NATION, P21 MARKETS, P6 INTERNATIONAL, P3 GOAFEST 2024 FANTASY GAMING CRACKDOWN DETHRONES GRAYSCALE Great leader a myth, value team, says Sanjiv Mehta New Sebi rules could hit investor education platforms: Experts BlackRock’s $20-bn ETF is now world’s largest Bitcoin fund CHENNAI/KOCHI, THURSDAY, MAY 30, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 20, 40 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 74,502.90 ▼ 667.55 NIFTY: 22,704.70 ▼ 183.45 NIKKEI 225: 38,556.87 ▼ 298.50 HANG SENG: 18,477.01 ▼ 344.15 `/$: 83.34 ▼ 0.16 `/€: 90.45 ▲ 0.02 BRENT: $84.48 ▲ $0.26 GOLD: `72,178 ▲ `205 IN THE NEWS UNDEREMPLOYMENT SURPRISINGLY HIGH IN INDIA, SAYS GOVT THE CURRENT STATE of the labour market in India depicts the presence of low to moderate “underemployment”, a paper by the statistics ministry has said, in an official acknowledgement of the dismal jobs scenario, reports Priyansh Verma. ■ PAGE 2 IMPORT DUTY ON WHEAT LIKELYTO BE REDUCED THE CENTRE MAY cut the import duty on wheat after six years to boost domestic supplies so that it would not have to dip into the stocks much, reports Sandip Das. The decision to cut import duty on wheat would be taken up only after June. ■ PAGE 2 STOP BYJU'S FROM SHARE SALES: US LENDERS TO NCLT US-BASED LENDERS OF Byju's have urged the NCLT to restrain the firm from pledging, selling or transferring its shares. They say Byju's was borrowing more money and alienating its shares in exchange, reports fe Bureau. ■ PAGE 5 EASE OF DOING BUSINESS: STILLA JOB HALF DONE INDIA HAS IMPROVED its ranking in the global sweepstakes for ease of doing business in recent years, but a lot needs to be done for it to be at the top, report Mukesh Jagota & Manu Kaushik. ■ PAGE 2 UDAN 2.0 TO EASE ENTRY BARRIERS, REDUCE COSTS THE CIVILAVIATION ministry is working on an expanded version of the Udan scheme to ease the entry barriers and cut operational costs, reports Rohit Vaid. The move is aimed at attracting new players. ■ PAGE 4 EXPLAINER How quality controls give trade a fillip ■ PAGE 9 S&P revises India’s outlook to RBI cracks down ‘positive’ on growth prospects IMPOSES BUSINESS RESTRICTIONS on ECL Finance, Edelweiss ARC SACHIN KUMAR Mumbai, May 29 CONTINUING ITS SCRUTINY of banks and otherfinancial entities,andthe imposition of restrictions, the Reserve Bank of India (RBI) onWednesdaybarred EdelweissAsset Reconstruction Company (EARCL) from acquiring financial assets. It also directed ECL Finance not to undertake anystructured transactions for its wholesale exposures. The actions followed errant behaviour by group entities that had entered into a series of transactions by which stressed exposures of ECLFinancewere beingevergreenedusing the EARCL platform and connected alternative investmentfunds(AIFs).Thecentralbanknoted inareleasethatthetransactionswere“circumventing applicable regulations”.The strictures againsttheEdelweissGroupcompaniesfollow similar measures taken by the RBI against JM FinancialProducts and IIFLFinance. TheRBIalsoobservedthatsecurityreceipts (SRs) in the case of both ECL and EARCL had been incorrectly valued. Moreover, it found thatECLhadindulgedinaslewofwrongpractices.These included the submission of incorrect details of its eligible book debts, to its lenders,forcomputing drawing power. Continued on Page 10 THE DIKTAT ■ ECL Finance barred from undertaking any structured transactions in its wholesale exposures ■ Edelweiss ARC to cease and desist from acquisition of financial assets, including security receipts ■ Group entities entered into a series of structured transactions for evergreening ECL's stressed exposures ■ They used the platforms of EARCL and connectedAIFs for evergreening ■ Incorrect valuation of security receipts was also observed in both ECLand EARCL PSBs weigh new clause in fresh project loans PIYUSH SHUKLA Mumbai, May 29 CONCERNED ABOUT THE Reserve Bank of India’s (RBI’s) draft proposal thatwill require lenders to set aside 5% initially as provision for infrastructure projects — both existing and new — some public sector banks have started hedging the risk. Sources said some lenders, including Canara Bank, Union Bank of India and Bank of India, are considering introducinganewclauseforfreshloans,specifying that the lender may pass on any additional cost they may incur. Canara Bank is understood to have taken stepsin this regard.“We havealreadyinserted a clause while making fresh sanctions. Any extra cost arising out of regulatory requirement can be passed on,” an official said. Canara Bank has a project loan portfolio of about `1.10 trillion. Union Bank is planning to put in a specific clause for project financing so that any increase in costs on account of the RBI regulation can be passed on,an official indicated. The final interest rate hike on project finance loanswillbedecidedoncethefinalRBInorms are issued, the person added. Union Bank’s ON THE TABLE ■ Clause to act as hedge if the project finance guidelines become reality ■ Canara Bank has already inserted a clause to pass on the extra cost ■ Union Bank and Bank of India also planning to put in the clause ■ SBI has hinted that the pricing of project loans may be revisited project finance loans account for 28% of the lender’s `2.96 trillion corporate loan book. Continued on Page 10 Sees chances of rating lift over 24 months BOOST TO ECONOMY PRIYANSH VERMA & SACHIN KUMAR New Delhi/Mumbai May 29 S&P Global Ratings Fitch S&P GLOBAL RATINGS on Wednesday reviseditssovereignratingoutlookonIndia to“positive”from“stable”,citing the country’s long-term growth prospects,which it feltweresustainable,irrespectiveoftheoutcomeofthegeneralelections.WhileretainingtheratingforIndiaatthelowestinvestment grade, the static level maintained by it and peers for the last over 15 years, S&P hintedatamuch-desiredratingupgradefor the country over the next 24 months,subject to several parameters, including “cautious”fiscal and monetarypolicies. The agency’s move comes close on the heels of the ratherunexpected boost to the Union government’s fiscal position from the higher-than-expected dividend transfer from the Reserve Bank of India and tax Tata Steel Q4 profit falls 64%, sales down 7% TATASTEELHAS posted a 64.1% fall in consolidatednetprofitto`611crore for the fourth quarter, missing Street estimates, hit by a `595-croreexceptionalitem,mostly relatedtochargesfromEuropeanoperations, reports Rajesh Kurup. It had posted a net profit of `1,705 crore a year ago.While revenues fell 6.8% to `58,687 crore, Ebitda declined 8.6% to `6,601 crore. A consensus estimate of Bloomberg analysts had pegged a profit of `892 crore on revenues of `58,375 crore andEbitdaof`6,040crore. ■ Page 4 ■ S&P retains lowest investment Moody's Outlook BBB- Positive BBBBaa3 Stable Stable receiptsinApril-Mayoutpacingtheannual growth estimated in the interim Budget. The revision of the outlook byS&Pis a positive for the bond market with analysts expecting the yields to soften in the mediumtermdespitethecurrentvolatility. The benchmark 10-year government bond yield closed higher at 7.013% on grade rating for India, the static level maintained by it and peers for the last over 15 years ■ S&P last raised India rating outlook, to stable, in 2010; Moody's and Fitch continue to have ‘stable’ outlook Wednesday,from 6.996% on Tuesday. The last time the agencyupgraded the rating outlook was in 2010, when it shifted from “negative” to “stable”. Moody's and Fitch continue to have a “stable” outlook for India. Continued on Page 10 MARKETS FALL FOR 4TH SESSION BENCHMARK INDICES SAWtheir worst session in nearly three weeks onWednesday.The Sensex and Nifty fell nearly 1%, ending on negative note for the fourth session.The Nifty bank index slid 1.3%. Meanwhile, the government bond yields ended marginally higher, moving above the 7% mark, tracking a similar move in US Treasury yields. The benchmark 10-year yield ended at 7.013%, following its previous close of 6.9956%. Global oil benchmark Brent crude climbed 0.88% to $84.94 a barrel, a four-week peak on expectations of extension of output cuts. The rupee logged its biggest daily decline against the dollar in nearly seven weeks, ending at 83.34, its biggest daily fall since April 12. Bank Nifty 49,200 49,142.15 49,000 1.30% 48,800 48,600 48,400 48,501.35 May 28 May 29 Dollar vs Rupee 83.15 0.19% 83.18 83.20 83.25 83.34 83.30 83.35 BSNL's FY24 loss narrows to `5,367 cr BSNL NARROWED ITS netlossto`5,367crorein FY24 from `8,161 crore in FY23, on the back of lower expenses, especially finance cost, and higher non-operating income, reports Jatin Grover. The state-run telco’s revenue from operations grew 1% to `19,343.6 crore, missing the target of `20,008 crore set by the government as part of the `3.2-trillion revival package.Total expensesfell2.5%to`26,683crore. Ofthis,employeecostandotherbenefitswereat`8,304crore,anincrease of 4.4% from FY23. ■ Page 5 ■ The outlook revision is a positive for bond market; analysts expect the yields to soften in the medium term (Inverted scale) 83.40 May 29 May 28 May 29 (close) 74,502.90 Sensex May 28 (close) 0.89% 75,170.45 10-year govt bond yield (%) Brent crude prices ($ per barrel) 7.02 85.2 85.0 84.8 84.6 84.37 84.4 84.2 Open 7.01 6.996 7.013 7.00 6.99 6.98 May 28 May 29 84.79 IST 5.07 pm CHENNAI/KOCHI