ECONOMY, P3 COMPANIES, P4 INTERNATIONAL, P7 BHARAT MOBILITY GLOBAL EXPO AHEAD OF ESTIMATES BUMPER SHOW India moving fast, to become third-largest in our third term: PM Expect order book to cross `5 trn in first half of FY25: L&T CFO Meta, Amazon surge by $280 bn as earnings smash expectations MUMBAI, SATURDAY, FEBRUARY 3, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL LXIV NO. 29, 24 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 72,085.63 ▲ 440.33 NIFTY: 21,853.80 ▲ 156.35 NIKKEI 225: 36,158.02 ▲ 146.56 HANG SENG: 15,533.56 ▼ 32.65 `/$: 82.93 ▲ 0.05 `/€: 90.31 ▼ 0.72 BRENT: $78.38 ▼ $0.32 GOLD: `62,901 ▲ `396 IN THE NEWS BANK LIQUIDITY DEFICIT DROPS BY `1 TRILLION AFTER TOUCHING an all-time high of `3.4 trillion last month, the liquidity deficit in the banking system has begun to ease. The liquidity deficit declined to `2.4 trillion, reflecting a drop of around `1 trillion, data from RBI showed, reports Sachin Kumar. ■ PAGE 8 NEWROOFTOP SOLAR SCHEMETO PROVIDE UPTO 60% SUBSIDY THE GOVERNMENT will increase the subsidy provided to consumers under the newly announced rooftop solar scheme, Suryodaya Yojana, to 60% against the current 40% provided for installation of rooftop solar projects up to 3 kW capacity, Union minister for power and renewable energy RK Singh said on Friday, reports Arunima Bharadwaj. ■ PAGE 3 SEBI PANEL SUGGESTS REMOVING SECURITY DEPOSIT FOR IPOs AN EXPERT panel formed by Sebi on Friday suggested abolishing the requirement of a mandatory security deposit with the exchanges before a public issue, a move that could make it easier for firms to access the primary market. ■ PAGE 8 ‘GOVT SETTING REALISTIC GOALS ON DEFICIT, PUBLIC DEBT’ Era of rigid targets over: FS PRASANTA SAHU New Delhi, February 2 SOMANATHAN-SPEAK `1.64 trillion THE RELEVANCE OF “very specific and very rigid”targets for budget deficits and public debt is becoming questionable globally, finance secretaryTV Somanathan said on Friday,adding thatratherthansetting“Utopiangoals”and then deviating from them,the governmentwould set realistic ones and meet them. The comments assume significance as India has in recent years walked its talk on fiscal consolidation, with the latest interim Budget, too, bearing testimony to this approach. Yet, global credit rating agencies remained ambivalent towards India’s fiscal situation, and indicated status quo in the country’s sovereign rating in their post-Budget commentary. While the capex growth is budgeted to slowin FY25,the secretary said no additional provision for capex would be required in the year.“There is enough for the current economic conditions. I think private capex is picking up,”he said. On the“lowersubsidyprovisions”for food and fertilisers for FY25,the official said the food subsidywas revised up for the current fiscal from the budget estimate of `1.97 trillion to `2.12 trillion (RE) as arrears of decentralised procurementwere paid to the states.“For the next year,food subsidy (of`2.05trillion)isbasedonanticipated(economic costsof PDS grain),and isveryrealistic,” he said. Onfertilisersubsidy,however,hesaidthatthe provision of `1.64 trillion for FY25 (against `1.89 trillion in FY24),is based on current market prices,and more funds would be provided in case prices move up. India has adopted the recommendations of a panel on fiscal responsibility, for capping the Centre’s debt-to-GDP ratio at 40% of the GDP, andthatforstates,at20%.ItsoriginalFRBMgoal is to keep the fiscal deficit below 3%. Thankstobetterrevenueperformance,theCentrehasreviseditsfiscaldeficittargetto5.8%ofthe RESULTS CORNER Tata Motors posts record quarterly profit PAGE 4 IndiGo profit soars to `2,998 crore PAGE 4 Apple India reports record revenue in Oct-Dec PAGE 4 FE S P E C I A L S We drove two luxury cars this week, both on two extremes of the segment. ■ MOTOBAHN, P7 `11.1 trillion, private capex picking up ■ Fiscal path after achieving the 4.5% ON PAGE 2 SANJAY MALHOTRA, REVENUE SECRETARY TUHIN KANTA PANDEY DIPAM SECRETARY VANANTHA NAGESWARAN, CHIEF ECONOMIC ADVISER ‘PITTWEAKS AN ONGOING AGENDA, CAPITAL GAINS TAXES CONVERGING’ ‘DISINVESTMENT TO BE CALIBRATED, NO CHASING TARGETS’ ‘FISCAL CONSOLIDATION TO LOWER INFLATION, INTEREST RATES’ GDP for FY24 from the budget estimate of 5.9% and pegged it at 5.1% for FY25, a steeper correctionthanthemarketexpected.Onthefiscaldeficit targetfornextyearbeing“ambitious”,Somanathan saiditwasfoundedonreasonablerevenuegrowth, reasonable increase in non-tax revenue and tight control overavoidable expenditure. Feb 1 SENSEX 10-year govt bond yield (%) 7.05 7.04 points 21,855.65 Close: Feb 2 22,126 (New high) 7.06 21,697.45 Brent crude ($/bbl) 79.5 79.3 7.04 79.24 79.17 79.1 7.03 78.9 7.02 7.01 points 72,085.63 158.20 0.73% Feb 1 7.06 440.33 0.61% Close: Feb 2 NIFTY Open Previous close: 7.06 Close 78.7 78.5 Open Close STOCK PLUNGES ANOTHER 20% RBI crackdown: Paytm loses `17,000 crore in two days SACHIN KUMAR Mumbai, February 2 THE SHARES OF One97 Communications,Paytm’s parent company,slumped 20% for the second day in a row, wiping out over `17,000 crore ($2 billion) of investor wealth in just two trading sessions. This follows the Reserve Bank of India (RBI) barring its associate company, Paytm Payments Bank, from taking fresh deposits and doing credit transactions. The two-day decline has pushed the stock to `487 per share on the BSE, taking it close to its all-time low of `438, which it had touched in March 2022. The sell-off comes against the backdrop of a number of analysts such as Jefferies, JPMorgan Chase & Co and Citigroup Inc,downgrading the stock to‘sell’ after the RBI notification. “The order materially impacts Paytm’s core payments business at 59% of revenue,” VIJAY SHEKHAR SHARMA, FOUNDER & CEO, PAYTM TO EVERY PAYTMER, YOUR FAVOURITE APP IS WORKING, WILL KEEP WORKING BEYOND FEBRUARY 29 AS USUAL JPMorgan analysts, including Ankur Rudra,wrote in a note. Continued on Page 14 Says investors have no right to vote on management change ANEES HUSSAIN Bengaluru, February 2 fiscal deficit target by 2025-26 would become clear once "we are closer to the milestone" 71,645.30 ■ REPORTON PAGE 8 A tale of two stars: Mercedes-Benz GLA and AMG GLE based on current prices, will revise if needed A day after Budget, indices rally A DAY AFTER the interim Budget, stocks rallied on Friday with the Nifty scaling a new peak of 22,126.80 in intra-day trades before settling at 21,855.65, up 0.73%. The Sensex climbed 440.33 points to settle at 72,085.63. Bond yields ended flat at 7.06%. On Thursday, the yield had fallen by about 10 bps after the government announced smaller market borrowings for FY25. Brent crude oil prices were ruling below the $80 per barrel mark. No additional provision for capex would be required in FY25 over and above the budgeted ■ FY25 fertiliser subsidy outlay of Byju’s leadership rallies behind Raveendran Paytm wallet biz at risk as licence transfer uncertain PAYTM PAYMENTS BANK'S popular wallet business will not be able to operate after a February 29 deadline imposed by the Reserve Bank of India to wind down key businesses as the wallets cannot be transferred to One97 Communications without the central bank’s approval, two sources familiar with the matter told Reuters. Paytm Payments Bank holds the licence forthewallet business and houses all of Paytm’s 330 million wallet accounts,the sources said.For the licence to be transferred back to One 97 Communications, the RBI would have to give fresh approval, which appears difficult under the current circumstances, one of the sources said. Fitch Ratings said on Friday that the pace at whichIndiaisreducingthesizeofitsfiscaldeficit isn’t enough to change its credit profile, as the country continues to have high debt metrics compared with peers. Continued on Page 14 ADAYAFTER some Byju’s investors issued a notice convening an extraordinary general meeting (EGM) to oust the current leadership team led by founder & CEO Byju Raveendran, the company said its shareholder agreement does not give investors theright tovoteonCEOor management change. The leadershipteamcomprising32executives also expressed “unequivocal support”for Raveendran. “Think & Learn (TLPL), the parent of Byju’s,has notedwith sorrow, statements from a select few investors calling for an EGM to replace founder and group CEO Byju Raveendran. Under these unfortunate circumstances, we would emphasisethattheshareholder’s agreement does not give them the right to vote on CEO or management change,”the company said in a statement on Friday. Byju’s will continuewith SHAREHOLDER AGREEMENT DOES NOT GIVE THEM THE RIGHT TO VOTE ON CEO OR MANAGEMENT CHANGE BYJU’S STATEMENT ON INVESTORS SEEKING FOUNDERS’ OUSTER INSIDE Byju’s US arm files for bankruptcy PAGE 5 the proposed $200-million rights issuethatwasannouncedonJanuary 29,forwhich it has received encouraging responses from multiple investors,the statement added. In an email to employees on Friday, the company also blamed “an artificially induced crisis” by a select groupofinvestorsforadelay in paying January salaries. The salarieswill be paid in a phased manner starting Fridayandwillbecompletedby Monday,it said. Continued on Page 14