BACK PAGE, P22 VERDICT 2024, P6 INTERNATIONAL, P3 PREMIUM RATES FOR FINALE ENFORCING MODEL CODE CONSERVATIVES FACE TOUGH TASK IPL spot rates hover around `19 lakh per 10 sec at season's end EC notices to Nadda, Kharge; asks parties to exercise restraint British PM Rishi Sunak announces national election on July 4 CHENNAI/KOCHI, THURSDAY, MAY 23, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 14, 26 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: 74,221.06 ▲ 267.75 NIFTY: 22,597.80 ▲ 68.75 NIKKEI 225: 38,617.10 ▼ 329.83 HANG SENG: 19195.60 ▼ 25.02 `/$: 83.28 ▲ 0.03 `/€: 90.32 ▲ 0.27 BRENT: $81.84 ▼ $1.04 GOLD: `73,912 ▼ `20 IN THE NEWS RECORD `2.10 TRN PAYOUT MORE THAN DOUBLE OF BUDGETED RBI’s surprise gift to govt LINKEDIN, NADELLA, RBI’S SURPLUS TRANSFER TO GOVERNMENT 8 OTHERS FINED Contingency risk buffer FOR LAW BREACHES increased to 6.5% for FY24 2.0 FY24 dividend payout at record high (` trillion) THE CORPORATE AFFAIRS ministry on Wednesday slapped fines on LinkedIn India, Satya Nadella and eight others for violation of the significant beneficial owner norms, reports PTI. ■ PAGE 5 PAYTM WARNS OF JOB CUTS AS NET LOSS WIDENS IN Q4 PAYTM SAW ITS net loss widening to `550 crore in Q4 from `168 crore a year ago due to a fall in revenue, reports Ajay Ramanathan. ■ PAGE 10 OYO TO RAISE FUNDS AT 60% VALUATION CUT ORAVEL STAYS IS looking to raise a small round of equity from private investors at a valuation of $3-4 billion, 60% less from its last discussed valuation of $10 billion. ■ PAGE 4 EXPLAINER The quality issue in made-in-India drugs ■ PAGE 9 1.5 PIYUSH SHUKLA Mumbai, May 22 1.0 IN A SURPRISE gift to the government, the Reserve Bank of India’s (RBI) Central Board of Directors on Wednesday approved a record dividend transfer of `2.10 trillion for 2023-2024. The amount is more than double what was budgeted,shoring up fiscal revenues. The government had budgeted to receive `1.02 trillion in dividends from the RBI and state-controlled banks.The RBI’s annual payout to the government comes from the surplus income it earns on investments and valuation changes on its dollarholdings,and the fees it gets from printing currency. Last year, the RBI transferred `87,416 crore to the government. State Bank of India’s group chief economic adviser Soumya Kanti Ghosh said the RBI’s income in FY24 is projected to be around `3.754 trillion, a sharp increase from `2.35 trillion in FY23.“While all otherthings in the balance sheet are either steady or increasing as per trend,however,foreigninvestmentshaveincreased sharply. Therefore, nearly 60-70% y-o-y increase in the income is expected to be from interest income from foreign securities as well as exchange gain from foreign exchange transactions,”he said. Inastatement,thecentralbanksaid,thetransferablesurplusforFY24hasbeenarrivedatonthe basis of the economic capital framework (ECF) adoptedbytheRBIonAugust26,2019,asperrecommendationsoftheBimalJalan-ledexpertcommittee.Analysts had expected a surplus transfer in the range of `75,000 crore to `1.2 trillion. Continued on Page 21 Disney to sell Tata Play stake to Tata Group BAIJU KALESH AND P R SANJAI May 22 TATA'S TV PLAY WALT DISNEY HAS struck a deal to sell its minority stake in a subscription television broadcaster to Tata Group,people familiar with the matter said,allowing the US media gianttofocusonthemergerofitsIndianunit withbillionaireMukeshAmbani’smediaarm. ThetransactionvaluesTataPlayatabout $1 billion,the people said.Tata Group took full control of the TV platform after buying the 29.8% stake from Disney,said the people, who asked not to be identified as the informationisprivate. The deal came as the India’s media landscapeisgoingthroughamajorshakeup.Disneysigned a binding agreement in late Februaryto combine its India unitwithViacom 18Media,creatingan$8.5billionentertainmentgiantthatwillhave750millionviewers and dominate the sectorin theworld’s populouscountry.TataPlaywasincorporatedin 2001 as a jointventure betweenTata Group and TFCF,formerly known as Twenty-First CenturyFox.Thecompanyprovidespaytelevision via set-top boxes and over-the-top video streaming through its app and has a pan-India footprint of 23 million connections,according to Tata Sons’s website.Tata full control oftheTV platform after buying the 29.8% stake from Disney ■ Tata Group took ■ Tata Playwas incorporated in 2001 as aJV betweenTata Group andTFCF ■ The company has a pan-India footprint of23 million users, according to Tata Sons website ■ The transaction values Tata Play at about $1 billion Playin2022filedconfidentiallyforadomesticIPObutthelistinghasyettohappen. TataGroupraiseditsstakeinTataPlayto slightlyover70% afterbuying outTemasek Holding’s stake earlier this year,the people said.Temasek first invested in Tata Sky,as it wasknownatthetime,in2007,accordingto its website.Representatives forTata Group, DisneyandTemasekdeclinedtocomment. —BLOOMBERG ■ The board, headed by governor Shaktikanta Das, also raised the provisions required under contingent risk buffer to 6.50% for FY24 ■ The surplus 0.5 0 FY12 FY14 FY16 FY18 FY20 FY22 FY24 FY13 FY15 FY17 FY19 FY21* FY23 *FY21 dividend was for nine months as RBI moved to a April-March fiscal year in FY22 from July-June previously Source: RBI/Reuters for FY24 has been arrived at on the basis of the economic capital framework Extra receipts 0.4% of GDP, capex budget scale-up likely PRASANTA SAHU & SACHIN KUMAR New Delhi/Mumbai, May 22 THE HIGHER-THAN-EXPECTED DIVIDEND of `2.10 trillion from the Reserve Bank of India (RBI) will let the Centre reduce its market borrowingsinthecurrentfiscalbyover0.37%ofthe gross domestic product (GDP) if other Budget numbers hold. However, official sources indicated that part of the extra inflows of around `1.3 trillion from the central bank could be used for scaling up the capex budget. The record surplus transfer by the central bank has positive spin-offs for the economy. It will boost investment demand and ease inflationary pressures further.The unexpected fiscal bonanzawillalsomake more capital available for corporates that are on the cusp of an investment cycle and ease the tight liquidity for banks, thereby accelerating credit flows to consumers. “The new government will take a call on how to use extra receipts,”a highly-placed source told FE on condition of anonymity.The extra receipts are pegged at `1.21- 1.31 trillion (0.37-0.4% of GDP),given thattheinterimBudgethadfactored in `80,000-90,000 crore dividend from the RBI for FY25. Speaking to FE, finance secretary TV Somanathansaidthepositivefiscalimpactofthe higher dividend compared to the Budget estimate for FY25 will be 0.2-0.3% of GDP. “Thegovernmentwillkeepmanagingits cash to the best extent possible to minimise interest costs,” Somanathan said when asked if the government would further buy back bonds. Continued on Page 21 Mobile PLI may be extended beyond 2026 Will be phased out once component scheme takes off FORWARD PLANNING ■ The scheme, which started in 2020, allows flexibility to choose any five consecutive years JATIN GROVER & RISHI RAJ New Delhi, May 22 SMARTPHONE PLI (PRODUCTION-LINKED incentive) scheme, the most successful of all 14 such schemes,maybeextended byacouple of years beyond 2025-26 when it officially ends. The five-yearPLI scheme,which started in 2020 ends in 2025-26, and each company has the flexibility to choose any five consecutive years. While Apple has chosen the period of 2021-2026,for Samsung it's between 2020-2025. Officials sources said that while it's not a good practice for any industry to be perpetually supported bysubsidy,ending the same abruptlycould also be counter-productive. Therefore, the thinking in the government is that a component scheme should replace the PLI in the sector.While the current smartphone PLI is for the finished products, the component-incentive scheme will be for inputs, which today are largely imported, adding to the current account deficit. ■ The thinking in the government is that a component scheme should replace the PLI in the sector ■ The scheme has seenvalue ofdomestic output of phones rising to `4.1 trillion ■ Smartphones exports from the country rose to `1.2 trillion in last fiscal “However, manufacturers wouldneedtimetoscale upincomponents and in the interim would continue to need support for finished products. That's the reason that the PLI scheme may be extended bya couple ofyears.Once the scaling up in components happen, the finished product subsidy would end,”officials said. Continued on Page 21 US judge says Byju’s brother not truthful on missing $533 mn STEVEN CHURCH May 22 A DIRECTOR OF Indian tech firm Think & Learn faces financial penalties for defying a US judge’s order to find out where the troubled company stashed $533 million that jilted lenders say should go to them. Riju Ravindran, the brother of company founder Byju Raveendran,not only failed to make a serious effort to find out what happened to the cash,but deceived the court,US Bankruptcy Judge John Dorsey said during a hearingTuesdayinWilmington,Delaware. “I conclude Mr. Ravindran’s testimony is not truthful,” Dorsey said. Ravindran eitherknowswhere the moneyis being hidden andwon’t say,orhe refused to find out, Dorsey said. The decision was a symbolic victory for lenders, represented by their agent, Glas Trust,and likely puts only limited pressure on Ravindran to cooperate in orderto avoid financial penalties. Continued on Page 21 GROUP TERMS CHARGES FALSE AND BASELESS Adani faces heat over coal supply FE BUREAU New Delhi, May 22 UNDER THE LENS AGAIN THE ADANI GROUP found itself at the centre of yet another controversy, with the Organised Crime and Corruption Reporting Project (OCCRP) alleging that the group passed off low-quality coal as far more expensive cleaner fuel in transactions with an Indian state power utility. A Financial Times report on Wednesday said documents accessed by OCCRP add a potential environmental dimension to other accusations against the conglomerate.“They suggest that Adani may have fraudulently obtained bumper profits at the expense of air quality, since using low-grade coal for power means burning more of the fuel,”the report said. According to the FT report, invoices showed that in January 2014,Adani purchased an Indonesian shipment of coal said to contain 3,500 calories per kg.The same shipment was sold to the Tamil Nadu Generation and Distribution company (Tangedco) as 6,000-calorie coal, one of the most valuable grades. “Adani appears to have more than doubled its money in the process, after the report, Adani Group purchased an Indonesian shipment of coal said to contain ■ According to was sold to the Tamil Nadu Generation and Distribution company (Tangedco) as 6,000-calorie coal, 3,500 calories per kg ■ The report ■ The same shipment one of the most valuable grades ■ The group owned by GautamAdani appears to have more than doubled its money in the process, after transport costs, according to the report transport costs,” the report noted. It added that Adani sourced the coal in Indonesia from a mining group known for its low-calorie output, at prices consistent with low-grade fuel. It delivered the coal to India’s southern-most state for powergeneration,fulfiling a contract that specified expensive high-quality fuel. The charges were, however, dismissed by the Adani Group. Terming the allegation of supply of low-quality coal as“false claimsAdani may have fraudulently obtained bumper profits at the expense of air quality, since using low-grade coal for power means burning more of the fuel and baseless,” the group gave a point-bypoint rebuttal of the FT report. On the PO (purchase order) 89 of Tangedco, the group said it was a fixed price contract, won through an open, competitive, global bidding process, wherein Adani Global was contractually obliged to supply coal at a pre-determined price. Continued on Page 21 CHENNAI/KOCHI