COMPANIES, P5 MARKETS, P6 INTERNATIONAL MORE STAFF, USE OF AI TOOLS DOMESTIC VALUE ADDITION FATAL 737 MAX CRASHES Sebi fast-tracks IPO nods; average time down 17% in FY24 Xiaomi looks to source 55% of non-chip components locally Boeing to plead guilty to fraud in US investigation CHENNAI/KOCHI, TUESDAY, JULY 9, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 54, 20 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 A TA , 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: 79,960.38 ▼ 36.22 NIFTY: 24,320.55 ▼ 3.30 NIKKEI 225: 40,780.70 ▼ 131.67 HANG SENG: 17,524.06 ▼ 275.55 `/$: 83.50 ▼ 0.01 `/€: 90.50 ▼ 0.11 BRENT: $85.98 ▼ $0.56 GOLD: `72,550 ▲ `202 ADI-NADIR GODREJ FAMILY BUYS 12.65% STAKE IN FLAGSHIP THE ADI-NADIR GODREJ family has acquired a 12.65% stake worth `3,803 crore from promoter RKN Enterprises in Godrej Industries on Monday, reports Viveat Susan Pinto. Last week, Godrej Industries had said AdiNadir Godrej families would acquire cousin Rishad Naoroji's stake in the firm. ■ PAGE 4 GOLDMAN SEES NO FISCAL RELAXATION IN UNION BUDGET THANKS TO A HIGHERTHAN-EXPECTED dividend transfer from RBI, the government will likely stick to the announced fiscal deficit target of 5.1% of GDP for FY25 or aim even slightly lower in the Budget, even if it allocates additional funds for welfare spending, Goldman Sachs said on Monday. ■ PAGE 2 NEET-UG CASE: SC SEEKS DETAILS ON PAPER LEAK THE SUPREME COURT on Monday said it was clear a leak has taken place in the NEET UG 2024 examination, but a retest depends on whether the alleged breach was at a systemic level, and if it was possible to segregate the beneficiaries of the fraud from the untainted students. ■ PAGE 11 WELSPUN ARM GETS `2,275 CRORE FOR SECOND FUND WELSPUN ONE, AN integrated fund and development firm ofWelspun Group, has raised `2,275 crore for its second fund, reports Raghavendra Kamath. It said this is the largest domestic fundraise in the warehousing space. ■ PAGE 4 FE S P E C I A L Bajaj Auto to bolster executive portfolio CNG network expansion will remain key to drive pan-India adoption ■ INVESTOR, P9 THE ANDHRA PRADESH government led by theTelugu Desam Party(TDP) is likelyto support the Centre’s plan forstrategic disinvestment of Rashtriya Ispat Nigam (RINL), also known as Vizag Steel, to revive its fortunes, TDP sources said. The stance of TDP,a key ally of the BJP-led governmentattheCentre,willgivethemuchneeded comfort to the Union government to proceedwiththeprivatisationplan,whichhas beenhangingfireforyearsduetolackofcooperation from the state government. N Chandrababu Naidu,whowas sworn-in as the chief minister on June 12, is keen that investment flows into the state get accelerated, as he strives to bring the state’s economy back on track. “We will support the Centre’s plan for RINL. We don’t have a problem,” a top TDP functionary said. Asked about the TDP’s stand on the privatisationpolicyoftheCentre,Naidurecently said he didn’t have a problem with that as it would bring growth and investment. LikeNeelachalIspatNigam(NINL)bought by the Tata Group in January 2022, the privatisation of RINL is crucial to reviving the fortunes of the plant and protecting the interest of the employees. Currently, the RINL plant has a 7 million tonne (MT) capacity,which can be expanded upto17MTiffreshinvestmentispumpedin. In January 2022, Tata bought Odishabased ailing NINL jointly owned by four central PSUs and two Odisha government PSUs for `12,100 crore.Besides reviving the plant Strong case for Vizag Steel privatisation 7 MT: Current capacity of plant, which is underutilised 17 MT: Capacity potential through pvt investment Loss reported by company in FY23; losses in 18 of the last 33 years `391 cr Net worth in FY23, a massive fall from `13,659 cr in FY12 growth in the last financial year, which, goingbythelatestrelease,buckedadeclining trend seen at the overall economylevel since 2019-20 (see chart). What the RBI came outwithwas the time-series data on productivity performance — the India KLEMS database — anchored bythe International Household Survey Network. Last week, Citibank in a report had stressedthatthecountrywouldneedmore Continued on Page 7 Tata moves a step closer to merging airlines and protecting the jobs of staff,the Tatas are expandingthecapacityoftheplantwithhuge fresh investments. RINLincurredalossof`2,859croreinFY23 anditsplantcapacitywasrunningmuchbelow the7MTcapacity.Itsnetworthhasfallentojust `391 crore in FY23 from a high of `13,659 croreinFY12,duetotheaccumulationoflosses overtheyears.Itsturnoverdeclinedby19%on yearto `22,778crorein FY23.The companyis nowfacing a severeworking capitalcrunch. TheCentrewasdrawingupafreshplanfor the privatisation of RINL, under which the prospective buyer/swould have to commit to expand its 7 MT plant. FE BUREAU New Delhi, July 8 Continued on Page 7 FRESH CHANCE MUKESH JAGOTA New Delhi, July 8 THE GOVERNMENT ON Monday reopened the window for fresh applications from companieswilling to invest underthe productionlinked incentive (PLI) scheme for white goods andshiftedtoasystemofquarterlyprocessing ofincentiveclaimsforthesector.Thiswillbethe third round of applicationsunderthe scheme. The moves signal a more liberal approach bythegovernmentindolingoutthesops,given that the PLI scheme hasn't made much headwayinmanysectors,partlyduetothestringent conditionsattached. Quarterly release of the incentives may be madeapplicabletoothersectorscoveredbythe PLI aswell,sources said. The PLI scheme for white goods is to run from 2021-22 to 2028-29,with an outlay of `6,238 crore. In the third and latest round of applications, existing beneficiaries can also apply if they propose to invest more by way of ■ Quarterly Prime Minister Narendra Modi meets Russian President Vladimir Putin, at the president’s house in Moscow on Monday. Putin and the PM will hold extensive talks, both one-on-one and with delegations, on Tuesday, Russian officials said. Modi will also co-chair the 22nd India-Russia annual summit with Putin release of incentives may be extended to other sectors ■ REPORT ON PAGE 20; ■ EXPLAINER ON PAGE 9 ■ Scheme to ■ To be the third run from 2021-22 to 2028-29, with round of applications `6,238-cr outlay under the scheme switching over to higher target segments or their group companies applying under different target segments,a statement by the ministryof commerce andindustrysaid. The shift from annual to quarterly settlement of incentive claimswill enable the beneficiary firms to maintain liquidity in the business,betterworkingcapitalmanagement,and enhance theiroperational efficiency,it added. Continued on Page 7 40.2 39.5 36.5 37 36.5 37.2 concerted steps to boost employment and skills. It had estimated that India would need to produce about 12 million jobs a year over the next decade to absorb the number of new entrants into the labour market.Based onan economicgrowthrate of 7%,India can onlygenerate 8-9 million jobs a year,it had said. Govt reopens window for white goods PLI Moves to quarterly settlement of claims 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 6.5 Source: CMIE Source: RBI; *provisional ● PM MEETS PUTIN ■ Turnover declined by 19% on year to `22,778 crore in FY23 Services 3.5 4.1 3.8 3.3 Manufacturing Employment rate (%) 2018-19 2019-20 2020-21 2021-22 2022-23 THE DIVIDE BETWEEN the government and private agencies on India’s employment scenario exacerbated on Monday, with official statements presenting a picture far different from the private sector narrative. The labourministryissued a“rebuttal” to a recent Citibank report that said the country would struggle to create enough jobs at the current pace of economic growth. On its part, the Reserve Bank of India (RBI)said that,onaprovisional basis, employment growth rose to 6% in 202324 from 3.2% in the previous fiscal, with the addition of 46.7 million jobs. However, the RBI did not provide industry-wide break-up of employment `2,859 cr Agriculture 2.2 3.0 1.4 5.8 2.7 FE BUREAU New Delhi, July 8 PRASANTA SAHU New Delhi, July 8 Overall economy Employment (% chg, y-o-y) 2018-19 2019-20 2020-21 2021-22 2022-23 Disinvestment pending since Union Cabinet gave its nod in 2021 BUCKING THE TREND 12.6 7.7 A SURPRISE LEFTWING surge in France's election thwarted the far right’s quest for power, but resulted in a hung parliament. The leftist New Popular Front alliance said it wanted to run the government, but conceded on Monday that talks would be tough and take time, reports Reuters. Many of France's allies breathed a sigh of relief after Marine Le Pen's National Rally failed to win the snap election called by President Emmanuel Macron. But with the New Popular Front coming first but far from an absolute majority, the election heralded a period of volatility and possible gridlock. Prime Minister Gabriel Attal, a centrist and ally of Macron, tendered his resignation but it was rejected. Employment growth nearly doubled to 6% in FY24, says RBI 2018-19 1.3 2019-20 2020-21 2021-22 0.0 1.9 2022-23 IN BLOWTO FAR RIGHT, LEFTWINS BIG IN FRANCE RINL’s sale may be fast-tracked Jobs debate heats up as govt, RBI data counter pvt surveys 4.8 5.5 5.1 3.3 3.2 6 NEWS NAIDU LIKELY TO SUPPORT PRIVATISATION 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24* IN THE TCS likely to witness modest growth in Q1 Mercedes drives in its most affordable EV at `66 lakh TATACONSULTANCY SERVICES (TCS) is likely to report a steady growth in the April-June quarter, driven by factors such as deal ramp-ups — including the pivotal BSNL deal — and sector-specific performance, multiple brokerage reports said, reports Padmini Dhruvaraj. The average of five brokerage firms expect TCS revenue to rise 1.5% sequentially to `62,155.5 crore during the period. ■ Report on Page 4 LUXURY CAR MARKET leader Mercedes-Benz India on Monday launched its most affordable EV —the EQA250+,priced `66 lakh, ex-showroom,reports Vikram Chaudhary. It also launched two new variants of the existing EQB — the EQB 350 5-seaterpriced `77.5 lakh, and the EQB 250+ 7-seater priced `70.9 lakh.With these launches,the carmaker has opened itself to entry-level luxury EV buyers. ■ Report on Page 4 THE FOUR TATA Group airlines have harmonised their operating manuals in the run-up to the Vistara-Air India merger and the amalgamation ofAIXConnectwith AirIndia Express,the companysaid on Monday. There will now be two separate manuals instead of four — one for full-service carrierAir India and the other for low-cost airline AirIndia Express —AirIndia said in a statement. The harmonisation will enable thegroupairlinesalignbestpractices and adopt common operating procedures. A team of more than 100membershasworkedtoachieve this over the last 18 months, the statement said. “This is an important milestone in the merger of the Tata Group airlines,”Air India managing director and CEO CampbellWilson said. Air India and group companies arenowinitiatingthenecessarycrew training to action the harmonised processes,the statement said. Atpresent,TataGroupfullyowns three airlines — Air India,Air India Express and AIX Connect (formerly AirAsia India) — while it holds a majorityof51%inVistara,withSingaporeAirlines holding the rest. As part of the restructuring plan, Air India Express and AIX Connect arebeingmergedtocreateano-frills airline,while the combined entityof Air India andVistara will be the fullservice carrier. Thegroupispushingtocomplete the Air India-Vistara merger by the endofthisyear.However,Wilsonhas said customer-facing elements, including Vistara’s brand identity, will remain unchanged till 2025. AT $960 MN, JEWELLERY STARTUP’S VALUATION LIKELY TO DOUBLE Prosus in talks to lead $100-mn funding round in BlueStone FE BUREAU Bengaluru, July 8 DUTCH INVESTMENT GROUP Prosus is close to leading a funding round of $100 million in omnichannel jewellery startup BlueStone,industry sources said. The latest funding round is likely to value BlueStone at nearly $960 million — more than double its valuation of $440 million as of September last year. Expected to be a mix of primary and secondaryshare sale,the round may also see participation from venture capital firms such as PeakXVPartners,SteadviewCapital and Think Investments, the sources added. Around $60 million of the round is expected to be a primary CAPITAL SUPPORT ■ To be Prosus's first late-stage bet since 2022 ■ May also include Peak XV Partners, Steadview Capital & Think Investments ■ Round likely to value BlueStone at nearly $960 mn capital raise, which BlueStone will plough back into the business. The balance will be a secondary component, in which early investors are likely to offload a portion of their shares. ■ Prosus has invested over $7 billion in unicorns such as Meesho and Swiggy If the funding round materialises,it will come just after Zepto’s $665-million fundraise at a valuationof$3.6billion,whichhappened late last month.Itwill also come at a time when the industry continues ■ In June, online grocery startup Zepto raised $665 million at a valuation of $3.6 billion to see muted number of deals. For Prosus, which has invested over $7 billion in unicorns such as Meesho and Swiggy,the dealwill be significant as it will be its first latestage bet since mid-2022. It was involved in Series A deals in 2023, with transactions in contract software firm Spotdraft and fashion brand Virgio,besides backing portfolio startups like Urban Company andCaptain Fresh.It hasbeen missing from late-stage activity like its peers SoftBank and Tiger Global. BothProsusandBlueStonecould not be contacted forcomments. BlueStone reported `788 crore in operating revenue in FY23, up from `476 crore a year ago. Its losses narrowed to `167 crore from `1,268 crore in FY22. According to Tracxn data, domestic tech startups saw a 13% declineinfundinginthefirsthalfof the current calendar year (JanuaryJune) to $4.1 billion.The firms had raised $4.8 billion during the same period in 2023. The number of funding rounds also saw a drop of 54% to 540 during the period from 989 in the first half of last year. The decline in funding was across stages during the period. While seed stage funding dropped 17.3%year-on-yearin the first half of this year, funding in early-stage startups were down 28% and in late-stage companies were slightly lower by 1.3%. However, compared with the second half of 2023, the funding scenario has improved in the first half of this year. The overall funding increased by 4% from $3.96 billion in the second half of last year,while across stages,too,funding saw an uptick. Continued on Page 7 CHENNAI/KOCHI