in China — avoid interference. In the past, revenue-sharing has earned much more than up-front fees in India, and the epicentre of the outbreak — could affect production across the world. Output And urgent steps to avert a cascading crisis rejuvenated communications.2 There are two and trade could get hampered because of outbursts in other countries as well. he government apparently cannot resolve the work towards establishing good infrastructure. additional reasons for revenue sharing. One is the Countries such as Italy and South Korea have been hurt significantly. There problems in telecommunications. Why? need to manufacture a significant proportion of have been deaths in the US and a number of cases have been reported in India TBecause the authorities are trying to balance What the government can do equipment with Indian IPR or value-added, to not as well. Besides disruptions from China, coronavirus can affect output in many the Supreme Court order on adjusted gross revenue An absolute prerequisite is for all branches of gov- have to rely as much as we do on imports. This is countries because of restrictions on travel and the temporary closure of factories (AGR), with keeping the telecom sector healthy, while ernment (legislative, executive, and judicial), the press critical for achieving a better balance-of-payments, safeguarding consumer interest. These irreconcilable and media, and society, to recognise that all of us and for strategic considerations. The second is to to contain the damage. People staying away from marketplaces can affect differences have arisen because both the United must strive together to conceptualise and achieve enable local talent to design and develop solutions demand. Further, if businesses are shut for far too long, it could affect wages Progressive Alliance and the National Democratic good infrastructure. It is not “somebody else’s job”, for devices for local as well as global markets, which and employment. Risk aversion could also tighten financial conditions. However, Alliance governments prosecuted unreasonable and certainly not just the Department of is denied because it is virtually impossible for them monetary accommodation and a possible fiscal intervention in different coun- claims for 15 years, despite adverse rulings! This Telecommunications’ (DoT’s). The latter cannot do to access spectrum, no matter what the stated policies tries will help only after the virus is contained. Till the world reaches that point, imagined “impossible trinity” is an entirely self- it alone, or even take the lead, because the steps might claim. policy interventions are unlikely to have a significant impact. Therefore, the created conflation. required far exceed its ambit. If only the authorities focused on what they can 2. Policies and organisation for priority for global leaders should be to contain the virus from spreading further. do for India’s real needs instead of tilting at windmills, Act quickly infrastructure sharing For India, the crisis has struck at a time when the economy is going we’d fare better. Now, we are close to a collapse in These actions are needed immediately: Further, the government needs to actively facilitate through a severe slowdown. While the number of reported cases in the country communications that would impede many sectors, nFirst, annul the AGR demand using whatever legal shared infrastructure with policies and legislation. One is still low, India would do well to prepare for the fallout. Action will be compound the problem of non-performing assets means are available. For instance, the operators could way is through consortiums for network development required on the part of the government. First, it is important that the system (NPAs), demoralise bankers, increase unemploy- file an appeal, and the government could settle out and management, charging for usage by authorised is able to identify infected people and give them adequate medical care. With ment, and reduce investment, adding to our eco- of court, renouncing the suit, accepting the Telecom operators. At least two consortiums that provide access nomic and social problems. Disputes Settlement and Appellate Tribunal (TDSAT) for a fee, with government’s minority participation in India’s below par health care, the real danger is of not being able to detect Is resolving the telecom crisis central to the public ruling of 2015 on AGR. both for security and the public interest, can ensure people carrying the virus. In this context, it is vital for the Central government interest? Yes, because people need nSecond, issue an appropriate ordi- competition for quality and pricing. Authorised service to work with states and, if required, provide adequate assistance. Second, good infrastructure to use time, nance that rescinds all extended providers could pay according to usage. the government should properly gauge the sectors that will be hit due to money, material, and mindshare claims. Follow up with the requisite Press reports of a consortium approach to 5G supply disruptions. This will help in making alternative arrangements and effectively and efficiently, with min- legislation, working across political where operators pay as before and the government evaluating if policy changes can help improve supplies from domestic sources. imal degradation of their environ- lines for consensus in the national “contributes” spectrum reflect seriously flawed think- ment, whether for productive pur- interest. ing.3 Such extractive payments with no funds left for Monetary accommodation is unlikely to help at this stage because the prob- poses or for leisure. Systems that nThird, take action to organise and network development and service provision only sup- lem is of supply disruption. In fact, supply disruptions could put upward deliver water, sanitation, energy, deliver communications services port an illusion that genuine efforts are being made pressure on prices and inflation. This is something that the Reserve Bank of transport and communications sup- effectively and efficiently to as many to the ill-informed, who simultaneously rejoice in the India needs to carefully evaluate. port all these activities. Nothing people as possible. The following idea of free services while acclaiming high govern- matches the transformation steps will help build and maintain ment charges (the two are obviously not compatible). brought about by communications SHYAM PONAPPA more extensive networks with good Instead of tilting at windmills that do not serve in India from 2004 to 2011 in our services, reasonable prices, and people’s needs while beggaring their prospects, com- End of uncertainty complex socio-economic terrain more government revenues. mitment to our collective interests requires imple- and demography. Its potential is still vast, limited menting what can be done with competence and More than consolidation, PSBs need real reforms only by our imagination and capacity for convergent 1. Enable spectrum usage on feasible terms integrity. action. Yet, the government’s dysfunctional approach (a) Wireless regulations he Union Cabinet’s decision on Wednesday to clear the merger of to communications is in stark contrast to the con- It is infeasible for fibre or cable to reach most people [email protected] 10 public-sector banks (PSBs) into four ends the prolonged uncer- structive approach to make rail operations viable for in India, compared with wireless alternatives. 1.https://dot.gov.in/sites/default/files/2018_10_29%20DCC. tainty over the exercise. Speculation over a possible delay in the private operators. Realistically, the extension of connectivity beyond pdf; 2. http://organizing-india.blogspot.in/2016/04/ merger date arose after the Cabinet didn’t approve the scheme in India’s interests are best served if people get the the nearest fibre termination point is through wireless breakthroughs- needed-for-digital-india.html; 3. T services they need for productivity and wellbeing middle-mile connections, and Wi-Fi for most last- https://www.business-standard.com/article/economy- the three meetings held last month even though it was announced by the with ease, at reasonable prices. This is why it is impor- mile links. The technology is available, and admin- policy/govt-considering-spv-with-5g-sweetener-as- finance minister on August 30 last year. Bankers involved in the process were tant for government and people to understand and istrative decisions together with appropriate legisla- solution-to-telecom-crisis-120012300302_1.html concerned as after the notification, it would usually take 40-45 days for the entities to complete the due processes. Work will now have to be fast-tracked as there is less than a month left before the April 1 deadline for the integration of the balance sheets and shares. The Cabinet’s delay was reportedly because of concerns over the financial results of Bank of Baroda, which absorbed Vijaya Neutron Jack’s better legacies Bank and two years ago. The combined entity posted a net loss of ack Welch, who died on March 1, enjoyed hal- Coming from Welch, this is praise indeed, since it social events (golf weekends and so on) so that the ~1,407 crore in the third quarter of this financial year, mainly because of higher lowed following among India’s male-dom- was an open secret that the two men didn’t get along candidates could interact with board members. provisioning. The bank’s fresh slippages rose to around ~10,387 crore. Jinated, mostly family-owned business universe at all (mostly bad chemistry, perhaps because the two It was an extraordinarily detailed process micro- While there is no obvious logic behind the way the finance ministry has for his macho, John Wayne approach to manage- were so alike). Yet it would surprise many to know managed by Welch (including stipulating the seating identified the merger candidates (for example, three weak banks can’t make ment, an image he did much to nurture carefully. that Wendt was very much on Welch’s shortlist of pos- arrangements at corporate meets), though he may one strong big bank), the fact is that an announcement was made about the Everybody, whether owner-man- sible successors, with most putting well have bulldozed the board into accepting his agers or professional managers, him down as a cert. He was felled final shortlist of three. These were James McNerney, listed entities and there was no way the government could have gone back wished they could be like “Neutron” by an embarrassingly public — and who headed the aircraft engine business; Robert on its commitment. After all, the stakeholders in these banks deserve some Jack, abrasive, straight-talking, hir- landmark — divorce case, after Nardelli, chief of the GE business that makes tur- certainty about the way forward. Now that the decision has been made, it ing and firing and closing businesses which Welch asked him to step bines and generators for electric utilities, and Jeffrey would be useful for the government to consider the real reforms that PSBs at will (of course, Indian labour laws down, which he did in 1998 (in a R Immelt, head of the medical devices business, badly need at a time when their share in incremental deposits and lending make the last activity near-impos- twist of fate Welch was later who finally got the top job (perhaps because he was has been falling steadily. The massive erosion in shareholder wealth in PSBs sible). But it is a pity that few choose involved in his own very public and the youngest of the three). to emulate their idol’s less-acknowl- awkward divorce case, this one True, none of the chosen three shone in their sub- in recent years is a reflection of the failure of the path that PSBs have taken. edged governance talents: Working prompting a federal investigation sequent careers. Jeff Immelt proved a sub-optimal For example, AU , listed less than three years ago, has productively with people he didn’t into his spectacular post-retire- choice for GE. Jim McNerney, who became Boeing’s surpassed Punjab National Bank in market capitalisation even though the get along with and meticulously ment benefits). CEO, made the fateful decision to upgrade the 737 latter’s asset book and deposits are many times those of the former. The mar- planning his succession. SWOT In a corporate culture riddled series to 737 MAX instead of developing a new model Much of GE’s extraordinary per- with yes-men, it is hard to think of (he stepped down as chairman in 2015 and so escaped ket capitalisation of Bank of Baroda is also roughly the same as that of the KANIKA DATTA small finance lender. formance under his stewardship was the chief honcho of any Indian com- the brunt of the criticism over the MAX’s disastrous courtesy GE Capital, better known as pany — especially those that are performance). Robert Nardelli became CEO of Home So it’s now or never as far as PSB reforms are concerned. The real reform Capital, the financial services behemoth that family-owned and managed — even tolerating a dis- Depot, the home improvement retailer, in 2000 and that needs to be looked at is in the ownership structure and remuneration of accounted for almost 40 per cent of GE’s earnings. sident senior executive let alone giving him (and it’s doubled revenues until his Welch-style management senior management in PSBs. The goal should be to let banks get over the Between 1991 and 1996, according to an assessment mostly men still) the leeway to become a star in his technique compelled the board to ask for his resigna- restrictions imposed by state ownership such as low pay, political interference, in Fortune magazine, “GE’s revenues would have own right. As for shortlisting him as a possible succes- tion seven years later. and the worry of being hounded by investigation agencies. The government grown just 4 per cent a year were it not for Capital, sor: Out of the question. Note the succession patterns Poor successors are a professional hazard for star which more than doubled the growth rate to 9.1 per in India’s largest corporations: If the successor is not a CEOs. Still, the fact that the larger-than-life Welch’s should get cracking on vesting bank ownership in a holding company, whose cent”. … “Wall Street’s confidence in Capital is the family/founder member, it’s usually a technocrat with stint saw a smooth succession certainly kept the giant board should appoint the boards of individual banks. The holding company main reason GE stock is rising at a rate that makes a fine-tuned sense of survival who can be relied on to global conglomerate on even keel. There was no can leverage its capital to inject funds into banks, and shield them from pol- the overall market advance look modest, up 123 per do the promoter’s bidding. If it’s not a family-owned eureka moment when the youthful member of a iticians and bureaucrats who meddle with decision- making. It can institute cent in two years, vs. 63 per cent for the S&P 500.” conglomerate, star CEOs struggle to let go. search committee and part owner of a group was a remuneration structure that rewards the performance of bankers, aligning The article was written a year before the man Tolerating and encouraging a rival was not the abruptly appointed successor — only to be sacked it with the performance over time of assets that they originate. The approach behind these exceptional numbers, Gary Wendt, only uncharacteristic Welch touch. So was his suc- four years later. No double extensions for an MD who stepped down for reasons that had nothing to do with cession planning. He retired in 2001 but the search then became chairman and appointed a successor to reform, and the sequencing of reform, have been very well laid out in the performance. Variously described as quirky, blunt, for his successor began as early as 1994. The exercise MD who would retire before him. No promoter who recommendations of the PJ Nayak Committee. However, the government demanding and detail oriented, he established busi- was merged into the routine annual board-level stepped down as chairman and then stepped back up has chosen to pick and choose clauses without trying to understand the spirit ness practices and management styles that gave GE assessments of senior executives but Welch widened when the market regulator relaxed appointment rules. in which the recommendations were made. most of its mojo. Welch, his boss, described him as “a and deepened its ambit by shortlisting candidates, Welch did none of these but sadly, it’s his less attractive brilliant entrepreneur”. tracking their performance and organising a series of management style that will be remembered.

he invited Sangh functionaries to his Eventually, his quest to understand despite periodic overtures from the house for a meal after a funeral what he had witnessed led him to B R Sangh. Being one of the few memoirs An RSS Dalit’s awakening procession for slain karsevaks, he Ambedkar. He had, till then, read written by a former swayamsevak, the noticed their hesitation. about Ambedkar in Sangh book repudiates the linear view of RSS old, he travelled by train to Lucknow in come to form an integral part of Mr He was informed that the sadhu- publications. “…I learnt that mobilisation that even many of those October 1990 to participate in the Meghwanshi’s life, and he was impressed sants who were part of the procession Babasaheb was a great nationalist... who oppose the Sangh have come “second battle of Independence”. by the austere lives pracharaks led. would be “really upset if without That he had wanted to make Sanskrit to accept. As soon as the train left the station, Steady progress up the ranks, albeit at the informing them, we give them food the national language and the saffron Clearly, there are inherent fault lines senior Sangh functionaries, local level, gave Mr from a lower caste flag the national flag. That despite in the RSS’s project of creating a pracharaks and industrialists got off. Meghwanshi the I COULD NOT BE home”. every temptation, he had not homogenous Hindu society. These BOOK REVIEW “Only people like me remained — impression that the A HINDU: The Mr converted to Islam or Christianity but tensions remain despite moments impassioned Dalits, Adivasis, other Sangh valued him. Story Of A Dalit Meghwanshi was to Buddhism, which was part of when the project appears to have VIKRAM GOPAL young people from the lower castes, Things In The RSS asked to pack the Hinduism. And that he was opposed to triumphed. and a few sadhus and sants… some changed soon for Author: food so that it the continuation of Article 370 in Consider the communal riots in hanwar Meghwanshi’s I Could lower-order functionaries tried to put Mr Meghwanshi, Bhanwar could be used to Kashmir, which gave the state a Gujarat in 2002. Mr Meghwanshi says Not Be a Hindu: The Story of a us at ease, don’t worry, these people who had rebelled Meghwanshi feed the special status”. that during his travels across the state BDalit in the RSS is an extraordi- have other contingents to see off and against his procession at the What he read overwhelmed him, at that time, he realised that “much of nary memoir for these troubled times. then they’ll follow us directly to Congress- Publisher: next village. The because it was exactly the opposite of the violence was committed by Dalits Beginning with a Dalit youth’s Ayodhya. They were never to come. supporting father. Navayana next day a good what the Sangh had told him about and Adivasis… The game plan of the desire to prove his credentials as a “true They were sensible people and went He was denied the Price: ~399 friend informed Ambedkar. The texts helped him right-wing forces was successful. swayamsevak ” during the Ram back to their homes. I understood that opportunity to be a him that the food realise why of the six sarsanghchalaks, Muslims, Adivasis and Dalits died Janmabhoomi movement, it traces the sensible people always use us, we who pracharak was thrown away the topmost leaders of the RSS, five fighting each other”. journey of a brutal awakening to the are driven by passion; they push us into because he was a vicharak (thinker) right outside the village. were Brahmins and one from a It is, however, the realisation of the intrinsic Brahminism of the Rashtriya battle and return to their safe little and the Sangh had no use for such Thirsting for revenge, Mr Kshatriya caste. fragility of this project that drives the Swayamsevak Sangh (RSS) and the coops. In this lies their greatness; people. It only needed those who could Meghwanshi joined up with other This opposition to the Sangh led Sangh to seek to muzzle people like Mr author’s subsequent turn to maybe greatness is just another word effectively convey the “message from disgruntled former swayamsevaks to him first to take up journalism and Meghwanshi, whose relentless exposes Ambedkarite politics. for cunning”. Nagpur exactly as it was intended”. form a students’ organisation to take then to join hands with the Mazdoor of casteism in the RSS have resulted in Mr Meghwanshi’s faith in the RSS This, however, didn’t precipitate a Mr Meghwanshi’s decisive break on the Akhil Bharatiya Vidyarthi Kisan Shakti Sangathan. And he hasn’t multiple attempts to shut down his received the first jolt when, as a 15-year- decisive break because the shakha had with the Sangh came soon after. When Parishad, the Sangh’s student wing. relented in his opposition to the RSS, publications. 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Analysts say as fee arbitrage bites Mumbai, 4 March the under-penetration of credit cards in Bids by institutional investors crossed India and the government’s focus to spur ndia’s second-largest credit card the ~1-trillion mark digital transactions will give SBI Cards the PMS ALLOCATIONS issuer SBI Cards and Payment impetus to grow in the coming years. Services’ initial public offering (IPO) Segment Subscription (x) “The company has maintained a strong Assets (~crore) I has got a thumbs up from institu- QIB 57.2 earnings trajectory, with revenue rising at tional investors despite the turmoil in the a CAGR of 44.6 per cent to ~6,999 crore in secondary market. HNI 1.4 2017, and a net profit trajectory of 52.1 per The so-called qualified institutional Retail 1.7 cent CAGR to ~862.7 crore in 2019, with

buyer (QIB) segment was subscribed 57.2x, sustainable RoA above 4 per cent and RoE 1,433,886 Employee 3.3 151,434 with the cumulative bid amount crossing at more than 28 per cent,” says a note by a record ~1 trillion. Nearly half the bids in Shareholder 2.3 ICICI DIRECT. the QIB segment came from overseas Overall 15.2 SBI Cards’ IPO is the fourth largest in investors. Wednesday was the last day for the domestic market after Coal India (issue 30,316 QIB: qualified institutional buyer; book has closed

QIB bidding. Overall, the IPO has been Source: NSE, BSE size ~15,200 crore), Reliance Power (~11,700 14,339 2,320 2,320 subscribed 15.2x. Other segments of the crore) and GIC Re (~11,373 crore). While the 847 505 IPO, too, have seen more demand than the SBI Cards issue size is ~10,300 crore, the Plain Listed Mutual Others Structured Unlisted Equity shares on offer already. Market players say some believed, would moderate the IPO were excited about investing in the first company has already allotted shares worth debt equity funds debt equity derivatives that the strong demand from institutional demand. Most brokerages have recom- credit card company to list in the domestic ~2,800 crore to anchor investors. Note:I ncludes funds from EPFO/PFs, as of January 2020 Source: Sebi bulletin investors will spur other investors, includ- mended their clients to “subscribe” to the market. It is the second-largest player in Through the IPO, SBI Cards is looking ing high networth individuals (HNIs), to SBI Cards IPO. The price band for the IPO domestic credit cards market, with a mar- to raise ~500 crore in fresh equity issuance, bid aggressively. is ~750-755 per share. At the top end, the ket share of 18 per cent. to shore up its capital base. The remaining SACHIN P MAMPATTA the segments might affect the extent to The premium on shares of SBI Cards in stock is valued at 46x its earnings for the “SBI Cards has diversified its reach ~9,800 crore will come from a secondary Mumbai, 4 March which the shift happened. The AIF seg- the grey market has come off in the past first nine months of FY20. through multiple channels, aided by SBI’s share sale by parent ment comes with a multi-year lock-in few days, on account of the fall in the mar- “SBI Cards offers an investment oppor- vast customer base of around 446 million. (SBI) and private equity major Carlyle. A change in upfront fee regulations may and has a minimum investment of at kets. At one point, grey market operators tunity in a unique business model with Financially and operationally, the com- The PE firm had bought a stake in 2017 mean a switch in what distributors pitch least ~1 crore, or twice that of the PMS were offering as much as 50 per cent pre- strong profitability. Sustainability of pany has delivered robust performance from the lending arm of General Electric to their wealthy clients. industry. mium over the issue price of ~755. higher business growth and strong return over the past three years. Therefore, the for about ~2,000 crore. Large distributors may look to pitch The Securities and Exchange Board However, the last few trades in the unoffi- ratios justify the premium valuation for premium that the issue commands is jus- SBI’s stake will drop to 70 per cent from more alternative investment funds of India recently doubled the minimum cial market took place at less than 20 per the business,” says a note by ICICI Direct. tified, considering the growth opportunity 74 per cent, while that of Carlyle will (AIFs) and fewer schemes under the ticket-size to ~50 lakh. It had also cent premium, said market players. This, Market players said that many investors of the industry,” said Umesh Mehta, head reduce to 16 per cent from 26 per cent. portfolio management service (PMS) changed the fee structure to ensure no scheme, according to experts. large payouts in the beginning to pre- Both are essentially sophisticated vent distributors mis-selling products products aimed at the wealthy though for short-term gains. there are significant structural differ- “As provided in … the PMS ences. Regulations, no upfront fees shall be Debt MFs eye gains from US Fed move Recent regulatory changes mean charged by the portfolio managers, PMS schemes have no upfront incentive either directly or indirectly, to the JASH KRIPLANI Market participants say further for distributors. clients,” said the February 13 circular. Mumbai, 4 March EYEING A BIGGER PIE upside in gilt funds — which take Daniel G M, founder-director at It added that portfolio managers also Softening of yields likely to shore up returns of exposure to longer dated govern- industry-tracker PMS Bazaar, which had to provide a direct plan, which Debt fund managers expect size- most fund categories (Returns in %) ment securities — will be limited also tracks AIFs, said distributors had would allow clients to invest without able gains to accrue across the on account of robust gains already been seeking information about AIFs. using a distributor. n n bond yield curve, following the One-year Three-year pocketed by such funds. In a one- Large wealth outfits are examining fee “Portfolio managers shall promi-

US Federal Reserve’s rate cut. The 17.42 year period, long duration funds structures and other factors. nently disclose in its disclosure docu- 10-year bond yields on US gov- have gained 17.4 per cent. “They’ve started evaluating that ments, marketing material and on its ernment securities dipped Experts say investors may look (segment),” he said. website, about the option for direct on-

12 basis points (bps) on 9.27 9.45 at duration play in the 7-8 year An AIF typically results in an boarding … At the time of on-boarding Wednesday, slipping to an over categories. upfront commission of 3-3.5 per cent of of clients directly, no charges except

three-year low of 6.23 per cent. 6.21 5.96 6.03 “The spread between 4-year the assets garnered. Commissions for statutory charges shall be levied,” it 5.52 5.74 “There could be further easing 5.20 and 7-8 year government bonds PMS schemes are lower by around 100 added. of bond yields as the Reserve Bank had widened to almost 80 bps. basis points, noted a senior executive Making the transition could be eas- of India (RBI) has also given the 2.05 Subsequent spreads (longer bonds at a wealth firm. ier said than done. signal that they are ready to act to spread over 7-8 year bonds) are rel- Arbitrage increases drastically with A portfolio manager pointed out give further fillip to the economy,” Long Medium Medium Short Ultra short atively low. This makes the 7-8 year the removal of PMS upfront commis- AIFs had ambiguities around taxation, said Mahendra Jajoo, head (fixed to long government bonds a ‘sweet spot’, sions. A distributor can expect to make besides a higher minimum investment. income), Mirae MF. Market par- US Fed Chair Jerome Powell PHOTO: REUTERS Source: Value Research (as on March 3, 2020) with strong likelihood of very wide 3 per cent or more immediately if they AIFs structured as trusts found ticipants say the RBI could take a spreads versus shorter-end bonds sell an AIF instead of the gradual trail themselves having to pay 42.7 per cent cue from the US Fed and cut rates compressing over coming commission paid in a PMS scheme. in taxes after an increase in the sur- to mitigate the impact of corona- cut (from RBI) in April. The space ing in a rate cut by the RBI, even “The longer-end may struggle months,” Choudhary added. This may result in some shift charge in the last Budget. Investors virus on the domestic economy. for long bonds rally has opened up though these expectations may or once the current momentum The medium-to-long duration towards the AIF segment. who can write large cheques required On Wednesday, the US Fed took further,” said Maneesh Danghi, may not fructify,” said Lakshmi fades, also in part due to the sig- category takes exposure to papers “Earlier, when mutual fund upfront in AIFs also tend to be sophisticated. a 50-bps rate cut amid concerns chief investment officer (fixed Iyer, CIO (fixed income) for Kotak nificantly higher state loan supply with maturities of 4-7 years, commissions were removed, the money They are less likely to be swayed by over the outbreak of coronavirus income), Aditya Birla Sun Life MF. MF. The RBI has already cut its expected over the year. This antic- whereas the long-duration funds which wouldn’t have been out of place what the distributor decides to push, slowing down US and global econ- “Longer-dated papers are likely repo rate by 135 bps since January ipated loan supply makes the take exposure to papers of dura- in either a mutual fund or PMS scheme said the person. omy. The rate cut sent the US treas- to gain more due to higher sensi- 2019 to boost the economy. 10-year on the AAA corporate tion over 7 years. tended to gravitate towards PMS. One There is also a sense that a similar ury’s 10-year yield to its lifetime tivity, but most duration categories Fund managers highlight that curve less attractive,” said Suyash In a 1-year period, the medium- can expect something similar now in regime may soon be in place for AIFs. low of 0.99 per cent. “Our base case should see gains from US Fed cut. papers of duration below 10 years Choudhary, head (fixed income), to-long duration category has favour of AIFs,” said the person. So any arbitrage is unlikely to persist is that we will have 25-50 bps rate Further, bond markets will be pric- will be more attractive. IDFC MF. given returns of 9.45 per cent. The person said differences between indefinitely, according to experts.

Overseas listings dry up as THE COMPASS firms eye domestic market Aviation stocks may descend further as traffic drops Lower crude oil prices RAM PRASAD SAHU growth stands at 3.3 per cent, FY06 saw most issuances at 56, raising $3.6 billion compared to 16.6 per cent a unlikely to offset SpiceJet and InterGlobe year ago, on the back of low SACHIN P MAMPATTA pressure on volumes Aviation (IndiGo), the two demand and Jet Airways’ exit. Mumbai, 4 March listed carriers, could see While managements had further correction in their guided for elevated costs due The recent move to ease for- share prices. to the delay in induction of eign listings for Indian com- The development comes new aircraft, the fall in crude panies comes even as the as passenger growth — which oil prices is expected to offer route has been languishing has been slowing down on some relief. Crude oil prices over the past few years. account of the economic have come off by a third from There has been only one slowdown — has taken 4 per cent of the international domestic routes have been their January highs. such instance since financial further hit due to the out- traffic to and from India, under pressure. Analysts at Ambit Capital year 2015-16 (FY16). HDFC break of coronavirus. While spread of the virus to South- Analysts at JM Financial say every $1 reduction per Bank had raised capital the IndiGo stock has slumped East Asia and West Asia could estimate that the average air barrel of crude oil leads to a through issues of depository 36 per cent from its highs over have a bigger impact, as the fare for four key routes has 7-per-cent improvement in receipts in FY19. the past year, that of SpiceJet corresponding figure for seen an over 20 per cent year- earnings before interest and This is in contrast to earlier has nosedived 53 per cent to these regions is 30 per cent. on-year fall in January and taxes. While this is a positive, years. The largest amount its 15-month low. Both airlines have been February 2020. The broker- a sharp fall in load factors, raised in a single year was The immediate hit for the placing higher share of incre- age says this will lead to mod- which have held steady so far, $7.7 billion in FY08 through HEADING SOUTH facing, according to Savla. two airlines has come in the mental capacity on interna- eration in yields, and sub- could offset gains on account 33 issuances, shows data from The availability of private form of fall in traffic on inter- tional routes, given the sequently a hit on March of lower crude oil prices. market tracker PRIME equity funding would also be national routes, which domestic slowdown. quarter earnings. Investors should await an Database. The largest number a factor for companies looking account for about a quarter of The expected dip in traffic Passenger growth in uptick in passenger traffic ($3.5bn) of issuances was in the year 2005-06 to decide on a listing, he said. their revenues. While traffic could put pressure on fares as January was muted at 2.2 per and yields before considering FY06, which saw a total of 56 The Securities and to China constitutes less than well as yields. Fares on cent. Year-to-date passenger the sector. issues raise $3.6 billion. Exchange Board of India The decadal average of (Sebi) has been debating the funds raised through this relative merits of allowing route is currently at its lowest such listings. Glenmark gets leg-up from drug licensing deals in US on record. An average of “Equity listings by com- $521 million was raised in the panies incorporated in India Reduction of debt UJJVAL JAUHARI The company’s US sales growth has partners, say analysts. Hence, develop- 10 years ending FY20. PRIME on foreign stock exchanges and recovery in US remained subdued on account of ments on this front, too, will be closely has yearly data on such issu- Note: 2019-20 data is as of February-end would allow them to access Glenmark Pharmaceuticals’ exclusive intense competition for its dermatology tracked by investors. ances going back to FY93. Source: PRIME Database foreign capital at a lower cost. sales are other licensing arrangement with Hikma for range. In addition, the US FDA’s warning Positively, the company’s domestic There was a greater incen- The Indian economy, in turn, re-rating triggers commercialising its allergic Rhinitis letter for its Baddi facility has also been growth remains on a strong trajectory. tive to look abroad earlier for which they may not get would experience added spray in the US is a step in the right a dampener. Domestic sales in December quarter access to foreign capital. This domestically,” he said. growth and economic devel- direction. While Glenmark will receive Likewise, high debt has added to con- (Q3) were up by 18 per cent year-on-year is not the case now, when more Mehul Savla, partner at opment... As a result, Sebi felt some upfront and milestone payments cerns. It is due to these reasons that the propelled by launch of a diabetes pro- foreign investors are investing boutique investment bank it appropriate to consider (which it hasn’t disclosed) till the drug stock has more than halved in less than duct, as compared to 13-15 per cent dur- directly in India, noted Pranav RippleWave Equity Advisors, facilitating companies incor- is approved, Hikma will be responsible a year. To improve profitability, the com- ing the first two quarters of FY20. Haldea, managing director at said that global investors porated in India to directly list for the drug’s sales in the US. pany is planning to control costs. Consequently, a recovery in US PRIME Database. would want to par- their equity shares Such deals are important as the Yet, analysts feel that with trials for growth and debt reduction could be a Foreign portfolio investors ticipate in equity The decadal on foreign stock upfront and milestone payments will various molecules leading to high R&D booster for the stock. Net debt stood at held ~30.8 trillion in equity issuances by new- average of funds exchanges and help Glenmark lower its debt as well as spends (at 8 per cent of sales), cost ~3,650 crore at the end of Q3. With no assets as of January 2020, age online Indian raised through companies incor- product development expenses, while reduction may be difficult till more part- major investments, the company shows data from the National companies if they this route is porated outside boosting its future growth prospects. nerships/agreements are achieved. expects debt to reduce moving forward. Securities Depository (NSDL). want to raise currently at its India to list on The approval for the said product, Among key molecules, Glenmark is Even as a thin US drug pipeline and Companies with global capital. “There will lowest on record Indian stock however, is anticipated only by H2CY20, conducting trials for GBR 830 (for auto- regulatory issues have weighed on operations or ambitions can be appetite,” says exchanges, in view, as the company has received a Complete immune disease), GRC 17536 (in diabetic Glenmark’s growth in the world’s largest choose to list abroad even Savla. particularly, of the Response Letter (CRL) from the US FDA. neuropathy), oncology trials for health care market, analysts at Emkay today, said Haldea. Firms may also weigh the ongoing evolution and inter- Hence, further developments on this GBR1302 and GBR 1342, inhaled respi- Global say that valuation is fairly com- “There is also a sense advantages of listing locally. nationalisation of capital mar- front will be closely watched by the ratory compound GRC 39815 and a bio- fortable at 10 times FY21 estimated earn- among certain companies Domestic listing could make kets across the globe,” said a Street, given its implications on similar, for which the company is said ings, and any palpable signs of debt that they can command a pre- sense for such companies December 2018 expert com- Glenmark’s US sales. to be in active discussions with potential reduction can drive stock re-rating. mium in an overseas market, because they are consumer- mittee report. MUMBAI | THURSDAY, 5 MARCH 2020 THE SMART INVESTOR 11 . < AU bank: Small, beautiful and expensive ILLUSTRATION BY: BINAY SINHA Stock has risen 100% in the past year; m-cap crosses (~ crore) even after their listing — it puts AU SFB in ON THE RISE MAPPING THE M-CAP an advantageous position in terms of being larger peers like Bank of Baroda, PNB and IDBI Bank IndusInd Bank 73,939 insulated from capital dilution. 64,473 However, while these positives have HAMSINI KARTHIK What has also supported the price rally helped the bank so far, investors must be AU Small Finance 35,083 Mumbai, 4 March is the bank’s ability to grow upwards of cognizant of the fact that AU SFB’s assets 35 per cent quarter after quarter, whether Bank of Baroda 33,869 are still at a nascent stage and haven’t really ith gains of over 100 per cent there is an economic slump or not. Base=100 Punjab National Bank 29,948 stood the test of time yet. “There is a con- in the past year, AU Small For instance, in the December quarter centration of business and geography Finance Bank (AU SFB) is (Q3), which arguably turned out to be the IDBI Bank 29,585 while liabilities are still in its early stages W the und oubted top per- toughest so far for banks, AU SFB managed IDFC First Bank 17,914 as the bank is still quite new,” say analysts former among stocks in banking and to expand its loan book to ~29,867 crore (up 16,628 at Kotak Institutional Equities. financial services. 37 per cent year-on-year). Consequently, The brokerage is among the few to have In terms of price gains in a year, it has its net interest income grew 46 per cent 15,956 a ‘sell’ rating on the stock. done better than giants such as ICICI Bank, year-on-year, and net profit pocketed a Bank of India 15,811 “We find valuations expensive at cur- Bajaj Finance, HDFC Bank, and State Bank handsome 99 per cent increase. Source: Exchanges Compiled by BS Research Bureaurent levels given the higher cost of equity of India. On the market capitalisation front, This happened without comprising to reflect the risk of the businesses,” they it has overtaken long-standing players like much on asset quality (maintained at 1.9 add. Whether the AU SFB stock sustains Bank of Baroda, Punjab National Bank, and per cent) and improving profitability by While year-on-year growth in disburse- rent account-savings account (CASA) AU SFB attracted a reasonable investor its run or not remains to be seen. For now, IDBI Bank. Its m-cap of ~35,083 crore is 17 basis points (bps) YoY to 5.5 per cent in ments in Q3 (at 21 per cent), visibly came deposits wobbled a bit to 17 per cent from interest right from its initial public offering 13 of the 22 analysts polled by Bloomberg more than the combined figures of 10 other Q3. Drawing 41 per cent of its business from off its past levels, these numbers — albeit 24 per cent last year. in 2017 for its clean shareholding structure, have a ‘buy’ on the stock. However, their banks including Oriental Bank, Syndicate Rajasthan (where its headquarters is), AU their relatively low base — turned out to be Clearly, there is more work to be done and its business that is oriented towards average target price of ~1,026 indicates a Bank, and DCB Bank. Suppo r ting this bull SFB’s ability to focus on select products and the best in the sector. for the bank to showcase itself as a serious non-microfinance. With a clutch of SFBs potential downside of 11 per cent. run is its relatively small balance sheet of target customers helps it remain nimble. What’s also positive is its ability to competitor to its larger peers, which oper- waiting to hit the market and most of them Even at 8x its FY21 estimated book just ~53,732 crore (loans of ~29,867 crore and Vehicle loans and small business loans expand its deposit base (up 63 per cent YoY ate at a CASA ratio upwards of 30 per cent. saddled with the burden of high promoter value, the stock remains among the pre- deposits of ~23,865 crore). account for 77 per cent of its loan book. in Q3). However, the share of low-cost cur- But even beyond these numbers, holdings — which will remain an issue ferred picks in the banking pack. Market revival stalls Norwegian fund raises corporate bond bets SACHIN P MAMPATTA Fixed income accounts for Mumbai, 4 March TOP PLAYERS 26.5 per cent. on new virus cases Name Market value(in $ million) “In the first years, returns The world’s largest sovereign were low, but the fund grew Adani Ports & Special 98.1 SUNDAR SETHURMAN India was worrying, given the country wealth fund, Government Economic Zone due to large inflows. In the Mumbai, 4 March is densely populated. If not contained, Pension Fund Global of past decade, the fund has it could have a significant impact on the Norway, is raising its bets on 73.5 had lower inflow, but the return The recovery in domestic indices was domestic consumption-driven econ- corporate bonds in its India Reliance Holding USA 21.6 (was higher)…The strong short-lived after the health ministry omy, which is already under significant fixed income portfolio. Britannia Industries 0.3 return the past decade was reported new cases of coronavirus, taking pressure. According to the fund’s facilitated by the equity the total number of infections in the “India, which had so far remained latest disclosures, it has added Source: Norges Bank Investment Management purchase… during the financial country to 28. largely unaffected, is now seeing cases two new names — Adani Ports crisis. The fund is now worth While the benchmark indices ended rise, which has dampened sentiment. & Special Economic Zone, and debt assets. In response to a query from bond portfolio, going forward,” more than the Norwegian with losses, most global markets This event has introduced an additional Britannia Industries. Its invest- Government of India Business Standard, a spokesper- the fund stated in its annual people’s combined net wealth extended gains as investors focused on downside risks to our earnings estimates ments are worth $100 million debt securities account for the son for the fund said it was a report. and three times the country’s the global policy respo - for FY21. Overseas flows in the Adani venture and close bulk of its holdings. The classification error. Norway established the fund GDP. We now have wealth nse to the virus out- could also add to volatil- to $250,000 in Britannia. fund held instruments worth “Bonds denominated in after its oil discoveries to invested in the world’s financial break, and a surprise ity,” said Siddh artha The total proportion of cor- $2.16 billion. dollars, euros, pounds, and yen provide a cushion against oil markets that exceeds the comeback for Joe Biden Khemka, head (retail porate bonds in its India fixed The figure was $1.96 billion climbed from 82.6 per cent to price fluctuations and help government’s total oil revenue in the US presidential research), Motilal Oswal income book has risen from last year. It also held Export- 84.6 per cent of fixed income meet future needs. It invests over the past 50 years,” accord- primary. Financial Services. 5.1 per cent to 8.2 per cent as of Import Bank of India instru- investments. Debt instruments across asset classes, including ing to the report. The Sensex, after Foreign investors 2019. Other holdings include ments under “government- issued by governments and equities, fixed income, and Instruments that are no briefly trading in the have pulled out close to Reliance Holding USA and related bonds”. Investments in companies in countries real estate. longer in the fixed income port- green, slumped as much $2 billion from the Reliance Industries. Reliance Industries had also classified as emerging markets The fund is now worth over folio of the fund include REC as 800 points (2 per domestic markets in the The two companies account been classified as “government- will be limited to 5 per cent $1.1 trillion, about 70.8 per cent and Power Finance cent). Stocks managed to CORONA FEAR past fortnight. On for a further $95 million in related bonds”. of the market value of the of which is invested in equities. Corporation. recoup losses in the last Tuesday, the US Federal hour of trade as US Reserve announced its futures indicated a first emergency rate cut TODAY’S PICKS BY DEVANGSHU DATTA strong opening on Wall since the 2008 financial Street. crisis, slashing policy The Sensex settled at rates by half a percentage Nifty Bank Nifty Tata Steel Bajaj Finance Wipro 38,409, down 214 points points. Current: Current: Current: Current: Current: or 0.6 per cent. The “The recent surge in 11,254 (fut: 11,247) 28,671 (fut: 28,758) ~377 ~4,286 ~229 index has now ended cases outside China has with losses in eight of spooked investors across Target: NA Target: NA Target: ~371 Target: ~4,215 Target: ~233 the previous nine the globe. Monetary Stop long positions at 28600. Keep a stop at 380 and go short. Keep a stop at 4315 and go short. Keep a stop at 227 and go long. sessions. Since February measures by various cen- Stop short positions at 28900. Big Add to the position between Add to the position between Add to the position between 19, it has declined 2,914 tral banks are going moves could go till 29300, 28250. 372-374. Book profits at 371. 4225-4240. Book profits at 4215. 231-232. Book profits at 233. points or 7 per cent. unnoticed. Markets are Excessive volatility likely. Trend The Nifty closed at 11,254, down 49 currently witnessing a roller-coaster ride, could stay negative. points or 0.43 per cent. and we do not see this ending anytime Harsh Vardhan, Union health min- soon,” said Ajit Mishra, vice-president ister, said on Wednesday that 14 Italian (research) of Broking. Barring tourists and their Indian driver had tested three, all BSE sectoral indices ended in positive, taking the total number of the red. Banking and finance stocks were people infected in the country to 28. worst-hit, with their respecti v e gauges Globally, infections rose above 93,000, falling 1.7 and per 1.6 cent each. with the death toll rising to 3,201. Market players said the outbreak in With inputs from Bloomberg Target prices, projected movements in terms of next session, unless otherwise stated

COMMODITIES1 > US Fed’s rate cut boosts TN copper plant closure costs Vedanta $600 mn base metals, crude oil T E NARASIMHAN Chennai, 4 March Higher bauxite sourcing helps DILIP KUMAR JHA Mumbai, 4 March SHINING BRIGHT With the copper smelting plant firm cut alumina cost by 8% Commodities price movement of Vedanta Group’s Sterlite JAYAJIT DASH cost of production (CoP) of ase metals’ prices jumped 1-2 per cent on Copper in Thoothukudi (Tamil Bhubaneswar, 4 March aluminium at $1,691 per Wednesday after the US Federal Reserve (US Bullion March 4 % change* Nadu) lying shut for close to tonne. Vedanta said, at a > PRICE CARD Fed) announced a 50 basis points (bps) emer- Silver (~/Kg) 46,205 2.7 two years now (since May Higher sourcing of bauxite recent investor presentation, gency interest rate cut. The Fed also confirmed 2018), losses incurred by the from local suppliers helped Standard gold (~10 gm) 43,130 2.0 that local bauxite was now B Vedanta prune cost of alumina high downside risk for the global economy as a result of company because of the shut- ENERGY meeting over half of the increasing number of coronavirus (COVID-19) cases down are estimated to be making at its Lanjigarh refinery company’s total requirement. As on March 4 International Domestic ICE crude oil ( $/BBL) 53 1.4 by 8 per cent year-on-year ------across the world. around $600 million so far. During April-December Price %Chg# Price %Chg# Gold and silver prices increased 2-3 per cent in the BASE METAL The company has been (YoY) to $269 per tonne in Q3 2019, output at Lanjigarh of this financial year. Mumbai spot market, while the copper contract for Nickel ($/tonne) 12,795 1.9 incurring losses for six consec- refinery was up 24 per cent to METALS ($/tonne) delivery in three months on the benchmark London utive quarters due to the clo- Alumina production at reach 1.33 million tonnes (mt), Copper ($/tonne) 5,725 1.0 Aluminium 1,706.0 -3.7 1,939.1 2.7 Metal Exchange (LME) jumped 1 per cent to trade at sure and is now seeing a daily Lanjigarh was up 16 per cent whereas the cost of $5,725 a tonne in afternoon trade. Zinc ($/tonne) 1,993 0.9 loss of ~5 crore, said a company YoY at 476,000 tonnes. Lower production was down 16 per Copper 5,668.0 -2.7 6,131.4 -1.2 Nickel rose 1.9 per cent to $12,795 a tonne and zinc Aluminium ($/tonne) 1,733 0.6 executive. The company has alumina cost also led to cut in cent YoY at $281 per tonne. by 0.9 per cent to $1,993 a tonne on Wednesday. been fighting a prolonged legal Zinc 1,986.0 -12.0 2,184.9 -15.1 *Change over previous day’s close Source: IBJA, LME , Bloomberg Aluminium prices also followed suit, with a 0.6 per cent Compiled by BS Research Bureau battle and is now waiting for Delhi, which set aside the Piyush Goyal, minister of Gold ($/ounce) 1,647.4* 11.7 1,831.9 10.3 rise to trade at $1,733 a tonne. the Madras High Court’s order TNPCB’s closure order and commerce and industry, Silver ($/ounce) 17.3* 2.3 19.6 1.0 It wasn’t just base metals; prices of crude oil, gold, “Base metals in a first reaction have appreciated on the issue. passed fresh orders for renewal recently told Rajya Sabha that and silver rose as well. While crude oil prices jumped sharply on the LME and MCX after Fed’s interest cut. The factory had been facing of consent. imports of refined copper had ENERGY 1.4 per cent to $52.59 a barrel on the Intercontinental Further gains came in as the dollar slipped for the sixth protests from locals for several The state government increased from 44,245 tonnes Crude Oil ($/bbl) 52.8* -16.0 51.9 -16.1 Exchange (ICE), while on the Multi Commodity straight session. Industrial metals turned positive on years over the alleged emis- approached the Supreme ($294.95 million) in 2017-18 to Exchange of India (MCX), it rose by 2.3 per cent to optimism that China will follow the US in lowering sions from the factory. The pro- Court, which in turn, set aside 92,290 tonnes ($605.20 mil- Natural Gas ($/mmBtu) 1.8* -25.0 1.8 -25.3 ~3,537 a barrel. interest rates,” said Naveen Mathur, director (commod- tests took a turn for the worse the NGT order and asked the lion) in 2018-19. AGRI COMMODITIES ($/tonne) Gnanasekar Thiagarajan, director of Commtrendz, ities and currencies), Anand Rathi Shares and after the company announced company to approach the Indian exports of refined said the cut by US Fed showed the paranoia around the Stockbrokers. that it would double the plant’s Madras High Court. At pres- copper had declined from Wheat 190.2 2.1 291.3 -2.2 COVID-19 spread. “Most importantly, base metals and China is making slow but steady progress in getting capacity to 800,000 tonnes at ent, the matter is pending 378,555 tonnes ($2,435.57 mil- Maize 183.5* 0.7 240.1 -15.4 energy have recovered their quantum of recent correc- back to work. Gold and silver have gained sharply over an estimated investment of with the high court. lion) in 2017-18 to 47,917 tonnes tions with room for further rise possible. With COVID- the past few weeks as investors moved out of risky assets ~2,400 crore. The Thoothukudi plant ($302.27 million) in 2018-19. Sugar 388.3* 12.0 474.4 -1.8 19 spread widening by the day, which poses further to park their funds in bullion, which offered about 30 The expansion was put on accounted for 40 per cent of This resulted in net downside risk in the global economy, bullion prices have per cent returns in calendar year 2019. hold after 13 people were killed India’s copper smelting capac- imports of 44,373 tonnes Palm oil 607.5 -8.6 1,007.8 -3.2 gained sharply in the last two months due to their safe Gold prices have jumped by over 8 per cent so far in police firing during the pro- ity and production in India fell ($302.93 million) in 2018-19 Cotton 1,383.4 -0.7 1,494.9 -4.4 haven appeal with potential for further increase,” he this year on sustained demand, with prices hitting a tests. The company’s applica- by 46.1 per cent during FY19 from 334,310 tonnes ($2,140.62

* As on Mar 04, 20 1800 hrs IST, # Change Over 3 Months added. Since sentiment around the US Fed’s interest seven-year high as holdings in bullion-backed exchange- tion for renewal of consent to due to closure of Sterlite’s million) in 2017-18. Conversion rate 1 USD = 73.2& 1 Ounce = 31.1032316 grams. rate cut was building for a couple of days, the quantum traded funds expanded to a record. “Sentiment is likely operate (CTO) for the existing 400,000 tonne production During April-November Notes: 1) International metals, Indian basket crude, Malaysia Palm oil, Wheat LIFFE and Coffee wasn’t a surprise, though the timing was. Normally, the to remain positive in the yellow metal,” said Mathur. copper smelter was also facility in 2018. 2019, imports and exports of Karnataka robusta pertains to previous days price. US Fed announces a revision in interest rate at its sched- Both gold and silver prices in the spot Zaveri Bazaar rejected by the Tamil Nadu The factory closed in March refined copper stood at 2) International metal are LME Spot prices and domestic metal are Mumbai local spot prices except for Steel. uled meeting. here gained by over 2 per cent to close at ~43,130 per 10g Pollution Control Board 2018 for annual maintenance 109,324 tonnes ($684.02 mil- 3) International Crude oil is Brent crude and Domestic Crude oil is Indian basket. 4) International Natural gas is Nymex near month future & domestic natural gas is MCX Tuesday’s surprise cut was the first such since the and ~46,205 a kg, respectively. Gold was up by ~1,054 (TNPCB) in April 2018. first, and later due to protests lion) and 18,300 tonnes near month futures. Lehman Brothers crisis in 2008, which weakened prices per 10g while silver was up ~1,225 per kg. This was followed by the when the government issued ($106.35 million), respectively. 5) International Wheat, White sugar & Coffee Robusta are LIFF E future prices of near month contract. of all dollar denominated commodities. In fact, investors Additionally, crude oil’s positive undertone state government disconnect- an order to close the facility. “Domestic production and 6) International Maize is MATIF near month future, Rubber is Tokyo-TOCOM near month future and Palm oil is Malaysia FOB spot price. aggressively sold their greenback on Wednesday result- extended into a third day after the Organisation of the ing power supply to the factory The facility contributed exports of refined copper have 7) Domestic Wheat & Maize are NCDEX future prices of near month contract, Palm oil & ing in a fall in the value of the dollar against major global Petroleum Exporting Countries (OPEC) Joint Technical and ordering permanent clo- around ~635 crore to the local declined largely due to closure Rubber are NCDEX spot prices. 8) Domestic Coffee is Karnataka robusta and Sugar is M30 Mumbai local spot price. currencies. The rupee in initial trade slipped to 73.90 Committee suggested an additional reduction of pro- sure of the facility thereafter. economy and ~2,559 crore to of the copper smelting plant 9) International cotton is Cotton no.2-NYBOT near month future & domestic cotton is MCX Future prices near month futures. against the dollar, before closing with a marginal 7 paise duction by 600,000-1 million barrels per day during Sterlite approached the the exchequer by way of taxes of Vedanta at Tuticorin,” the Source: Bloomberg Compiled by BS Research Bureau appreciation on Wednesday at 73.23. the second quarter. National Green Tribunal, New and statutory contributions. minister had said. MUMBAI | THURSDAY, 5 MARCH 2020 PERSONAL FINANCE 13 . < Small businesses should buy extra cover Don’t play with

These facts help the insurer A riot may be a COST OF INSURING YOUR HOME arrive at the right premium. debt portfolio Incorrect disclosure can become a Compare product features also, not just premium low-probability cause for claim rejection. In case of some charges for prema- event, but the Plan Premium for ~1 crore an eventuality, do not start repair ture encashment after that), sum insured (~) work before the surveyor has visited the governments SCSS pro- and assessed the damage. viding an interest rate of 8.6 damage it causes ICICI Home Insurance 19,470 per cent makes eminent can incapacitate Bajaj Allianz-my home insurance 18,880 Buy add-ons with vehicle policy sense since it adds more you financially The base motor insurance policy than 2 percentage points a HDFC Ergo Home Insurance 14,958 covers your vehicle against damage year with no increase in risk SANJAY KUMAR SINGH Royal Sundaram Insurance 7,258 due to riots, acts of vandalism, etc. and only a one-year imped- Source: PolicyX But purchasing a few add-ons will iment in liquidity. The max- he riots that took place in help you get better coverage. imum amount that can be northeast Delhi recently Two types of damages can occur FRANKLY invested is ~15 lakh. caused loss of lives and STEPS TO TAKE AFTER AN INCIDENT to your car—repairable and total. Another scheme that T also resulted in the When the damage is repairable, you SPEAKING can be considered is PM destruction of shops, houses, n File an FIR with the n Even if your policy take your car to the nearest garage HARSH ROONGTA Vaya Vandana Yojana vehicles and other forms of property. police, preferably within document has got lost or in the insurer’s network for repairs. (PMVVY) offered by LIC, A riot in the nation’s capital may be 24 hours of the event destroyed, inform the In this case, the insurer will compen- with backup support from a rare, low-probability event, but it insurer immediately. Do sate you for the depreciated cost of The recent corporate the government of India. does occur. The incident once again n parts, not their full replacement defaults have started a Maximum investment Inform the insurance not wait until you have underlines how important it is for value. “You will have to pay the search for a safe investment allowed is ~15 lakh. This company at the earliest recovered the document businessmen and entrepreneurs to so that it can send a depreciation part out of your own option. The Covid-19 virus provides 8 per cent pension purchase insurance to safeguard surveyor to assess the n Do not disturb the pocket. If you live in a sensitive area scare has only accelerated per year for 10 years. Money themselves against events that can damage scene of damage with a higher probability of a riot, or this search. Yet in the mid- can only be withdrawn destroy all the assets they have built other such incidents, buy a zero- dle of all this there is the under exceptional circum- up over a lifetime. depreciation add-on cover. The question – how to increase stances like treatment of n If you need to make changes at the scene, take insurer will then compensate you returns of the low-risk por- critical illness for self or Business assets: photographs before you do so the entire cost,” says Animesh Das, tion of the portfolio. This spouse. However, loan is Buy right sum insured head of product strategy, Acko Dil Maange More attitude allowed after three years for A businessman, who owns a shop, General Insurance. from investments is haz- 75 per cent of the value such factory, or godown can protect them instance, in case of a godown storing Insurance. He also advises against the belongings within against dam- In case of total damage (the car ardous for their financial that most of the pension by buying a standard fire and special metals, and higher in case of one opting out of any cover just for the age in a riot. “For about ~10,000- is beyond repair), the insurer will pay health. will go in paying perils policy. It provides cover that stores inflammable chemicals. minor discount in premium it may 15,000, you can buy a home insur- you the insurance declared value Any investment If you opt for interest on the against loss or damage due to riots, At the time of purchase, make fetch you. ance policy that has a sum insured (IDV). Suppose that you had bought can be evaluated fixed-income loan and you strikes and malicious damage. It also sure you are not underinsuring. If the proposal form has ques- of ~1 crore,” says Naval Goel, chief your car for ~10 lakh. After, say, three on the three pri- instruments in will get back covers these assets against other per- “The customer needs to decide the tions about loss or claims history, executive officer, PolicyX.com. years, its IDV may go down to 60 per mary parame- your portfolio your amount on ils such as fire, lightning, explosion, replacement value of the structure disclose the facts properly. If the Mohan adds that the premium starts cent, or ~6 lakh. ters – risk, return that offer maturity. So, implosion, impact damage, etc. and buy that much sum insured. For property is situated in an area prone from 0.014 per cent of the insured In the case of total damage, this and liquidity. higher returns, there is a higher The cost of this policy, say stocks and other contents of the to flooding, that fact should not be value for a residence. is what the insurance company will These three they will come degree of com- experts, is not as high as many building, the pricing used is market hidden. One silly mistake buyers To decide on the sum insured, pay you. If you want to buy the same parameters are with higher promise on people assume it would be. “The pre- value,” says Mohan. In other words, commit is to give the incorrect use the replacement cost for the car again as a replacement, you will inversely linked. risk or lock-in liquidity, but the mium rates, as a percentage of the depreciation has to be taken into address of the premises. Many fill in structure and market value for the have to shell out ~4 lakh from your If you need low return is good insured value, start at 0.066 per cent account when deciding on the sum their office address instead of giving goods within. Goel suggests buying own pocket. “To avoid this loss, go risk, it necessarily comes for no additional risk. for a shop, 0.098 per cent for a insured for contents. the address of their godown or fac- a home insurance policy that for return to invoice add-on. This along with low returns. Risk For those not eligible godown, and roughly 0.193 per cent Insurance buyers need to keep an tory. Vishwanathan suggests keep- includes a burglary cover. “The will negate the loss caused by depre- remaining the same, if you for these schemes or who for a factory. They vary, depending eye on increases in the value of the ing a copy of your insurance policy chances of burglary are higher than ciation in case of total damage,” says are willing to sacrifice have exhausted their limits on the nature of goods and products insured property, due to the pur- elsewhere (away from the site) so those of riots or natural calamities,” Das. Some companies cover the ex- liquidity, you can get a rel- under both the plans, my stored or manufactured in the prem- chase of new machinery, raw mate- that it does not get destroyed in an he adds. showroom value, which is ~10 lakh atively higher return. Only advice is quit looking for ises,” says C R Mohan, senior vice rials, etc. “Notify such developments incident. Disclose facts about your house in this scenario. the government can upend incremental return in the president and national head, prop- to your insurer so that they can be correctly in the proposal form, such Some even cover the invoice this formula to some extent portion of your portfolio erty and risk engineering services, covered by paying an additional pre- Home: Make correct disclosures as whether it is situated within a value, or the on-road price, which by providing higher returns reserved for low-risk Bajaj Allianz General Insurance. The mium,” says S. Vishwanathan, A home insurance policy will cover society, whether it has guards, and would include the additional regis- on some of its schemes investing. Stick to bank premium rate will be lower, for national underwriter, SBI General both your home (the structure) and so on. tration cost, road tax, etc. (which are low risk because fixed deposits with public the government guarantees or large private sector them) where it serves a use- banks. If your tax rate is ful purpose, such as Senior high (taxable income in BUDGET: Citizens Savings Scheme excess of ~10 lakh), look at ~1.5 CRORE -~2 CRORE Money steps before March-end (SCSS). banking & PSU debt funds So, investors, especially or liquid funds from the senior citizens, need to larger fund houses. You REALTY Most worry about getting advance tax, there is a provision of penal evaluate their needs care- can look at the Bharat interest. “Any taxpayer whose total tax fully. Any attempt to Bond fund of funds. The CHECK Section 80C benefits, but liability exceeds ~10,000 must pay increase returns should be chance that any invest- there are many other advance tax,” says Gupta. viewed in terms of the risk ments made by these Business Standard brings you a snapshot of average POPULAR it adds from, say, a fixed schemes will default on current rates and unit sizes in localities that offer moves one has to Mandatory investments in NPS, PPF deposit with State Bank of maturity is low. Don’t play property in the price range of ~1.5 crore and ~2 crore. If TAX-SAVING or SSY: Your existing investments or India (SBI) which goes at around with the low-risk you are looking at buying real estate, an idea about make for hassle-free INSTRUMENTS housing loan repayment may have around 6-6.50 per cent. For portion of the portfolio. prevailing rates would come in handy taken care of your Section 80C senior citizens who do not tax filing investment requirement. However, if mind the lock-in of their The writer is a Sebi-registered Avg price Avg unit size you have started investing in specific funds for a year or so (and investment advisor (~/sq ft) (sq ft) SARBAJEET K SEN schemes with mandatory investment JAIPUR limits, complete it. For example, Jagatpura 3,229 1,247 With March-end approaching fast, both National Pension Scheme mandates a salaried and business persons need to minimum investment of ~1,000, Public Sodala 8,200 492 ensure they have made all the right Provident Fund prescribes minimum TIPPING POINT Ajmer Road 2,535 1,406 investments, bought insurance and Fixed income Annual investment of ~500, and Sukanya filed claims to get maximum tax Samriddhi Yojana prescribes a Mansarovar Extension 3,520 1,126 instruments return (%) Vaishali Nagar 3,517 1,158 benefits. Some of these steps include: minimum investment of ~250. Deposit Opt for ready to Senior Citizens 8.6 this before March 31, otherwise penal MWC Road 2,960 1,280 Capital gains planning: If you have Savings Scheme provisions will kick in. “This is the Tonk Road 2,868 1,344 been dabbling in the stock markets, and Sukanya Samriddhi 8.4 government’s effort to ensure that move-in properties Kalwar Road 3,157 1,198 have booked capital gains or losses on Account people who use these schemes for According to research done by Anarock Property MANGALORE some of your investments – both short savings and tax-savings benefit from Consultants, on an average it took six-and-a-half years term and long term – do quantify them Public Provident Fund 7.9 them. Dormant accounts are gradually for large-sized projects of more than 500 units to be Jeppu 3,733 1,028 and ascertain your tax liability. You can closed,” says Harsh Jain, COO and Co- National Savings 7.9 completed in the country. The research was for the Derebail 4,083 1,010 reduce your tax Certificates founder, . period Kavoor 3,436 1,194 burden if you can set off your capital losses Market-linked Return-5 year File for all reimbursements: If you are between 2010 Kulshekar 3,415 1,166 LONG WAIT FOR against capital gains. instruments CAGR (%) an employee and have incurred some HOMEBUYERS and 2019. The Bejai 4,945 771 And if you have a NPS-tier 1-Scheme E 5.66-7.83 expenditure for which you are eligible Delhi-NCR Shakti Nagar 3,455 1,149 capital loss from for refunds, do it now. Apply at the Region/City Average completion region had the NPS-tier 1-Scheme C 8.53-9.10 time (yrs) Kulai 4,262 978 earlier years, you earliest. It will give you time if there is a worst track could offset them as NPS-tier-1-Scheme G 8.65-9.89 mistake in your reimbursement Urwa 4,025 1,103 NCR 7.2 record in this YOUR well. Equity linked applications. Leave travel application matter while If you have some and other reimbursements, if not saving schemes -0.64-11.17 MMR 6.5 the southern Sreekariyam 4,117 1,046 MONEY laggards in your Besides 80C, NPS is also eligible for deduction of applied for, are paid to you after portfolio, then this is ~50,000 under Section 80CCD(1B) deducting the taxes applicable. Kolkata 6.3 cities fared Vazhayila 3,963 1,106 better. Given the right time to book your losses and Sources: Indiapost.gov.in, npstrust.org.in, Pune 6.2 Technopark 3,615 1,159 reduce your tax burden. “This move is mutualfundindia.com Belated return for the AY2019-2020 these findings, Pallippuram 2,961 1,161 called tax-loss harvesting. Several (the financial year 2018-2019): This is Chennai 5.6 homebuyers Mannanthala 3,899 1,010 taxpayers employ this strategy to reduce needed for stocks in the portfolio which the last chance to file income tax returns will be better Bangalore 5.5 Kazhakoottam 4,448 1,008 their tax liability, especially due the to 10 pay good dividends since the incidence for a previous financial year without a off buying per cent long-term capital gains tax on will be on the investor from next year,” fine. Belated income tax return for the Peyad 4,200 925 Hyderabad 5.4 ready-to- capital gains on equities beyond ~1 lakh. Archit Gupta, CEO and founder, previous financial year can be done by move-in Akkulam 4,500 989 Equity shares may be sold at the end of Cleartax. March-end. There will be a late fee of Average 6.5 properties. VASAI-VIRAR one financial year and purchased again ~10,000 for ITR filed after December 31, Numbers are for larger projects of more than 500 immediately at the start of the next Payment of advance tax: If you are in 2019, up to till March 31, 2020. However, units. Source: Anarock Research Since the real Size (Sq Ft) financial year. This helps reduce tax the slab that attracts advance tax, there will be terms and conditions estate market Virar (W) 4,702 809 outgo in a particular financial year, calculate your liability. The last attached to this. Consult your tax is depressed, at present the premium between ready- Naigaon (E) 5,057 766 without impacting holdings or overall instalment of advance tax is due on advisor to make the most of the last to-move-in properties and under-construction Vasai (E) 4,721 782 investment strategy. Also, a relook is March 15. For delayed payment of month of the financial year. properties is not very high. Nalasopara (E) 4,840 762 Vasai (W) 5,944 671 Nalasopara (W) 4,461 804 READER’S money you have received will not be adequate of ~40 lakh. I want to buy for tax saving and to per month in equity funds. So, my estimate is INDORE to finance your education. It might at most have a holiday home. I am the only child and that you will be able to build a corpus of about help you buy your air ticket. will inherit the South Mumbai house. What do ~1 crore over the next 11 years. Nipania 3,369 1,285 CORNER Peer-to-peer investment is basically a you suggest? Super Corridor 2,486 1,472 FINANCIAL PLANNING money-lending scheme, but from an I do not see any desperate need for you to buy a My husband recently has been posted to Vijay Nagar 2,945 1,253 organised and licensed platform. You get a house. Tax benefits should never be the reason Belgium. I shall get a dependent visa. I make New Rani Bagh 2,965 1,315 much higher rate of return (12-18 per cent or for investing. You should only invest if there is ~45 lakh a year. We are a double-income, no- more) than you would from a fixed deposit, merit in the investment. A holiday home is like kids household. Together we make around Rajendra Nagar 2,860 1,283 but you also carry the risk of default by the maintaining a white elephant. Invest the ~80 lakh a year. Now with the transfer, his Piplyahan 3,608 1,053 KARTIK borrower. It is an unsecured loan. money you have, make profits out of it, and salary will be around ~65 lakh in Indian VADODARA JHAVERI use that money to travel to various locations rupees. Should I move on a dependent visa I am a 40-year-old software professional. I around the world. Live in serviced apartments right now, or wait for a year? We also have a Harni 2,687 1,368 have around 45 mutual funds with SIP of while on holiday so that you feel you are truly house that will give us a rental income. Vasna Bhayli 2,514 1,535 ~500 in each. Is my portfolio okay? in a holiday home. Everything seems to be going well for you. Bhayali Road 2,470 1,492 Your portfolio is not okay. You should not have There is no certainty at the moment about Chhani 2,482 1,482 I am 18 years old. My mother gave me ~10,000 more than seven-eight schemes. Have one or I am 40 and my son is seven. I have been your income in Belgium. Your life can be for my 18th birthday. I want to study in the US two schemes belonging to each of these investing ~12,000 in equity funds for six comfortable with your husband’s earnings after three years, once I have completed my categories—large-cap, mid-cap and small- years. I received ~1 lakh in December 2020 and rental income from India. You will get NOTE ·The ticket price range considered for the above data points is between graduation. What is a good investment option cap, and perhaps one or two sector funds. from a previous investment, which I need to time to explore new possibilities there. I do not ~1.5 crore and ~2 crore for me? I have read about peer-to-peer Diversification and professional management reinvest. How much corpus will I need for his know your entire net worth. However, if you ·All the data points discussed in the above table refer to primary market only lending and the stock market. My friend, who are the reasons for investing in mutual funds, higher education by the time he turns 18? feel compelled to have more savings, then ·Above residential data set comprises of residential apartments only ·Above residential data is representative of organised real estate developers is older than me, says I should invest in equity but 45 funds amount to overkill. The question really is how much will you be perhaps you should go to Belgium a little later. only mutual funds. able to accumulate for your son over the next ·The top performing micromarkets based on sales during last year Investing in the stock market is always a great I live in south Mumbai in my parents’ house. I 11 years. You must have around ~12-14 lakh The writer is director, Transcend Consulting. The (November-2018 to October-2019) is represented on the above table ·Data points are updated till October 2019 idea because it definitely creates wealth over want to buy a house of my own, but I can't from your investments over the past six years. views expressed are the expert’s own. Send your Source: PropEquity the long term. In your case, investing the afford one in South Mumbai. I have a budget I assume you will continue investing ~12,000 queries to [email protected] 14 TECHNOLOGY 4.0 MUMBAI | THURSDAY, 05 MARCH 2020 1 > Robots and Engineering AI can help fight corona goes digital In normal times, the words artifi- cial intelligence Engineering and construction major L&T is (AI) and virus executing complex projects with the help of would be men- tioned in refer- connected machines powered by the latest ence to cyber security matters. technologies. TE Narasimhan reports These are not normal times, it our years ago, Larsen & Toubro physical presence of workers. IoT was seems. The (L&T) was looking at ways to used to monitor in real time the pro- KRANTI NATION Coronavirus digitally transform many of its duction of concrete, track the move- called COVID Fbusinesses. The engineering ment of transit mixers and even the PRANJAL SHARMA has spread to a and construction giant with a revenue pouring of concrete. The data cap- level where the of $21 billion set up a small team of just tured from the machines, transit Geospatial technologies were used to World Health Organization says that this is three people to drive this initiative. mixers and trucks were captured and intricately study the terrain of the site “uncharted territory.” Today, the team, led by its chief dig- transmitted to remote dashboards that for the statue of Sardar Vallabhbhai In these abnormal times, emerging technologies ital officer Anantha Sayana, has swelled were constantly monitored by operat- Patel in the Narmada valley in — even if untested — are being deployed to manage to over a 100 members and is at the fore- ing managers. Gujarat; (left) Construction work the situation. Robots have been pressed into service front of conceptualising and building According to Sayana, over 11,000 being remotely managed by for isolated patients while hopes are high that artifi- solutions, leveraging several of L&T’s machines at the company’s project sites engineers at L&T’s Mumbai office cial intelligence can help find a counter to Covid 19. new-age technologies. These initiatives around the world have been equipped Denmark based UVD Robots is leading from the have helped the engineering major to with latest technologies, giving real- environmental conditions and also front with its disinfection robots. “With ultraviolet improve the utilisation of its machines time data and visibility. monitor their vitals such as heartbeat, light, the robots can disinfect and kill viruses and by at least 10-15 per cent. In Another colossal L&T pulse rate, blood pressure and fatigue,” bacteria autonomously, effectively limiting the fact, the group has become a Using a safety app, project where technology the company said. spread of coronaviruses without exposing hospital model for the global con- site engineers and has played a huge role is When it comes to plant and staff to the risk of infection,” says the company. “The struction industry on how to supervisors can the Statue of Unity — the machinery, the company is working invention increases the safety of both staff, patients transform itself by using cut- instantly check steel, concrete and brass- on a 3D Grade control system in motor and their relatives by reducing the risk of contact ting-edge technologies. good compliance clad statue of Sardar graders, which is equivalent to a with bacteria, viruses and other harmful microor- The digital solutions processes such as Vallabhbhai Patel, located “The popularity of real-time survey- insights into the company’s operations. driverless car in the construction ganisms. The concentrated UV-C light emitted by have been implemented at pre-start in the Narmada valley in ing lies in its simplicity, quickness, accu- These include productivity trends of industry. The system, when ready, will the robots as they drive has a germicidal effect that hundreds of L&T inspection, Gujarat. Geospatial tech- racy and the elimination of all human machines, identification of machines be able to measure blade positions removes virtually all airborne viruses and bacteria Construction’s project sites incident reporting nologies like LiDAR sur- errors. It is most handy when executing to be de-hired or moved to another through GPS and control their move- on the surfaces of a room.” and factories, covering and rectification, veys were used to get intri- locations near the sea as it enables auto- project site, identifying anomalies in ment by referring to a 3D design model More than 2,000 hospitals in China are already thousands of equipment, among others cate details of the terrain matic stakeout of pile locations on the weigh bridge measurements and fuel of the road preloaded on the Grade using these robots while many are being shipped to materials and workmen. of the site, the island and coast,” says the company. consumption, among others. Control system to achieve precise other hospitals in Europe, the US and Asia. In China, From tracking machines to the river bed during var- Geospatial technologies like ground- Sayana reveals that most of the solu- accuracy. a local company is believed to be using AI to diagnose collecting data from them, to tracking ious stages of construction. Radio- penetrating radar, which provides an tions are designed in-house or with the As part of Industry 4.0, L&T’s large potential patients of corona. With patients rising rap- raw material, training staff and map- frequency identification (RFID) tech- X-ray vision into what lies below the help of group technology companies welding machines at its factory in idly, human based diagnosis can’t cope with ping of inaccessible terrains for proj- nology was used for the correct surface, have also been useful for the such as LTI, LTTS and L&T- NXT. L&T- Hazira, Gujarat, are now connected numbers. AI-based diagnosis could be the way ahead. ects, L&T has successfully leveraged identification and installation of the company in executing water and NXT, which is a new business unit, and automated. The factory has a Beijing based startup InferVision has developed the all these technologies. over 6,000 bronze panels that went into effluent treatment projects. looks at taking the innovative digital modular fabrication facility as well as software being used by Zhongnan hospital in Wuhan. According to CEO and Managing the making of the statue. This is L&T is also using AR/VR technol- solutions to external clients in adjacent heavy engineering, defence, ship- Similarly, Alibaba’s research institute Damo Director S N Subrahmanyan, the com- because, even though the panels looked ogies to demonstrate safety practices to sectors like oil and gas, power and util- building, and power equipment man- Academy claims to have created an AI-based system, pany is using technologies such as the similar, they constituted different parts its employees. Bar codes at every project ities, transportation and logistics, con- ufacturing facilities. which has 96 per cent accuracy in detecting corona- Internet of Things (IoT), Augmented of the statue. sites make periodic inspections easy. struction and manufacturing. An interesting showcase of the virus. The algorithm was trained with 5,000 CT scans Reality/Virtual Reality (AR/VR), Big The company has also used LiDAR Using a safety app, site engineers and That’s not all. RFID and bluetooth company’s digital capabilities, as also from confirmed corona Data and Analytics, RFID and QR Codes in other projects such as the Bar-Bilara- supervisors can instantly check good technologies are being used to match its heritage and legacy, can be wit- cases to differentiate and advanced image-sensing technol- Jodhpur road project, smart city proj- compliance processes such as pre-start workers to their assigned task locations nessed at its digital museum in A densely between COVID 19 virus ogies like LiDAR or Light Detection and ects in Nagpur, a surveillance system inspection, incident reporting and rec- and indicate when they stray into haz- Chennai. A walk through of this touch- populated India and ordinary pneumonia Ranging to not only improve perform- in Mumbai and the City Surveillance tification, among others. ardous areas. A comprehensive data- enabled, multimedia museum gives does not have virus. ance, execute difficult projects, but also and Intelligent Traffic Management base of the skills of all workers help the the visitors a peep into L&T the luxury of Another Chinese to ensure the safety of its staff. System in Hyderabad. Drone-based The Alchemy company to assign the right resource Construction’s capabilities. The iPad resources nor can giant Baidu’s AI devel- One such interesting project is the photometry, which quickly and accu- It is perhaps fitting that L&T has named for the right job. interactive mosaic/architectural LED it wait for western opers’ team has created a Medigadda barrage, dubbed as the rately surveys linear road projects, has its big data engine Alchemy, a word that “Our ultimate digital vision is of the video wall showcases the company’s countries to tool called LinearFold, world’s biggest lift irrigation system. been used at the Dholera Special refers to the medieval practice that ‘connected worker’ who, with ‘wear- 30 most iconic projects. When visitors develop a which claims to slash Part of the Kaleshwaram Lift Irrigation Investment Region site in Gujarat and attempted to extract gold out of base ables’ can be ‘sensed’. And this can leave, a telepresence robot bids fare- solution.India Covid 19 detection time Project and located in a remote, Naxal- the Dedicated Freight Corridor metals. All the digital data generated play a vital role in ensuring his safety. well to them by recording a video or must rope in from 55 minutes to 27 sec- infested part of Telangana, here, the Corporation of India Projects in the by the connected machineries go to Sensors and beacons on workers can taking a digitally written feedback smart startups in onds. A US-based startup, company used IoT solutions to limit the Eastern and Western corridors. ‘Alchemy’ for processing and provide detect altitude, temperature and other from them. the war against Insilico, has used artifi- corona cial intelligence and machine learning to identify molecules that ALGO RHYTHM could be used to counter Covid 19. Insilico claims that it took just four days to identify thousands of THE ADVERSARIES AND THEIR MODUS OPERANDI MALWARE VS MALWARE-FREE ATTACK new molecules, which could be turned into medi- ACTIVITY IN CYBER SPACE SINCE cines. If this works, human trials could begin in weeks ADVERSARY DESCRIPTION 51% Malware-free 40% Malware-free rather than the years it takes to identify new mole- REVOCATION OF J&K AUTONOMY QUILTED TIGER After around a year hiatus, CrowdStrike cules. Companies that are involved in public health Intelligence identified renewed activity from data surveillance are leading the way in predicting Quilted Tiger in August 2019. A Kashmir-themed trends in the spread of virus. Some of them like lure was observed delivering the adversary’s 2019 2018 BlueDot and MetaBiota are using social media lis- bespoke BadNews malware tening to capture citizen reports that signify relevant symptoms. Many emerging tech companies will find VICEROY TIGER In Aug 2019, Viceroy Tiger made alterations to its 49% 60% opportunities to test their hypotheses in this time of bespoke BackConfig malware, updating the Malware Malware a health crisis. As long as companies are aligned download mechanism, persistence mechanism towards public good, all experiments will hopefully and data obfuscation. Intermittent use of GOING BEYOND MALWARE yield productive results. malicious android malware, including KnSpy Countries like India must also rope in smart start- According to the CrowdStrike report, 2019 saw fewer ups in healthcare in the war against corona. The was reported while in July, activities were malware-based attacks globally signifying the change targeted at users associated with the J&K region Ministry of Health and state governments should in tactics and techniques by individual adversaries. bring in smart minds and deploy the best that tech MYTHIC Unlike other India-based adversaries, Mythic has to offer. Sometimes untested and unusual ideas LEOPARD Leopard was detected consistently throughout WHAT DOES IT MEAN? can help when legacy systems are under stress. AI and robotics for public health is a real need Cyber space has always been the most fertile ground to spread false the year. It not only continued to target Indian MALWARE ATTACKS: These Malware-free attacks: and has demonstrated great value. A densely pop- news, rumours and propaganda by adversaries or malicious entities government sector entities, it was seen going are simple use cases where Those in which the initial beyond its target scope ulated India does not have the luxury of resources whose aim is to prevent the users from achieving their goals. a malicious file is written tactic did not result in a file nor can it wait for western countries to develop a According to a recent report by CrowdStrike, a cyber-security BITTERCIRCLE This suspected India-affiliated adversary to disk. These intrusion being written to disk. Such solution. There is enough talent and enterprise software firm, India witnessed heightened activities by these ACTIVITY resumed operations during Aug to Oct 2019, attempts are attacks generally require a among Indian tech companies to be able to support adversaries post the revocation of Article 370 of the Constitution by CLUSTER using previously identified tools.The actors comparatively simple to wide range of sophisticated the fight against Covid19. It is time for healthcare the Indian government in August last year. This action, said the behind BitterCircle target the Chinese and intercept and block using detection techniques organisations and public health policy makers to report, was immediately preceded by an increase in targeted Pakistani government and defence sectors traditional anti-malware detection and human shed their bureaucratic reservations and create a new intrusion activity from adversaries linked to India and Pakistan. solutions. threat hunting. framework of tech-based collaboration. Premium perks Wearables, apps are set to transform health the GOQii platform. same way that cash-backs “Traditionally, health insurance in revolutionised digital payments, such insurance, writes Namrata Acharya India has been based on old data. Now, wellness incentives will revolutionise we are moving away from actuarial to the health insurance sector in the next he health insurance sector Health Insurance has come out with a real-time data. This is a massive two to three years. could be in for a major trans- concept called Active Dayz. A customer transformation, one where health Watch Your Health is another formation as technology- needs to wear a device and earn Active insurance is based not only on reactive, insure-tech firm which has helped two T backed wellness regimes Dayz points, which can be redeemed while but proactive days,” says Vishal Gondal, companies to get sandbox approval. become the order of the day. Moving paying the insurance premium for the founder and CEO of GOQii. According to Ratheesh Nair, CEO and away from actuarial data, much of the next year. The customer can earn an Health insurers are also looking to founder of the company, the sandbox health insurance benefits in future Active Dayz by taking 10,000 steps in a day. test targeted disease management regulation has led to the proposed might be linked to real-time data from “Our Activ Health app has resulted programmes under the sandbox. For rollout of a host of tech-backed health apps and wearable devices. in significant business benefits, and example, ICICI Lombard General innovative products in the health Last year, the Insurance Regulatory lesser claims,” says Mayank Bathwal, Insurance has got the approval for an insurance space. Development Authority of India CEO, Aditya Birla Health Insurance. app-monitored diabetes and For example, one firm is offering to (IRDAI) invited proposals for products “We have been leveraging several cholesterol management wellness redeem points earned through activity under the sandbox regulatory regime. technology solutions such as mobile Health insurance companies are using apps to encourage people to adopt a healthy programme. The company will reward against gym membership or diet Regulatory sandbox usually refers to apps, cloud computing, wearable lifestyle and earn reward points which can be redeemed annually customers who exhibit regular exercise consultation. There is also a proposal to live-testing of new products in a devices and data integration with other and well-managed sugar, cholesterol, provide customers with a personalised controlled environment. It is similar to healthcare entities to create an edge offering much more for a healthy health device. weight and hypertension levels, which health coach, similar to the relationship a pilot project. The insurer is free to and deliver a seamless experience to lifestyle. For example, GOQii, a tech- For example, if the insurance policy are monitored through real-time health manager in a bank. Some companies withdraw from the project in case it fails our stakeholders,” he adds. enabled, preventive healthcare claim is for ~5 lakh, with a 50 per cent devices. are proposing to reward customers with to succeed, and provided it doesn’t However, the current regulations platform, has helped six companies in co-pay in the health insurance product, “Technology is going to bring major health monitoring devices like blood impact the customers who have already carry certain restrictions on such the health insurance space to get the policyholder pays only ~2.5 lakh and disruptions in the health insurance pressure and glucose monitoring purchased a product. schemes. Insurers are allowed to let approvals under the sandbox. the insurance company pays the sector. It will increase customer machines, against a fitness regime. IRDAI has so far received 173 customers redeem points earned GOQii has designed a co-pay balance. If the policyholder is very connect, reducing operational costs Regulatory sandbox requires the rolling proposals, most of which incentivise through activity against the renewal of insurance product for Bajaj Allianz, active, his co-pay amount might come while giving the insurance companies a out of pilot programmes to a limited wellness in the health insurance space premium, diagnostic tests, buying under which a customer can avail of a down to zero, which means the entire lot of data to analyse and come out with number of customers, from six months through the use of apps and wearable medicines, consultations with doctors health insurance cover of up to ~5 lakh claim will be paid by the insurer. In this better products,” says Sanjay Datta, onwards. So if all goes well, the health devices. Many health insurance and buying of health supplements. without paying any premium, provided product, the co-pay can change every chief underwriting claims, ICICI insurance space could be chockful with companies are already experimenting on Under the regulatory sandbox, they lead a perfectly healthy lifestyle, month, depending on the Lombard General Insurance. incentives for a healthy lifestyle by next these lines. For example, Aditya Birla health insurance companies are which is monitored through a wearable policyholder’s lifestyle as captured on According to Gondal of GOQii, in the year. MUMBAI | THURSDAY, 5 MARCH 2020 BRAND WORLD 15 . < Brands scour the sound cloud for a premium pitch As consumption of wearables soars in the country, brands look at ways to build premium niches in the growing mass market for audio devices

T E NARASIMHAN Clarion Kenwood, Bose, Chennai, 4 March Sennheiser, B&O, B&W, and scores of others are all chiming ith consumption pat- in for some ear-time with such terns and lifestyle customers. W choices rolling down But how does one do that? the millennial track, the mar- By building brand ket for wearable devices in the equity, according to country is growing at breakneck market ana- speed. From fitness devices to lysts. Make a hear-ables, consumers have fan out of a con- plumped for smart gadgets with sumer and hook him increasing fervour and in larger for life while leading numbers and brands, having him up the price flocked in and crowded up the chain, gradually, they sector, are now looking at ways say. Wearable device own- to score higher margins and lure ers live and breathe active buyers into big ticket purchases. (replaced Fitbit) and Fossil, observation and data, is grow- lifestyles, several reports indi- From big names such as according to IDC. ing rapidly. It has almost dou- cate. The consumer also usual- Titan, Xiaomi, Samsung However the numbers tell bled in volume and turnover ly pursues an affluent lifestyle among others and scores of just part of the story. While the year on year and there is a lot of and is strongly connected with small start-ups in fitness, audio market is large and growing, it is potential for brands like ours others who share a similar pas- and health, all are pitching for dominated by basic wearables to accelerate in this business. It sion, for fitness or entertain- a slice of the wearables market. that account for 96.2 per cent offers opportunities for giving ment and health. Working with With reason too. Shipments of category share, up 177 per cent diverse value propositions to this insight, brands can offer wearables saw an impressive YoY in 2019. However more consumers, which Titan has products that locks them in. 168.3 per cent year-over-year expensive and premium prod- always been strong in," said Brands can also generate growth in 2019, closing the year ucts or smart wearables that can Somprabh Singh, business stickiness by bringing in prod- with 14.9 million units, report- run third-party applications on head-Wearables, Titan ucts at different price points that ed the International Data the device itself, accounted for Company. serve a single function. For Corporation (IDC). just 3.8 per cent of the overall To drive greater demand for example, a hear-able can differ- Within the segment, ear- wearable shipments in 2019. premium products, brands are entiate its prices on the basis of wear or hear-ables topped the Brands are hoping to prise digging into the lifestyle and the quality of the sound or by charts with about 57 per cent open the premium market, by behavioural patterns that mark innovative features. Anisha share, followed by wrist bands, offering consumers a range of a millennial consumer, espe- Dumbre, market analyst, IDC watches and others. The ear- value propositions, upgrade cially within the audio devices India said, “Ear-worn devices wear category grew five-fold, opportunities and sleekly category, which in many ways is have found huge appeal with shipping 8.5 million units and designed products. To an extent akin to the art market. True afi- consumers, who are spoiled for watches grew 77.5 per cent. this has worked in the past year, cionados are willing to go as choice with a variety of models at Xiaomi maintained its leader- as shipments of smart wear- high as it takes for the right different price points. ship in the market for the fifth ables grew 49.5 per cent over the sound or the tone and pitch and Affordable neckbands are consecutive quarter, followed previous year. even the look. Brands such as leading the charge of migration by GOQii, Titan, Samsung “The market, based on our Harman, Alpine, Blaupunkt, from wired to wireless.

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base to Singapore, Malta, or Malaysia. The involving 480,000 cases were stuck. Sources Mega merger... promoters of one of the largest exchanges, say the government is eyeing 100 per cent However, the timeline for inviting comments Zebpay, recently sold their stake to overseas resolution under the scheme and is expect- from shareholders will be shorter than what investors and, under new promoters, Zebpay ing to gather at least ~2 trillion by the end of was followed during the merger of Dena will offer crypto-to-crypto trading. Now, such this month. Bank and Vijaya Bank into Bank of Baroda, exchanges can allow buying and selling cryp- In the report cited above, the tax depart- which came into effect on April 1, 2019. tos against money, subject to KYC and banks ment has briefed the panel about the com- Finance Minister Nirmala Sitharaman said opening their current accounts. munication with large taxpayers/foreign the government weighed the benefits arising companies and whether they are eligible to out of the Bank of Baroda amalgamation With inputs from Arup Roychoudhury take this route. According to the tax author- before taking a call on the merger of 10 pub- ities, most of the large taxpayers who have lic sector banks (PSBs). disputes relating to international tax have “We looked at the outcome (of the BoB L&T plans... been contacted. The report said most of these amalgamation) within a short span, with an cases were being fought again. They had first intention to understand if there are any les- The 1400-MW Nabha power project in gone in favour of assessees, and the depart- sons we need to learn from it and the impact Punjab is also put on the block, which could ment challenged the decisions in higher on the performance. The amalgamations are reduce its debt by another ~7,500 crore. forums. However, in such cases too, the com- being done so that customers reap benefits of “Our consolidated debt looks high due panies concerned have been told how they larger banks. There will be more fund for to L&T Finance Holdings where it borrows could avail of the benefits. credit and so on,” Sitharaman said. money to lend further. Hence, L&T Finance's Sources, however, say foreign firms may After the process is complete, India will debt should not be considered while looking not be enthusiastic about opting for the have 12 PSBs instead of 27 back in 2017. at L&T’s debt. Our standalone debt after scheme because their cases are mostly on reducing cash is not high for the size of the legal grounds. Mumbai, which contributes 37 organisation. We do have high debt at some per cent of direct tax, has 448 disputed cas- SC lifts crypto ban... SPV (special purpose vehicle) level like pow- es of ~807 crore, pending before the income- er and Hyderabad Metro project, which are tax appellate tribunal, Mumbai. Garg said after the judgment: “I stand by on their own steam where debt was taken what the committee had recommended. The based on their own cash flow,” said he. use of private cryptocurrencies is danger- Subrahmanyan said for the next financial India Inc... ous. They are not stable and have no sover- year, the company did not have any big cap- eign backing, and their use can lead to a lot ital expenditure plan and was conserving In case he’s not available, officials at the lev- of problems. They can be used to fund illegal cash. "In these times, it’s better to have cash el of senior vice-president have to give per- activities. They will never work as a payment in hand. But at the same time, if there is any mission. Any employee with symptoms is system.” The government will now have to good opportunity like Mindtree, we will cer- being told to work from home. “We are also decide on regulating crypto currencies. tainly look at it," said he. promoting the use of video conferences, and The judgment is also expected to benefit In FY20, the company spent ~10,000 crore are temporarily avoiding big events ,” said a blockchain. Nishith Desai, founder of Nishith to acquire Mindtree, which Subrahmanyan company spokesperson. Desai Associates, which represented the said, would help increase its presence in the Among others, Tech Mahindra and IPE Internet and Mobile Association of India IT sector. “Ultimately, the plan is to merge Global have cancelled events. “There’s a push (IAMAI) in this case, said: “We have been Mindtree and L&T Infotech once the new towards using tech for meetings,” said fighting this issue since 2013. We have sub- management settles down, but the merger is Ashwajit Singh, MD, IPE Global. Harsvendra mitted to the government a draft framework still one or two years away,” he said. Soin, chief people officer of TechM, said the for self-regulations incorporating best prac- L&T earns almost 75 per cent of its rev- firm was stocking up on supplies of sanitiz- tices for crypto trade and KYC norms. This enues from the EPC (engineering, procure- ers, emergency medicines, and food. ruling will facilitate the growth of blockchain ment and construction) and projects busi- Meanwhile, Karnataka has issued an for the benefit of eGovernance in the matters ness, followed by 15 per cent from IT and advisory to IT firms to avoid non-essential of land records, eVoting, stock records, etc. financial services, and the rest from manu- travel to affected countries. Firms such as The government too will benefit as it will be facturing. “The defence business is a per- Wipro and TCS have sent out advisories, too. able to collect more direct and indirect taxes.” manent start-up but it is limited by its size According to sources at Wipro, the firm Exchanges are eager to launch trading in while it’s the services business which will has formed teams to assess the situation at its cryptos. Many exchanges have shifted their grow faster. These companies are growing at campuses. Wipro employees, who’ve trav- the rate of 15-16 per cent a year and elled to any affected areas within China in the will continue to grow at the same last few days, have been asked to work from pace, faster than other businesses,” home for 14 days. “Wipro has suspended he said. travel to and transit through mainland China, Subrahmanyan said FY20 was including Hong Kong and Macau, until fur- one of the toughest years in recent ther notice. Employees have also been times. As the company has several advised to avoid non-critical travel to verticals, once one vertical went Singapore, South Korea, Japan and Italy,” down, others chipped in. “The the company said in a statement. hydrocarbon, power transmission, Intel, too, has sanitised its offices in water and power sectors did well.” Bengaluru. “All vendors, who are coming to The domestic order book did our offices, are being screened,” said an Intel not see any major change, though it employee. US-based IT services firm Aeris received some good orders from Communications, which has its India office West Asia in the hydrocarbon and in Noida, has started distributing medically water segments. The company also certified N95 masks to its employees. received some good orders from As the risk of infection increases, FMCG Africa in power transmission and firms are also taking several precautionary water which compensated for slow measures to minimise employee exposure. orders in India. In the power sector, Apart from travel advisories, Hindustan the company received an order to Unilever has ramped up cleaning efforts in set up a power project in Buxar offices. Hand sanitizers in office corridors worth ~7,000 crore. are a common sight. Companies such as Godrej Group, RPG Enterprises and Titan have also sent out internal mails, advising 5K entities... employees to restrict travel to coronavirus affected geographies. The common instruc- The report highlighted that 80,332 tion across offices: wash your hands fre- appeals of direct tax involving ~4.5 quently, and use sanitizers liberally. trillion had been pending before Major upcoming events such as Ficci forums including the commission- Frames and Indian Premier League (IPL) er (appeals), income-tax appellate cricket tournament, scheduled later this tribunals, high courts, the SC, and month, haven't been postponed yet, but dispute resolution panels. Earlier there’s a shadow of uncertainty. The partici- the impression was that tax pation of delegates at Frames could be poor demands of over ~9 trillion and this year, an executive said. 16 MUMBAI | THURSDAY, 5 MARCH 2020 1 > Coming soon: India plans Chandrayaan-3 launch by first half of next yr The Indian Space Research based on the lessons learnt from by Isro. The revised configuration takes Isro will attempt to launch in the same GISAT-1 LAUNCH POSTPONED Organisation (Isro) is planning to Chadrayaan-2. Earlier, Isro Chairman K care of the robustness in design and area, and would have a lander, rover Isro has decided to postponed GISAT-1 launch Chandrayaan–3 during the first Sivan had said Chandrayaan-3 would capacity enhancement for flexibility. and propulsion module like its prede- onboard GSLV-F10 launch. The rocket Own Michelin half of 2021. The previous one crash have a similar configuration to the Isro had aimed to land on the south cessor. The spacecraft would cost GSLV-F10 carrying India's first agile Earth landed on Moon’s surface in September Chandrayaan-2, which he described as pole of Moon — on a spot that no oth- around ~610 crore, including ~360 crore observation satellite was scheduled to rankings 2019. The mission has been configured the most complex mission attempted er landing craft had reached before. for the launch rocket. T E NARASIMHAN launch on March 5.

THE EAT SHEET Number of restaurants (Organised & unorganised) 95,287 87,650 42,307 38,838

Delhi Mumbai Bengaluru Kolkata Source: NRAI India Food Services Report 2019

PAVAN LALL rankings and the processes Mumbai, 4 March were created after studying how the Grammy Awards and hat do you get when the Oscars were nominated a private equity and compiled. The rankings W investor, a culinary will be determined by profes- journalist and an award-win- sionals who understand the ning Indian chef, with two trade and include chef Gaggan Michelin stars, come together Anand, who will serve as men- over a venture? Well, it’s India’s tor for Culinary Culture. very own version of Michelin Will the platform be partial Star rankings for Indian chefs. to particular kinds of cuisine? Everstone Group’s co- “We are not looking to promote founder and chief executive chefs who are corporate bosses Sameer Sain, a huge fan of or chefs who are into reality Indian food, founded Culinary shows,” said Anand. “A chef is Culture, which aims to provide supposed to cook and the idea is authoritative rankings to to rank and promote the best of restaurants and chefs through chefs who are true to their art no Foodstars — the Indian equiv- matter what they cook. I am a alent of Michelin Rankings. Kolkata boy but started train- Michelin Guides ing as a pastry chef.” are a series of books Everstone Group Anand’s point is that have been co-founder & CEO that influences will published by the Sameer Sain, chef vary across every French tyre firm for Gaggan Anand, chef’s personal jour- several decades and and journalist ney but what mat- gives awards by star Vir Sanghvi have ters ultimately is ratings from one to come together how good it tastes. a maximum of for this venture Culinary three. The gain or Culture will bring loss of a star can lead to a sig- globally-ranked chefs to India nificant impact on the success as well as take local chefs of a restaurant in Europe and abroad so they can work at the international markets. world-ranked eateries. “Indian food isn’t main- Vir Sanghvi, executive stream yet. Italian cuisine and chairman for the venture, said even Japanese and Peruvian Foodstars, which will be award- food are. You don’t see Indian ed, will go through a rigorous food around the world. This is process of evaluation from The an initiative that will hopefully Academy, a team of culinary 50 change that around,” said Sain. experts, food critics, and indus- “The three biggest things in try personalities as well as writ- India are actually cricket, ers spread across 15 cities. Bollywood and food.” “Ultimately, it’s all about He said initial funding good food but that doesn’t would be around $5 million mean it will be restricted to and that the Foodstar rankings, gourmet eateries or five-star expected to come out in the joints,” Sanghvi said. “There are near future, are a professional dhabbas and sidewalk restau- purist ranking. These rankings rants that will also be part of will not be influenced by ads, the consideration.” votes or democratic populism. Culinary Culture has also Sain, whose Everstone launched Street Food Super- Group has funded and backed stars, an award for street food Burger King in India, said the vendors. Nirav Modi assets garner ~2.29 crore in online auction Items were expected to fetch ~50 lakh

PORSCHE VIANNEY HALTER & GOLDPFEIL PANAMERA JUMP HOUR WRISTWATCH SUB MODEL S WITH MOONPHASES Estimate: ~1.5-2.5 lakh Estimate: Winning bid: ~10-15 lakh ~12.94 lakh Winning bid: CARTIER ASYMMETRIC ~36 lakh 'CRASH' WRISTWATCH Estimate: ~2-3 lakh Winning bid: ~36.4 lakh

PHOTOS: SAFFRONART.COM

PAVAN LALL Auction closed with all lots Mumbai, 4 March sold at a total value of ~2.29 crore. “We saw competitive An auction of cars, sculptures bidding across categories and and personal objects of value countries, with well over 700 — including watches and advance bids received prior to designer handbags — the auction’s opening, mak- belonging to diamond jew- ing it one of the most success- eller Nirav Modi, accused of ful online auctions to date,” bank fraud, went under the said Minal Vazirani, president hammer on Wednesday and and co-founder Saffronart. beat estimates. Nearly all lots surpassed The auction was conduct- estimates. Top items includ- ed by Saffronart on behalf of ed a Porsche Panamera that the deputy director, was driven by Nirav Modi’s Enforcement Directorate, wife, Ami Modi, that went for Mumbai, and was expected ~36 lakh; a gold Cartier wrist- to garner ~50 lakh in pro- watch that went for ~36 lakh; ceeds, but generated over and, a Vianney Halter and four times that number. Goldpfeil wristwatch that Saffronart’s Spring Online was sold for ~13 lakh.