1. RBItoappealHCorder
onYesBankAT-1bonds uP1
Govt may announce universal
enterpriseIDsforsmallbizuP1
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NEW DELHI, mumbAi, beNGALuru, kOLkAtA, cHeNNAi, AHmedAbAd, HyderAbAd, cHANdiGArH*, PuNe* VOL. 17 NO. 19
Monday, January 23, 2023
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MoNDay, 23 JaNuary 2023
New Delhi
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NEW DELHI, MUMBAI, BENGALURU, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 17 NO. 19
Monday, January 23, 2023
QUICK EDIT
Inaweb-linkedageofdataana-
lytics,itispresumablypossible
tocheckwhetherabanwinsor
loses an audience for material
that reaches out for one. India
kept Salman Rushdie’s 1988
novel The Satanic Verses off
domesticbookshelves.Asitwas
seen as sufficiently scandalous
to harm national interests, few
had access to it till the internet
arrived.Nowthatvideoclipsgo
viral online as a matter of rou-
tine, the odds of a ban failure
haveevidentlyshifted.Howfar,
though, is a matter of debate.
With the nation’s interests
deemedatstakeagain,thistime
on account of a BBC show, the
Centre has exercised controls
on digital intermediaries
acquired under the IT Rules of
2021tokeepitoutofsight.This
case could test the hypothesis
thattryingtocontroltheinter-
net is “sort of like trying to nail
Jello to the wall”, as former US
presidentBillClintonmemora-
bly put it at the turn of the mil-
lennium, drawing laughter at
thetime.HehadwishedChina
“good luck” with that, which
Beijing appears to have taken
literallysincethen.Whatabout
aconstitutionaldemocracylike
India?Dueprocessiskey.Even
so,whetherstuffcanbebarred
effectively enough to limit its
onlinereach is unclear.
Do bans
work?
MINT METRIC
by Bibek Debroy
Persuadedonavideocalltostrip,
Abusinessmanwentonascarytrip.
Soonthelusciousfemale
Madehimlosecroresinblackmail.
Hewilltakegreatercaretounzip.
mint primer
What was the impact
of GST on states?
North-eastern states have
recorded a compounded annual
GST revenue growth rate of 27.5%
so far since the implementation of
the GST as against 14.8% for all
states, making them the biggest
gainers of the new indirect tax
regime. The top five states that
required compensation for the
shortfall in GST revenue were
Maharashtra, Karnataka, Gujarat,
Tamil Nadu, and Punjab. The five-
year compensation period ended
on 30 June, 2022. Without GST
compensation, the states would
need to augment their revenue by
increasing compliance, plugging
leakages and widening tax bases,
the report said.
How did northeastern
states gain from GST?
Unlike the central sales tax (CST),
an origin-based tax, GST is a
destination-based tax levied at the
time of consumption of goods or
services. If say, goods produced in
Chhattisgarh are sold in Sikkim,
GST would be levied in Sikkim and
not Chhattisgarh. Hence, it
benefits consuming states like
Bihar, and those in the north-east.
Producing states have complained
that they have lost out under the
indirect tax regime. Pre-GST, CST
was collected by the producing
state on inter-state transactions.
Therefore, NE states, which do not
have much production, gained
immensely post GST
implementation.
What about Punjab
and Chhattisgarh?
Punjab is among states that
needed the highest compensation
as it used to get a large amount of
purchase tax from paddy, rice and
wheat, which got subsumed under
GST. Chhattisgarh had stated that
it would face revenue losses of
₹3,000 crore annually without
compensation. It says it no longer
gets revenues from any comm-
odity produced in the state. Odisha
would collect VAT from rice, food
grains, pulses, which got exempt
under GST. It also imposed CST on
minerals and other commodities,
which got subsumed.
Why did states stop
getting compensation?
Initially, states were promised GST
compensation for five years to
make up for losses, which ended on
30 June, 2022. Compensation was
calculated as the difference
between the projected revenue
growth based on 14% annual
growth with 2015-16 base year and
actual collection. According to
RBI, states likely to be “most adve-
rsely affected” by the end of comp-
ensation are Puducherry, Punjab,
Delhi, Himachal Pradesh, Goa and
Uttarakhand, where share of GST
compensation in tax revenue was
over 10% on an average.
Why did Karnataka, Gujarat
gain and Delhi lose?
States with a strong manufacturing base
such as Maharashtra, Gujarat, and Tamil
Nadu are among top performers in GST, as
these are also large consumers, making
them big revenue earners. Experts say
Delhi was impacted as the tax arbitrage on
CST ended. Before GST, Delhi had a lower
CST of 1%, prompting many to ship goods
from Delhi by locating their offices here.
1
The north-eastern states have been the biggest beneficiaries of the
five-year-old goods and services tax (GST) regime, according to the
Reserve Bank of India (RBI) report on State Finances released earlier
this week. Mint explains how some states gained but others didn’t.
How GST brought
cheer to some
states, not others
No more goodies
GST compensation cess (in ₹ trillion)
Source: Budget documents
2017-18 2018-19 2019-20 2020-21 2021-22
Collected Disbursed
0.63
0.69
0.95 0.96
1.66
1.05
1.68
0.85 0.85
0.50
2
3
4 5
QUOTEOF THEDAY
SUDHAMURTY
AUTHOR
I prefer our childrenshouldnot
use electronicgadgets,asit
affectstheir eyes, theywill not
enjoythesimplethings like
holdingabook, and gadgets will
distract youalot more. So at
least up to 10-14years
theyshouldread
BY DILASHA SETH
S T O C K T A L K
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
KOTAKMAHINDRABANK
We expect Kotak
Mahindra Bank’s
RoA to normalize to
2% in FY25E from a
high of 2.2% in
FY23E, and RoE to
settle at around 13%.
The impending MD
changeinJan-24willalsoemergeas
akeyoverhang onthestock.
EMKAYGLOBAL (22JANUARY)
POLYCABINDIA
Polycab India Ltd’s
marketleadershipin
the wire and cable
segment, strong
brandequity,robust
scale-up prospects
inFMEG,improving
margin profile and
strengthening balance sheet & cash
positionwillsupportitsvaluation.
NIRMALBANG (22JANUARY)
UNIONBANK OFINDIA
UnionBankofIndia
reported a healthy
quarter with earn-
ings growth driven
by lower provisions
and margin expan-
sion. Loan growth
remained healthy
fuelledbytheRAMsegment,which
remainsthefocusarea ofthebank.
MOTILAL OSWAL (21 JANUARY)
PETRONET LNG
Petronet LNG Ltd is
a formidable player
onIndia’srisingLNG
imports, despite ris-
ing domestic gas
production backed
byearningsvisibility
from long term con-
tracts and limited competition to its
well-entrenchedreachinthesector.
PRABHUDASLILLADHER(21 JANUARY)
TARGETPRICE
₹3,015
CURRENTPRICE
₹2,761.15
BUY
TARGETPRICE
₹2,000
CURRENTPRICE
₹1,761.35
BUY
TARGETPRICE
₹100
CURRENTPRICE
₹81.15
BUY
TARGETPRICE
₹326
CURRENTPRICE
₹222.70
BUY
SUBSCRIBE TO
OUR NEWSLETTER
TOPOFTHE MORNING
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4. PLAIN FACTS
PEANUTS by Charles M. Schulz
Adopting rupee trade settlement has
both its pros and cons
POTENTIALLY higher
non-resident ownership
of Indian assets
ENABLE trade with
dollar-scarce economies
UNLIKELY to be accepted
by some trading partners,
including US and China
Forgo dollar
receipts on exports
LOSE reserve accretion
from export dollars
SAVE dollar
payments on imports
REDUCE role of
reserves as import cover
GET protection
from exchange
rate fluctuations
Pros
Cons
Key trade partners that are low on
dollars will be biggest gainers
India's trade with key partners, Apr-Nov 2022
*Year-on-year growth. Countries shown here include those reported
as approved for or interested in rupee trade, as well as close South
Asian neighbours that could consider rupee settlement.
Source: Ministry of commerce and industry
0
1
2
3
4
5
6
7
8
0 100 200 300 400 500
Share in India's exports (%)
Imports growth* (%)
-100
Russia
UAE
Nepal
Bangladesh
Mauritius
Sri Lanka
Myanmar
Saudi Arabia
Partners with whom
rupee trade discussions
are ongoing, or with
whom it could be
favourable.
Rupee trade gainful with countries
with which India runs a trade deficit
Trade surplus (+)/deficit (–) with key partners* ($ million)
Source: Ministry of commerce and industry
Countries include those that are reported to be considering rupee
trade plus members of the Asian Clearing Union.
-27,164
-22,157
-16,128
-1,140
-109
246
378
409
737
2,922
4,865
6,743
Russia
Saudi Arabia
UAE
Maldives
Myanmar
Mauritius
Bhutan
Pakistan
Iran
Sri Lanka
Nepal
Bangladesh
*Apr-Nov 2022
Rupee trade unlikely to lead to
significant de-dollarization
World forex reserves by currency, Q3 2022 (share in %)
Source: International Monetary Fund
59.8
19.7
5.3
3.3
4.6
2.8
2.5
1.9
0.2
US dollar
Euro
Yen
Pound
RMB
Canadian dollar
Australian dollar
Swiss Franc
Others
I
narecentinterviewwiththeFinancialTimes,ReserveBankofIndia(RBI)governorShaktikantaDastalkedaboutIndia’s
effortstopromotetheuseoftheIndianrupeeininternationaltrade.Thiscouldbeanaptpolicyinitiative,giventhesharp
rise in the US dollar against most currencies in 2022. In July 2022, RBI allowed invoicing, payment and settlement of
exportsandimportsinrupeesviaspecialrupeevostroaccountswithoverseasbanks.Officialinformationonactualtrades
donesofar is scarce,butit is clear that policymakers are keentoencouragegreaterinternationalizationoftherupee.
India’s rupee trade bid
andthemathbehindit
BY DEEPA VASUDEVAN
AT ITS core,rupeetrade is ago-aroundtotransact with
partnersthat cannot pay in dollarsfor variousreasons. Under
thissystem,Indianimporterspayrupeesandexporters receive
rupeesinto avostroaccount. Whilenamesofthecountrieswith
vostroaccountshavenotbeenformally released,reports
suggest that SriLankaandMauritius are ontheapproved list,
whileSaudiArabiaandtheUnitedArab Emirates(UAE)have
expressedinterest.Rupeetrade with Russiaissaidtohave
alreadystarted.
Rupeetrade is mostfavourable with partnerssuchasRussia,
SaudiArabia, or theUAE,where Indiaisalargeimporter,and
there is astrong existing or potential demand for Indian
exports. In September2022,theFederation ofIndianExport
Organizations(FIEO) estimatedthat therupeetrade system
couldpotentiallygenerate anadditional$5 billionofexportsto
Russiain ayear’s time.
TradeBoost
1
INDIAWILL save dollarsbypayingin rupeesfor itsimports,
butit willforgodollarsbyreceiving rupeesfor exports. This
meansrupeetrade willbedollar-positiveonly whendollars
saved exceed dollarsforegone—orwhenit is carried out with
countrieswith which Indiahasanetdeficit (imports exceeding
exports).For example,evenbysettling 10% ofthetrade with
Russiabetween AprilandNovember2022in rupees, India
wouldhavesaved $2.7billion.ButsinceIndiarunsatrade
surplus with Bangladesh, asimilarswitchwouldhaveresulted
in Indiagiving up$670 million.
Thusthefinal impact onIndia’s current accountwilldepend
onwhether Indiahasanetsurplus or deficit with participating
countries,andwhatthesizeofrupeetrade value is relativeto
totaltrade.Iftheamount ofdollarsforegone due torupeetrade
is significantrelativetotheoverallcapital account,it could
impact theexchangerate negatively.
CurrencyMath
2
IFRUPEE trade doespick up, it willbelimited tosmall blocks
ofcountrieswhere therupeeisacceptable.Thismay include
GulfCooperation Councilcountries,andneighbouring
economies,in additiontoRussia. The rupeetrade group will
probably beoneofseveralnon-dollarblocks that may emerge
in future: there are reportsofanoil-basedpetro-yuanblock
consisting ofChinaandWestAsian countries. However,none
ofthese trade groups are likelytodethrone theUS dollaror
allow theworldtoswitchtoother currencies in abig way.
The US dollaraccountsfor 60% ofglobal reserves(Q32022),
88%oftheOTCforexturnover(April2022),74%ofexport
invoicing in theAsia-Pacificregion (1999-2019),andaround
60% offoreigncurrency-denominateddebt (2020).The US
offerstheworld’sdeepest andmostliquidfinancialmarkets,so
it remainstheinvestmentcurrency ofchoiceaswell asasafe
havenasset.
DollarsRule
4
ANOPTIMISTIC viewofrupeetrade popular onsocial media
is that it heralds theriseoftherupeeasaglobal currency.
The opposite viewis that it willbeaccepted only bydistressed
tradingpartnersfighting dollarscarcity.Neither scenario is
likelytocome true. A morerealisticassessmentis toviewrupee
trade asapolicytooltomanage theproblemoffundingimports
atatimewhenslowingglobal growthandrising interest rates
threatendollarflowstoemergingeconomies.Note that
economies that runcurrent accountsurpluses,suchasoil
exporters,needcountrieslike Indiawhich rundeficits in order
toinvesttheirsurplus savings. Aslong asIndiahastheenabling
environment,it willalwaysreceive overseas capital,both
rupeesanddollars. Bypermittingrupeesettlement, authorities
havesimply openedanother channelfor these capital flows.
DeepaVasudevanis anindependentwriterineconomics and
finance.
CapitalInflows
5
THE GREATESTbenefitofrupeetrade is its
potential toincrease trade flowsamong nationsthat
prefertosettle internationaltrade in rupeesinsteadof
dollars. Domestically,businesses that exportand
import in rupeescanbebetterprotectedfrom
exchangerate fluctuations.Ifasignificantvolumeof
India’s trade is in rupees, theeconomy canbebetter
hedged againstsudden exchange-rate shocks.
Accretionofforexreserves viaexportdollarswould
drop, buttheneedfor reserves may alsocome down.
Ontheflipside,if rupeetrade were totake off, India,
asarepository ofglobal rupeesavings,willface therisk
ofgreaterforeignownershipofdomestic assets. This
couldopenupasituationwhere non-resident
investorsholdingG-secs may sell offatatimeofcrisis,
resultingin market volatility.
ProsandCons
3
Source: International Monetary Fund
Rupee trade can help countries with
surplus savings invest in India
Current account balances [surplus (+)/deficit (–)],
as a % of world GDP
0
0.2
0.4
0.6
0.8
1
1.2
1.4
2010 2022
Emerging markets Oil exporters
Advanced economies China
-0.6
-0.4
-0.2
PARAS JAIN/MINT
This PDF was uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
5. How to explain the budget to
your grandma uP10
‘We want to maximize retail,
HNI interest in Adani FPO’uP5
SENSEX 60,621.77 0.00 OIL $87.64 $1.70
thattheadministratorappointedby
the RBI exceeded his powers to
writeofftheAT-Ibondsasthedeci-
sionwastakenafterthefinalrecon-
stitutionschemewasnotifiedon13
March2020.
Itsaidthattheschemecameinto
TURN TO PAGE 6
aggrieved bondholders.
AT-Ibondsareunsecuredbonds
withnomaturitydateandareused
by banks to shore up their capital
base and comply with Basel III
norms.
An email sent to a spokesperson
for RBI wentunanswered.
The high court, in its order, said
GopikaGopakumar
gopika.g@livemint.com
MUMbAI
T
heReserveBankofIndia
will likely appeal the
Bombay high court rul-
ingthatquashedthereg-
ulator and Yes Bank
administrator’sdecisiontowriteoff
additional tier-I (AT-I) bonds to
save the lender from collapsing,
according to two officials familiar
with thematter.
This high court on Friday
grantedsixweekstoYesBanktofile
its appeal against the order in the
Supreme Court.
“RBIbelievesthewritpetitionis
not maintainable and the order
couldhaveahugesectoralimpact.
Thecentralbankalsobelievesthat
theadministratorhadallthepowers
of the board to write off the bonds
and, therefore, the court’s argu-
ment is not valid,” said one of the
two officials aware of the matter,
requesting anonymity.
RBI approved the Yes Bank
administrator’s March 2020 deci-
sion to write off the AT-I bonds as
part of a restructuring plan to save
bank depositors from losing their
savings.
The decision was then chal-
lenged in court by a group of
Bombay high court ruling could have a huge sectoral impact
RBItoappealHCorder
onYesBankAT-1bonds
Devina Sengupta
devina.sengupta@livemint.com
MUMbAI
I
ndia’sITandstartupsectors
may lay off 15,000 to
20,000 employees in the
nextsixmonths,battlingslow-
ing demand after the hiring
frenzy of the last two years
inflated salary costs.
Recruitment consultants
expectfewerhiringmandates
inthemonthsaheadandhave
decidednottoenternewbusi-
nessesfor now.
However, even as some IT
and startup companies will
shed staff to manage costs,
otherswithinthesamesectors
are hiring,too.
“We expect about 20,000
layoffsoverthenextfewquar-
ters.Overthelastyear,compa-
nies faced the fear of missing
out on talent hiring and
recruited in large numbers
and paid them many folds
more than inflation and mar-
ketstandards,”saidLohitBha-
tia, president of workforce
managementforrecruitment
firm Quess Corp.
Thecostofmaintainingthat
talent has begun to hurt IT
firms and startups, Bhatia
added.
In FY23 so far, the two sec-
TURN TO PAGE 6
IT,startups
maycutupto
20,000jobsin
next6months
JSWSteel’snetprofitfell90%to₹474crintheDecember
quarterfromayearago,butthehighest-everproduction
figuresatthecompanyhelpeditscriptasequential
turnaroundofalmost₹1,400crorefromalossof₹915
croreintheSeptemberquarter,jointmanagingdirector
andgroupchieffinancialofficerSeshagiriRaosaid. >P7
‘Highest-everoutputhelpedJSW
Steelscriptsequentialturnaround’
US FederalReserveofficials arepreparing to
slow interest-rate increasesforthesecond
straight meeting anddebate howmuch
higher to raise them aftergaining more
confidence inflationwill ease furtherthis
year. >P8
US Fed sets course for milder
interest-rate rise in February
Groundsformorehopethattheglobaleconomy
canavoidamajorslumpmayemergeinthe
comingweekinbusinesssurveysshowinggradual
improvement.Purchasingmanagerindexesfor
boththeUSandtheeurozoneareanticipatedby
economiststotickhigher. >P9
The worst fears for global
growth may be subsiding
InflowingoldETFsplunged90%to₹459crin2022on
risingpricesoftheyellowmetal,increasinginterest
ratestructure,coupledwithinflationarypressures.
Thiswaswaylowerthananinflowof₹4,814crorein
2021and₹6,657crorein2020,datafromthe
AssociationofMutualFundsinIndiashowed. >P4
Inflows into gold ETFs plunged by
90% last year, Amfi data shows
DON’T MISS
Govtmayannounce
universalenterprise
IDsforsmallfirms
Under the proposal, a group of MSMEs
will form an SPV to borrow from banks
under a single transaction, and then
on-lend to members. MINT
lEgAl PERSPECTIvE
THE CASE IN POINT
RBIissaidtobeoftheview
thattheadministratorhad
powerstowriteoffthebonds
THE central bank is also
saidtobelievethatthe writ
petition is not maintainable
HC saidthebondscould
onlybewrittendownbefore
thebank’sreconstruction
marketaccessbydevelopinga
digitalbusinessmatch-making
platformtoshowcaseandinte-
grate them with national and
international supply chains,
according to the document
reviewedbyMint.
“We can’t have the same
credit norms for
the corporate sec-
tor and the non-
corporatesector.It
isbecauseofwhich
the small busi-
nesses, part of the non-corpo-
ratesector,deservesadifferent
credit rating based on basic
fundamentals of the business
module of the non-corporate
sector,”saidPraveenKhandel-
TURN TO PAGE 6
RaviDuttaMishra&DilashaSeth
NEWDELHI
T
heUniongovernmentis
working on a Universal
Enterprise ID system to
helpstrengthenthecreditrat-
ings of small enterprises that
serve as the engines of the
Indian economy, an internal
documentshowed.
Under the proposal, which
may be announced in the
Union budget, a group of
MSMEswillformaspecialpur-
pose vehicle (SPV) to borrow
from banks under a single
transaction and on-lend to its
members.
Also, credit rating agencies
are expected to come up with
newmodelstoassessthecred-
itworthinessofMSMEs.
The enterprise ID was first
proposedbyanexpertcommit-
teeonmicro,small
and medium
e n t e r p r i s e s
(MSMEs) led by
formerSebichair-
man U.K. Sinha in
2019 to enhance credit availa-
bilitytotheseentities.Indiahas
about 63.39 million MSMEs,
accordingtothe73rdroundof
the National Sample Survey
(NSS).
The government is also
working to improve MSMEs’
NIFTY 18,027.65 0.00 DOLLAR ₹81.13 ₹0.00 EURO ₹87.87 ₹0.00 GOLD ₹56,770 ₹0
livemint.com
NEW DElHI, MUMbAI, bENGALURU, kOLkATA, CHENNAI, AHMEDAbAD, HYDERAbAD, CHANDIGARH*, PUNE* VOL. 17 NO. 19 Rs 5.00 IN DELHI-NCR; Rs 6.00 OUTSIDE DELHI-NCR. PRICE WITH HINDUSTAN TIMES Rs 10.50 (FOR DELHI & NCR) 18 PAGES
Monday, January 23, 2023
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7. LIVEMINT.COM DEALS, TECH & STARTUPS MoNDay, 23 JaNuary 2023
New Delhi 03
THE
MONDAY
QUIZ
ANSWERS:
1)
Generative
AI
(like
OpenAI’s
ChatGPT
platform)
2)
12,000
3)
380
4)
Greg
Peters
(formerly
CEO
of
Netflix)
5)BharOS
GLOSSARY
MADA:The Mobile
Application Distribution
Agreement (MADA) is an
agreementGooglesigns
with originalequipment
makers (OEMs)toallow
them touse Googleapps
andserviceslike thePlay
Store,GoogleMaps,
Chrome, etc.MADA is one
oftheagreements the
CompetitionCommission
ofIndia(CCI) cited when
it fined Googleover
₹1,300 crorefor abusing
itsdominancein smart-
phones. The agreement
imposes restrictionson
OEMsthat theCCI said
wouldrestrictcompeti-
tors’ accesstoconsumers.
Forked Android:A fork
is softwareterminology
for programs (likeoperat-
ingsystems)that are built
usingthesourcecodeof
another platform. Forked
Android refers tooperat-
ingsystems that are built
usingtheAndroid source
code,alsoknownasthe
Android OpenSource
Project.Examplesofsuch
platformsincludeopen-
sourceplatformLinea-
geOS.
Hockey Stick: In start-
ups,hockeystickis aterm
used todescribe revenue
growthor droppatterns.
It’sagraphthat hasasteep
upwardor downward
curve, representing asud-
denriseor dropin reve-
nues,respectively.
Usually, ahockeystick
curvedenotes aturning
point for astartup —good
or bad.
Exit strategy:For the
same,theyhaveanexit
strategy,which is when
andhowtheywilltake
theirmoney out ofafirm.
Thishappenswhena
startup goespublic,gets
acquired, etc, which is
whenaninvestor getsan
exit.
THE MONDAY QUIZ
m
1)WHATbranchofAI
didGautamAdanisay
wasthebuzzwordat
WEFthisyear?
2)HOWmanyjobsis
Google’sparentAlphabet
lookingtocutbecauseof
theeconomiccrisis?
3)HOWmanyemployeesdidfooddeliveryfirm
Swiggylayofflastweek?
4)WHOwillreplace
ReedHastingsasNet-
flix’snewco-CEOalong-
sideTedSarandos?
5)WHAT’Sthename
oftheIndianOS
developedatIITMadras
andreleasedlastweek?
Orchidsschools’parent
shuttersanimationunit
50 staffers lose jobs; company says it has rationalized some businesses
K12 Techno Services runs the chain of Orchids The International School (OIS) located in
over two dozen cities in India. MINT
Companies raise $608 mn last week
By Malvika Maloo & Anuj Suvarna
feedback@livemint.com
Fintech cos led funding
race last week
The financial services sector took the front seat in
funding activity last week, which also saw
Walmart-owned PhonePe, currently the most valuable
homegrown fintech startup, raising $350 million from
General Atlantic at a pre-money valuation of $12 billion.
Overall funding dropped 13% to $608 million last
week, from previous week's $698.1 million. More than
70% of this amount was raised by PhonePe and
Avanse. The volume of deals also declined to 27, from
previous week's 41.
Deal value ($ mn) Investors
350
PhonePe
General Atlantic
98.5
Avanse Financial
Kedaara Capital
*Includes debt financing
Source: VCCEdge, VCCircle, Media Reports
Blue Tokai
Coffee Roasters
A91 Partners
Beaconstac
Telescope
Partners
Isprava Group
Symphony
International
Holdings
NewGrowth*
MicroVest
Chara
Exfinity Venture
Partners
Mad Street Den
Avatar Growth
Capital
Log9 Materials
PTV International
Ventures
Locad
Reefknot
Investments
Breathe Well-being
3One4 Capital, Accel
Partners, General Catalyst
30
30
25
19.7
11.2
11
10
6.1
4.8
SARVESH KUMAR SHARMA/MINT
AnujSuvarna&DebjyotiRoy
BENGALURU/NEWDELHI
E
dtechstartupK12TechnoServices
Pvt. Ltd, which runs the chain of
OrchidsTheInternationalSchool
(OIS),hasshuttereditsanimation
divisionandlaidoffmorethan50
employees,twopeopleawareofthedevel-
opmentsaid.
Confirming the move, a spokesperson
forK12said,“Werationalizedsomeofthe
businessesweentered.Theanimationdivi-
sion was started because the company
makesbooks,socontentlookedlikeagood
play but since so many content players
have come up, it made less sense to con-
tinue it due to band-
width(constraints).”
Establishedin2010,
K12 manages schools,
business-to- business (B2B) vertical Lets
Eduvate, and e-commerce store Sparkle-
Box,andhasmorethan2,000employees
acrossthesethreedivisions.
TheSequoia-backedfirmhasbeenlay-
ingoffemployeesinbatchesacrossverti-
cals,severalformeremployeessaidoncon-
ditionofanonymity.
Fouroftheseformeremployeesalleged
that K12 has a practice of issuing employ-
mentlettersonbehalfofatrus-
tee to avoid complications
associated with the termina-
tion process as the firm only
wants to retain people for 3-4
months. “There are plenty of
examplesofthemsackingonly
after7daysofjoining.Youwill
lose your previous company
and the present one also,” said one of the
personscitedabove.
Thespokespersonexplainedthat“ear-
lier,toconservecashweusedtohirepeople
oncontractbecauseoursalescycleissea-
sonal, which starts from October and by
March-April the cycle is over; earlier we
usedtotakepeopleforsixmonthsforthis
purpose, now we take people for a whole
year.”“Theserolesarehigh-pressureones
asweconductweeklyreviews.Thishasalso
ledtohigherchurnamongthesalesforce.
In the first month of joining, employees
don’tgettheirtargets.However,theyneed
todeliverfromthesecondmonthonwards.
Thepressureintheserolesisveryhigh;we
can understand the angst among the
former employees,” the spokesperson
added.
Edtechstartupswereaffectedthemost
following the post-pandemic return to
physicalclasses,leadingedtechstartupsto
continue retrenchments in 2023. For
instance, edtech unicorn Lead School
sacked nearly 60 employees earlier this
month,addingtothe100employeesfired
inAugust.UpGrad-ownedHarappaEduca-
tionsacked70employeesor35%ofits200-
strongworkforce.Morelayoffsarelikelyat
thecompany,thehumanresourcesdepart-
menthadtoldpartingemployees.
Unacademy-ownedRelevelletgoof40
employees, or roughly 20% of its work-
force, so far this year as it pivoted to a test
productappcalledNextLevel.
Massivelayoffsacrosssectorscomeafter
a blockbuster 2021 when startups collec-
tivelyraisedmorethan$35billioninven-
turecapitalfunding.
K12runsmorethan90branchesofOIS
inmorethantwodozencities.Theschool
hasservedover75,000students,asperthe
website. Additionally, K12
providesanintegratedcurric-
ulum, an online class plat-
form,andotherschoolman-
agement tools to more than
300schoolsthroughitsunit,
Let’s Eduvate. It also runs an
e-commerce store for cus-
tom-made activity kits for
childrencalledSparkleBox.
K12 has four subsidiary companies
which provide specialized products and
servicesforschoolmanagementandedu-
cation.Theseofferarangeofproductsfor
students in both digital and physical for-
mats.SequoiaCapitalIndiatookcontrolof
K12fromtheoriginalownersin2016.Nav-
neetLearningLLPalsoholdsasignificant
stakeinthecompany.
anuj.s@livemint.com
in THE SpOTligHT
FORMER
employees say the
firm has a practice of
retaining staff for
only 3-4 months
THE firm provides
school management
tools to over 300
schools through its
unit, Let’s Eduvate
EDTEcH startups
have been affected
the most following
the return to
physical classes
Inventing the tech world loves
See us where 5G is
enabling smarter cities
This PDF was uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
8. LIVEMINT.COM
04 MoNDay, 23 JaNuary 2023
New Delhi MARK TO MARKET
S&P BSE Sensex
ClOsE
60621.77
1-MONTH CHANGE (%)
-1.75
6-MONTH CHANGE (%)
9.43
1-WEEK CHANGE (%)
0.60
3-MONTH CHANGE (%)
2.40
1-YEAR CHANGE (%)
1.95
Nifty 50
ClOsE
18027.65
1-MONTH CHANGE (%)
-1.95
6-MONTH CHANGE (%)
9.12
1-WEEK CHANGE (%)
0.40
3-MONTH CHANGE (%)
2.64
1-YEAR CHANGE (%)
1.52
Nifty 500
ClOsE
15347.90
1-MONTH CHANGE (%)
-2.41
6-MONTH CHANGE (%)
8.36
1-WEEK CHANGE (%)
0.01
3-MONTH CHANGE (%)
1.56
1-YEAR CHANGE (%)
-0.09
Nifty Next 50
ClOsE
41861.45
1-MONTH CHANGE (%)
-3.39
6-MONTH CHANGE (%)
5.36
1-WEEK CHANGE (%)
-0.69
3-MONTH CHANGE (%)
-1.13
1-YEAR CHANGE (%)
-2.41
Nifty 100
ClOsE
18169.45
1-MONTH CHANGE (%)
-2.16
6-MONTH CHANGE (%)
8.32
1-WEEK CHANGE (%)
0.24
3-MONTH CHANGE (%)
1.91
1-YEAR CHANGE (%)
0.82
S&P BSE Mid-cap
ClOsE
25005.19
1-MONTH CHANGE (%)
-3.24
6-MONTH CHANGE (%)
6.81
1-WEEK CHANGE (%)
-0.66
3-MONTH CHANGE (%)
0.05
1-YEAR CHANGE (%)
-1.80
S&P BSE Small Cap
ClOsE
28630.19
1-MONTH CHANGE (%)
-3.26
6-MONTH CHANGE (%)
8.13
1-WEEK CHANGE (%)
-0.79
3-MONTH CHANGE (%)
-0.38
1-YEAR CHANGE (%)
-6.33
MINT SHORTS
m
Mark to Market writers do not have positions in the companies they have discussed here
PTI
feedback@livemint.com
M
arkets regulator Sebi
has launched an
informationdatabase
onmunicipalbonds.
Aspartofeffortstodevelop
thebondmarkets,anoutreach
programme on municipal
bonds and municipal finance
was organised by Sebi in the
national capital on 20 and 21
January.
Representativesfromvari-
ous stakeholders, including
the ministry of housing and
urban affairs, municipal cor-
porations, stock exchanges,
credit rating agencies, mer-
chantbankersanddebenture
trustees, participated in the
programme.
At the launch event, Sebi
chairperson Madhabi Puri
Buch emphasised the poten-
tial of municipal bonds in
infrastructure development
andnation building.
“Theinformationdatabase
containsawiderangeofinfor-
mationintheformofstatistics
andregulations,circulars,gui-
dance note and Frequently
Asked Questions issued by
Sebi in respect of municipal
debt securities,”it said.
The repository contains
variouschecklistsforpre-list-
ingrequirementsandsample
letters and certificates from
various intermediaries to be
obtained by an issuer who
plans to tap the municipal
bondmarket.
Sebisetsup
databaseon
municipal
bonds
The acquisition will also
rampupcapacityfrom1.2MT
to 2 MT plus, while giving
access to countries in Africa,
Europe, and North America,
said analysts at Motilal Oswal
Financial Services Ltd. The
acquisitionislikelytobecom-
pletedin18months.However,
it’s the valuation of the deal
globally, particularly the US
Federal Reserve, volatile
crude, rising commodity pri-
ces along with Russia and
Ukraine conflict.
Theyear2022wastheworst
year for FPIs in terms of flow
PTI
feedback@livemint.com
F
oreign investors pulled
out a net amount of
₹15,236crorethismonth
so far on attractive Chinese
markets and concerns about
the US economy entering a
recession. However, foreign
portfolioinvestors(FPIs)have
turned buyers in the last four
tradingsessions.
Theoutflowinthemonthof
January came following a net
inflow of ₹11,119 crore in
December and ₹36,239 crore
in November.
Overall,FPIspulledout₹1.21
trillionfromtheIndianequity
marketsin2022onaggressive
ratehikesbythecentralbanks
andwithdrawalfromequities
comes following a net invest-
ment in the preceding three
years.Accordingtodata,FPIs
havemadeanetwithdrawalof
₹15,236 crore this month (till
20 January). The latest FPI
sell-off was largely driven by
the aggressive reopening of
theChinesemarketsafterthe
lockdown.
Inaccordancewithitszero
covid policy, China had been
enforcingrigorouslockdowns
toreducethenumberofcovid
cases.Asaresult,Chinesemar-
kets fell, making them more
appealingfromavaluestand-
point, said Himanshu Srivas-
tava,associatedirector-man-
ager research, Morningstar
India.
FPIspullout₹15,236crorefrom
equitiesinJanasChinareopens
FPIs’ 2022 outflows came after
3 years of net investments. PTI
ments while they wait for a
correction. A rising interest
rate structure coupled with
inflationarypressuresthatthe
economyhasbeenwitnessing
for most part of this year has
also posed challenges,” Kavi-
tha Krishnan, Senior Analyst
ManagerResearch,Morning-
PTI
feedback@livemint.com
I
nflow in gold exchange
traded funds (ETFs)
plunged by 90% to ₹459
crorein2022duetorisingpri-
cesofyellowmetal,increasing
interestratestructurecoupled
with inflationary pressures.
Thiswaswaylowerthanan
inflow of ₹4,814 crore seen in
the segment during 2021 and
₹6,657 crore in 2020, data
with Association of Mutual
FundsinIndia(Amfi)showed.
However, the asset base of
gold ETFs and investors’
account or folio numbers
increased in 2022 from the
preceding year.
“A rising price (of gold)
probably puts some pressure
oninvestors,withalotofpeo-
ple holding back their invest-
starIndia, said.
On the domestic front,
investors are preferring to
invest in equities over other
assetclasseswiththesegment
attracting an investment of
₹1.6 trillion in 2022, way
higher than
₹96,700 crore
seenintheprece-
dingyear.
Also, SIP’s
flows too have
witnessed a sig-
nificant rise with
investors likely
redeemingout of
otherassetclasses
in favour ofequity funds.
Globally, uncertainties
around the Russia-Ukraine
war and a hawkish stance by
theUSFederalReserveamong
other factors have led to
record outflows from gold
ETFs,Krishnanadded.
Despitethis,goldETFscon-
tinuedtoseeinflow,although
thequantumofinvestmentin
thecategorydeclinedlastyear,
compared to preceding two
years.
The positive
inflow helped in
pushing assets
under manage-
ment of gold
fundsbyover16%
to ₹21,455 crore
at the end of
December 2022
from ₹18,405
croreayear ago.
Gold, with its superlative
performanceoverthelastfew
years,hasattractedsignificant
investorinterestandthecon-
sistent surge in their folio
numbers is a testimony of the
same.
GoldETFinflowsslumpaspricesrise
Inflows plunged 90% on high
gold prices, interest rates PTI
Gold ETFs
continued to see
inflow, although
the quantum of
investment in the
category declined
last year
Ujjval Jauhari
ujjval.j@livemint.com
nEw dElHI
H
industan Zinc Ltd’s
(HZL)performancefor
the quarter ending 31
December was impacted by
lower zinc prices and cost
pressures. The street’s focus,
however, has been on the
company’sannouncementon
acquisition of Zinc Interna-
tional assets from parent
VedantaLtd.Thoughanalysts
feel the acquisition will help
improve the company’s
growth prospects, they have
raised concerns on the valua-
tion ofthedeal.
The stock closed 6.32%
lower on the National Stock
ExchangeonFriday.
ZincInternationalhasmin-
ing assets in South Africa and
Namibia with a total reserves
andresourcesofabout35mil-
lion tonne which Hindustan
Zincwillbeacquiringforcash
consideration of not more
than $2.98 billion. The ana-
lysts feel that the acquisition
providesHZLtheopportunity
to increase its mining asset
portfolio as not many zinc
minesareavailableforauction
in India and there is limited
upside potential for produc-
tion from current mining
assets.
thatislookedatwithconcern
bymany analysts.
“Theassetshavesignificant
growth potential, given rich
resources; however, we find
the acquisition
expensive on
currentearnings,
a s g r o w t h
optionality has
high execution
risk,” said ana-
lysts at Kotak
Institutional
Equities. Expan-
sion at Zinc
Internationalwouldbeachal-
lenging task, given the unde-
veloped mines and faces sig-
nificant execution risk, they
said.Theacquisitionat$3bil-
lion has a significant value
ascribedtogrowthoptionality.
They find the acquisition
expensive versus their fair
value of Zinc
International at
$2billion.
Even analysts
at JM Financial
I n s t i t u t i o n a l
Securities Ltd
also have similar
views and said
that the acquisi-
tion (if it goes
through) will add significant
valueoverthelongerterm,the
expensivevaluationislikelyto
weighonnear-termstockper-
formance. The acquisition is
implyingvaluationsof11xEV/
Ebitda (enterprise value to
Ebitda)andadjustingfor70%
stake in Gamsberg (mines in
Namibia), valuation could be
12-13x EV/Ebitda,theysaid.
Analystsatanotherdomes-
tic broking said that at FY24
estimates, the consideration
implies valuation of 14x EV/
Ebitda (global peers trade at
average 7x FY24 EV/ Ebitda),
which isvery expensive
Meanwhile, the company’s
Q3performancesawrevenue
from operations during the
quarterat₹7,866crore,down
1.6% y-o-y and 5.6% sequen-
tially.
ZincInt’ldealbrightensHZL’sgrowthprospectsbutvaluationweighs
Hindustan Zinc Ltd’s stock closed 6.32% lower on the National
Stock Exchange on Friday MINT
The acquisition
provides
Hindustan Zinc
the opportunity
to increase its
mining asset
portfolio
BullishcallsmountasAsian
stocksgoonatearin2023
FromtradingdeskstoWallStreetanalysts,positivecalls
aregrowingoverAsianstocksthisyearastheoutlookfor
earnings,valuationsandflowsallpointupward. Therally
since end-October last year has pushed the MSCI Asia
PacificIndexhigherbyalmost23%,outperformingtheUS
benchmarkbythemostsince1993whilealsobeatingits
Europeanpeer.ThepredominantdriverhasbeenChina’s
reopening,withaweakeningdollargivinganaddedfillip
asinvestorslookforrecession-proofmarkets. Headingfor
thebeststarttoayearsince2012,theMSCIAsiagaugehas
climbed7.2%inJanuary.Therallyhasmanymoremonths
torun,accordingtoasurveyoffundmanagersbyBankof
AmericaCorp.China’sgrowthoutlookisgettingrapidly
upgradedinaboonfortheregion’seconomies,whilethe
earnings estimates are also increasing in contrast to the
downgradesseeninEuropeandtheUS. BLOOMBERG
UStechstockstohittheirnext
hurdlewithearningsseason
US technology stocks are about to hit their next hurdle
whenearningsseasonforthemostinfluentialsegmentof
the S&P 500 Index gets underway in the coming week:
vanishingprofits.Thetech-heavyNasdaq100StockIndex
entersthiscrucialstretchamidadarkeningbackdropthat
short-circuitedastrongstarttothecurrentyear.Under-
scoring the risks ahead, Microsoft Corporation, which
kicksoffthegroup’sreportingonTuesday,joinedAma-
zon.comInc.instartingtocutthousandsofjobsthisweek
assalesslow.GoogleparentAlphabetInc.followedwith
plans of its own to shrink its workforce. Wall Street has
beenslashingearningsestimatesformonthsforthetech
sector, which is projected to be the biggest drag on S&P
500 profits in the fourth quarter, according to the data
compiledbyBloombergIntelligence.Thedangerforthe
investors,however,isthatanalystsstillprovetoooptimis-
tic,withdemandfortheindustry’sproductscrumblingas
theeconomycools. BLOOMBERG
Underscoring the risks ahead, Microsoft Corporation
joined Amazon.com Inc. in starting to cut jobs. BLOOMBERG
segmenthasbeenmoderatingamidele-
vatedretailinflationinrecentmonths.
Weakconsumersentimentislikelyto
continue in the near-term, at least.
Given that raw material prices have
againstartedtoinchuptowardstheend
ofQ3,itwouldbetoughtotakeproduct
price cuts, which could perhaps aid
exports, among other factors.
Onthebrighterside,lowercok-
ing coal prices (down about
$100 per tonne sequentially),
demand. Havells’ Ebitda margin rose
sequentiallyto10.3%inQ3aidedbyeas-
ingrawmaterialexpensesandliquida-
tionofmostofitshigh-costinventoryin
fan, cable and wire segments. To
accountforrisingcostsduetochanges
inratingnorms,Havellshikedpricesof
fans and air conditioners from Q4
HarshaJethmalani
harsha.j@htlive.com
H
avellsIndiaLtd’sfinancial
results for the quarter
ended December
(Q3FY23)wereencourag-
ingonsomecounts.How-
ever,thatfailedtoenthuseinvestorsin
thestock.Sharesoftheconsumerdura-
blesmakerhavefallenby4%inthepast
two trading sessions since the results
wereannounced.
Amid moderating consumer
demand,Havells’Q3revenueincreased
by 13% year-on-year (y-o-y) to ₹4,120
crore, ahead of analyst forecasts.
Excluding the Lloyd Consumer busi-
ness,Havells’revenuegrowthstoodat
10% y-o-y. Here, the cable division
clocked the fastest revenue growth of
17%amongallbusinesssegments.
Revenue growth was primarily vol-
ume driven, said the company. In the
earningscall,Havells’managementsaid
excluding Lloyd’s business, the B2B
segment saw strong traction aided by
demandinindustrialandinfrastructure.
However,theB2Csegment,whichcon-
tributes bulk of revenue (75%, non-
Lloyd),remainedmuted.Accordingto
themanagement,demandfromtheB2C
onwards, the management said in the
earningscall.
Increased ad spends and employee
costs were among the dampeners. Ad
spends rose 27% y-o-y in Q3. Conse-
quently,Ebitdamarginwaslowery-o-y
in Q3. Ad-spends are at optimal levels,
said the management and it doesn’t
anticipateanymaterialrise
from here on. However,
according to analysts at
Investec Capital Services
(India),withthecompany’s
focus remains on research
and development, brand
building and attracting/
retainingtalent,areversalin
this trend is unlikely. “We
raise our employee/opex
estimates, more-than-off-
setting the benefit of RM
cost moderation,” the ana-
lystsatInvestecsaid.
Meanwhile, Lloyd remains a pain
point and continues to make losses at
the earnings before interest and taxes
(Ebit)level.Llyodstillholdssomehigh-
cost inventory and is seeing intense
competition in the air conditioner
space.However,marginrevivalinLloyd
maynothappeninahurry.
Consequently, several brokerages
have trimmed Havells’ earnings per
share (EPS) estimates. Investec cut its
FY23-25 EPS estimate by 2-5%. Kotak
Institutional Equities has lowered
FY2023-24 EPS by 5-8%. Kotak’s
revisedfairvalueforthestockis₹1,075
apieceanditseesariskofdowngradeto
consensus EPS amid demand softness
andonlyagradualimprove-
mentinLloydmargins.
On Friday, the Havells
stockclosedat₹1,153.60on
theNSE.Inrecentmonths,
thestockhasseenaswiftfall
fromgloryfromits52-week
highof₹1,405.55inSeptem-
ber.
“Inthelastoneyear,con-
sumer durable stocks
including Havells’ saw
de-ratingduetovariousfac-
tors such as commodity
price-led destocking,
changeinnormsforfansandACs,”said
NaveenTrivedi,institutionalresearch
analyst at HDFC Securities Ltd. The
companyenjoyslong-termpositivesin
termsofscaleandmarketpositioning,
but there are concerns on sluggish
demandpersistingintheB2Cbusiness.
“Thiscouldkeepthestockfromseeing
afast-pacedrecovery,”hesaid.
Havells’near-termdemandgloomy
Clawing back
Havells India’s Ebitda margin rose sequentially aided by easing input prices, but
was lower year-on-year.
Ebitda (in ₹ crore) Ebitda margin (in %) (right-hand scale)
Q3FY23
Q1FY21
Source: Company, JM Financial
Note: Ebitda is earnings before interest, tax, depreciation and amortisation
130
8.8
420
0
3
6
9
12
15
18
0
100
200
300
400
500
600
10.3
WHERE it
HURtS
WEAk consumer
sentiment in the B2C
segmentisa concern,
while raw material
prices are rising
LLOyd is a pain
point facing stiff
competition and
continuing to make
losses at Ebit level
SATISH KUMAR/MINT
aided the strong rebound in
standaloneEbitdapertonnein
Q3fromthemulti-quarterlows
seenin Q2.
PallaviPengonda
pallavi.pengonda@livemint.com
J
SW Steel Ltd’s shares have
gained almost 43% from
their 52-week lows seen in
May.Manyanalystsreckon
valuationsarecurrentlypricey.
The company’s high debt is a
concern. JSW’s consolidated
netdebtstoodat₹69,498crore
asofDecember-end,upby5.7%
from September-end. The
increase in debt was led by
higher working capital and
adverseforeximpact.
“The increase in debt in Q3
means that JSW Steel’s enter-
prise value is now close to its
previouspeaks,whileearnings
improvementatpresentisbet-
ter for peers,” said Satyadeep
Jain, analyst at Ambit Capital.
Enterprisevalueofacompanyis
its market capitalization plus
netdebt.
In its December quarter
(Q3FY23) earnings call on Fri-
day, JSW’s management told
analysts that the debt would
reducegoingahead,helpedby
favourablecurrencymovement
andlowerinventory.Thecom-
pany’s Q3 financials were
decent. It swung to a net profit
forthequarterfromalossinQ2
on a standalone as well as con-
solidatedbasis.However,earn-
ings were sharply lower year-
on-year driven by a drop in
Overall,consolidatedEbitda
stoodat₹4,547 crore.
Thecompanyexpectscoking
coal costs to remain range
boundinQ4.“Withsteelprices
standingfirmandnomajorcost
increase,weshouldseemargins
improving in the near-term,”
saidanalystsfromMotilalOswal
Financial Services. Even so,
high iron ore prices are
expected to play spoilsport on
the margin front. “Increasing
ironorepricesmightconstrain
profitability compared to inte-
gratedsteelplayers,”saidICICI
Securities Ltd analysts in a
report on 21 January. The bro-
kerage sees this as one factor
thatmakesJSWmorevulnera-
ble to steel cycle compared to
peers.
To be sure, JSW’s volume
growthoutlookisstrongbacked
byitsexpansionprojects.Better
thanexpecteddemandgrowth
in the coming quarters could
offeraboosttoearnings.Still,as
mentioned earlier, valuations
are expensive and that could
welllimitmeaningfulnear-term
upsides in thestock.
According to Jain, “JSW has
superior ROCE track record
over past few years. While we
seeupsideinboth,wepegTata
Steel higher in our pecking
orderasitsdeleveragingpoten-
tial is higher and stock’s valua-
tion isrelativelycheaper.”
Amidmarginrecovery,steepvaluationasorepointforJSWSteel
Strong rebound
JSW Steel’s Ebitda per tonne in Q3FY23 increased sharply on a
sequential basis.
Source: Motilal Oswal
Financial Services, Company
Note: Ebitda is earnings before interest, tax,
depreciation and amortization
0
5,000
10,000
15,000
20,000
25,000
30,000
Q1FY21 Q3FY23
StandaloneEbitda per tonne (in )
SATISH KUMAR/MINT
This PDF was uploade To Teligram channel_ LBS Newspaper platform (https://t.me/LBSNEWSPAPER) @LBSNEWSPAPER
9. LIVEMINT.COM CORPORATE MoNDay, 23 JaNuary 2023
New Delhi 05
directorandchiefexecutiveof
theinsurer.
Though it is flat on-year,
and down from the 27.4% it
had in FY22, having already
neutralised it so early, the
company hopes to improve it
further to take it to the FY22
levelof27.4%orevenbetterit
intheMarchquarter,Padalkar
PTIovertheweekend,without
crore,upfrom₹2,115.97crore,
and the renewal premium
soared to ₹7,187 crore from
₹5,543.03 crore.
At26.8%,theVNBmarginis
already at the pre-merger
level, neutralising the impact
ofthemergerofExideLife(in
Q2 FY23) almost three quar-
tersearlierthanplanned,said
VibhaPadalkar,themanaging
‘We want to maximize HNI,
retail interest in Adani FPO’
Adani group has been running investor outreach programmes for 3 years, says group CFO
wouldbecomingtherewithus
andinwhatway.WithTotalwe
still have to sign an MoU. The
talksareinthefinalstages,”she
added.
While the initial survey is
being done by the Centre, she
saidtheblockswouldbeupfor
auctioneitherthroughtheopen
acreage licensing policy
(OALP-XI)roundofauctionor
there may be a separate round
The initial plan was to list relatively smaller firms in FY23 but the
govt wanted to allow the sales to have maximum absorption. ISTOCK
quantifyinganumber.
She said the VNB climbed
20% to ₹877 crore in the
Decemberquarter,boostedby
a healthy 52% growth in the
creditlife(loanprotectionpol-
icies)portfolioto₹5,200crore.
Given the demand for such
productsfromindividualcus-
tomers and NBFCs, she
expects this segment to top
₹6,000crorebyMarch.
Theotherrevenuebooster,
shesaid,wasprotectionprod-
uctswhichclippedat13%and
cornereda14%incomeshare.
Non-participating products
stillcontinuetoholdthemajor
revenueshareat42%,followed
byparticipatingproductsand
ULIPs at22 %each.
Annuityproductsgot6%of
the top-line. Padalkar said
with a combination of data
analytics, insights into cus-
tomer profiles and calibrated
riskretention,overallprotec-
tion premium grew by over
20%.
PTI
feedback@livemint.com
L
eading private sector life
insurerHDFCLifeexpects
itsmarginstoimprovefur-
therinthefourthquarter,hav-
ingalreadyneutralisedthehitit
had taken from the merger of
Exide Life three quarters ear-
lier thanexpected.
The company closed the
Decemberquarterwithanew
business premium margin of
26.8%.ItsFY22VNB(valueof
newbusiness)marginstoodat
27.4%andthemanagementis
confidentofreachingthereor
making a further improve-
ment as it closes the current
fiscal.
Over the weekend, HDFC
Lifereporteda15.2%growthin
netincomeat₹315.22croreon
a net premium income of
₹14,379.38 crore, which rose
18.6% annualised from
₹12,124.36crore. Itsfirst-year
premium stood at ₹2,724.87
HDFC Life sees better margins in Q4
Over the weekend, HDFC Life reported 15.2% growth in net
income to ₹315.22 crore. HT
PTI
feedback@livemint.com
T
he India-UK free trade
agreement (FTA) is
expectedtobeclinched
this year but it won’t involve
any boost of free movement
visa offers for Indians, British
tradeministerinchargeofthe
negotiations hassaid.
KemiBadenoch,whowasin
New Delhi last month to kick
offthesixthroundofFTAtalks
with commerce and industry
minister Piyush Goyal, said
that former prime minister
Boris Johnson’s “deal by
Diwali”deadlinelastyearwas
not feasible and had to be
changed. Inaninterviewwith
‘The Times’ recently, the UK
Secretary of State for Trade
alsoruledoutanymajorsimi-
larities between the FTA the
UKhadstruckwithAustralia—
one of the first post-Brexit
trade deals—and that with
India.
“We left the EU (European
Union) because we didn’t
believeinfreemovement,we
didn’t think it was working.
Thisisnotadealthat’snegoti-
atingsomekindoffreemove-
ment with India,” Badenoch
told the newspaper, with ref-
erence tomorevisaoffers.
The minister indicated a
willingness to make conces-
sions on issues like business
mobility, but ruled out the
prospectofIndiansgettingthe
samekindofdealaswithAus-
tralia—which allows under-
35stoliveandworkintheUK
forthreeyears. Thereciprocal
UK-IndiaYoungProfessionals
Scheme, formally launched
earlier this month, is seen as
overcoming this hurdle by
annually offering 3,000 18 to
30-year-oldgraduatesvisasto
liveandworkineithercountry
for uptotwoyears.
‘India-UK
FTA does
not involve
visa offers’
RamSahgalSwarajSinghDhanjal
nEwdELhi
A
dani Enterprises Ltd, the
flagship of the diversified
Adani group, is exploring
ways to garner maximum
participation from retail
investorsandhigh-networthindividu-
alsforitsproposed₹20,000-crorefol-
low-onpublicoffer,whichwillbeIndia’s
largestsofar.
“TheFPOaimstomaximizeretailand
HNIcategoriesastheyareinter-genera-
tional investors unlike mutual funds or
domestic institutional investors, who
haveamuchshorterhorizonforinvest-
ments,” said Jugeshinder Singh, chief
financialofficer,Adanigroup.“Thereare
somelargefamilyofficesthatcanpartici-
pate as institutions also, so they don’t
havetoparticipateasHNI.Iftheypartici-
pate as institutions, that gives us more
spaceforHNIsandregularinvestors,and
allows us to have greater HNI and retail
participation,”hesaidwhenaskedabout
interest evinced by institutional firms,
given the meteoric rise in valuations of
AdaniEnterprisesinthepastfewyears.
“Having a core infra portfolio, these
companies will be massively valuable,
buttheirvalueaccruesoveraperiodof
time.IfyouseeAdaniTransmission,the
valueaccruedoveranine-yearperiod;
westartedin2012.AdaniGreen,we
started incubating in 2011, and the
valueisnowemerging.Soweneed
thosekindsofinvestors,”headded.
To draw retail investors, Adani
Enterpriseswillofferanaddeddis-
count of ₹64 per partly paid-up
share from the cut-off price. The
price range for the FPO, running
through27-31January,hasbeenfixedat
₹3,112-3,276.
Mutualfunds,hesaid,hadmonetized
lessthan2%ofIndianhouseholdwealth,
allowingthegrouptopotentiallyaccess
a vast swathe of savings. It has been
engagedindomesticinvestoroutreach
forthelastthreeyears,hesaid.
“Wehavebeenrunningroadshowsto
reach domestic investors across cities:
Delhi, Kolkata and Surat for five years,
and next month, we will hit Rajkot to
increase their count as shareholders
acrossourgroupverticals.Ouraimisto
have10millionretailinvestors.Iamtold
bysomeinvestorsthatattheroadshows,
they are seeing huge interactions
betweencorporateanddomesticinves-
tors, decades after what Dhirubhai
Ambani would do on outreach pro-
grammesfordomesticinvestors.”
Onsteepvaluationsofgroupcompa-
niesbecomingaroadblockforpotential
retailinvestors,Singhsaid:“Highequity
valuationsimplythatpeoplevalueour
growth and this reduces our risk pre-
mium,whichinturnwillboostthevalue
ofourutilitybusiness.”
“Wefeelacrossinfralikeairports,for
one,wecanreducetariffsandcompete
withthebestlikeinSydney,”headded.
After the ₹20,000-crore proposed
FPO, retail investors’ holding in Adani
Enterpriseswillincreasefromaround1.4%
toover3%,whilepromotershareholding
willdropby3.6percentagepoints.
AdaniEnterprises’shareshavesoared
174% from their 52-week lows in less
than 10 months to ₹4189.55 on 21
December. The stock has since cor-
rectedto₹3,456apieceon20January.
On why brokerages avoid including
Adanigroupcompaniesintheircoverage
universe,Singhsaidutilitybusinessesare
not tracked widely by analysts. But, this
wouldchangewithtime,headded.
The follow-on public offer will see
thegroupinvest₹10,869croreforcapi-
tal expenditure requirements of the
company’s subsidiaries in the green
hydrogenecosystemprojects,existing
airports and for construction of a
greenfield expressway, while ₹4,165
crorewillbeusedtorepaydebteither
partly or fully as well as for three sub-
sidiaries—AdaniAirportHoldingsLtd,
AdaniRoadTransportLtd,andMun-
draSolarLtd.Therestwillbeusedfor
generalcorporatepurposes,according
totheofferdocument.
The group is also confident that its
greenhydrogenbusinesswillbeopera-
tionalinfouryears.“Weareconfident
that by 2026, hydrogen will be at an
operatingcostof25-30cents.Depend-
ingontherateofreturnrequirement,
we will sell it for between $1.80 and
2.30 a kg, which is lower than India’s
LNG import cost. So, already it will
competewithoutanygovernmentsub-
sidy,”saidSingh.
The group has invested $1.6 bil-
lioninthehydrogenecosystemand
has signed a memorandum of
understandingwithFrenchenergy
majorTotal.Itwillbeinvesting25%
equityinthebusiness,hesaid.
TheAdanigroupisalsolookingat
variouspartnershipsfortheairport
business,headded.
“We have entered a joint venture in
theduty-freearea.Inairports,youhave
specificelementsthataddressaspecific
consumer base, and we are looking at
other JVs in fuel services and public
entertainment space, among others,”
Singhsaid.
MEGA SALE
ADANI Enterprises
will offer discount of
₹64 per partly paid
up share from the
cut-off price
THE price range for
the FPO, running
through 27-31
January, has been
fixed at ₹3,112-3,276
AFTER the FPO,
retail investors’
holding will increase
from around 1.4% to
over 3%
IT is also confident
that the green
hydrogen business
will be operational
in four years
GulveenAulakh
gulveen.aulakh@livemint.com
nEwdELhi
T
he Centre has started
preparations for initial
public offerings of two
central public sector under-
takings,ECGCLtdandIndian
Renewable Energy Develop-
mentAgencyLtd(IREDA),in
the first quarter of 2023-24.
“Workhasbegun.TheIPOs
shouldtakeplaceinFY24.We
are trying an early timeline,”
said an official requesting
anonymity. The government
hadlaunchedthe
Life Insurance
Corp. of India
IPOinMay2022.
The public share
salewasoversub-
scribed,allowing
the Centre to
mop up ₹20,516
crorefromselling
3.5%equityinthe
insurer.But,thesharepriceof
LIC has fallen by over 25%
since, and is at ₹698.6, below
the listing price of ₹949
apiece.
Whiletheinitialplanwasto
listtherelativelysmallercom-
panies in FY23, the govern-
mentwantedtoallowthesales
tohavemaximumabsorption,
andthereforedecidedtopush
it to the next financial year,
the official said.
ThepubliclistingofECGC,
awholly-ownedcentralpublic
sector enterprise that pro-
vides exporters credit risk
insuranceandrelatedservice
for improving their competi-
tiveness, had been given the
go ahead in September 2021
by the Cabinet after it agreed
to invest ₹4,400 crore over
five years.
TheCentre’splansincluded
raisingECGC’sunderwriting
capacityto₹88,000croreand
propellingadditionalexports
of₹5.28trillionoverfiveyears,
through capital infusion and
an IPO. It also
aimed to create
590 million new
jobsincludingan
additional 26
million formal
sector workers.
For mini-
RatnaIREDA,the
Cabinet had
given its nod for
listingin2019andinJanuary
2022,ithadapprovedcapital
infusion of ₹1,500 crore that
would help lend additional
₹12,000 crore to the renewa-
ble energy sector, and meet
debtrequirementswithaddi-
tionalcapacityof3500-4000
MW. The IPO will help the
CPSE generate 10,200 jobs
every year, and to cut CO2
equivalentemissionsbyabout
7.49 million tonnes.
GovtplansIREDA,
ECGCIPOsinFY24
The public listing
of ECGC received
the go ahead in
September 2021,
while IREDA got
Cabinet nod for
listing in 2019
RiturajBaruah
rituraj.b@livemint.com
nEwdELhi
S
tate-run energy major
ONGCplanstotieupwith
French giant TotalEner-
giesforexplorationandproduc-
tionofoil andgasintheAnda-
man islands, said Sushma
Rawat,director,explorationat
ONGC Ltd. In an interview,
Rawat said that prospective
hydrocarbon blocks are
expectedtobeauctionedatthe
next round of auctions under
the Open Acreage Licensing
Programme for which both
companies may bid as a joint
venture.
“For deepwater, talks are
underway with Total. Anda-
mans, which is coming up, is
mostlydeepwater.Thegovern-
menthasanIslandExploration
Project, a lot of seismic data is
being acquired in the Anda-
mans which will be processed
and analysed. Within a month
we will know whether Total
fordeepwaterexplorationand
production.“Wehaveprepared
the blocks, we need to submit
them,”shesaid.
The Centre has been ambi-
tious with the National Island
ExplorationProject,seekingto
reduce its import dependence
forcrudeoilinavolatileglobal
marketscenario.
Talking of the
tie-ups and joint
ventures, Rawat
said apart from
Total, the Maha-
ratna company is
also looking for
tie-upswithother
major players in
exploration and
production, as well as carbon
capture,amongothers.
“For international partner-
shipswehadaglobaloutreach
programme, which was initi-
ated 2-3 years ago by the then
chairman-managingdirectorof
ONGC. In that area we have
gone ahead, and held a lot of
technical discussions and four
MoUs have been signed right
fromExxonMobiltoEquinorto
Chevronandall.So,wearelook-
ingforwardtotieupswithTotal
andothersrightfromexplora-
tionandenhancedoilrecovery
tocarboncaptureandrenewa-
bles.” In August 2022 ONGC
signed an agreement with
American oil and
gas major Exxon-
Mobilfordeepwa-
ter exploration at
India’s east and
west coasts. The
tie-upisexpected
to firm up by
March-end, she
said.“ExxonMobil
(contract)istotally
(for)deepwater.Theyhavebeen
looking at the data both at the
east cost and west coast. They
will let us know at the end of
March,whentheirentirestudy
is complete, and identify areas
theywouldliketogoforacreage
bidding, or may be it will be a
jointventurewithONGC,”she
said.
ONGC, TotalEnergies plan joint venture
The firm is looking for tie-ups
with other energy majors.
In August 2022,
ONGC tied up
with ExxonMobil
for deepwater
exploration at
India’s east and
west coasts
JUGESHINDER SINGH
Chief financial officer, Adani group
The FPO aims to
maximize retail and HNI
categories as they are
inter-generational
investors unlike mutual
funds or domestic
institutional investors,
who have a much
shorter horizon for
investments.
O
nlineshoppinginIndia
isgrowingbyleapsand
bounds. According to
the consulting firm Bain
Company’s report of October
2022, India’s e-retail market
wasestimatedtobe$50billion
in 2022, growing at 25% over
2021. By 2027, the market is
expected to grow to between
$150–$170 billion, with up to 1
in10retaildollarsspentonline.
This fast-paced growth of
India’s online retail is sup-
portedbyahostoftechnology
solutions which power each
aspect of online shopping -
including targetted advertis-
ing,efficientdiscoveryofprod-
ucts, ease of placing orders,
secure payments, trackable
deliveries and an overall opti-
misedandpersonalisedexperi-
ence for users.
When a user makes an
online purchase, it triggers a
series of activities that cover
theentirerangefromreceiving
theordertodeliveringittothe
c u s to m e r ’s d o o r s te p.
Technology facilitates every
aspectofthetransaction-from
locatingtheordereditemfrom
a vast inventory, verifying the
delivery address as well as
tracking the shipment until it
reaches the customer. SaaS
platform,Unicommerceisthe
power behind many of these
technologysolutionsthatkeep
thewheelsofe-commercerun-
ning smoothly.
As online sales continue to
increaseandbusinessessellon
multiple platforms, e-com-
merce fulfilment becomes
morecomplex,makingitnear
impossible for companies to
handle large order volumes
manually. Unicommerce has
helped numerous brands
streamline their supply chain
operations through automa-
tion,resultinginabettershop-
pingexperienceforcustomers.
Unicommerceoffersacompre-
hensive suite of solutions viz.,
Warehouse and Inventory
Management Solution,
Multi- Channel Order
ManagementSolution,Omnni-
Channel Solutions and Seller
Panel for Marketplace.
An increasing number of
businesses operate from mul-
tiplewarehousesin
order to manage
growing volumes
and to improve
delivery speeds.
Unicommerce’s
W a r e h o u s e
M a n a g e m e n t
Solution allows
brands to integrate
all their warehouses and pro-
vide a centralised platform to
view all orders and the entire
inventory on one panel. This
helps businesses automate
tasks like real-time inventory
management,
automated pur-
chase manage-
ment, finding
products in and
across multiple
wa r e h o u s e s ,
routing and
tracking ship-
ments, packag-
ing and alloca-
tion to the cor-
rect shipping
provider. By
automating these processes,
brands can improve the effi-
ciency of their warehouse
operationsandboostbusiness
performance.
Unicommerce’s client-fac-
ing application Uniware cap-
tures the data of all stocked
products and enables busi-
nessestoeasilyintegratetheir
inventory on multiple
marketplaces and brand web-
sites.Thisallowsbusinessesto
view all orders they receive in
one place rather than having
to go to each platform sepa-
rately.Additionally,brandscan
do an analysis of all
theirstocksandeas-
ily manage multi-
product and multi-
city orders. The
platform provides
the flexibility to
track inventory on
various parameters
including Item-
level traceability (unique seri-
alisation),SKU-leveltraceabil-
ity(serialisationatEANorSKU
level), batching (serialisation
the at batch level), and None-
level traceability. The multi-
leveltraceability
further simpli-
fies online sell-
ing for house of
brands and roll-
up firms as it
allows them to
manage diverse
product portfo-
lios through a
c e n t r a l i s e d
platform.
Intoday’scon-
nected retail
environment,whereconsum-
ers have constant access to
multiple online and offline
sales channels, brands are
striving to provide a seamless
shopping experience.
Unicommerce’sOmnichannel
Retail technology helps retail
businesseswithastrongonline
andofflinepresence.Thesolu-
tionconnectsalltheonlineand
offlinechannelsofthebusiness
on a single system to ensure
that consumers can shop,
experience, buy or return any
product anywhere digitally
or offline.
TheUnicommerceplatform
caters to various product cat-
egories and the company has
streamlined operations for
thousands of clients to ensure
a great post-purchase experi-
ence for their consumers.
Unicommerce solutions are
deployed across multiple cat-
egories including established
categoriessuchasFMCG,fash-
ion,apparel,footwear,eyewear,
personalcare,healthandphar-
maceuticals, and emerging
segments such as pet care,
home decor, nutraceuticals,
toys, baby products, and car
accessories. Additionally, the
platformservesfulfilmentpro-
viders,roll-upfirmsand3PLs,
using which they can manage
different types of businesses
through a centralised
dashboard.
A p a r t f r o m I n d i a ,
Unicommerce is present in
various international markets
and is serving clients in
Singapore, the Philippines,
Indonesia and Malaysia in
South East Asia and the
Kingdom of Saudi Arabia and
the United Arab Emirates in
the Middle East. It continues
to enhance its products’ fea-
tures to meet the specifics of
various markets. Some of the
newfeaturesincludelabeland
invoice printing in the Arabic
language, international ship-
ping and automated local-tax
compliance processes in vari-
ous nations.
Thelasttwoyearshaveseen
brandsmovepastthetechnol-
ogy affirmation stage. The
upcomingyearsofferanexcit-
ingglimpseoftechnologyplay-
ing a greater role in moulding
the online retail segment, in
India and elsewhere.
UNICOMMERCE
Created by Mint Brand Studio
Technology is reshaping India’s
online retail: Unicommerce
The Unicommerce
platform caters to
various product
categories and
streamlines
operations for
thousands of
clients to ensure a
great post-
purchase
experience
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