COMPANIES, P4 ECONOMY, P2 INTERNATIONAL, P7 FROM A PEAK OF 47% TO 29% NOW ‘SECTOR NEEDS MAJOR INVESTMENTS’ STATE OF THE UNION SPEECH New launches fail to halt Hero MotoCorp’s market share slide Coal-based power addition to continue till RE storage is sufficient: RK Singh Democracy, freedom under 'threat' in US under Trump: Biden NEW DELHI, SATURDAY, MARCH 9, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. L NO. 7, 18 PAGES, `12.00 (PATNA & RAIPUR `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: 74,119.38 ▲ 33.39 *NIFTY: 22,493.55 ▲ 19.50 NIKKEI 225: 39,688.94 ▲ 90.23 HANG SENG: 16,353.39 ▲ 123.61 *`/$: 82.79 ▲ 0.04 *`/€: 90.26 ▼ 0.17 BRENT: $82.69 ▼ $0.27 *GOLD: `65,007 ▲ `587 *Prv close IN THE NEWS CPSE DIVIDENDS SURPASS RE, MAY HIT `65,000 CRORE THE CENTRE’S DIVIDEND receipts from the central public sector enterprises climbed to a record high of `61,981 crore as of March 8, may inch closer to `65,000 crore by the end of the year, an official source said, reports Prasanta Sahu. ■ PAGE 2 SPECTRUM AUCTION WORTH `96,318 CR TO START ON MAY 20 THE UPCOMING SPECTRUM auction, which will see airwaves worth `96,317.65 crore across bands being put up for sale, will start from May 20, according to notice inviting applications released by the DoT, reports fe Bureau. ■ PAGE 4 THRESHOLDS FOR M&A SCRUTINY EASED BY CCI THE EXEMPTION LIMIT for notifying mergers and acquisitions to the CCI has been eased, reports Manu Kaushik. There is no need to notify the regulator if the acquired company has assets (including arms) of less than `450 crore and turnover below `1,250 crore. ■ PAGE 2 IBA-BANK UNION PACT: PSB STAFFTO GET 17% WAGE HIKE PUBLIC SECTOR BANK employees are set to receive a 17% wage hike after the Indian Banks' Association and bank unions on Friday signed the 9th joint note and the final 12th bipartite settlement agreement, reports Piyush Shukla. ■ PAGE 8 RBI REDUCES SIZE OF VRR AUCTION IN LASTTWO MONTHS THE RBI HAS scaled down the size of its variable rate repo auction over the past two months, indicating a gradual easing of liquidity tightness in the banking system, reports Sachin Kumar. ■ PAGE 8 ELECTORAL BONDS: SC TO HEAR SBI'S PLEA ON MONDAY THE SUPREME COURT will hear on March 11 a petition filed by State Bank of India seeking extension of time till June 30 to disclose details of each electoral bond encashed by political parties, reports PTI. ■ PAGE 17 Modi 3.0 to work on domestic AI chipsets: Vaishnaw RISHI RAJ New Delhi, March 8 THENARENDRAMODIgovernment in its third term will work towards enablingdomesticmanufacturingof AI chipsets,communications and IT ministerAshwiniVaishnawtold FE. “There are a lot of global manufacturerswhoarelookingatIndiaand are interested in partnering us in developing their chipsets here,” Vaishnaw said. “We have started domestic manufacturing of smartphonesandIThardware.Abeginning has been made in the direction of semiconductor and the Union Cabinet approved the `10,372-crore AI missiononThursdaytocreatesovereign capability in computing. The next on our agenda, which we will look in the third term of the Modi government,is making AI chipsets,” the ministersaid. AI chipsets basically include graphicsprocessingunits(GPUs)and other computing hardware, which areessentialforcreatingAImodelsas theserequirelarge-scalecomputing. Central processing units (CPUs) are not able to do such large-scale computing.At present,the US and China lead in computing infrastructure required for the development of AI technology. US-based Nvidia dominates the GPU market with about 88% market share and there is a lag of 12-18 months in getting GPUs from the company due to its high demand across the globe. GPUs with processing capacity close to that of Nvidia's over a period of time.Itwillbeawin-winsituationfor both sides,”Vaishnawsaid. He said that alliance with the globalfirmswouldbeonapublic-private partnership mode as the governmentalonewouldnotbeableto doeverything.TheAImissionwill also work in PPP mode to create public AI compute infrastructure of 10,000 or more GPUs, required forAI innovation. Analysts said that the model is workable on the lines of smartphones and semiconductor if the government works out an attractive incentive structure here aswell. ASHWINI VAISHNAW, COMMUNICATIONS AND IT MINISTER SEVERAL GLOBAL FIRMS WANT TO SCALE UP AND WE NEED TO START FROM GROUND ZERO. IFTHEY PARTNER US, IT'S A WIN-WIN SITUATION." Vaishnawexplainedthatthereare several other global firms making GPUs,buttheirprocessingcapacityis around60%ofNvidia’s.“Thesefirms want to scale up andwe need to start from ground zero.If theypartnerus, together we will be able to make TO EXAMINE IF INVESTORS EXITED VIA CONNECTED NBFCs RBI, Sebi to widen probe into debt issue managers JAYSHREE P UPADHYAY & DHARAMRAJ DHUTIA Mumbai, March 8 CRACKDOWNS TO DEEPEN THE RESERVE BANK of India (RBI) and the Securities and Exchange Board of India (Sebi) are widening aninvestigationintohowmerchant banks manage retail subscriptions in public debt INSIDE issues, two sources with Probe into JM Fin points direct knowledge of the to Piramal matter said. NCD issue Apart from ■ PAGE 8 JM Financial, several other casesareunderinvestigationtoseeif merchant banks provided investors withanexitthroughconnectednonbankingfinancialfirms,saidsources, whodeclinedtobenamedastheyare notauthorisedtospeaktothemedia. Sebi barred JM Financial from `20,000 crore have been raised via public issues of bonds so far in FY24, highest in last five years ■ Sebi found funds from connected entities were used to provide an assured exit to investors ■ RBI banned JM Financial's non-banking unit to stop any form of financing against shares and debentures ■ Sebi barred JM Financial from acting as lead manager of any public debt issue taking newmandates thisweek,sayingithadfoundthatfundsfromconnected entities were used to inflate subscriptionsandprovideanassured exit to investors.JM Financial said in a stock exchange filing on Thursday thatitwillfullycooperatewithSebiin ■ Several other cases are under scanner to see if disproportionate loans were given to subscribers its investigations. The RBI, meanwhile,has told JM Financial's non-banking unit to stop anyform of financing against shares and debentures, including loans to customerstosubscribetoinitialpublic offerings (IPOs). Small-caps lead equity MF inflows in Feb Net inflows into openended equity funds hit a two-year high of `26,866 crore in February owing to traction in sectoral and thematic funds, and small cap funds, data from the Association of Mutual Funds in India (Amfi) showed. Small cap funds led the inflows, attracting the highest amount at `2,922.5 crore in February. While large and mid-cap funds witnessed net inflow of `3,157 crore, flexi-cap funds saw net inflow of `2,613 crore. Inflows into systematic investment plans (SIPs) hit record highs for the 14th time in 17 months. The SIP contribution for February was at `19,187 crore. EQUITY MF INFLOWS NUDGE 2-YEAR HIGH Apr May 7,626 Sep Oct 20,245 14,091 Nov 19,957 15,536 Dec 16,997 Jan ‘24 Feb 21,781 26,866 6,000 4,500 1,773 2,256 3,000 1,500 0 -1,500 -3,000 Midcap Multicap 716 1,628 921 Largecap Jan 2023 1,808 Feb 2024 44.8 14,734 46.3 15,245 Aug 46.9 15,814 Sep 47.8 16,042 47.8 16,928 48.8 17,073 Dec 2,922 43.0 14,749 Nov 2,414 41.5 13,728 Oct Smallcap 40.1 14,276 Jul (` crore) 40.7 13,686 Jun SMALL-CAPS SEE MOST INVESTMENTS 8,637 40.8 13,856 May 3,240 Aug SIP CONTRIBUTIONS AT RECORD HIGH FOR 14TH TIME IN 17 MONTHS Apr 6,480 Jul Continued on Page 9 Mar 20,534 Jun Investigators are also studying if disproportionateloansweregivento subscribes and whether customer identification processes were not adequatelyfollowed,sourcesadded. Feb 15,686 Mar ■ Sebi probe could push NBFCs back to fundraising through private debt placements Jan ‘23 12,547 Feb to diversify their source of funds, may be hardest hit Avg MF AUM (` trillion) SIPs (` crore) (` crore) Jan ‘23 ■ NBFCs, which are looking 51.1 17,610 Jan ‘24 52.9 18,838 Feb 54.5 19,187 Source: Amfi FE S P E C I A L Vaishnawsaidthatontheagenda will also be to start domestic manufacturing of printed circuit boards andcreatecapabilitieswheredomestic firms emerge as leading global producers of telecommunications equipment, consumer electronics and smart devices. The minister said that with the success in domestic mobile manufacturing,whichsawApplesettingup its base in the country and global manufacturers like Micron deciding to set up a local assembly, testing, marking and packaging plant, it’s quiteevidentthatglobalplayershave developed confidence in India and the government’s incentive scheme. Continued on Page 9 Baron marks up Swiggy’s value to $12.1 billion AYANTI BERA Bengaluru, March 8 BARON CAPITAL, AN investor in Swiggy, has increased the value of its stake in the food tech platform, implying a valuation of $12.16 billion,13%higherthanthe$10.7billionatwhichthefirmsecuredfunding in early 2022. The US-based asset management firm has marked up the fairvalue of its stake in Swiggy by nearly 17% to $87.2 million as of December 31, from $74.7 million a quarterprior,as per its latest quarterly report. IntheDecemberquarter,Swiggy was among the top ten holdings in Baron Capital’s emerging markets fund,whichalsohasTaiwanesechipmaker TSMC, Samsung Electronics, Tencent Holdings, Alibaba Group, alongwithBajajFinance,HDFCBank and BhartiAirtel,among others. In an earlier quarterly filing, Baron Capital noted that Swiggy is India’s leading food delivery platform with a roughly 50% market share, and the company is benefitting from increasing penetration of THE UPTICK 13% higher than the $10.7-billion valuation during Swiggy's last fundraise in 2022 ■ Baron Capital participated in the $700-million funding round in January 2022 ■ It has marked up its stakevalue to $87.2 million, up 17% from $76.7 million a quarter prior ■ On January 4, Invesco had raised Swiggy’s valuation to $9.5 billion, as of October 31 food delivery in the country and improving profitability. Continued on Page 9 IDBI Bank: RBI decision on bidders this month PRASANTA SAHU New Delhi, March 8 THE RESERVE BANK of India’s (RBI) much-awaited decision on the fit-and-properprofilesofthe bidders for IDBI Bank will likely be conveyed this monthtothegovernment, asourceprivytothematter said. This would pave the way for the first strategic sale of a bank,with a significant government holding,immediatelyafter a new government assumes office aftertheApril-Maygeneralelections. The sale of IDBI Bank,formerly a public sector bank, is seen as a test case for the new public sector enterprisespolicy,whichaimstominimise government’s presence in busi- nesses,includingbanking,astheCentrefeelsprivatesectorisbestsuitedto scale up businesses,with skin in the game. Recent laudatory comments on PSUs by Prime Minister Narendra Modi have bolstered the perception that the Centre may be rethinking its policy. Reports had suggested that Kotak Mahindra Bank and Fairfax India Holdings (promoterof CSB Bank) are likelyin thefrayforIDBIBank.“TheRBI’s‘fitand-proper assessment’ of the biddersisataprettyadvancedstageand the approval could come during this month,”thesource,whodidnotwish to be identified,told FE. Continued on Page 9 RENEWS SELF-RELIANCE PUSH AS WASHINGTON LOOKS TO IMPOSE MORE RESTRICTIONS China readies $27-bn chip fund to counter US curbs Mercedes-Benz GLS vs BMW X7: India’s muscle cars Both are India’s biggest SUVs, have mighty engines, but who’s the boss? ■ MOTOBAHN, P7 Staggeryour investments in gold Go for Gold ETFs or buy sovereign gold bonds in the secondary market ■ PERSONAL FINANCE, P8 DONG CAO & GAO YUAN March 8 CHINA IS IN the process of raising more than $27 billion forits largest chip fund to date, accelerating the development of cutting-edge technologies to counter a US campaign to thwart its rise. The National Integrated Circuit Industry Investment Fund is amassing a pool of capital from local governments and state enterprises for its third vehicle that should exceed the 200 billion yuan ofitssecondfund,accordingtopeople familiarwith the matter. Known as the Big Fund, the state-backed firm is expanding its remit just as the US prepares to sharply escalate technology curbs TECH WARS ■ US prepares to sharply escalate curbs designed to curtail Chinese chip andAI progress ■ Huawei and its partner SMIC still ■ China move signals a resurgent effort to harness the world’s largest semiconductor market after years of mixed success had to rely on US-origin tech to build an advanced processor last year ■ Beijing is amassing a pool of capital from local governments and state enterprises designedtocurtailChinesechipand artificial intelligence progress. The establishment of a much largerthirdfund—directlyoverseen byChina’s powerful tech ministry— signals a resurgent effort to harness the world’s largest semiconductor market after years of mixed success with central stewardship. Huawei Technologies and its partner Semi- ■ US urges allies, including Germany, South Korea and Japan, to further tighten restrictions on China conductor Manufacturing InternationalCorpstillhadtorelyonUS-origin technologytobuildanadvanced processorlastyear. A majority of the capital for the INSIDE Huawei chip breakthrough in 2023 used US tech PAGE 7 Big Fund’s third-phase vehicle is expectedtocomefromlocalgovernments, their investment arms and state-owned enterprises,while the central government will only contributeafraction,saidoneofthepeople.Beijing’sgoalnowistopoolvaluable capital across the country for majorprojects,akeyelementinPresident Xi Jinping’s “whole nation” approach,according to the person. Beijing’s renewed push for selfreliance is taking place as the US urges allies including the Netherlands, Germany, South Korea and New Delhi Japantofurthertightenrestrictions on China’s access to semiconductor technology and plug holes in existing export controls.The Big Fund is pivotal to China’s push. The governments of Shanghai and other cities, China Chengtong Holdings Group and State Development and Investment Corp are among investors that look to commit billions of yuan each to the third-phase fund, the people said, asking not to be identified discussing a private matter.That fund will help finance three to fourpools of capital managed byothergeneral partners under a so-called “fund of funds” structure to diversify deal sourcingandinvestmentstrategies. Continued on Page 9