BACK PAGE, P22 VERDICT 2024, P6 INTERNATIONAL, P3 LEAGUE DEBUT IN 2016 CALLS IT ANTI-WOMEN ‘OUR BUSINESSES COULD BE AT RISK’ RCB's Swapnil, a late bloomer in IPL, gives hope to journeymen INDIA bloc communal, casteist and dynastic, says Modi in Bihar US, Europe must respond jointly to China's industrial overcapacity: Yellen NEW DELHI, WEDNESDAY, MAY 22, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE VOL. L NO. 69, 40 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 WWW.FINANCIALEXPRESS.COM READ TO LEAD SENSEX: 73,953.31 ▼ 52.63 NIFTY: 22,529.05 ▲ 27.05 NIKKEI 225: 38,946.93 ▼ 122.75 HANG SENG: 19,220.62 ▼ 415.60 `/$: 83.31 ▲ 0.02 `/€: 90.58 ▼ 0.21 BRENT: $82.74 ▼ $0.97 GOLD: `73,932 ▲ `916 NEWS FSIB POSTPONES INTERVIEW FOR SBI CHAIRMAN'S POST THE FINANCIAL SERVICES Institutions Bureau (FSIB) has postponed the interview for the post of SBI chairman. The interview is now likely to take place after the general elections. Current chairman Dinesh Kumar Khara will superannuate on August 28, when he turns 63. BOND BUYBACK GETS MUTED RESPONSE AGAIN GOVERNMENT’S ATTEMPTTO infuse liquidity through bond buyback on Tuesday failed again for the third time in row as RBI rejected most of the bids in Tuesday’s auction, reports Sachin Kumar. ■ PAGE 10 FM CALLS ICAI TO WORK TOWARDS A GLOBAL CA FIRM FINANCE MINISTER NIRMALA Sitharaman on Tuesday exhorted the Institute of Chartered Accountants of India to start work for the creation of an Indian CA behemoth which will be among the top four globally. ■ PAGE 2 GOVT READYING SOP FOR FTA NEGOTIATIONS THE CENTRE IS working to codify the experience gained through intensive negotiations on the FTAs in the past and compile it as SOP for future guidance, reports Mukesh Jagota. ■ PAGE 2 FE S P E C I A L ‘Cultural connect gives us better consumer access’ General manager at Airbnb India, SE Asia talks about the platform’s recent offerings ■ BRANDWAGON, P9 MARKETS STAY VOLATILE WITH VIX AT 20-MONTH HIGH BSE-listed firms’ m-cap races past $5-trn mark VIVEK KUMAR M Mumbai, May 21 HIGH FIVE FOR INDIA THE MARKET CAPITALISATION of BSElisted companies hit a record $5trillion on Tuesday as sustained flow of domestic money and strong economic growth prospects fuelled investor optimism. It took less than six months for the marketcapitalisationtojumpfrom$4trillion to $5 trillion – the fastest $1 trillion gain ever.The rupee has also been flat during this period.It closed at `83.31 against US dollaronTuesdayas against `83.33 on November 29, when the $4-trillion milestone was achieved. At close, the total valuation stood at an all-time high of $4.97 trillion. US, China, Japan, and Hong Kong are ahead of India in terms of market capitalisation of companies. Continued on Page 18 BSE m-cap ($ trillion) 0.5 1 2 3 4 5 5 Top 5 countries by market cap STARTUPS INTHE GenerativeArtificialIntelligence(GenAI) space have found awayto disrupt the crowdedpost-ChatGPTmarket.They offerinnovative on-tapsolutions tailor-made for the needs of Indian businesses. For instance, Bengaluru-based deeptech startupNeuralGaragehasbuiltitsproprietary GenAI models in the audio-visual space that can change the lip and jaw movements visuallyusing audio as a controllerat studio quality. This means, when an advertisement video is INSIDE shot in one language (say Hindi) and dubbed into AI mission other languages (say value hiked Tamil,Telugu,Malayalam, PAGE 4 Bengali, etc), the startup’s tool recreates the video Startups for such that it looks as if the AI push actors in it are actually PAGE 4 speaking that language visually. “We can create multiple videos by shooting just one video with an actor,” Subhabrata Debnath,co-founderand CTO,NeuralGarage told FE. The startup’s client list includes 16 large brands such as Amazon (Fresh, Daily, Fashion,Pay),Britannia,Coca-Cola,Dream11, HP,UltraTechCements,EnoandMicrosoftUS. The startup has also started offering a voice cloning model,withwhich thevoice of a dubbing artist can be changed to the voice of an actor. 9. 9.4 Ja Japan 6. 6.4 Source: BSE, Bloomberg In India 5. 5.0 Norms to tackle market rumours issued THE SECURITIES and Exchange Board of IndiaonTuesdayissuedguidelines formitigatingtheimpactonstockpricesduetomarket rumours,reports Akshata Gorde.This will be facilitated through a new concept of ‘unaffected price’. The regulator has also revamped the method for calculating the market capitalisation of listed companies undertheListingObligationsandDisclosure Requirements(LODR)rules. ■ Page 10 104 firms trade at over 50x P/E,9 with 100x-plus Kotak report says stock valuations not sustainable PUSHING THEVALUATION BAR Mar-14 Mar-15 FE BUREAU New Delhi, May 21 5 10 4 20 18 Mar-16 2 ASMANYAS104companiesaretradingataprice toearnings(P/E)ofover50whileninecompanies tradeabove100times,areportbyKotakInstitutional Equities (KIE) said.A companywith a 100 times PE would need 83,000 times earnings in the 100th year to justify its current multiple. ManyofthesehighPEstocksbelongtotraditional sectorsandcouldfacesignificantdisruptionrisks, thereportsaid. Cautioning investors on the“unsustainable” valuations of Indian stocks,KIE has pointed out thatvaluationmethodologieshavelittleornocorrelationtofundamentals.Stockpriceshavebeen drivenuptostratosphericlevelsthankstoasense ofcomplacencyandanobsessionwithnarratives, strategistsatthebrokeragesaid. This,it noted,makes high multiples acceptable regardless of how“outrageous”the implied math for underlying parameters becomes at higher multiples. The number of companies whicharerichlyvaluedishighevenifoneexcludes youngcompaniesandsectors. AsperKIE’sdiscountedcashflow(DCF)model, such companies will need to grow at very steep rate over a sustained period to justify their high multiples.“Wenotethatmanysectorsandstocks enjoyvery high profitability and returns,which areunlikelytolastbeyondthenext5-10years,as forcesofdisruptionhavestrengthenedacrosssectors,”theywroteonTuesday.Furthertojustifythe valuations, companies will need to grow at Mar-18 24 Mar-19 3 ● Central bank reiterates stand on cryptocurrencies PAGE 10 ● RBI net bought $13.2 bn in spot forex market in March PAGE 10 Companies with P/E>50X 14 Mar-20 1 Mar-22 ● Q1 GDP to grow at 7.5%; India on cusp of economic take-off PAGE 2 29 5 Mar-21 RBI BULLETIN 17 Mar-17 1 12 Mar-23 3 Mar-24 9 May-24 Companies with P/E>100X 53 9 71 41 92 9 104 Source: Bloomberg, Kotak Institutional Equities sharperandhigherratesintheshortterm. “A 100x P/E company,which may be in the growthphaseoverthenext40years,willneedto report an earnings CAGR of 20% over the next 20years and 9% CAGRoverthe subsequent 20, according to our simplistic DCF model,” the strategists observed. The implied market size, theynoted,wouldneedtobeevenhigherincase profitability were to decline from current elevatedlevels.“Thelatterisextremelylikely,theformerunlikely,” theysaid. COPILOT+PCs EMBEDDED WITH SPECIALISED AI CHIPS Windows-Mac rivalry set for a reboot with Microsoft’s latest PCs: Nadella EMILY CHANG AND DINA BASS May 21 MICROSOFT CHIEF EXECUTIVE officer (CEO)SatyaNadellaisbettinganewgeneration of computerswith specialised artificial intelligence chips and faster performance willrevivethelong-runningrivalrybetween Windows PCs andApple’s Mac. “Apple’sdoneafantasticjob,”Nadellasaid inaninterviewwithBloombergTelevisionon Monday.“Wenowwanttobringrealcompetition back to theWindowsversus Mac.” Microsoft unveileda newcategoryofAIfocused PCs called Copilot+PC.Thanks in parttoachipdedicatedtoAIprocessing,the company said, the machines from Microsoft’sSurfacelineandothermanufacturerswillbemorepowerfuland58%faster than Apple’s top-of-the-line MacBook Air M3.The new hardware will start at $1,000 and ship on June 18. Apple is playing catch-up with Big Tech rivals in AI but is poised to lay out an ambitious strategy at its Worldwide Developers Conference next month. The company is placing high-end chips — similar to ones it designedfortheMac—incloud-computing serverscreatedtoprocessthemostadvanced AItaskscomingtoAppledevices,Bloomberg reported previously.SimplerAI-related fea- NEWER, BETTER, FASTER ■ Microsoft'sAI- focused PCs called Copilot+PC have a chip dedicated to AI processing ■ It claims theywill be more powerful and 58% faster thanApple’s top-ofthe-line MacBookAir M3 ■ The new hardware will start at $1,000 and ship on June 18 tures will be processed directly on iPhones, iPads and Macs. Applewillfocusonfeaturesthatmakelife easier for users as they go about their day — say, by making suggestions and offering a customised experience. Microsoft is leveraging its relationship with leading AI startup OpenAI to forge an earlylead in the burgeoning field of generativeAIservices.Butthepartnershiphascome underregulatoryscrutiny.OfficialsintheUS, Europe and the UK are examining Microsoft’s AI investments,as well as those ONE-STOP SOLUTION S SHANTHI Bengaluru, May 21 55 55.7 5. 5.5 Dec 31, 1999 Startups providing customised models for a host of services US Ho Hong Kong 0.18 On-tap GenAI turns virtual into reality Chi China May 21, 2024 Sep 12, 2005 May 28, 2007 Jul 10, 2017 May 24, 2021 Nov 29, 2023 May 21, 2024 IN THE SATYA NADELLA, CEO, MICROSOFT APPLE’S DONE A FANTASTIC JOB. WE NOW WANTTO BRING REAL COMPETITION BACK TO THE WINDOWS VERSUS MAC of its rivals, to determine whether they impinge on competition or should be regulated more similarlyto mergers. Nadella said his company’s partnerships are increasing competition in the nascent field ratherthan constrainingit. “Today there is formidable amount of competition, right?” he said.“Whether it is between the big players orthe small players. So I don’t think that this is about any one companyacquiring ornot acquiring,but it’s about competition.” —BLOOMBERG New Delhi ■ NeuralGarage's tool allows dubbingvideos in a way as ifthe actors are speaking other languages ■ NeuroPixel.AI allows online marketplaces to automate the apparel cataloguing etc ■ Konverz.ai offers tools to streamline hiring by sorting candidates in minutes ■ According to Tracxn, India has 174 GenAI startups that have raised a total funding of $831.5 million The opportunity in the GenAI space is huge, but so is the competition. The overall GenAI market size in India is expected to show an annual growth rate (CAGR 20232030) of 27.66%, resulting in a market volume of $4.20 billion by 2030, a PwC India report said. It also added that between 2021 and 2023, the number of GenAI startups in India has more than doubled. Another area where these startups are playing an effective role is in helping small fashion businesses adopt GenAI with ease. Continued on Page 18