COMPANIES, P4 VERDICT 2024, P7 INTERNATIONAL, P15 TO BE ISSUED IN JULY CENTRAL LEADERSHIP INTERVENES FOR WAR CRIMES IN GAZA Stricter norms likely for call lags, video jitters on 5G After snub over TMC pact, Kharge praises ‘soldier’ Adhir ICC prosecutor seeks arrest warrants for Netanyahu, Hamas trio CHENNAI/KOCHI, TUESDAY, MAY 21, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 12, 18 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: 73,917.03* ▲ 253.31 NIFTY: 22,466.10* ▲ 62.25 NIKKEI 225: 39, 069.68 ▲ 282.30 HANG SENG: 19,636.22 ▲ 82.61 `/$: 83.33* ▲ 0.17 `/€: 90.38* ▲ 0.39 BRENT: $83.51 ▼ $0.47 GOLD: `73,016* ▼ `139 IN THE NEWS ● 59% TURNOUT IN PHASE FIVE PTI DEBT-TO-EBITDA AT A DECADAL LOW GANESH SHIRSEKAR BASE YEAR FOR CPI MAY BE CHANGED TO 2024 THE GOVERNMENT IS planning to update the base year of the Consumer Price Index to 2024 from 2012 at present, and that of other macro-indicators, such as the GDP, IIP and WPI to 2022-23, official sources privy to the matter told FE, reports Priyansh Verma. ■ PAGE 2 FPI SELL-OFF HITS FINANCIALS, IT IN FIRST HALF OF MAY SHARES OF FINANCIAL services and information technology companies continued to see the worst of heavy selling from foreign portfolio investors (FPIs) in the first half of May, reports Vivek Kumar M. ■ PAGE 10 TATASTEEL’S NODTO GRID CONNECTION FOR UK GREEN SITE TATA STEEL HAS signed an agreement with National Grid’s Electricity System Operator to build the power infrastructure required to switch its Port Talbot site to a green steel project, reports Bloomberg. RICE EXPORT CURBS HITAGRI SHIPMENTS HARD INDIA’S EXPORTS OF agricultural and processed food products in FY24 declined 6% to $25.01 billion on year mainly because of sharp fall in non-basmati rice shipments due to restrictions imposed last year, reports Sandip Das. ■ PAGE 2 TATA DIGITAL NEW CEO REJIGS TOP TEAM FOR NEU TATA DIGITAL'S NEW CEO, Naveen Tahilyani has put in place a new team for the company's super app, Neu. The development comes after several senior executives quit the company recently. The new structure is effective from Monday. According to an internal mail to the employees, majority of the positions have been filled with existing team members. FE S P E C I A L S JSW Steel: Well placed, going forward Robust balance sheet, cash flow to support five-year capex plan ■ INVESTOR, P9 Why retail investors need not fear the VIX Normally, the India VIX stays in the 15-35 range, and a range of 13-19 is considered to be safe ■ EXPLAINER, P9 *Prv close Leverage falls at top companies RAJESH KURUP & KISHOR KADAM Mumbai, May 20 GANESH SHIRSEKAR (Clockwise from left) RBI governor Shaktikanta Das and his family after casting their votes during the fifth phase of Lok Sabha elections in Mumbai on Monday. RIL CMD Mukesh Ambani, with wife Nita and son Akash, and N Chandrasekaran (chairman, Tata Sons) and family also stepped out to exercise their franchise. A voter turnout of 59% was recorded across the 49 parliamentary constituencies for which voting was held on Monday. ■ VERDICT 2024, PAGE 6 & 7 Tesla has time till Nov to firm up India plans ROHITVAID New Delhi, May 20 BROAD CONTOURS OF EVPOLICY THE GOVERNMENT IS looking at operationalising the electric vehicle policy by the end of July and give companies a 120-day window to apply.The policy allows import of completely built units (CBUs) at a concessional10%dutyforaperiodoffiveyears.This means that Tesla and other foreign EV-aspirants will need to submit their applications by the end of November. ThedevelopmentissignificantbecauseElon Musk,who was earlier scheduled to visit India between April 22-30 to unveil his plans,postponedhisvisitatthelastminute.Lastweek,officials said that there has been no update from Muskabouthisrescheduledprogramme. Officials said that the portal where the applications can be be submitted,will go live byJuly31,bywhichtimethegovernmentwill finalisealltheguidelinesrelatedtothepolicy. The first round of consultations with the industry has already taken place and the secondroundwillbeheldbeforeJuly,afterwhich the guidelines will be issued. Officials said that the policy provides for reopening of the window at a later date. AsreportedbyFE,thegovernmenthasprovided certain clarifications to the industry in terms of the investment criteria, so that a larger number of global players are able to submit their investment proposals. For instance, passenger vehicle manufacturers who have made part-investments for ■ Global firms will be allowed to import CBUs at a concessional rate of15% for vehicles priced $35,000 & above for five years ■ CBUs priced more than $40,000 will continue to attract 100% duty and those below it, at 70% Firms opting will have to commit investment of `4,150 crore or more ■ ■ Theywill be required to set up manufacturing facilities in the countrywithin a three-year period ■ Further, they will need to achieve 25% localisation by the third year and 50% by the fifth year manufacturingEVs,willalsoqualifyunderthe policy.Vietnamese EV manufacturer Vinfast had,in January,announced its plans to invest $500millioninIndiaoveraspanoffiveyears. Though the EVpolicywas announced later in March, the company's investments will be counted towards it,officials have said. Continued on Page 15 RBI set to buy back bonds worth `60k cr after two tepid rounds THE BOND market will be closely watching the Reserve Bank of India's (RBI’s) buyback of `60,000 crore worth of securities on behalf of the government on Tuesday,as the previous two buybacks earlierthis month did not achieve the desired results, reports Sachin Kumar. With banks offering to sell bonds at higher prices - orloweryields - the RBI rejected most of the bids in the previous two auctions, accepting bids worth only `12,583 crore out of a total notified amount of `1 trillion. Through these buybacks, the RBI aims to injectfundsintothebankingsystem,whichis experiencingtightliquidityduetolowspending by the government. Government spending has been low due to an ongoing national election, leading to a build-up in the government's cash balances and a subsequent cash deficit in the banking system. ■ Page 10 New govt’s Budget likely on July 10-12 PRASANTA SAHU New Delhi, May 20 AS GENERAL ELECTIONS enter the final phases, the ministries and departments of the Union governmenthavebeguntheinternalexercise tofirmuptheproposalsandexpenditure plans for the full Budget 202425, which is likely to be presented around July10-12,sources told FE. In2019,theBudgetwaspresented on July 5, a month and five days after outgoing PM Narendra Modi was sworn in on May 30.This time, electionresultswillbeannouncedonJune 4 and the swearing-in of the newgovernment will likely happen before June 10. Given the paucity of time, only around a month will be available for the Budget consultationswith industry and other stakeholders before it is presented in Parliament. Modi continues to express supreme confidence that his governmentwill secure a third straight term intheongoinggeneralelections,even astheleadersoftheoppositionINDIA alliance see a tide turning in their favour. “We have been told to firm up our proposalsandrecommendationsnow as there will not be much time after the government formation as the Budget has to be approved at the earliestforfasterexecutionofproposals,” a seniorofficial said. Recently, a meeting of financial advisers of all departments was held tosensitisethemabouttheupcoming Budget.The Centre’s expenditure so far has been as per the plans envisioned in the interim Budget but will see acceleration onlyafterJune. A source said the expenditure size of `47.65 trillion presented in the interim Budget in February for FY25 may see some changes depending on the new ideas included by the government. THE BALANCE SHEETS of some of India’s leading companies have improved sharply, with leverage coming down significantly in FY24.Forauniverseof275companiesbelongingtotheBSE500,thedebt-to-Ebitda(earnings before interest,tax,depreciation and amortisation)felltojust2.7x,thelowestlevelinabout a decade.The improvement since the recent highof4.3xseeninFY20issignificant,reflecting the smart recoverysince the pandemic. Of course, the total borrowings of these companieswentupto`26.23trillionlastyear, a rise of just 2.1% -- the smallest increase in eight years. Moreover, in an elevated interest rate environment, the interest bill has risen sharplyin the last couple ofyears. However,thereareindicationsthatcompaniesaresavingoninterestcostsbyparingdebt. Forexample,theinterestbillforagroupof889 companiesthathaveannouncedresultsforthe Marchquarter,increasedbyjust8%y-o-y.This is the smallest increase in the past four quartersandmuchlowerthantheincreasesof14% y-o-y,18%y-o-yand23%y-o-yreportedinQ3, Q2 and Q1 respectively. Among the companies that have done a goodjobofstrengtheningtheirbalancesheets is Tata Motors.The company generated free cash flows of close to `27,000 crore in FY24, which resulted in a sharp reduction in the overall consolidated net automotive debt. At JSW Steel, the net debt fell to just under `74,000 crore as of March and is expected to reducefurtherinthecomingquartersasprofitability improves.Analysts at Motilal Oswal estimate the net debt-to-Ebitda for the steelmakerat 2.6x. CementmajorUltratech’snetdebtwhichis already modest at `2,780 crore is expected to further reduce to just `1,500-2,000 crore by end FY25, according to the management.At Larsen &Toubro, the net debt-to-equity has beencomingdownfrom1.3xinFY21to1.1xin FY22 and furtherto 0.9x in FY23 before rising slightlyto 1x in FY24. Vedanta’sconsolidatednetdebtwentdown in Q4FY24 to `56,300 crore from `62,500 in the previous quarter.Companies that remain BETTER BALANCE SHEETS Ebitda FY16 FY17 FY18 FY19 FY20 FY21 Debt (` crore) 3,68,649 11,92,265 4,09,966 Debt-toEbitda ratio 13,23,807 4,37,012 13,57,997 4,94,340 17,08,496 4,45,808 19,27,442 5,67,427 21,60,336 3.2 3.2 3.1 3.5 4.3 3.8 FY22 7,09,675 22,86,733 3.2 FY23 7,30,443 25,71,695 3.5 FY24 9,72,567 26,26,370 2.7 Aggregate of 275 companies from BSE500 Index Source: Capitaline highly leveraged include Godrej Industries, Tata Teleservices,Adani Green and NLC India. Reliance Industries is among the country’s biggestborrowerswithadebtof`3.46trillion, followed byVodafone Idea with `2.44 trillion. Bharti Airtel came in third (`2.16 trillion). IndianOilCorporation(`1.33trillion),Larsen& Toubro (`1.16 trillion) and Tata Motors and Mahindra&Mahindra(both`1.07trillion)are the big borrowers. ● ALL EIGHT DEAD IN IRAN CRASH AP Rescuers recovered the charred wreckage of the helicopter, which crashed on Sunday, leading to the death of Iran president Ebrahim Raisi, foreign minister Hossein Amirabdollahian and six others. First vice-president Mohammad Mokhber, will take over as interim president, said supreme leader Ayatollah Ali Khamenei on Monday. Khamenei has announced five days of public mourning while India will have one-day state mourning today ■ PAGE 15 COMMENDS BANKS FOR A COMBINED NET PROFIT OF OVER `3 TRN IN FY24 My Adani-Ambani remark validated by Congress leader: PM VIJAYJOSHI & KUMAR RAKESH Bhubaneswar, May 20 PRIME MINISTER NARENDRAModi has asserted that his‘Adani-Ambani’ remark has been validated by senior Congress leader Adhir Ranjan Chowdhurywhenhe“admitted”that he will not speak against AdaniAmbaniiftheysend“tempo-loadsof money”. He was speaking to PTI Videos late Sunday. OnMay8,theprimeministerhad accused the Congress of having a nexus with‘Ambani and Adani’, and askedifthepartyhadreceived‘tempo loads of black money’ from the two businessmen for its leader Rahul Gandhi to stop‘abusing’them. Asked about the remark which had taken people by surprise, Modi said,“Forthepastfewyears,themain campaign plank of Congress’ ‘shehzada’(prince) had been singing the same tune about two people. And suddenly,as the elections began,the main campaign plank has shifted. Why this sudden change? My point wasinstantlyvalidatedbynoneother thantheleaderoftheCongressinthe Lok Sabha.”The Congress has been accusing the prime minister of favouring the top five industrialists in the country, including Gautam Adani and MukeshAmbani. In an interview to an online platform,Chowdhury was asked that he speaks against Adani and Ambani andherespondedbysaying,"Yes,Ido because theydon't send us money.If they send, people (will) become silent." Asked if he would become NARENDRA MODI, PM BEFORE 2014, THE ED ATTACHED ONLY `5,000 CRORE. IN MY TENURE, ASSETS WORTH `1 TRILLION HAVE BEEN ATTACHED ...IMPROVEMENT IN THE HEALTH OF BANKS WILL HELP IMPROVE CREDITAVAILABILITY TO OUR POOR, FARMERS AND MSMES silentongettingmoney,Chowdhury nodded with a laugh and said,“First letthemsend,thenwewillconsider.” Modi said the battle against corruptionisaseriousoneandtheinves- INSIDE Never spoken against minorities: PM PAGE 7 tigative agencies must be allowed to do their work without interference. Pointing out that the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) are agencies that function independently, he said, "They have done an excellent job in tackling cases of corruption and black money. Before 2014, the ED attached only `5,000 crore. In my tenure, assets worth `1 trillion have been attached.” Meanwhile,inapost on X, Modi commended banks for recording a combined net profit of over`3trillioninFY24andaddedthe improvementintheirhealthwillfurther augment credit delivery to the needysectors,includingthepoorand micro,smallandmediumenterprises (MSMEs). “In a remarkable turnaround in thelast10years,India'sbankingsector net profit crosses `3 lakh crore (trillion) forthe first time ever,” Modi said, replying to a media report. According to the media report,while public sector banks (PSBs) reported 34% annual growth in net profit at `1.4 trillion in FY24, private banks togetherposteda42%increaseinnet profit at `1.7trillion. Continued on Page 15 CHENNAI/KOCHI