COMPANIES, P4 BACK PAGE, P22 INTERNATIONAL, P3 GOING GREEN THE BIG PICTURE IN A RARE MOVE Toyota looks beyond traditional fuel options in India ABFRL: How and why the Aditya Birla Group fashioned a demerger Jack Ma steps out from the shadows with morale-boosting post LUCKNOW, THURSDAY, APRIL 11, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL 17 NO. 108, 22 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: 75,038.15 ▲ 354.45 NIFTY: 22,753.80 ▲ 111.05 NIKKEI 225: 39,581.81 ▼ 191.32 HANG SENG: 17,139.17 ▲ 311.10 `/$: 83.19 ▲ 0.12 `/€: 90.38 ▼ 0.16 BRENT: $89.65 ▲ $0.23 GOLD: `71,536 ▼ `71 IN THE NEWS COAL MINISTRY’S 100-DAYAGENDA FOR MODI GOVT 3.0 THE FIRST 100-DAY agenda of the Narendra Modi government if voted to power again would include operationalising 12 new coal mines and nearexclusive transfer of coking coal blocks to steel companies willing to set up washeries via the auction route, sources in the know told Arunima Bharadwaj. ■ PAGE 2 SWIGGY’S 20% DISCOUNTTO HNIs IN PRE-IPO DEAL FOOD DELIVERY UNICORN Swiggy’s wealth managers are pitching a pre-IPO deal to high net worth individuals (HNIs) to buy the company’s shares at a 20% discount on its current valuation, Entrackr reported citing three sources. ■ PAGE 4 ‘WILL RIP YOU APART’: SC SLAMS RAMDEV, AIDE THE SUPREME COURT on Wednesday refused to accept the affidavits of yoga guru Ramdev and his aide Balkrishna of Patanjali Ayurved tendering unconditional apologies for publishing “misleading” advertisements. ■ PAGE 11 EXPLAINER Why Vistara’s pilot problem is still up in the air ■ PAGE 9 At age 45, Sensex closes Musk to visit above 75,000-mark MAY DISCLOSE TESLA UNIT PLANS India in April, meet Modi ADITYA KALRA & ADITI SHAH New Delhi, April 10 points 74,683.70 Close (April 9) ■ Tesla has lobbied India for months to lower import taxes on electric vehicles slashed import taxes to 15% from 100% on some models ifa firm invests at least $500 mn and sets up a factory plant for export to India later this year,sources have said. Musk said this week on X that “India should have electric cars like everyothercountryhas electric cars. It’s a natural progression to provide Tesla electricvehicles in India”. Tesla’s push into India comes as slowing EV demand in its main US and Chinese markets coincides with intensifying competition from Chinese automakers. Tesla reported a drop in first-quarter deliveries that missed analyst estimates. —REUTERS ($ billion) 8.1 8.2 FY20 5.6 FY21 9.4 FY22 6.1 FY23 2.95 FY24* *April-September the amendments “seemed to have retrospective effect”. A 2016 amendment to the DTAA,it maybe recalled,had ended the virtual zero capital gains tax benefit for Mauritius investors, by making gains from sale of shares purchased after April 1, 2017 taxable at India’s rates. The DTAA, which allowed the lowerofthetaxratesamongthesig- 10 natory countries to prevail, meant nil tax capital tax liability for investors,as theAfrican nation kept the rate zero. The latest protocol is in compliancewith the OECD-anchored plan to reinforce anti-abuse provisions, undertheso-calledbaseerosionand profit sharing (BEPS) framework. Continued on Page 11 JOYDEEP GHOSH Mumbai, April 10 25.41 40 162 274 Sensex PE ratio 100,000 12.86 100,000 Source: BSE FY24 Source: NSDL, BSE lifetime highs. While Sensex rose 354 points or 0.47% to close at an all-time high of 75,038 points, the Nifty closed at a lifetime high of 22,753 points. The BSE mid-cap index closed at 41,110 — another all-time high. Only the small-cap index was an outlier and closed lower than its lifetime high. Seven sectoral indices — commodities, consumer discretionary, financial services, bankex, metal, powerandservices indices— joined thepartyandhittheirclosinghighs. Continued on Page 15 SC BENCH HEARING DMRC’S CURATIVE PLEA THIS (PREVIOUS SC ORDER UPHOLDING ARBITRALAWARD) HAS CAUSED A GRAVE MISCARRIAGE OF JUSTICE RAJESH KURUP Mumbai, April 10 IN A BIG setback for the Anil Ambani group, the Supreme Court on Wednesday set aside its own three-year-old judgment that awarded Delhi Airport Metro Express (DAMEPL), a Reliance Infrastructure (RInfra) subsidiary, `8,000 crore in a dispute with Delhi Metro.The court asked the company to return about `2,500 crore it had already received. The apex court said that the previous verdict caused grave miscarriage of injustice to a public utilitywhich was saddled with an exorbitant liability. Allowing the curative plea of the Delhi Metro Rail Corporation (DMRC) against the 2021 judgment, a special bench headed by Chief Justice DY Chandrachud said the order of the Delhi High Court division bench was a well-considered decision and there was no valid basis for the Supreme Court to interfere with it. The interference by the apex court,in its earlier decisions, had resulted in restoring a patently illegal award, it said. “The judgment of the two-judge bench of this court, which interfered with the judgment of the division bench of the high court, has resulted in a miscarriage of justice,” it said. Now, the amount paid by the DMRC to the Reliance Infrastructure firm in pursuance of the award has to be paid back to the PSU. As per the arbitral award, DAMEPL was enti- 2023,the net inflows were up 10.2%. The small-cap funds sawnet outflows of `94 crore in March, after having seen inflows of `2,000-5,500 crore in the previous 15 months. Even the mid-cap 220 Previous close: 284.2 Open 20% Close tled to `2,782.33 crore plus interest in terms of the concession agreement. This amount had swelled up to `8,009.38 crore by February 14, 2022. The apex court had on September 9, 2021, upheld the 2017 arbitration award enforceable against DMRC and said there was a disturbing tendency of courts setting aside such awards. Continued on Page 11 2,922 Mar Feb Jan Oct Sep Jun May Apr funds saw net inflows slide 43.7% month-on-month and 52.2% on-yearto `1,018 crore. On the other hand, net inflows into large-cap funds more than doubled both sequentiallyand on-yearto `2,128 crore during the month, according to the data. “The shift in trend is in line with valuation differentials among largev/s mid and small caps, suggesting that large Lessons from Sensex journey PAGE 6 EDIT: Sensex@75K PAGE 8 Apple bears fruit: 1 in 7 iPhones now made in India Continued on Page 15 227.4 240 2024 INSIDE Continued on Page 15 Intra-day on BSE (`), April 10 260 -94 3,858 Dec 3,257 3,699 Nov 4,495 2,678 4,265 Aug 5,472 4,171 2,430 Mar Jul 2,246 Feb 3,283 2,256 2,182 2,245 Jan 2023 FY24 caps/flexi cap oriented schemes may attract higher flows in the coming months,” said Akhil Chaturvedi, chief business officer at Motilal Oswal AMC. The Securities and Exchange Board of India (Sebi) had in March raised concerns about a build-up of froth in some segments of the broader market. Following this, Amfi wrote a letter to fund houses asking them to conduct a stress test on small-cap and mid-cap funds and to limit inflows into these funds. As of March 31,mutual funds had net AUM (assets under management) of `23.5 trillion in equity-oriented schemes.The overall netAUM,including debt funds, stood at `53.4 trillion. The debt funds sawnet outflows of `1.98 trillion in March against inflows of `63,809 crore in February. 287.40 Source: Association of Mutual Funds in India FY09 FE BUREAU New Delhi, April 10 280 200 -200,000 IN AROUND THREE years,India has emerged as a majorcentre forApple formanufacturing iPhones. Sample this: In FY24, the company produced smartphones worth $14 billion, which was double the number it manufactured in the previous fiscal.This means one in every seven iPhones in the world is now assembled in India. According to sources, over 70% of this $14-billion production has been exported from India across countries in Europe, the US and Asia. FY24 is also the firstyearwhenApple averaged over $1 billion of production each month, compared with FY23, where it averaged $620 million per month. This production has been achieved by Apple’s three vendors — Foxconn Hon Hai,Pegatron,bothin ■ Ofthe India-made Tamil Nadu, and iPhones, Foxconn Wistron — now assembled owned by the Tata over 67%, group, located in while Pegatron Karnataka. made about 17% According to industry data and information filed by the vendors, a lion’s share — over 67% — of the total produc■ Wistron’s plant tion has been conin Karnataka, tributed by Foxconn Hon Hai. Pegatron which theTata and Wistron have group took over togethercontributed last year, made the remaining 33%. the remaining All three companies are participants in the government’s smartphone productionlinked incentive (PLI) scheme. The smartphone PLI scheme is considered by far the most successful of all 14 PLI schemes on multipleaccounts— incrementalproductionover the base year 2019-20, exports, job creation and investments. Each of the three Apple vendors are required to invest `1,000 crore during the five-year tenure of the PLI scheme. Allthreeareaheadoftheiroriginalinvestment schedules. While Foxconn Hon Hai has already qualified for the PLI incentive for FY24, Pegatron and Wistron are also understood to have crossed the threshold of a minimum `15,000-crore production during the fiscal. In effect, while all three companies will individually qualify for PLI in the third year, Foxconn is expected to go over the threshold. Reliance Infrastructure 300 58,758 -100,000 -49,384 FY25 -200,000 FY09 FY99 210,554 0 -100,000 Big setback for Anil Ambani firm, relief for DMRC Dec Nov 1,378 1,825 1,582 1,779 Jul Oct 1,616 Jun Sep 1,769 2022 Aug 1,260 1,717 Apr 1,696 Mar 1,498 1,430 Jan Feb 1,024 May 2021 Dec 782 349 Oct Nov -249 Sep Mutul fund inflows into small-cap funds (` crore) high Apr 8 Apr 10 2024 2024 200,000 0 10 Jul 6 2023 402 188 All-time DII 300,000 200,000 Small-cap funds see outflows first time in 30 months INFLOWS INTO SMALL-CAP and midcap mutual funds took a hit in March after the Association of Mutual Funds in India (Amfi) asked the fund houses to put in place a policy to safeguard investors amid concerns overexcessivevaluations. Data released byAmfi on Wednesday showed that small-cap funds were impacted by the regulatory concerns as theysawnet outflows forthe first time in 30 months. At the same time, large-cap funds found favour with investors as they saw higher inflows compared with the mid-cap funds forthe first time since June 2022. Overall, net inflows into equity schemes in March were down 15.8% from February at `22,633 crore,according to the data. Compared with March 200 88 1,766 1,524 598 208,200 FPI SC sets aside `8,000-cr arbitral award to RInfra TAKING A HIT 100 400 Net equity investments (` crore) 300,000 INVESTORS FLOCK TO SAFE HAVEN OF LARGE-CAP SCHEMES AMID VALUATION CONCERNS VIVEK KUMAR M Mumbai, April 10 50 300 Sep Aug 2, Mar 30 May 21 Sep 21 Dec 3 Feb 4 2000 2005 2006 2007 2007 2014 2021 15 A DAY AFTER TOUCHING 75,000 points before slipping into the red, the Sensex finally closed above the landmark number for the first time on Wednesday — a journey that has taken slightly over 45 years since it started at 100 in 1979 (base year). The returns for investors have been spectacular at 15.85% compound annual growth rate over this period. It was a day when many major indices, including the benchmark and many sectoral, closed at their 30 20 Days 1,294 taken 20 FDI inflows from Mauritius FY19 ` trillion The current 12-month trailing P/E at 25.41x is lower than the fiveyear average of 26x, but higher than 10-year average 24.48x. 25 ■ Govt has MONEY MATTERS THE TAX BENEFITS for investors based out of Mauritius in India are set to be reduced substantially further,with the two countries signing a protocol to amend the convention encompassing the bilateral Double Taxation Avoidance Agreement (DTAA). The agreement signed by the two sides on March 7 at Port Louis — FE has seen a copy of it — is the first of its kind for New Delhi. It will, for all practical purposes, result in denial of tax reliefs for assorted incomes – dividend, royalty, technical fee etc – to investors and traders from the island nation. Indian high net worth individuals (HNIs),who take the island route for taxavoidance,willalsobeimpacted. Tax experts also said once the amendments take effect — both countrieswill have to notifythem in due course — the benefit of nil capital gains tax for investments from MauritiusmadebeforeApril1,2017, too,couldcomeunderthescanner,as Investor wealth at an all-time high Sensex P/E doubles in 25 years 30 Investor wealth swells to all-time high of `402 trn Tax benefits to be slashed as India,Mauritius ink new deal PRIYANSH VERMA New Delhi, April 10 0.47% SENSEX ■ Elon Musk likely to announce plans to invest and open a new factory in the country Close (April 10) 354.45 HITTING THE ROAD SOON? TESLACHIEF ELON MUSK willvisit India this month to meet Prime Minister Narendra Modi and is expectedtomakeanannouncement on plans to invest and open a new factory in the country, two sources with direct knowledge said. The billionaire will meet Modi in theweekofApril22inNewDelhi,and will separately make an announcement about his India plans, said the two sources, who declined to be named as the trip details are confidential.TheTeslaCEOwillbeaccompaniedbyotherexecutivesduringhis visit,said the first source. Modi’s office and Tesla did not respond to requests for comment. Musk’sfinalIndiatripagendacould still change. Musk and Modi last met in New York in June, and Tesla for months lobbied India to lower import taxes on electric vehicles while it weighed up a factorythere. India last month unveiled a new EV policy lowering import taxes to 15% from 100% on some models if amanufacturerinvestsatleast$500 millionand sets up a factorytoo. Reuters has previously reported that Tesla officials are expected to visitIndiathismonthtolookatsites for a manufacturing plant that would require an investment of about $2 billion. Tesla has also begun production ofright-handdrivecarsatitsGerman 75,038.15 A BIG BITE Lucknow