MARKETS, P6 VERDICT 2024, P7 BACK PAGE, P18 ‘WANT QUICKER M&A CLEARANCES’ FORMER PM RETIRES FROM POLITICS THE BIG PICTURE Intend to invest $2 bn every year in India: Blackstone’s Gray Manmohan Singh ends 33-year-long stint in Parliament Bima Sugam: In general, life will be easier KOLKATA, THURSDAY, APRIL 4, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 33 NO. 131, 18 PAGES, `12.00 (NORTH EAST STATES & ANDAMAN `12.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 73,876.82 ▼ 27.09 NIFTY: 22,434.65 ▼ 18.65 NIKKEI 225: 39,451.85 ▼ 387.06 HANG SENG: 16,725.10 ▼ 206.42 `/$: 83.43 ▼ 0.05 `/€: 89.84 ▼ 0.28 BRENT: $89.47 ▲ $0.55 GOLD: `69,101 ▲ `294 IN THE NEWS ELECTION CHECK: TELECOM AUCTION DEFERRED TO JUNE 6 THE GOVERNMENT HAS deferred the next telecom spectrum auction to June 6 from the earlier date of May 20, according to an amendment to the notice inviting applications released by the DoT on Wednesday, reports fe Bureau. The reason for the same was keeping in view the upcoming Lok Sabha elections, according to DoT officials. The proposal to defer the auctions came from the industry. CRUDE AT $90 PER BARREL COULD PUSH OMCs TO LOSSES SPIRALING CRUDE OIL prices may hit marketing margins of the state-run oil marketing firms in the beginning of FY25. With crude nudging $90, OMCs face a threat of under recoveries similar to that in FY23, reports Arunima Bharadwaj. ■ PAGE 2 BHARTI HEXACOM IPO: CENTRE TO GET `4,200 CR STATE-RUN TCIL'S PLAN to sell a 15% stake in Bharti Hexacom via the latter's IPO will yield around `4,200 crore to the Centre, reports Prasanta Sahu. TCILwill transfer the amount from disinvestment in Bharti Hexacom to the government as a special dividend, sources said. ■ PAGE 2 VISTARAASSURES PILOTS OF BETTER WORKING HOURS THE TOP MANAGEMENT at Vistara on Wednesday sought to address the concerns of pilots over pay cuts and leave, and reassured them of a new duty roster that would provide a better work-life balance, reports Rohit Vaid. However, operational bottlenecks, including the unavailability of cockpit crew, led to another 26 cancellations during the day. ■ PAGE 4 NET INVESTMENTS BY FPIs IN DEBT MARKET SURGE NET INVESTMENTS BY foreign portfolio investors in the debt market surged to $14.58 billion in FY24, making it the highest net inflow in the past six years as investors turned bullish following announcements to include government securities in global indices, reports Sachin Kumar. ■ PAGE 6 High valuations could tame the bull this fiscal VIVEK KUMAR M Mumbai, April 3 JYOTSNA BHATNAGAR Ahmedabad, April 3 ALITTLE OVERayearaftertheBarCouncil of India (BCI) decided to allowentryof foreign law firms into the country,the scorecard is stuck at just one. Link Legal announced a “combination” with one of the world’slargestgloballawfirms,Dentons,in Maylastyear.Butthetie-upisamere“handshake” or at most a co-branding exercise anddoesnotheraldanactual“entry”inthe real sense of the term,legal experts say. Bharat Anand, senior partner at Khaitan&Co,saidthelackofinterestofforeign legalentitiesshowsthat“theoldplaybook ofonestepforwardandtwostepsback”by theBCIwouldnotworkanymore.“It’svery apparent that the regular flip flops done by successive governments over the years hasbeenareasonfortheinternationallaw firmstopauseandrecalibratetheirstrategies and plans for India,”Anand added. RETURNS TALLY AFTERAGREATyear,whichsawtheNiftygiving decadal high returns, things are likely to slow down in FY25,said market experts. What would impact the market sentiments are events such as elections in India,the US and othercountries,interest rate action and continued geopolitical tensions. But most experts believe the returns from Indian markets could bearoundastable10-15%—implyinganother yearwhenrealreturns(returnsminusconsumer price inflation) couldbe in the positive. InFY24,theSensexandNiftyreturned25% and29%,respectively.Thebroadermid-capand small-cap indices outperformed the benchmarkssignificantlybyreturningover60%each. Between FY20 and FY24,the Nifty and Sensex have given thumping 160% and 150% returns,respectively.The next best performer was the Nasdaq composite that returned 113%,followed by S&P and Taiwan’s Taiex, which gave returns in three-digits.All the othermajormarkets gave returns in double digits.China’s Hang Seng fell byalmost 30% during this period. Given the spectacular returns, experts advisecaution,especiallywhenitcomestomid and small caps. In fact, they believe that FY25 couldbeastockpicker’syearunlikeFY24which saw broad-based rally. Continued on Page 10 Returns in % Sensex FY15 -9.4 -8.9 FY16 FY18 FY19 CHANDNI SHAH & AKASH SRIRAM Bengaluru, April 3 -23.8 -26 68 70.9 FY21 18.3 18.9 FY22 FY23 -0.6 0.7 24.9 28.6 FY24 GIVEN THE EXCEPTIONAL RETURNS SEEN IN FY24, ITWOULD BE PRUDENT FOR INVESTORS TO MODERATE THEIR EXPECTATIONS FOR FY25 ENTRYWOUNDS ■ Legal experts say Link Legal-Dentons tie-up is at most a co-branding exercise, not an actual entry ■ Regular govt flip-flops over the years may be behind foreign law firms' lack ofinterest ■ Also, from a regulatory perspective, there is a lot of uncertainty and lack ofclarity ■ Clarity is required around tax treatment of international law firms' revenues in India ■ What complicates matter for BCI is the strong pushback by the Indian law fraternity Echoing similar sentiments Ritvik Lukose,co-founderanddirectorofVahura, the country’s largest specialist legal and governance search, and consulting firm, said that from a regulatory perspective, thereisalotofuncertaintyandlackofclarityabouttheissueevenayearaftertheBCI notification.Inadditiontotherevisedrules thathavebeensignalled,clarityisrequired around tax treatment of international law firms' revenues in India. Everyone concerned is still in await-and-watch mode. Continued on Page 10 Tesla to scout sites for $3-bn India plant 16.9 18.5 11.3 10.2 17.3 14.9 FY17 FY20 Nifty 24.9 26.7 UR BHAT, CO-FOUNDER, ALPHANITI FINTECH THERE MIGHT BE SOME LULL IN MID AND SMALL CAPS. BUT FOR LARGE CAPS, YOU CAN’T ARGUE THAT THEY’RE TERRIBLY EXPENSIVE TESLA WILL SEND a team to India this monthtoscoutlocationsforaproposed$23- billion electric car plant, the Financial Times reported on Wednesday.Tesla’s reportedpushintoIndiacomesatatimewhen EV demand is slowing and competition heats up in its main markets of the US and China, causing it to report a drop in firstquarterdeliveries and missingestimates. Thecompanywillsendateamfromthe US by late April to study sites for the plant, withafocusonstatesthathaveautomotive hubs such as Maharashtra, Gujarat and Tamil Nadu, the report said, citing people familiarwith the matter. Tesla did not immediately respond to a Reutersrequestsforcomment. NewDelhi last month lowered import taxes on certain EVs produced bycarmakers that commit to invest at least $500 million and start local manufacturing within three years. New Delhi wants Tesla CEO Elon Musk to committ to local manufacturing.Tesla saidinJulylastyearthatitwasinterestedin buildingafactoryinIndiatoproduceanEV priced at $24,000. — REUTERS HUNT BEGINS ■ Focus on ■ Tesla to send a team states with by late April to study sites for the plant ■ Tesla has shown interest in building a plant to produce an EV priced at auto hubs like Maharashtra, Gujarat, Tamil Nadu $24,000 SHANKAR SHARMA, FOUNDER, GQUANT BULL MARKETS DO NOT LAST MORE THAN 5 YEARS, BUT I’M HOPING THAT INDIA WOULD BE AN EXCEPTION TO THIS GLOBAL RULE NILESH SHAH, MD, KOTAK AMC Exchange-traded options market tied up in knots inching up 0.04% to 83.4200. Typically, the premium on put options should fallwhenspotprices rise,unlessthereis THE RUPEE'S EXCHANGE-TRADED deriva- a change in volatility expectations. tives marketsawaturmoil onWednesdayafter Further,the option premium on the 83.25 brokersaskedclientstosubmitproofofunder- strike put was higher than on the 83.3750 lying exposure on their derivstrike put.Aput option allows ative contracts or unwind the buyer to sell dollar/rupee NITHIN KAMATH, their existing positions. at the strike price on the co-founder, Zerodha While Reuters reported expiry date. that brokerages were doing A right to sell at a lower so of their own volition and REGULATORY RISK IS BY strike price should cost less, FAR THE BIGGEST RISK Reuters said. had not been instructed to do so by the Reserve Bank of Out-of-the-money call FOR BROKERS. India (RBI), the premium on options for the April 26 E X P L A I N E R expiry climbed between out-of-the-money dollar/100% and 300%. rupee put options expiring on A look into the heart April 26 soared up to 250%, of the matter ■ PAGE 9 despite spot dollar/rupee Continued on Page 10 FE BUREAU Mumbai, April 3 Nikhil Kamath is India's youngest billionaire Net worth ($ billion) Zerodha founders Nithin and Nikhil Kamath, and Flipkart founders Sachin and Binny Bansal have emerged as India's youngest billionaires. Nikhil Kamath leads the list. Mukesh Ambani remains India’s richest. Meanwhile, Byju Raveendran's net worth falls to zero from $2.1 billion 4.8 3.1 3.5 1.4 1.2 AGE: 37 41 42 44 Nikhil Kamath, Zerodha co-founder Binny Bansal , Flipkart co-founder Sachin Bansal, Flipkart co-founder Nithin Kamath, Zerodha co-founder Source: Forbes Richest List 2024 A year on, just one foreign law firm has entered India EXPERTS SEE RETURNS OF 10-15% 2.6 2.9 47 47 49 Shamsheer Vayalil, founder and chairman, Burjeel Holdings Ravi Modi, owner, Vedant Fashions Karthik Sarma, founder, SRS Investment Management Kolkata