MARKETS, P7 COMPANIES, P4 INTERNATIONAL, P3 NEW RBI CIRCULAR REVENUE DOUBLES SINCE MARCH COMMITS $45 MN A MONTH FOR CAMPAIGN Separate notices to defaulters may delay banks’ loan recovery Yulu to use high-speed EVs for food delivery, e-comm market share Elon Musk in uncharted territory with Donald Trump endorsement CHENNAI/KOCHI, WEDNESDAY, JULY 17, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLV 61, 18 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 80,716.55 ▲ 51.69 NIFTY: 24,613.00 ▲ 26.30 NIKKEI 225: 41,275.08 ▲ 84.40 HANG SENG: 17,727.98 ▼ 287.96 `/$: 83.59 ▲ 0.01 `/€: 91.10 ▲ 0.13 BRENT: $83.65 ▼ $1.20 GOLD: `73,320 ▲ `309 ‘Our best work bridges purpose and business’ CEO — SouthAsia, Leo Burnett talks about brands that play a role beyond commerce ■ BRANDWAGON, P9 Why Zomato & Swiggy raised platform fee While the 20% hike improves unit economics, it may impact order volumes also ■ EXPLAINER, P9 ■ The total amount due to Byju's creditors exceeds `200 crore, according to sources ■ Byju's has suffered numerous setbacks in recent years, including boardroom exits and a tusslewith investorswho accused Byju Raveendran of corporate governance lapses, job cuts ofthecompanywilltransitionfromthecurrent management to its creditors. The company enters a moratorium period,during which all debts and interest on debtswill remain frozen until lifted by an NCLT order.Additionally, no asset transfers can occur during the CIRP,and theinitiationorcontinuationoflegalproceedings againstByju's is prohibited. TheCoC,workingthroughtheIRP,nowhas amaximumof330daystoattemptarevivalof the company through a potential sale to an interested party. Continued on Page 6 0.66 % higher at `16.8 on the BSE. Bharti Airtel closed 2% higher at `1,466. Others like Mahanagar Telephone Nigam (up 8.9%), Sterlite Technologies (up 1.92%),OnMobile Global (up 1.84%), part of the BSE Telecommunication Index, also saw smart gains. ■ TELCOS MAY GET OVER `50K CR BENEFIT, P4 BSE Telecommunication Index Top gainers from telecom sector Intra-day, July 16 0.89% (% gain on July 16) 3,177.71 0.66 FE S P E C I A L S working through the IRP, now has 330 days to attempt a revival of the company through a potential sale to an interested party « OLA ELECTRIC IS likely to value the company at around $4.5 billion for its initial public offering (IPO), around 16-20% lower than the valuation in its last funding round, sources said, reports Reuters. The company is likely to list on the bourses in the first week of August. ■ PAGE 10 SHARES OF TELECOM players edged higher on Tuesday following the news of Supreme Court allowing a curative petition by Vodafone Idea seeking correction of alleged errors in adjusted gross revenue (AGR), reports fe Bureau. Shares ofVodafone Idea rose as much as 6% during the day, before closing Vodafone Idea OLA ELECTRIC EYES LOWER VALUATION OF $4.5 BN FOR IPO case on September 8, 2023, but itwas officially registered by the NCLTon November 15 Telecom scrips edge higher 2.00 SEBI HAS ISSUED an administrative warning to Paytm’s parent company One 97 Communications for conducting two unapproved related party transactions amounting to `360 crore with Paytm Payments Bank (PPBL) in FY22, reports Piyush Shukla. ■ PAGE 7 2.59 RELATED PARTY TRANSACTION WARNING TO PAYTM Bharti Airtel BROKERAGE HOUSE ANGEL One may have to abandon its zero brokerage fee model following a directive from the Securities and Exchange Board of India (Sebi) to levy uniform transaction fees on stock brokers regardless of trading volumes, reports Akshata Gorde. ■ PAGE 7 BYJU'S, ONCE INDIA'S biggest startupvalued at$22billion,willfaceinsolvencyproceedings forfailuretopay`158croreinduestotheBoard of Control forCricket in India (BCCI). On Tuesday, the Bengaluru bench of the National Company Law Tribunal allowed bankruptcy proceedings to begin against Think and Learn Pvt Ltd,the parent company of Byju’s, and installed Pankaj Srivastava as interimresolutionprofessional toreplacethe founder Byju Raveendran, who not so long ago was treated as a poster child for India’s startupeconomy.Thecourtalsoinvitedother creditors, Byju’s employees and vendors to file claims. The ruling is the biggest single step yet towards an end for the startup, which was founded in 2015.The resolution professional will now be responsible for carrying out the operations of the company and keep it as a going concern until the formation of a Committee of Creditors (CoC). ThepleabroughtbytheBCCI—Byju’sused to sponsor the national team — is one of several bankruptcy cases Byju’s is fighting in Indiaandabroad.The“existenceofadebtand a default in the payment of debt is clearly established,”NCLTsaid in its decision,adding itfoundnoreasontodenythepetitionfiledby the cricket body. BCCI had filed the case on September 8, 2023, but it was officially registered by the NCLTon November 15. This ruling sets in motion a series of significant changes forByju's.As perthe IBC,control Indus Tower ANGEL ONE TO EXIT MODEL OF ZERO BROKERAGE FEE ANEES HUSSAIN Bengaluru, July 16 5.49 STEELAND HEAVY industries minister H D Kumaraswamy said on Tuesday that the third phase of the Faster Adoption and Manufacturing of Electric Vehicles (FAME-III) scheme will be finalised soon, reports Rohit Vaid. "It is in the final stages,” he added. ■ PAGE 2 SINKING SHIP ■ BCCI had filed the ■ The CoC, Tata Teleservices (M) FAME-III SCHEME WILL BE FINALISED SOON: MINISTER Founder Raveendran loses control of startup 5.69 ECONOMISTS HAVE RAISED their retail inflation forecasts for the July-September quarter by 40-50 basis points, but feel it will meet the RBI’s full-year estimate of 4.5%, report Priyansh Verma & Sandip Das. The RBI has projected CPI inflation to average 3.8% in Q2. ■ PAGE 2 Vindhya Telelinks Q2 INFLATION MAY TOP RBI FORECAST BY UP TO 50 BPS NCLT admits BCCI plea against Byju's for insolvency 8.90 NEWS INTERIM RP TO OVERSEE MANAGEMENT MTNL IN THE Open 3,177.71 Close 3,137.31 (Previous close) New asset class for risk-takers Sebi proposes new category between mutual funds, PMS AKSHATA GORDE Mumbai, July 16 THE SECURITIES AND Exchange Board of India(Sebi)onTuesdayproposedanewasset class for investors with higher risk appetite and investment ticket size of `10 lakh or more.Themoveisaimedatcurtailingunauthorised and unregistered products as well asgivinganotherinvestmentrouteforthose wishing togo the extra mile to earn more. “The new asset class is proposed to be introducedunderthemutualfundstructure, withrelaxationsinprudentialnormsforsuch a new asset class to be adequately effective. While such relaxations may enhance the risks associated with the product,the same canbemitigatedbyputtingahigherlimiton minimuminvestmentsize,”Sebisaid. The product would be like a hedge fund andpositionedbetweenmutualfunds(MFs) andportfoliomanagementservices(PMS)in termsofflexibilityinportfolioconstruction. The hedge fund concept is very popular in globalmarketswhereinaninvestmentman- 50% 10% WEALTH CREATION ACCELERATED ■ Minimum investment `10 lakh cap on ETFs, compared to MFs and PMS at `100 and `50 lakh ■ Gross exposure including derivatives and other instruments should not exceed of the net assets 100% cap on single stock derivatives ■ Both SIP and SWP route allowed ■ Invested amount cannot fall below `10 lakh, except for value erosion ageruses awide range of strategies allowed to invest in all instruINSIDE to earn above-average investment ments permissible to mutual REIT and returns. funds as well as in derivatives In terms of ticket-size as well, InvIT rules for purposes other than hedgthe market regulator has set an amended ing and rebalancing, unlike in investment threshold of `10 lakh, mutual funds. ■ PAGE 7 which falls neatly between a The cumulative gross expomutual fund where the minimum surethroughallinvestableinstruinvestment can be as lowas `100,and PMS ments, including derivatives, should not and alternative investment funds (AIFs) exceed 100% of the net assets of the investwheretheinvestmentthresholdis`50lakh mentstrategy. and `1 crore,respectively. The proposed asset class will be Continued on Page 6 IMF raises India GDP forecast 20 bps to 7% ● BUDGET SEASON SWEETENER PRIYANSH VERMA New Delhi, July 16 Finance minister Nirmala Sitharaman with MoS Finance Pankaj Chaudhary and others during the customary halwa ceremony to mark the final stage of preparing the Budget, in New Delhi on Tuesday. The Budget is scheduled to be presented on July 23 PTI Mainboard migration of SME stocks falls 80% VIVEK KUMAR M Mumbai, July 16 THEMIGRATIONOFsmall-and-mediumenterprises (SME) stocks to the mainboard has plunged by over 80% so far this calendaryear. Just six SME stocks have migrated to the mainboard so far as compared to 32 in the same periodof2023and37in2022,accordingtodata fromPRIMEdatabase. Overall,38stocksmigratedtothemainframe in 2023 and 60 in 2022. The significant fall comes in the backdrop of new guidelines introducedbyexchangesthat,expertssay,havemade thingsalittlemoredifficult.Thecompanieslisted on SME platforms -- NSE Emerge and BSE SME --canmigratetothemainboardiftheymeetcertain criteria.The criteria in the new guidelines include a paid-up capital of over `10 crore post issue,minimum market capitalisation of `25 crore,networthofatleast`15croreintheprevioustwofinancialyearsandaminimumperiodof threeyearssincelistingontheSMEplatform. The guidelines came into effect from January 1.Earlier,companies were only required to completethreeyearsonSMEplatformstobeeligible for migrating to the mainboard if they IMPACT OF NEW NORMS Migration to mainboard Continued on Page 6 6 37 2022 2023 IMPROVED OPTIMISM Growth forecast (FY25, in %) 32 *till July 16 THE INTERNATIONAL MONETARY Fund (IMF) has raised India's GDP growth projection for the current financial year by 20 basis points to 7%, primarily due to "improved prospects"for private consumption. Therevisedprojectionis,however,still lowerthantheReserveBankofIndia’s projectionof7.2%. In its latestWorld Economic Outlook report,the IMF said the upward revisioninIndia’sgrowthforecasthas been carried out,“with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption,particularlyinruralareas.” In FY24, private final consumption expenditure (PFCE) had grown merely 4%,at the lowest pace in the current GDP series with 2011-12 as the base year.This excludes the pandemicyear2020-21,whenPFCEhad contracted5.3%onyear. For FY25,many economists have shownoptimismontherevivalofrural consumption, which has remained lacklustre during the previous financialyear.This is on the assumption of improved monsoon prospects and reductioninruralinflation. World Bank 2024* Source: PRIME Database S&P Global 6.6 6.8 7 IMF Fitch wishedso,accordingtoexperts.However,likein thepast,shiftingtothemainboardisavoluntary decisionofacompany. 7.2 RBI 7.2 Moody's Ratings* 6.8 Continued on Page 6 *for 2024 TELLS SHAREHOLDERS THE TWO-WHEELER MAKER NEEDS A NEW, YOUNGER MD Rajiv Bajaj kick-starts succession talk at Bajaj Auto SWARAJ BAGGONKAR Mumbai, July 16 WITH BAJAJ AUTO managing director RajivBajaj saying it is time someone younger takes over the reins of the business, succession plans may be in the making at the two-wheeler manufacturer. Addressing shareholders at the company's 17th annual general meeting (AGM) on Tuesday in Pune, Bajaj said, “Every time I say something to you (shareholders), I start bysaying,‘mymind goes back 30 years'. So, it tells me that perhaps I have been here long enough.” “So,just as these two companies (Chetak Technologies and Bajaj Auto Credit) have new MDs, Bajaj LEADERSHIP TRANSITION RAJIV BAJAJ, MD, BAJAJ ■ Bajaj joined the promoter-driven company in the early 1990s and has been serving as its MD since April 2005 “I HAVE BEEN HERE 34 YEARS. I AM 58 AND NOT SO YOUNG ANY MORE. BUT DON’T WORRY, I AM NOT GOING ANYWHERE IMMEDIATELY” ■ The company was split into three entities in 2007. Rajiv got the automotive business, while his younger brother Sanjiv got the finance business Auto (also) needs a new MD; a younger MD because I have been here 34 years. I am 58 and not so young anymore. But don’t worry, I am not going anywhere immediately,” Bajaj added. This is the first time in 17 years that leadership changes are being talked about at BajajAuto.In 2007 the company split into three legal entities, Bajaj Auto, Bajaj Holdings and Bajaj Finserve.While the automotive business went to Rajiv, younger brother Sanjiv got the finance business. Patriarch Rahul new technologies in electric and Bajaj was the chairman of all three other powertrain domains, entities. appointed BajajAutoveteranAbraRajiv’s son Rishab joined Bajaj ham Joseph as its MD. Auto in FY22 as management Bajaj Auto Credit, a 100% captrainee and currently tive finance subsidiary of INSIDE holds the designation of Bajaj Auto established as divisional manager Bajaj Auto a non-banking finance (product strategy – eleccompany (NBFC), Q1 profit tric vehicle) in the comappointed another vetpany. Members of Bajaj up 19% eran Kevin D'sa as its MD. ■ PAGE 4 Auto’s board accorded Bajaj Finance, an entity theirapproval to Rishab’s controlled by Bajaj Finposition in the company for a serve, earlier provided, vehicle period of five years until the end loans to BajajAuto’s two and threeof FY28 through a resolution wheelers.Later,Bajaj Auto decided passed on March 5, 2024, details to have its own NBFC as Bajaj provided in the company’s 17th Finance manages retail loans to annual report stated. other segments as well. Chetak Technologies, a company formed recently to look at Continued on Page 6 CHENNAI/KOCHI