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XXI 22, 28 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: 75,390.50 ▼ 19.89 NIFTY: 22,932.45 ▼ 24.65 NIKKEI 225: 38,900.02 ▲ 253.91 HANG SENG: 18,827.35 ▲ 218.41 `/$: 83.14 ▼ 0.04 `/€: 90.34 ▼ 0.35 BRENT: $82.80 ▲ $0.68 GOLD: `71,926 ▲ `172 THE INDIAMETEOROLOGICALDepartment (IMD) on Monday reiterated its earlier forecast of ‘above normal’ monsoon rainfall at 106% of benchmark average during JuneSeptemberthisyearwith 92% chances of the rains being in the“normal-to-excess”range. Though the Met department sees a somewhat skewed pattern of rain distribution, with some of the paddy-growing areas in east and north India poised to receive belownormal rains,the mostly rain-fed“monsoon core zone” in central India has been predicted to witness above-normal precipitation.This augurswell forthe agriculture sector which saw a 4.4% annual decline in output (gross value added) in the 2023-24 crop year (July-June), after a steady rise witnessed for six straight years. The IMD stated that conditions are likely tobecomefavourableformonsoononsetover Kerala during the next five days. The IMD's prediction also comes as a breather as a prolonged scorching summer wouldhaveadverselyaffectedeconomicactivities and posed a renewed risk of sticky inflation.The Reserve Bank of India (RBI) had said initsAprilbulletinthatextremeweatherevents mayposearisktothecountry’sinflationinthe nearterm,alongwithgeopoliticaltensionsthat couldkeep crude oil prices“volatile”. Retail inflation in March eased to 4.85% afteraveraging 5.1% in January-March.Food inflation,despite some signs of moderation, remains elevated and a potential source of risk to the disinflation trajectory. 2019 2020 2021 2022 2023 2024 ^2nd long range forecast, *LPA (long period average) is average annual rainfall (87cm) recorded between 1971-2020, 96%-104% of LPA considered 'normal', <96% is 'below normal', <90% is 'deficient', >104% is 'above normal', >110% plus is 'excess', monsoon season (June-Sept), India Meteorological Department (IMD) Continued on Page 10 ● REMALWREAKS HAVOC IN BENGAL THE LIC BOARD has declared a final dividend of `6 per share, which combined with `4 announced earlier aggregates to `10 per share — a record payout to its shareholders, reports fe Bureau. The government, LIC’s largest shareholder, will get `3,662 crore as dividend. LIC posted a 2.5% y-o-y rise in its net profit in January-March. ■ PAGE 6 AI-powered deepfake voices have emerged as a potent tool in political campaigns as well as cyber frauds ■ EXPLAINER, P9 1.00 May 24 (close) HDFC Bank L&T 0.75 0.69 May 27 (close) 55,918.60 56,271.27 24.65 points (0.11%) 352.67 points (0.63%) sion when the indices failed to hold on to their gains after hitting fresh lifetime highs. The volatility gauge, India VIX, jumped nearly 7% to a level of 23.19, a two-year high. Experts believe that the market is likely to continue to consolidate with a positive bias until the outcome of the election is clear.Theresultsofthegeneralelectionswill be known on June 4when counting begins. On Monday, the Sensex rose to 76,009.68 points in intraday trades, ending the session at 75,390.50 points. The Nifty50 too hit a record high of 23,110.80 points, but closed the day at 22,932.45 points,down 0.1% over Friday’s close. Continued on Page 10 Adani Energy gets board nod to raise `12,500 cr RAGHAVENDRA KAMATH Mumbai, May 27 QUALITY CHECK ■ Big Five came ■ Three more firms, including MSKA and Associates and Lodha, under the lens now under scrutiny last year in effort ■ NFRAis going to further expand the list and pick to enhance up more firms in FY25 audit quality ■ Detailed report on top 8 audit firms to be out by December this year Inthelastroundofinspection,regulatorhad raised issues with the auditors'independence andtheirnon-auditwork.Ithadfoundthatlarge auditors were providing non-audit services to their clients,which was leading to a conflict of interest with the auditees, and subsequently causing lapses in the auditingprocess. Continued on Page 10 ASONEOFthestrategiestogain4G subscriberspostthe`20,000-crore equity fundraise,Vodafone Idea is offering extra data packs for new prepaid users on its network, reports Jatin Grover.The telecom operator on Monday launched ‘Vi Guarantee Program’ under which it will provide 130 GB extra data over one year to its subscribers with 5G smartphones or those who have recently upgraded to a new 4G smartphone. ■ Page 4 ADANIENERGYSOLUTIONS(AESL) on Monday received the board's approval to raise `12,500 crore throughqualifiedinstitutionalplacement(QIP)ofsharesorotheravenues in oneormore tranches. Besides other regulatory approvals,theboardwillseekshareholders’nodatthecompany’sannualgeneralmeetingonJune25.AESLisyetto fixtheQIPdateandthepriceatwhich thesecuritieswillbeissued.Thecompanyaimstotapfourtofivebigglobal investorswhoarekeentoparticipate in India’s infrastructure growth, a Bloomberg report said. Adani Group, which has raised almost $6 billion from marquee investors like Rajiv Jain’s GQG Partners,QatarInvestmentAuthorityand TotalEnergiessinceJanuarylastyear, is aiming to aggressively expand its businesses. AESL is the country's largest private transmission company with a presence across 17 states and a cumulativetransmissionnetworkof 20,509 circuit km and 57,011 MVA transformation capacity.The company's distribution business,AEML, investedacapexofover`1,334crore and reduced its long-term debt by `855 crore through a bond buyback programme during theyear. AESL’ssharesended0.18%lower at `1,104.70 on Monday. In transmission,AESL operationalised1,244circuitkminFY24.The under-implementation pipeline stood 22.8 million smart meters, comprisingnineprojectswithacontractvalue of over`27,195crore. AESL reported a 13.26% decline in its consolidated net profit to `381.29 crore during Q4FY24 on account of increased expenses. CENTRE NEEDS TO REIN IN GROWTH IN SUBSIDIES VIA DIRECT TRANSFERS Spending reforms key to fast-track capital formation sector, the Centre should also strengthen states’ hand to clean their finances, they said. There is a need to reverse the process of centralisation of fiscal resources and allocations, and move further to 11 1.6 4.5 5 1.3 decentralised financing of projects and schemes, while keeping local needs in focus. These steps are also expected to make available more government funds for capital expenditure and 2.38 (RE) FY25 2.40 (BE) FY24 3 5.0 5.0 FY23 2.42 0 1.9 6.0 5.2 FY22 1.99 6 2.2 FY21 2.08 9 1 2.5 17 17.4 FY20 1.84 0 2 29 25 FY25 11.90 (BE) 2 1.6 1.1 12 ` trillion % of central govt budget (RHS) 23 15 FY24 10.55 (RE) 4 3 Pension budget of Centre ` trillion % of central govt budget (RHS) FY23 9.29 6 4 FY22 8.05 % GDP (RHS) FY21 6.80 3.6 Interest cost of Centre FY20 6.12 -2 ` trillion FY25 (BE) 5.31 ENDA AG 8 FY22 4.50 THE GOVERNMENT'S FISCALtransparency -2 0 2 9 needstobetakento 24 the next level by redesigning subsidies onlyforthe needy, setting sunset clauses for fiscally-burdenPA R T somewelfareschemes and shifting from cash to accrual-based accounting, analystssaid.ThisisdespitetheNarendra Given that international agenModi government getting a shot in cies, including rating firms, take the arm by ending off-Budget bor- into account general government rowings,plugging leakages and just- debt, including states’ liabilities, in-time release of funds forschemes that determine the cost of funds for in the second term. the government and the private Subsidy FY21 7.08 EYE ON EXPENDITURE FY20 2.28 PRASANTA SAHU New Delhi, May 27 20 What is the law on deepfake voices? BSE BANKEX May 27 (close) 22,957.10 22,932.45 KALAIRWAYSAND Kalanithi Maran on Monday said they will seek over`1,323croreindamagesfrom SpiceJet and its promoter Ajay Singh,aswellaschallengetherecentDelhiHC orderin the ongoing dispute between the two sidesintheSupremeCourt,reportsfeBureau. OnMay17,aDelhiHCdivisionbenchsetaside a single judge order that had upheld an arbitralawardaskingSpiceJetandSinghtorefund `579 crore plus interest to Maran. ■ Page 4 People wade through a waterlogged road in Kolkata on Monday. So far, cyclone Remal has claimed six lives in West Bengal. Though flight services resumed at Kolkata airport, eight flights bound for the city had to be diverted due to bad weather. Heavy rain also lashed a few northeastern states EXPRESS PHOTO: PARTHA PAUL ■ INVESTOR, P9 NIFTY May 24 (close) Maran to seek `1,323 cr Vi banks on data offers from SpiceJet, Singh to up subscriber base FE S P E C I A L S Inflation in key raw material prices for cigarettes may constrain expansion 19.89 points (0.03%) 75,390.50 THE NATIONAL FINANCIAL Reporting Authority(NFRA) continues to be unrelenting in its drive to enforce audit quality.While the Big Five auditors came under its scrutiny last year, the regulator has decided to widen the ambit of its annual inspection this year. Three more audit firms, including MSKA and Associates (affiliated to BDO) and Lodha & Co, will be subjected to fresh inspection soon, a senior official said, adding that the regulator is going to further expand the list and pick up more firms in FY25. “The top eight auditing firms will be inspected first and a detailed report on each of them will be out by December this year. A few more firms will be picked up later for inspection,”the source said. The annual practice to inspect audit firms, which started in 2023, is to ensure that the statutory auditors are following the audit standardsnotifiedbythecentralgovernment. The auditors are required to take corrective steps in case lapses are found. The official source said that the regulator has also identified around 60 listed companies — clients of these majorauditing firms — to examine their compliance with the auditing standards.The NFRA will directly engage with the audit committees, independent directors, chief financial officers and other management executives of the companies once they begin inspection. CENTRE TO GET `3,662 CR FROM LIC AS DIVIDEND Formal industry to drive ITC’s growth May 27 (close) PRIYANSH VERMA & MANU KAUSHIK New Delhi, May 27 In terms of regional distribution,the IMD said that 'above-normal' rainfall is expected “over southern peninsula and central India while northwest India is expected to get'normal'precipitation”. However, the north-eastern region and parts of Odisha,West Bengal,Jharkhand and Chhattisgarh may get 'below-normal' rainfall, Mrutyunjay Mohapatra, director-general,IMD,said. 1.65 0.87 NFRA to widen ambit of scrutiny this fiscal 4.13 THE MODI GOVERNMENT has reshaped the Budgets in the last decade from a mere record of expenditures into a “strategic blueprint” for “equitable development”, finance minister Nirmala Sitharaman said on Moday, reports fe Bureau. ■ PAGE 2 SANDIP DAS New Delhi, May 27 (RE) FM SAYS BUDGETS IN LAST DECADE DROVE EQUITABLE GROWTH Actual Axis Bank Bajaj Finance THE SENSEX ON Monday scaled yet another peak hitting 76,009.68 points in intra-day trades as did the broader Nifty which crossed the 23,100 mark even as the markets remained volatile. Both benchmarks touched fresh highs for the third consecutive session but failed to hold on to the day’s gains as investors booked profits in the last trading hour. The momentum in the markets has beenattributedtolimitedsellingbyforeign portfolio investors (FPI), strong purchases by local institutions.According to the provisional data, FIIs net sold shares worth `541.22 crore on Monday while DIIs net bought sharesworth `922.60 crore. Bank stocks were in demand and pushed up the Nifty Bank index by 0.6%; the gauge outperformed the benchmark indices for the third consecutive session. HDFCBank andAxisBankwereamongtop contributors to Monday’s rally. This was the second consecutive ses- FY24 TROUBLED EDTECH FIRM Byju's has told its employees in a recent townhall that their salaries and other statutory dues will be cleared based on cash flow and future availability of funds, reports Anees Hussain. ■ PAGE 10 Forecast^ TOP SENSEX GAINERS (% gain) IndusInd Bank 75,410.39 VIVEK KUMAR M Mumbai, May 27 FY23 5.31 WILL CLEAR SALARY, OTHER DUES, BYJU’S ASSURES ITS STAFF (% of LPA*) High: 76,009.68 May 24 (close) 106 PROXYADVISORY FIRM IiAS has asked invesors to vote against ITC's plan to demerge its hotels business, reports Rajesh Kurup. However, two others — Stakeholders Empowerment Services and InGovern Research Services — have asked investors to support the move. ■ PAGE 4 Markets remain volatile MILESTONE MONDAY with VIX at 2-year high SENSEX BOOST TO ECONOMY 96 94 PROXYADVISORY FIRMS DIFFER ON ITC DEMERGER PLAN Says 92% chances of normal-to-excess rains; inflation concern ebbs 103 106 THE RECORD RBI dividend of `2.11 trillion should help the Centre ensure that the 5.1% aim of fiscal deficit-to-GDP ratio for FY25 is met, reports fe Bureau. This will also aid the authorities in meeting near-term deficit reduction goals, the note said. ■ PAGE 2 101 99 NEAR-TERM DEFICIT REDUCTION GOALS CAN BE MET: FITCH Sensex scales 76,000 peak Above-normal rain in most of India: Met dept 100 109 NEWS GOOD TIDINGS FOR FARM SECTOR 96 110 IN THE 5.5 4.0 Source: Budget documents infrastructure financing. In the absenceofthis,aslowingofthegrowth in public capex would be inevitable. Accumulation ofdebtand rise in interest rates post-pandemic means `11.9 trillion will be forked outbythe Centre forservicing loans in FY25, which is equivalent to its net market borrowing during the year. A large part of the rise in debt was due to a sharp increase in subsidy spending after the pandemic outbreak and the continuation of manyschemeswithout sunset conditions. The glaring example is the food subsidy,whichisnowfullyabsorbed by the Centre while it almost bears 90% of the fertiliser cost despite spiralling costs. Neither of these schemes have anysunset clause nor any evaluation made to exclude beneficiaries based on improvement in their economic status/upliftment over the years. Continued on Page 10 HYDERABAD