MARKETS, P8 ECONOMY, P2 COMPANIES, P9 TO BOLSTER COMPLIANCE $49 BN RECORDED A YEAR AGO TO DEVELOP TECHNICAL STANDARDS Paytm forms advisory panel under former Sebi chief Damodaran Lower FDI inflows at $47 billion in FY24 not ‘material factor’: Goyal Google joins Adobe, Intel, Sony to trace AI content origin CHENNAI/KOCHI, SATURDAY, FEBRUARY 10, 2024 WWW.FINANCIALEXPRESS.COM FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE READ TO LEAD VOL NO. XLIV 235, 32 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 71,595.49 ▲ 167.06 NIFTY: 21,782.50 ▲ 64.55 NIKKEI 225: 36,897.42 ▲ 34.14 HANG SENG: 15,746.58 ▼ 131.49 `/$: 83.03 ▼ 0.08 `/€: 89.41 ▲ 0.05 BRENT: $81.43 ▼ $0.20 GOLD: `62,379 ▼ `70 ■ Kaynes Tech, CG Power, Foxconn-HCL JV, Hiranandani group, among others, in the fray ■ Till now, US-based Micron's `22,516-crore ATMP project approved On Friday, CG Power announced a joint venture with Japan-based Renesas America and Stars Microelectronics (Thailand) Public, for its outsourced semiconductor assembly and test (OSAT) unit.The location forthe unit isyet to be finalised,but the expected investment is $791 million (`6,570 crore) for a period of five years. Jairam Sampath, chief financial officer, KaynesTechnology,said,“The process ofvetting projects forapproval is underway.We are quite confident that our proposal would get approved and because general elections are a couple of months away, the approval should happen shortly,”he said. Continued on Page 9 ● SHARIF CLAIMS POLLWIN IN PAKISTAN REUTERS RESULTS CORNER Hero profit rises 51%, beats estimates PAGE 4 IPO-bound Oyo’s profit jumps about 88% PAGE 4 Tata Power posts marginal growth in net proft PAGE 5 empowerittoregulate(superviseandmonitor) NBFCs,the sources added. According to RBI regulations, NBFCs have to obtain priorwritten permission for acquisition or transfer of control. This Continued on Page 9 Dividend payouts remain strong Hyundai picks JPMorgan, Citi to accelerate $3-billion IPO Oil companies drag CPSEs down in FY23 PRASANTA SAHU & KISHOR KADAM New Delhi/Mumbai, February 9 REPORT CARD CENTRAL PUBLIC SECTOR enterprises (CPSEs) posted a 15% year-on-year decline in theiraggregate net profits to `2.12 trillion in FY23,owingmainlytothedeclineintheearningsofoilmarketingandsteelcompaniesthat are vulnerable to global commodity price cycles,andreducedprofitabilityofsteelfirms. But the CPSEs, which withstood the pandemic much better than the broader economy,largelyheld paceinthelastfinancialyear too. Of the `38,000-crore annual decline in aggregate CPSE net profits, almost all was attributable to the inability of OMCs to pass onthehighercostofcrudeoiltotheretailconsumers of auto fuels. Also,therewasn't a commensurate annual decline in dividend payouts by the CPSEs in FY23 (down just 8.7%) as the government continued to nudge them to reward it and other shareholders, as it strove to boost nondebt receipts and find resources for the elevated Budget capex (see chart). It may be noted that calender year 2023 was bestyearforCPSE stocks in a decade,with the PSU index,comprising56listedfirms,rallying over 53%.The otherpublic sector index — BSE CPSE index with 57 stocks — did even betterintheyear,rising71.7%.Thiswaswhen the benchmarks’ — Sensex and Nifty — rose 17.3% and 18.4%,respectively,in 2023. (` trillion) M SRIRAM & ADITI SHAH New Delhi, February 9 CPSEs’ net profits FY19 FY20 FY21 FY22 FY23 Excluding oil marketing companies, CPSEs reported a flat growth in net profit, at `2.01 trn in FY23, compared with `2 trn in FY22 Dividends (` cr) ALL OMCs FY19 FY20 FY21 Source: Public Enterprises Surveys FY22 FY23 In fact,the rally in PSU stocks in 2023 was so impressive that out of 84 listed stocks, almost a fourth gave returns of over 100% while another 25 yielded returns between 50% and 100%. Continued on Page 9 ● BHARAT RATNATO SINGH, RAO, SWAMINATHAN FE S P E C I A L S Former Pakistan prime minister Nawaz Sharif, his daughter and politician Maryam Nawaz Sharif, his brother and former PM Shahbaz Sharif gather at the party office of Pakistan Muslim League (N), in Lahore on Friday. Sharif declared victory in the national elections and will talk to other groups to form a coalition government as his party failed to win a clear majority on its own. ■ REPORT ON PAGE 7 Travel: Agar Kutch nahi dekha,toh kucch nahi dekha Finding Antarctica, Iceland, seven seas and prehistoric India in a corner of Gujarat. ■ MOTOBAHN, P7 Earn tax-free returns from Sovereign Gold Bonds Open to subscription from February 12-16, the issue price is `6,262 per gm ■ PERSONAL FINANCE, P8 Charan Singh, former prime minister Narasimha Rao, former prime minister Rashmi Saluja, executive chairperson, Religare Enterprises includestakeoveroracquisitionofcontrolof an NBFC or merger of an NBFC that would lead to transferof more than 10% stake. 7,844 initially under consideration Mohit Burman, chairman, Dabur India 105,000 `13,000 cr now has to write to RBI for the deal to see the light of the day 2.12 worth around ■ Rashmi Saluja-led Religare 28,355 INDIA'S FOREX RESERVES jumped by $5.736 billion to $622.469 billion for the week ended February 2, the Reserve Bank of India said on Friday. In the previous week, the overall reserves had increased by $591 million to $616.733 billion. In October 2021, the country's forex kitty had reached an all-time high of $645 billion. ■ Proposals abide by the RBI rules that empower it to regulate NBFCs 115,171 FOREX RESERVES HIT ONE-MONTH HIGH OF $622.47 BN setting up semiconductor fabrication units ■ Acquirers are to complicate the takeover of Religare by the Burman family 18,440 WHILE ZOMATO’S FOOD delivery business posted a nearly 30% y-o-y growth in sales in the October-December quarter, analysts maintain that going ahead its quick-commerce arm Blinkit, will outpace the food delivery business, reports Ayanti Bera. ■ PAGE 4 Four for proposals THE RESERVE BANK of India (RBI) has refused to give priorpermission to the Burman family for its open offer proposal for ReligareEnterprises(REL).Initsletterdated February5,theregulatorhasstatedthatthe proposal cannot be acceded to as the application should be submitted by the nonbanking financial company(NBFC) and not the potential acquirer. The move gains importance as it could complicate the takeover of Religare by the Burman family,the owners of Dabur India, who are embroiled in a bitter feud with the managementof the NBFC. RBI has stated that the NBFC, in which change in management and control is taking place, should submit the application, sourcesclosetothedevelopmentsaid.Ithas askedtheacquirerstoabidebytherulesthat 2.5 BLINKIT MAYTOP ZOMATO’S FOOD DELIVERY BIZ semiconductor fabs andATMP are embroiled in a bitter feudwith the NBFC's management ■ Move could 73,088 THE FINANCE MINISTRY on Friday met fintechs and banks such as PNB and SBI, and officials from various government departments, to discuss the ways to tackle increasing incidents of recent online financial frauds, reports fe Bureau. SEVERAL SEMICONDUCTOR ASSEMBLY and packaging projects are expected to be approved by the government before the dates for the parliamentary elections are announced. Sources said that clearances need to be expedited as the approved projects are entitled fora 50% subsidybythe government on the project cost.Once the election dates are announced, the model of code of conduct will come into force and the disbursal will have to wait for a couple of months, which may delay the projects. Currently, four proposals for setting up semiconductor fabrication units and thirteen for setting up compound semiconductor fabs and assembly, testing, marking and packaging (ATMP) units byfirms such as Kaynes Technology,CG Power,Foxconn-HCL JV, Hiranandani group, among others, are at the evaluation stage by a governmentappointed committee. Projects submitted by companies are vetted by the India Semiconductor Mission (ISM)andapprovedorrejectedbaseduponits recommendations. Goingbythedisclosedinvestmentsbysome of the companies, the proposals add up to around `13,000 crore.This is over and above US-based Micron’s `22,516-crore ATMP project,which was approved by the government lastyearandwillrolloutthefirstmade-in-India chip bythe end of the current calendaryear. “Wehavesubmittedourapplication,which needs to be approved by the government.The momentwehaveclearancesfromourprospective technology partners we will share more details with the government,” N Srinivasan, managingdirectoratCGPowerandIndustrial Solutions,saidduringthecompany’sOctoberDecemberearnings callwith analysts. 13 proposals for setting up compound ON THE TABLE ■ Dabur India’s owners submitted by the NBFC and not the potential acquirer RAJESH KURUP Mumbai, February 9 1.65 ONLINE FRAUDS: GOVT MEETS BANKS, FINTECH OFFICIALS JATIN GROVER New Delhi, February 9 Central bank refuses to NEW OBSTACLE give prior permission ■ Application should be 0.93 INDIA IS NOT concerned about voluntary output cuts by the Organisation of Petroleum Exporting Countries or Saudi Arabia's decision not to expand its capacity, said oil minister Hardeep Singh Puri, reports Arunima Bharadwaj. ■ PAGE 2 Green light to several chip projects soon 71,693 13,067 OPEC CUTS NOTA WORRY, SUPPLIES ROBUST, SAYS PURI Burmans’ open offer proposal for Religare runs into RBI wall 1.43 NEWS AHEAD OF MODEL CODE OF CONDUCT 71,848 16,963 IN THE MS Swaminathan, agricultural scientist SEE ON PAGE 19 HYUNDAI MOTOR HAS appointed investment bankers JPMorgan and Citi to advise on its at least $3-billion India IPO, accelerating listing plans in the world’s third-largest auto market, sources with direct knowledge said.Thecompanyplans to file regulatory papers by May or June foran approval,said two of the three sources,all of whom declined to be named as the talks are private. JPMorgan, Citi and Hyundai's Indian unit declined to comment. In a statement, Hyundai said it had“nofurtherupdateatthisstage”, referring Reuters to its statement earlierthisweekthattheplanhasnot beendecided,andthatitwouldcomment on the matter when the plan becomesfinalisedorwithinamonth. Hyundai, the second-biggest automaker in the country with a 15% market share, is in the initial stages of considering an IPO in Indiathatwouldvalueitslocaloperation at up to $30 billion, Reuters reportedthisweek.TheIPOcouldbe the country’s largest. Such a fundraising by Hyundai would put the valuation of its Indian operation at more than half its market capitalisation of around $47 billion in Seoul. Some domestic Indian investment banks are also likely to be appointed for the IPO in coming months,the two sources added. IPOs in the country boomed in H2of2023,andbankers expectthis to continue in 2024 amid hopes for political stability after elections. Hyundai is doubling down in India and the US after scaling back its production in China after years of losses there, and selling its two Russian plants. — REUTERS SEVERAL FIRMS MOVING SOME OFFSHORE BUSINESS FROM SINGAPORE, DUBAI GIFT City presents asset managers a way back home JAYSHREE P UPADHYAY Mumbai, February 9 SEVERALDOMESTICASSET managers said theyare moving,orplanning to move, some offshore fund business from financial centres such as Dubai and Singapore to Gujarat International Finance TecCity, or GIFT City, to gain better access to the capital markets. The government is promoting GIFT City as a“gateway for global capital and financial services for the economy” and is trying to attract companies through tax-breaks and other incentives. Inthelastsixmonths,abouteight of the 10 biggest domestic asset managershaveeitherrelocatedtheir business,orset up newfunds orfiled HOME-RUN Mirae Asset Investment Managers ■ Shifted a $200-mn Hong Kong-based fund to GIFT City ■ In active Kotak Mahindra Bank has an office at GIFT City, helping funds set up their operations there DSP Mutual Fund Plans to move its $450-500 mn Mauritius-based operation to the hub by March Aditya Birla Sun Life AMC ■ Has `3.08 trn under management ■ Is moving operations from Dubai & Singapore to GIFT City consideration to move a second fund Over 80 fund managers Commitments of $30 bn Investments of over ■ Expects to manage $435 mn out of GIFT $2.93 bn City in the near term forpermitstomovetoGIFTCity,according to executives at thesefunds. “Thestableregulatoryregimeand proximity to the Indian markets is Last 3 years in GIFT City: driving our decision,” said Swarup Mohanty, CEO, Mirae Asset Investment Managers,which has shifted a $200millionHongKongbasedfund to GIFTCityand is in“active”consideration to move a secondfund. Mirae Asset Investment Managers is the Indian unit of South Korea's MiraeAsset Financial Group. Mirae expects to manage $435 million out of GIFT City in the near term.The fund has a total of `1.46 trillion ($17.58 billion) of assets undermanagementin the country. GIFT City offers companies that set up there a 10-year tax break and does not charge taxes on transfer of funds from overseas jurisdictions. There are no capital gains taxes for investinginunitssetatupGIFTCity, similarto Singapore orDubai. “It is substantially more cost effectivetorunafundinGIFTCityas compared to Mauritius and Singapore due to lowercost of living,rentals and cost of manpower,” said Sachin Samant,president banking and financial institutions group, Kotak Mahindra Bank. It has an office at GIFTCityandhasbeenhelpingfunds set up theiroperations there. DSP Mutual Fund, which manages$20billioninassetsinIndiaand offshore,planstomoveitsMauritiusbased operation, which manages $450-500 million in assets,to GIFT City by March, said Jay Kothari, a seniorvice-president. Aditya Birla Sun Life AMC, the country’ssixth-largestassetmanager with `3.08 trillion under management,isalsomovingoperationsfrom Dubai and Singapore to GIFT City. “Outsideofmultipleinboundfunds, wehaveoneoutboundfundandhave anapprovaltosetupanESG-focused fundwithseedinvestmentalreadyin place,” saidABalasubramanian,CEO, Aditya Birla Sun LifeAMC. — REUTERS CHENNAI/KOCHI