BACK PAGE, P22 COMPANIES, P4 INTERNATIONAL, P3 Paralympics: Avani Lekhara wins back-to-back gold I don't look at biz, I look at finance: Singhania Harris pledges to 'turn the page' in CNN interview HYDERABAD, SATURDAY, AUGUST 31, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. NO. XXI 104, 22 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: 82,365.77 ▲ 231.16 NIFTY: 25,235.90 ▲ 83.95 NIKKEI 225: 38,647.75 ▲ 285.22 HANG SENG: 17,989.07 ▲ 202.75 `/$: 83.87< > 0.00 `/€: 92.95 ▲ 0.11 BRENT: $78.80 ▼ $1.14 GOLD: `71,679 ▼ `24 — IN THE NEWS SEBI TIGHTENS F&O ENTRY NORMS FOR STOCKS THE SECURITIES AND Exchange Board of India (Sebi) on Friday tightened the eligibility criteria for stocks to enter futures and options (F&O) segment. Among the tweaks by the regulator are market-wide position limit, average daily delivery value in cash market, and median quarter sigma order size. ■ PAGE 6 NCLT CLEARS VIACOM18-STAR INDIA DEAL THE MUMBAI BENCH of the National Company Law Tribunal (NCLT) on Friday cleared the Viacom18-Star India merger deal, days after the Competition Commission of India (CCI) approved the transaction, valued at $8.5 billion, with modifications, reports Viveat Susan Pinto. ■ PAGE 4 HDFC BANK TO SELL `100 BN OF LOANS TO PLUG FUNDS GAP HDFC BANK PLANS to sell as much as `100 billion of loan portfolios using a debt instrument it rarely used, as the nation’s banks devise ways to overcome challenges in raising deposits essential to maintaining healthy margins, reports Bloomberg. ■ PAGE 6 FE S P E C I A L S Do open-top cars (convertibles) make sense in India? Driving new Mercedes-Benz CLE 300 Cabriolet AMG Line attracts too much attention ■ MOTOBAHN, P9 Future-proof your term insurance plan In increasing term plans, sum assured goes up periodically ■ PERSONAL FINANCE, P9 Apple & Nvidia in talks to invest in OpenAI at $100-bn valuation GDP SLOWS TO 5-QUARTER LOW OF 6.7% Consumption back as key growth driver CADE METZMICHAEL J DE LA MERCED & TRIPP MICKLE San Francisco/London, August 29 GDP-GDA GAP NARROWS Internals positive, say economists Real GDP FE BUREAU New Delhi, August 30 INDIA'S GROSS DOMESTIC product (GDP) grewatafive-quarterlowrateof6.7%inAprilJune quarterof the current fiscal,as the robust performanceofthesecondarysectorcomprisingmanufacturing,construction&utilitieswas morethanoffsetbythefarmsector'scontinued torpor and a slowing of INSIDE keyservices industries. Yet, the relatively FISCALDEFICIT soliddatareleasedbythe AT17% National Statistical OFTARGET Office on Friday sug■ PAGE 2 gested the economy's resilience, given that EDITORIAL: Q1FY25sawaslowingof ECONOMIC government spending RESILIENCE and assorted business ■ PAGE 8 activities amid the election phase. Moreover,privateconsumption,whichhad been sluggish and expanded at rates much lowerthanthebroadereconomyforsixstraight quarters to Q4FY24,picked up in June quarter andthattooonarelativelystrongbase.Private final consumption expenditure (PFCE) grew 7.4%onyearinQ1,comparedwith4%eachin theprevioustwoquartersand5.5%intheyearago period. % chg, y-o-y GVA 6.2 8.2 8.1 8.6 7.8 6.7 Q4FY23 Q1FY24 Q2FY24 Q3FY24 Q4FY24 Q1FY25 6 8.3 7.7 6.8 6.3 6.8 Key performers in Q1FY25 GVA (% chg, y-o-y) Construction Electricity, gas, water Public admin, defence Mining & quarrying Financial, real estate, etc Manufacturing Trade, hotels, etc 10.5 10.4 9.5 7.2 7.1 7 5.7 APPLE AND NVIDIA are in talks to invest in OpenAI as part of a new deal that would valuetheSanFranciscoartificialintelligence startup at $100 billion, according to three people familiar with the discussions,who spoke on the conditionof anonymity. The dealwould be led byThrive Capital and might also include Microsoft. Thrive would put about $1 billion into OpenAI, the people said. A $100 billion valuation would be abouta$20billionincreasefromOpenAI’s valuation eight months ago. NvidiaandAppledeclinedtocomment. OpenAI started the AI boom with the release of the online chatbot ChatGPT in late 2022. In the months that followed, investors pumped tens of billions of dollars into the startup and other companies thatwere developing similartechnologies. In recent months, investors’ interest has cooled as several prominent startups essentially disappeared into tech giants like Google, Amazon and Microsoft. But A BET ON FUTURE ■ A $100-billion valuation would be about a $20 billion $1 billion into OpenAI ■ Since 2019, Microsoft and others have invested over $13 billion in the startup OpenAI has remained an independent operationintentonbuildingandsellingits own technologies and products. Since 2019,Microsoft and others have invested over $13 billion in the startup, which needs billions of dollars in rawcomputing power to build its AI technologies. Nvidia,which supplies much of that computing power in the form of specialised computerchipssuitedtothedevelopment of AI, has experienced dramatic growth over the last 18 months. On Wednesday, Nvidia reported that its sales and profit had more than doubled during the three months that ended in July. Earlythisyear,ThriveledadealthatvaluedOpenAI atmore than $80billion.With that deal, the startup did not issue new shares. The company allowed its employees to sell their existing shares. Continued on Page 7 Source: MoSPI ● FINTECH VANANTHA NAGESWARAN, CEA GETS PM’S BACKING ...ECONOMY CAN GROW AT 7% PLUS ON A SUSTAINABLE BASIS IF WE CAN BUILD ON THE STRUCTURAL REFORMS UNDERTAKEN Prime Minister Narendra Modi with RBI governor Shaktikanta Das during the Global FinTech Fest 2024 in Mumbai on Friday. Modi said the government is making necessary policy changes, like removal of Angel Tax, to promote the fintech sector. PTI TURN TO PAGE 2 Continued on Page 7 It’s curtains forVistara flights from Nov 12 Date fixed after govt’s nod to Singapore Airlines’ `2,058-cr FDI in AI-Vistara merger DECKS CLEARED ■ Vistara is a 51:49 joint venture between Tata Group and SIA FE BUREAU New Delhi, August 30 WITH THE GOVERNMENT approving Singapore Airlines' `2,058.5-crore foreign direct investment inAirIndia,it'sgoingtobecurtainsforthe10year old full-service carrier Vistara from November 12. Vistara is a 51:49 joint venture between Tata Group and SIA.Following the merger of Vistara into Air India, SIA will have 25.1% stake in the merged entity. The government's approval is the last major clearance for the merger that was announced in November 2022. With regulatory approvals in place, Air India CEO and MD Campbell Wilson told the employees on Friday that November 12 has been set as the date for the movement of aircraft and crew of Vistara to Air India. Loss-makingVistara,whichhasafleetof70 planesandfliesto50destinations,willbeoperatingthelastflightunderitsbrandonNovember11.It had a domestic market share of 10% in July."Starting September 3,customers will, ■ PAGE 6 Following the merger of Vistara into Air India, SIAwill have Sebi to tighten SME IPO norms, draft by year-end 25.1% stake in the merged entity ■ It had a domestic market share of 10% in July ■ The merger, which will create one of the biggest airline groups, was approved by the National Company Law Tribunal (NCLT) in June progressively,no longerbe able to make bookings withVistara for travel on or after November12,"Vistara said in a statement. Thereafter, Vistara aircraft will be operated byAir India and bookings for the routes operated bythese planeswill be redirected to Air India's website. Continued on Page 7 AMID HEIGHTENED concerns oversmall and medium enterprises (SMEs) shortchanging investors bypaintinganunrealisticpicture of their operations, Sebi plans to issue tighter listing norms for SME IPOs through a consultation paperbythe end of 2024,said Sebiwhole-time member Ashwani Bhatia, reports Akshata Gorde. He said that the regulatorwants to remain light-touch to encourage quality SMEs to list. ■ PAGE 6 Adani Ports acquires Astro Offshore stake for $185 mn ADANI PORTS and Special Economic Zone (APSEZ) is set to acquire an 80% stake in Astro,a global offshore servicevehicle operator, in an all-cash deal for $185 million, implying an enterprise value of $235 million and EV/FY25 estimated Ebitda at 4.4x, as per a company statementonFriday.Astro,whichoperatesintheMiddle East, India, Far East Asia and Africa, owns a fleet of 26 OSVs (offshore supportvessels) comprising anchorhandling tugs (AHTs),flat top barges,multipurpose support vessels (MPSVs) and workboats. ■ PAGE 4 Vehicle recall hits 700K this year; 96% are 2Ws THE NUMBER OF vehicles recalled by automakers till the first week of August this year has already surged past those reported forthe two preceding years. About 96% of the nearly720,000vehicles recalled by the industry in 2024 comprises two-wheelers,as perdata shared by the Society of Indian Automobile Manufacturers (SIAM). India’s automotive basket is dominated by the two-wheeler segment, controlling 81% of the domesticmarket.In2022and2023, atotalof288,765and285,000vehicles respectivelywere recalled. This increase in recall underscorestheimportanceofthemandatory vehicle recall policy implementedbythegovernmentin2021. Suzuki Motorcycle India, the country’s fifth largest two-wheeler ■ Thrive would put about increase from OpenAI’s valuation eight months ago NUMBER ALREADY HIGHER THAN THAT REPORTED IN 2022 & 2023 SWARAJ BAGGONKAR Mumbai, August 30 ■ The deal would be led by Thrive Capital and might also include Microsoft FAULTY UNITS Top 5 companies that issued a recall in 2024 (units recalled) Suzuki Motorcycle Access 125, Avenis 125, Burgman 125 3,88,478 Mercedes-Benz Hyundai GLE 450, EQS,GLC, AMG SL,AMG GLA, S, E, EQB Ioniq 5, Creta, Verna 15,167 9,442 Toyota Kirloskar India Yamaha Motors Ray ZR FI 125, Fascino CI 125 3,00,725 maker,leads the chartwith recall of 388,500 units. The Japanese auto brand asked its customers to bring back Access 125, Avenis 125, Burgman 125 scooters at its service centres to rectify an issue. Crack and breakage occurred in high tension cord due to repeated bending caused by engine oscillation during running, resulting in Land Cruiser, Glanza, Lexus RX, Lexus NX 2,735 engine stall and starting failure in these Suzuki scooters,the company clarified. The company recalled more units than it sold in India in the seven months till July. Another Japanese auto brand, Yamaha, issued recall for a little more than 300,000 for its two scooters, Ray ZR FI 125 and Fascino CI 125, which are manufac- Source: SIAM tured in India.ForYamaha too,the number of recalled vehicles was more than the number of units sold in the country between January and July. Among the passenger vehicle (PV)makers,itistheluxurycarmarketleaderMercedes-Benzwhichled the charts. The company recalled a little over 15,000 units so far this yearspread across a total of 38variants and models. In Maythisyear,Mercedes-Benz warned that there could be sudden loss of propulsion, loss of traction and even a risk of fire on models including GLE 450,EQS,GLC,AMG SL, AMG GLA, S-Class, INSIDE E-Class and AUGUST PV EQB, if left DISPATCHES unserviced. MAY BE FLAT Maruti ■ PAGE 5 Suzuki and Hyundai Motor, with a combined domestic PV market share of 55%,, recalled around 12,000 cars and sports utilityvehicles.Hyundai recalled nearly 9,500 units of the Ioniq 5,Creta andVerna while Maruti Suzuki recalled 2,555 Alto K10 cars. Continued on Page 7 Competition for deposits for some more time: Setty SACHIN KUMAR Mumbai, August 30 STATEBANKOFIndia(SBI)chairman CS Setty expects competition for deposits to continue for some more time even as banks look at ways to spurdepositgrowth. In his first public speech after assuming charge as chairman of country’s largest lender, Setty said that banks maytweak interest rates of short-term deposits.However,he does not expect a rate war among the banks. “Most of the banks including us CS SETTY, CHAIRMAN, STATE BANK OF INDIA THERE WILL BE SOME TWEAKING IN INTEREST RATES PARTICULARLY IN ONE-TWO YEAR BUCKET are not getting into a rate war. We want to attract customers by way of improved service quality and some banks are looking at opening branches,” Setty said.“There will be some tweaking in interest rates particularly in one-two year bucket, whichisthepopularone.Competition for deposits is likely to continue for sometime,”hesaid. Banks are looking at how to get more value out of their existing customersandattractnewcustomersby offering better quality of service,he added.With deposit growth trailing the credit growth, banks are struggling to mobilise funds from depositors. Concerned by a widening gap between the credit and deposit growth,Reserve Bank of India governorShaktikantaDashasaskedbanks to innovate products to address the issue. Setty said there is no pressure on the bank to lower its credit-deposit ratio.“We have very comfortable CD ratio,andwearenotunderpressureto reduceCDratio.Wehaverobustcredit growth,andweexpect14-15%credit growth,”he said.“Even if we have 810% deposit growth in SBI,because of the large base in absolute number, it will be larger than the absolute amountofcreditgrowth,”headded. SBI has launched a 444-day term deposit scheme‘Amrit Vrishti’,offering7.25%interest.AccordingtoSetty, saversaremovingfundstohighyieldingassetswhichisputtingpressureon thebanks. “Itisafactthatduetothechange inassetallocationofthecustomers, some movementof investmentsis going to other asset classes, so obviously increase in credit growth and savings to other asset classes is putting pressure on deposits of the banks,”he added. Continued on Page 7 HYDERABAD