BENGALURU, New deLHi, mumbAi, kOLkAtA, cHeNNAi, AHmedAbAd, HyderAbAd, cHANdiGArH*, PuNe* VOL. 16 NO.

220

Wednesday, September 14, 2022

Large firms gear up to test IPO Vedanta weighs 2nd chip unit
livemint.com waters again uP1 after Gujarat facility uP1
 BENGALURU, NEW DELHI, MUMBAI, KOLKATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE*
Wednesday, September 14, 2022
mint primer
How higher food Our long
prices are making capex wait
RBI’s job difficult
BY PRAGYA SRIVASTAVA & TAUSEEF SHAHIDI
In five out of the last eight months, food inflation has remained
above the headline inflation figure. Have higher food prices made
inflation targeting particularly difficult for the Reserve Bank of India?
Mint explores.
Undue share
The contribution of food items in
inflation print has been greater
than their weight in CPI in five out
of the last six months.
Weight of food and beverages in CPI
Their contribution in y-o-y inflation
60
Consumer price inflation
50 45.9
40
30
20
17.0
10
Sep 2021 Aug 2022
Source: Mospi, Mint calculations
What does the latest
1 CPI data show?
After declining for three
consecutive months, retail
inflation rose in August to 7% from
6.71% in July. While the rise in
headline inflation is small,
inflation in food and beverage was
a much higher 7.57%. The rise was
mainly driven by cereals and
products, whose inflation rose to a
103-month high of 9.57%, while
inflation for vegetables and spices
remained in double digits. In
contrast, core inflation inched up
only 6 basis points to 6.01%, which
may not offer much relief, as the
Reserve Bank of India’s rate-
setting panel is mandated to take
headline inflation into account for
its monetary policy decisions.
Will a revision in the
4 CPI basket help?
Definitely yes, as an update would
most likely lower the weight for
food items. Historically, as the
income levels have improved, the
share of food in consumption
expenditure has declined. The
latest series for CPI for Industrial
Workers, which was released in
October 2020, saw a downward
revision of 7 percentage points in
the weight of food and beverages.
Unfortunately, a new CPI series is
unlikely before FY25 as the results
of a new Consumer Expenditure
Survey currently underway are
unlikely for a couple of years.
STO C K TA L K
DCB BANK
Considering DCB’s
strong operational
history, stable man-
BUY
agement team and
TARGET PRICE
improving visibility
₹145 on credit growth
CURRENT PRICE
₹109.20 revival, the stock is
likely to rerate going
forward. Key risks include decelera-
tion in loan growth.
ICICI SECURITIES
HERANBA INDUSTRIES
The company has a
diverse product
range, strong mar-
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gins, and a strong
TARGET PRICE
balance sheet. Its
₹745 management gave an
CURRENT PRICE
₹587.60 annual revenue
growth guidance for
FY23 of ~16% and Ebitda margins of
~17%.
ANAND RATHI SHARE & STOCK BROKERS
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
VOL. 16 NO. 220
livemint.com
QUICK EDIT
Finance Minister Nirmala
Sitharaman on Tuesday asked
Indian manufacturers why they
weren’t investing, even though
the government had extended a
corporate tax cut, production-
linked incentives (PLI) and
other benefits. “Since 2019,” she
said, “...I have been hearing
industry doesn’t think [the
The up-to-date one environment] is conducive.
The weight of food and beverages was revised Alright, the tax rate was brought
down by 7 percentage points in the new series down. Give PLI? We have given
of CPI-IW, with base year 2016.
(in %) PLI. I want to hear from India
Food and 46.20 Inc.; what’s stopping you?” Her
beverages 39.17
question reflects frustration
(in %) Pan, tobacco 2.27
and intoxicants 2.07
Consumer price
inflation-industrial
over India’s slow revival in pri-
49.6
Clothing 6.57 workers vate investment after a pro-
and footwear 6.08 2001 2016 longed slump. It has hamstrung
45.9 15.27 economic growth and bur-
Housing
16.87 dened the Centre with the task
6.43
Fuel and light
5.50 of ploughing in money to get
23.26 engines firing. The idea is to
Miscellaneous
30.31 spur growth and “crowd in” pri-
Source: Labour Bureau vate capital spending. Yet, while
SATISH KUMAR/MINT
excess capacity has lessened in
Why has food inflation many sectors, private sector
2 become a worry?
While food prices tend to see
activity has not stepped up quite
as expected. Consumer demand
seasonal spikes and crashes in a 12- was scarred by the pandemic
month cycle, this year, prices have but has been picking up as the
remained elevated, due to rising economy emerges from its
global food prices, erratic rains, adversities. Bank credit, though
and second-round effect of high still uneven, has also shown
transportation charges due to
signs of vibrancy. India Inc.’s
costly fuel. The contribution of
food and beverage items to animal spirits, however, appear
headline inflation, which was just rather concentrated at the top
17-19% in September-October 2021, of the league. And this isn’t easy
is now around 50%. In five of the for anyone to explain.
past six months, the group has
contributed to overall inflation
more than its weight of 45.86%.
Since the food and beverage group
dominates the inflation basket, its
influence on the headline figure is
MINT METRIC
more pronounced. by Bibek Debroy
MINT
Morimoto’s job is a dream -
3 How does it affect
monetary policy?
With about half of the price index
Paid to do nothing, he reigns supreme.
susceptible to seasonal factors and
If loneliness makes one cower,
government policies, inflation targeting is A companion needed- paid by the hour.
inherently cumbersome. Volatile food
prices affect the overall predictability of
He saw the gap, with USP extreme.
inflation, limiting RBI’s policy choices. So,
if food items were to have a lower share in
the consumption basket, predictability and
efficacy of monetary policy could improve. QUOTE OF THE DAY
Will food inflation
A lot has been said about the
5 worries end soon? pricing of IPOs of tech
Since food prices are generally companies… at what price you
volatile, it is difficult to predict
their direction. One of the lead choose to do the IPO is your
indicators–sowing–suggests lower business, we have no business
crop output this year. Kharif
acreage is currently 1% lower than to suggest otherwise.
last year, with rice sowing down
5%. However, the government has
imposed curbs on rice export,
which could offset supply short-
ages and check prices. While lower MADHABI PURI BUCH
global edible oil prices could ease SEBI CHAIRPERSON
pressure, milk price hikes will add
to food inflation. With RBI’s hands
tied on this front, the government
may have to intervene further.
DOWNLOAD THE
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QUESS CORP
The company’s gen-
eral staffing head-
count is likely to
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clock a 25%+ CAGR.
TARGET PRICE
The stock is trading
₹930 at an attractive valu-
CURRENT PRICE
₹643.90 ation of ~20x on
FY24 PAT estimates.
The key trigger would be RoE expan-
sion playing out.
EDELWEISS SECURITIES
M&M
We remain positive SUBSCRIBE TO
on M&M due to its OUR NEWSLETTER
sales upcycle across TOP OF THE MORNING
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segments and a large
TARGET PRICE
₹1,490 order book in pas-
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₹1,299.95 have raised our
FY23-25E earnings
per share estimates by 3-7%, factor-
ing a volume increase assumption.
EMKAY GLOBAL FINANCIAL SERVICES
 PLAIN FACTS

Advances & retreats of

Centre’s Udan scheme
BY howiNdiAlivES.Com

E
arlier this year, the regional connectivity scheme launched by the government, the Ude Desh ka Aam Nagrik (Udan)
scheme, completed five years. This marks the mid-point of this scheme, which offers incentives to consumers, airlines,
and airports to boost air traffic on regional routes that had never been on the map or were less used. An assessment of
the scheme against its stated objectives shows several advances and some retreats.
While inviting proposals for the scheme’s next phase last month, the government said the cumulative number of passen-
gers under Udan had crossed 10 million. Other than the pandemic-induced drop in 2020-21, Udan numbers have been pro-
gressively increasing. The 2021-22 figure was 3.3 million passengers, which is about 2% of the total domestic passengers
for the financial year. The importance of that small share lies in the network effects it can enable.
However, there are challenges of continuity. Of the 423 routes approved, 164 routes (39%) registered zero passengers in
June 2022, the latest month for which route-wise passenger data is available. The designated airline had stopped plying
the route, either temporarily or permanently. Routes allotted under the scheme’s first two phases, many of which have
crossed the three-year benefit period, show an operational rate of just below 50%. The third and fourth phases fare better,
with an operational rate of 77% and 84%, respectively. Meanwhile, viability issues dog airlines, especially smaller ones, who
were envisaged to be drivers of this scheme.

Passenger traffic under Udan has been rising, ...but half the routes from the first
barring the first pandemic year... two phases are inoperational
Number of passengers who used Udan (million) Status of Udan routes by passenger movement in June 2022
3.3 Operational Not operational

2.99 27
RCS-Udan 1.0
29

65
RCS-Udan 2.0
77

121
1.5 RCS-Udan 3.0
37
1.24

38
RCS-Udan 4.0
7

0.26 8
RCS-Udan 4.1
14
2017-18 2018-19 2019-20 2020-21 2021-22
List of Udan routes as of 12 July 2022. Passenger data for June 2022
Source: Government response to Lok Sabha question, dated 21 July 2022 Source: Airports Authority of India, Directorate General of Civil Aviation

Different Flight Paths Large airlines have fared better than

small ones in Udan
AIRLINES THAT chose routes under Udan have traced Number of Udan routes, based on passenger movement
different flight paths. They can be divided into large, national Operational Not operational
airlines and small, regional airlines. The drop-off on Udan SpiceJet 60 30
routes is across the board, but large operators have held on IndiGo 71 14
better. Among them, SpiceJet, which is battling a financial Alliance Air 64 19
crunch, has seen more route dropoffs than IndiGo and Alliance TruJet 16 26
Air. Routes plied by IndiGo have the greatest continuity, with 71 Star Air 26 10
of its 85 routes registering passenger movement in June. Pawan Hans 28
In the way Udan was conceived, routes were pairings FlyBig 16
between two small airports in the same region, such as Bikaner- Heritage 14
Jaipur, or between a large airport and a small one, such as Deccan Air 8
Bikaner-Delhi. Such a network pattern was seen enabling a Zoom Air 1 5
business model for small, regional airlines. The jury is still out Air Taxi 5
on this. Other than FlyBig and Star Air, some such as Deccan Air List of Udan routes as of 12 July 2022. Passenger data for June 2022.
have shut down and some such as Air Taxi and Pawan Hans Airlines arranged in descending order of total Udan routes awarded.
show zero passengers for 2022. Source: Airports Authority of India, Directorate General of Civil Aviation

Leading airports under Udan have

seen a big rise in traffic
Breakout Airports
Number of passengers Apr-Jul 2017 Apr-Jul 2022 FOR CONSUMERS, Udan offered connectivity to regional
Prayagraj (Uttar Pradesh) destinations at reasonable fares. For airlines, it offered more
Durgapur (West Bengal) routes and greater network possibilities. Airports are the third
Belagavi (Karnataka) node. Udan aims to put more airports on the aviation map. It has
added 68 airports, heliports, and waterdromes, including 19
Kanpur (Uttar Pradesh)
under-served ones such as Belagavi, Gwalior, Hubli, Kannur,
Hubli (Karnataka)
Puducherry, and Prayagraj and the remaining being unserved
Dimapur (Nagaland) ones. The government had spent ₹2,600 crore till June 2022 as
Gwalior (Madhya Pradesh) part of a ₹4,500-crore plan to improve such airports.
Jorhat (Assam) Between April-June 2017 and April-June 2022, of the 68
Agra (Uttar Pradesh) airports, those registering passengers have increased from 24 to
Kolhapur (Maharashtra) 53. Select airports have surged. Prayagraj in Uttar Pradesh,
0 40 80 120 160 200 which leads among these airports in passenger traffic, has seen
(in thousand)
Graphic shows Udan airports that led in passengers in the April to
a 13-fold increase in passengers during this period. However,
June 2022 period and for which passenger data was also available for some have not grown, such as Tezpur, Nanded and Bhatinda. In
the April to June 2017 period. Source: Airports Authority of India
general, though, Udan airports are seeing greater footfalls.

Central Commitment The Centre has reduced

allocations to Udan this year
THE NEXT phase, for which proposals are open, revolves Spending by Centre on Udan ( crore)
around “routes requested by” the tourism ministry. Under 994
Udan, half the seats on a route have distance-based pricing caps
for affordability. The operator has pricing flexibility on the
remaining seats. The shortfall for airlines is made good through 700
viability gap funding (VGF), with the Centre contributing 80% 601
and states 20%. On each route, the price caps and VGF are for 489
three years. 404
The Centre funds the scheme through a levy on major non-
Udan routes. It also extends other benefits to airlines such as 200
lower excise on fuel. The Centre allocated increasing sums to
Udan till 2021-22. In 2022-23, however, its spend is expected to
drop drastically, partly because of more routes moving to a full- 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
commercial mode. How they fare there will be their true test. Data shows budget estimates for 2022-23, revised estimates for
www.howindialives.com is a database and search engine for 2021-22 and actual expenditure for other years.
public data Source: Budget documents
PARAS JAIN/MINT

PEANUTS by Charles M. Schulz

 BeNgALUrU, NEw DELHI, MUMBAI, kOLkATA, CHENNAI, AHMEDABAD, HYDERABAD, CHANDIGARH*, PUNE* VOL. 16 NO. 220 Rs 15.00 18 PAGES

Wednesday, September 14, 2022

When the trading What is stopping India Inc.

livemint.com algorithm misfires uP10 from investing, FM asks uP2

SENSEX 60,571.08 455.95 NIFTY 18,070.05 133.70 DOLLAR ₹79.15 ₹0.38 EURO ₹80.47 ₹0.26 OIL $93.33 $0.70 GOLD ₹50,533 ₹122

Large firms gear up to Zetwerk dials

existing, new
investors for
DON’T MISS

test IPO waters again up to $125 mn

Sneha Shah
sneha.shah@livemint.com
Aadhar Housing, Ixigo, Asianet among firms planning to go public MUMBAI

World in ‘wrong direction’ as

Z
etwerk, a business-to-
Swaraj Singh Dhanjal business manufactur- climate impacts worsen: UN
swaraj.d@livemint.com Street SIgNS Union minister for electronics and information technology ing services startup, is Humanity is “going in the wrong direction”
MUMBAI Ashwini Vaishnaw, Gujarat chief minister Bhupendra Patel and in talks to raise $100-125 mil- on climate change due to its addiction to
A bunch of relatively large companies is set to test investors’ appetite Vedanta chairman Anil Agarwal in Ahmedabad on Tuesday. PTI lion in a funding round, valu- fossil fuels, the UN said Tuesday in an

E
for initial public offerings, signalling a revival in primary market activity. assessment showing that planet-warming
ncouraged by Indian stocks’ ing the company a notch
outperformance of emerg-
ing market peers, a bunch of
relatively large companies
Companies planning to start investor road shows
Aadhar Housing Finance
Five Star Business Finance 2,210
IPO size (in ₹ crore)

7,300 Vedanta weighs 2nd higher than its last valuation of

$2.7 billion, three people with
knowledge of the develop-
emissions are higher than before the
pandemic. >P9

is set to test investors’ appe-

tite for initial public offerings, signal-
ling a revival in primary market
Ixigo

Recent IPO performance

1,600
IPO activity Amount raised
semiconductor unit ment said.
The company has held talks
with funds such as Premji
Flipkart, Amazon get ready for
festive season sales starting 23 Sep
activity. (in ₹ crore) Invest, TCV Partners and Cat-
after Gujarat facility Online marketplaces Amazon and Flipkart
No. of IPOs
IPO subscription Listing day gain
Aadhar Housing Finance, travel (No. of times) (in %)* amaran, the people said, are gearing up for this year’s festival sales
firm Ixigo and lender Five Star Busi- 2021 1,18,723.2 requesting anonymity. The beginning 23 September, with the former
Syrma SGS
ness Finance are some of the large Technologies 32.61 42.3 63
Subhash Narayan &
round will be entirely primary running its flagship Big Billion Days till 30
issuers planning to approach institu- starting operations from the first fundraising, with the com- September, while its rival runs the Great
tional investors with the aim to tap Dreamfolks 2022** Gulveen Aulakh unit in Gujarat,” Agarwal said pany’s existing investors also Indian Festival for up to a month. >P6
Services 56.68 41.9 18
the public markets around mid-Oc- 41,712.8 over the phone. The Gujarat topping up, they added.
tober to November, three people *Calculated on closing price, **till August Source: Sebi filings, Prime Database, Stock Exchanges NEw DELHI facility may complete ground- In December, Zetwerk
aware of the development said. Col- breaking by the year-end, and raised its Series F funding Xi, Putin to work together

lectively, these companies have
plans to raise around ₹11,000 crore
from their initial share sales.
The revival in the primary market
comes as the benchmark Nifty
reclaimed the 18,000 mark on Tues-
day, the first time since April this
year. The Sensex, too, is trading
above 60,000. The benchmark indi-
ces have gained around 18% from
their June lows.
“Indian markets have been seeing
a strong performance, and that has
opened the window for some deals to
go through. Right now, we are
mainly seeing smaller issuers come
to the market. The response to these
deals has been encouraging and,
COMEBACK TRAIL
the firms collectively
plan to raise ₹11,000 cr
via IPOs in Oct-Nov
thus, other larger companies too are
now getting ready to see if they can
launch their IPOs,” one of the three
people cited above said.
Others, such as media company
Asianet Satellite Communications
and car dealership Landmark Cars,
too, are likely to begin investor road
shows, said the people cited above,
who work with investment banks.
Emails sent to Aadhar Housing
Finance, Ixigo, Five Star Business
the revival in primary the benchmark indices
market comes as Nifty have gained around 18%
reclaimed 18,000 mark from their June lows
SARVESH KUMAR SHARMA/MINT
Finance, Landmark Cars and Asianet
Satellite remained unanswered till
press time.
Following a two-month hiatus after
May, primary markets have seen three
IPOs so far. Syrma SGS Technologies,
the first one to hit the market, saw the
shares on offer subscribed 32.6 times.
The shares delivered a 42% gain on
their trading debut. The Dreamfolks
TURN TO PAGE 6
V
edanta Resources Ltd
chairman Anil Agarwal
on Tuesday said his
company is considering a sec-
ond chip and display manufac-
turing facility in India, even as it
announced a $20-billion (₹1.54
trillion) investment plan for its
first such venture in Gujarat.
Agarwal said India would need
at least two such factories to
become a hub of chip manufac-
turing and meet the needs of the
country and the world.
“There are some interesting
proposals from Andhra Pradesh
and Maharashtra, and we will
look for our second plant after
production is expected to start
by 2024, Agarwal said.
Vedanta’s Gujarat plan, to be
executed in a joint venture with
the world’s leading contract
manufacturer Foxconn, comes
about six months after it first
indicated an interest in finding
a suitable location for the
project. While Vedanta Dis-
plays Ltd will set up a display
fabrication unit with an invest-
ment of ₹94,500 crore,
Vedanta Semiconductors Ltd
will set up an integrated semi-
conductor fabrication unit and
TURN TO PAGE 6
round of $200 million from
investors led by D1 Capital and
Greenoaks, valuing it at $2.7
billion. The four-year-old
company’s previous $150 mil-
lion funding round helped it
enter the unicorn club, or
startups that are valued at
more than a billion dollars.
The retreat of technology
stocks and monetary tighten-
ing by global central banks
have made it tougher for
Indian startups to raise money
after raising record funds in
2021 when a deluge of cheap
TURN TO PAGE 6
to counter US global order
In the almost 1,000 days since Xi Jinping last
ventured abroad, China has found itself
increasingly isolated within the US-led world
order. He’s finally re-emerging this week
alongside Russia’s Vladimir Putin to showcase
his vision for a viable alternative. >P8
Mid-caps, small-caps continue
to outperform despite volatility
Mid-caps and small-caps continued to
outperform benchmark indices despite recent
volatility. The gains of 5.64% and 5.89% for BSE
mid-cap and small-cap indices, respectively, are
higher than the Sensex’s 3.42% rise in August, and
the trend continued in September. >P4

Wall Street tumbles as inflation Sebi probes 20 Indian AIFs

data stokes bets of large rate hikes over suspected violations
AP meeting next week. But the Jayshree P Upadhyay, Sneha pen in the case of distressed
feedback@livemint.com hope was that inflation was in Shah & Ranjani Raghavan funds, where there may be
the midst of quickly falling back greater investment risks.

S
tocks are tumbling and to more normal levels after MUMBAI “Sebi wants to ensure that
disappointment is hitting peaking in June at 9.1%. the AIF principle—that of a

T
markets worldwide Tues- The thinking was that such a he Securities Exchange pooling vehicle—is main-
day, following Wall Street’s slowdown would let the Fed Board of India (Sebi) is tained. Anything that is outside
While RBI is likely to raise the repo rate between 35-50 bps in sudden realization that infla- downshift the size of its rate probing practices the contract needs to be stated
September, there will be token increases after this month as tion isn’t slowing as much as hikes through the end of this adopted by at least 20 Indian- clearly and communicated to
inflation is expected to trend lower, said some analysts. MINT hoped. year and then potentially hold domiciled alternative invest- all investors,” a third person, a
The S&P 500 sank 3.1% in steady through early 2023. ment funds (AIFs) managing as fund manager with knowledge

RBI may hike rate midday trading, threatening to

snap a four-day winning streak.
Bond prices also fell sharply,
The fall in the indices snapped
Tuesday’s report dashed
some of those hopes. Many of the
data points within it were worse
much as ₹10,000 crore, two
people with direct knowledge
of the development said.
Sebi is said to be probing the alleged
violations to establish transparency
of Sebi’s thinking said. Perhaps,
the regulator views priority
payouts as a violation of this

by up to 50 bps as
sending their yields higher, after
a report showed inflation decel-
erated to 8.3% in August, instead
of the 8.1% economists expected.
a 4-day winning streak. AP than economists expected, Sebi is probing the alleged across the AIF ecosystem. MINT principle, he added.
including some the Fed pays violations to establish transpar- Sebi has also questioned cer-
to hike and hold, the big ques- particular attention to, such as ency across the AIF ecosystem, a whole-time director, Sebi, tain domicile status of limited
tion is at what level.” inflation outside of food and they said, seeking anonymity. said in an interview on the side- partners and general partners

inflation edges up The disappointing data

means traders are bracing for
the Federal Reserve to ulti-
The Dow Jones Industrial
Average lost 878 points, or 2.7%,
to 31,496, as of 11.42am Eastern
energy prices. Markets honed in
on a 0.6% rise in such prices dur-
ing August from July, double
The violations include divi-
dend stripping, inadequate
diversification, abrupt change in
lines of an event organized by
the Federation of Indian
Chambers of Commerce and
to ascertain whether a specific
investment should be treated
as a foreign direct investment
Shayan Ghosh ber and February, which, along mately raise interest rates even time, and the Nasdaq composite what economists expected. control at AIFs, non-adherence Industry on Tuesday. However, (FDI) or an AIF investment. “It
shayan.g@livemint.com with the expected 35 bps in higher than expected to com- dropped 4.1%. Big tech stocks “This suggests inflation to stated investment mandate, he did not comment on the is the job of Sebi to ask ques-
MUMBAI September, would take the ter- bat inflation, with all the risks swooned more than the rest of expectations may be becoming conflicts of interest, valuation other situations that Sebi may tions. I cannot comment on
minal rate to 6.25%. for the economy that entails. the market, as all 11 sectors in the ingrained,” said Gargi Chaud- policies, priority payouts, and be inquiring into. whether active investigations

A
s retail inflation acceler-
ated again to 7% in
August, there is a grow-
ing chorus among economists
for another 35-50-basis point
(bps) repo rate hike in the Sep-
tember policy, a move some
fear could stymie growth.
An aggressive 50-bps
increase in the repo rate would
take the policy rate to 5.9%, the
highest in more than three
years. It will also be the third
consecutive rate hike of 50 bps
in the current tightening cycle,
beginning with a 40-bps sur-
Given that inflation will likely “Right now, it’s not the jour- S&P 500 dropped. huri, head of investment strat- outsourcing management (of Some AIFs offer select lim- are on,” Bhatia said. A separate
stay above the monetary policy ney that’s a worry so much as Almost all of Wall Street egy at iShares. investments) to other entities. ited partners, or investors, in email query to a Sebi spokes-
committee’s flexible target of the destination,” said Brian came into the day thinking the The inflation figures were so “Why should priority pay- AIFs a priority payout, whereby person went unanswered.
2-6% for three quarters in a row, Jacobsen, senior investment Fed would hike its key short- much worse than expected that outs happen? Don’t you want they get their principal invest- Some of Sebi’s investigations
the central bank will have to strategist at Allspring Global term rate by a hefty three-quar- AIFs to be as safe as other equity ment back before other inves-
write to the government in Investments. “If the Fed wants ters of a percentage point at its TURN TO PAGE 6 investments?” Ashwani Bhatia, tors. This may especially hap- TURN TO PAGE 6
October, explaining the reasons
behind this deviation.
Retail inflation in August, at
7%, was 10 bps higher than
Deutsche Bank and Bloom-
berg’s consensus estimate of
Netflix’s megahit Squid Game makes history at Emmy awards
6.9%, Das said.
Retail inflation had eased to Bloomberg Korean director Bong Joon-ho’s by reflecting on some of the Apple Inc. and Warner Media to
6.71% in July after peaking at feedback@livemint.com Oscar-winning movie Parasite darker sides of its society— invest in local-language titles
7.8% in April. In its August pol- in 2020 and Minari’s Korean including its treatment of North and original series to lure sub-

prise increase in May.
Another round of steep
hikes, experts said, has been
necessitated by the unabated
rise in inflation as measured by
the Consumer Price Index
(CPI), primarily because of
higher food prices.
“We now expect the US Fed-
eral Reserve to hike by 75 bps this
month, against our earlier expec-
tations of a 50-bps hike, which
will likely push RBI and the MPC
to hike the repo rate by 35 bps,
against our earlier expectations
of 25 bps,” said Kaushik Das,
chief economist, India and South
Asia, Deutsche Bank.
He expects two more rate
hikes of 25 bps each in Decem-
N
icy, RBI’s monetary policy
panel had projected inflation at
6.7% in FY23, with July-Sep-
tember at 7.1%, October-De-
cember at 6.4%, and January-
March at 5.8%.
While RBI is likely to raise the
repo rate between 35-50 bps in
September, there will be token
increases after this month as
inflation is expected to trend
lower, said Soumya Kanti
Ghosh, group chief economic
advisor at State Bank of India.
Ghosh said that of the 299
commodities in CPI, 171 are cat-
egorized as supply-driven, 99
as demand-driven, and 29 as
TURN TO PAGE 6
etflix Inc.’s Squid Game
made history as the first
foreign-language drama
to win top honours at the televi-
sion industry’s Emmy Awards.
Creator Hwang Dong-hyuk
won for outstanding directing and
Lee Jung-jae, who played the main
character in the South Korean
drama, garnered the Emmy for
best actor in a drama series. “I
truly hope Squid Game won’t be
the last non-English series to be
here at the Emmys,” Hwang said
after receiving his award.
The Korean drama earned 14
nominations, competing against
the eventual best drama winner
HBO’s Succession. The megahit
followed the success of South
actress Yoon Yuh-jung winning
the Academy Award for best
supporting actress in 2021.
South Korea’s Park Chan-wook
also won the best director award
at Cannes in May with his film
Decision to Leave.
Parasite, Minari and Decision
to Leave all included the theme
of inequality and ill-treatment of
society’s minorities. Parasite, for
example, tells the story of a poor
family whose members scheme
to secure jobs in a wealthy
household by inflating their
qualifications and pretending
they’re not related. The Squid
Game similarly follows more
than 400 deeply indebted peo-
ple who play a series of deadly
Korean defectors, migrant work-
ers, divorcees, unemployed and
those with mental health issues.
The problems reflected in the
drama echoed across the globe as
loose monetary policies and,
more recently, a pandemic-
driven rush for real estate, pushed
up home prices internationally.
It was also Netflix’s biggest
Lee Jung-jae (left) poses with the award for outstanding lead actor in launch ever. The series cost $21
a drama series and Hwang Dong-hyuk with the Emmy for outstanding million to produce and went on
directing for a drama series for Squid Game in Los Angeles. AFP to be watched more than 1.65
billion hours in just four weeks.
children’s games to win a for- audience could relate to the It remained one of the top shows
tune for the amusement of a few drama which depicted the “chal- on Netflix for months.
super-rich VIPs. lenges of inequality and the loss of The series boosted the popu-
South Korean President Yoon opportunities in modern society.” larity of Korean content world-
Suk Yeol congratulated both The South Korean drama cap- wide and prompted global play-
Hwang and Lee, saying that the tivated international audiences ers including Walt Disney Co.,
scribers. The majority of Netflix
customers are international,
which means the company will
increase its investment in for-
eign-language shows relative to
its investment in English.
Bucket Studio Co., which
holds a stake in the agency rep-
resenting Lee, jumped as much
as 12% in Seoul trading, before
gaining 2.2% at close.
The surprise success of
“Squid Game” last autumn
sparked big gains for a wide
range of Korean entertainment
stocks as investors looked for the
next big hit to emerge from the
country. Bucket Studio’s stock
nearly tripled last year but has
tumbled 53% so far in 2022.
02 WedneSday, 14 SeptemBer 2022
Bengaluru ECONOMY & POLICY LIVEMINT.COM

m MINT SHORTS
‘Contesting election neither a
What is stopping you from No word yet
on Modi-Xi
fundamental right nor common law’
New Delhi: The right to contest an election is neither a fundamen-
tal right nor a common law right, the Supreme Court has said while
dismissing with a cost of ₹1 lakh a petition which raised the issue
investing, FM asks India Inc meeting at
SCO
regarding the filing of nomination for Rajya Sabha elections.
Observing that an individual cannot claim that he has a right to Rezaul H Laskar
contest an election, the apex court noted that the Representation letters@hindustantimes.com
of People Act 1950, read with the Conduct of Elections Rules 1961, The govt last year rolled out the PLI scheme with an outlay of about ₹2 trillion for 14 sectors
T
has contemplated the name of a candidate has to be proposed while he Shanghai Coopera-
filling the nomination form. PTI tion Organization sum-
Gireesh Chandra Prasad can boost spending in the hope of mit on 15 and 16 Septem-
gireesh.p@livemint.com crowding in private investment, which ber in Samarkand, Uzbekistan
‘Food, grocery retailers to NEW DELHI in turn could help speed up the eco- —the first in-person meeting of
nomic recovery. the world’s largest regional
clock 20% growth in revenue’

F
inance minister Nirmala Sithar- She also flagged delays in payments organization—is being closely
aman on Tuesday asked Indian by big businesses to MSMEs. “Support watched by analysts for China’s
businesses what is stopping to MSMEs is not just what the govern- and Russia’s response to the
them from investing in the ment can give. It is largely dependent on emerging world order, and for
economy at a time foreign that. I can take an example on which all a clutch of significant one-on-
direct investors, foreign portfolio inves- of you can equally help.” one meetings on sidelines.
tors and domestic retail investors are Sitharaman said the government had However, there’s no word yet
confident about India. examined the dues to MSMEs, which on a bilateral meeting between
The finance minister also called out included dues from central and state PM Narendra Modi and Chi-
some large businesses which delayed governments, as well as public sector nese President Xi Jinping.
making payments to micro, small and enterprises under the Centre and states. The recent decision by India
medium enterprises (MSMEs). “But I was surprised to find considerable and China to pull back troops
The direct question posed by the pending payments were from big indus- from patrolling point-15 at Hot
finance minister at the Mindmine Sum- tries.” Springs has fuelled intense
New Delhi: Brick and mortar food and grocery retailers mit 2022 in the capital reveals a degree Union finance minister Nirmala Sitharaman called out some large businesses Sitharaman said she cross-checked speculation about the possibil-
could report 20% growth in revenues on the back of higher of frustration at the failure of domestic which delayed making payments to micro, small and medium enterprises. PTI this with the data from the Registrar of ity of the first face-to-face bilat-
realizations due to commodity inflation and market share private investments taking off even after Companies on declarations made by eral meeting between Modi
gains from the unorganized players, ratings agency Crisil said the central government took the lead in cive (for investments). (They said) own strengths and capacity. “When companies. There were declared dues and Xi in nearly three years,
in a report. “The largely non-discretionary nature of demand stepping up capital expenditure in the ‘Alright, bring the rate down’; the tax countries and industries abroad think by large companies. though both countries have not
had kept the segment resilient even during peak pandemic hope of crowding in private invest- rate was brought down. ‘Give produc- this is the place to be in, at this time, FDI “I can push public sector enterprises, officially said anything on this
in fiscal 2021, when revenue fell only 3%. Operating margin ments. tion linked incentive’ (PLI)—we have is coming, FPIs are coming, stock mar- I can request states, I can make sure issue. Modi and Xi are set to be
is expected to sustain at the current level of 6.3-6.8% due to The minister reminded the industry given PLI. I want to hear from India Inc., ket is also so confident, Indian retail departments pay up. (But) I can only in same room for at least two
better economies of scale and gradual pass-through of infla- about the government’s investor believes in appeal to the industry. For all the tears sessions at the summit. While
tion in input prices, notwithstanding a normalization of store policy measures taken to QUESTIONINg INDUSTRY them...Is it, like Hanuman, that we shed for the MSMEs—my tears, an exchange of pleasantries
rentals,” the report said. LIVEMINT encourage businesses to you do not believe in your your tears—can we limit the time by between the two leaders isn’t
invest, including the SITHARAMAN THE minister urged SHE wondered if capacity, in your own which the MSMEs will get their dues?” being ruled out, people familiar
reduction in corporate tax reminded the big businesses to
industry about govt’s support
Indian industry is
unaware of its own
strength, and there has However, Sitharaman acknowledged with the matter said there was
Election Commission delists 86 rates in 2019. policies to uplift micro, small and strengths and got to be somebody stand- that companies were disclosing their no word yet on a structured
“If it is not sort of businesses ing next and say, ‘Hey, you dues to small businesses in their statu- bilateral meeting.
‘non-existent’ political parties impertinent to say this
medium enterprises capacity
are Hanuman, do it’. And tory documents. Former ambassador Vishnu
New Delhi: In continuation of action initiated on 25 May for now, I equally would want who is that person to tell An RBI survey released in August Prakash said: “With the borders
enforcing due compliances by Registered Unrecognized Political know from the Indian industry what is it what is stopping you?” Sitharaman Hanuman? That certainly can’t be the showed capacity utilization in manufac- still alive, PM is likely to meet Xi
Parties (RUPPs), Election Commission of India today delisted 86 that they are hesitant about…. Since asked business leaders at the event, government.” turing crossed 75% in Q4FY22, up from only if some agreement on
non-existent RUPPs & declared 253 as ‘Inactive RUPPs’. This 2019, when I have taken charge of the which was webcast. The ministry has laid emphasis on 69% a year ago, but was yet to touch restoring status quo ante is in
action against 339 non-compliant RUPPs takes tally to 537 default- finance ministry, I have been hearing The minister asked if it was a case of stepping up capital expenditure and giv- 80%, a threshold businesses expect to hand or if the Chinese side
ing RUPPs. SAURAV ANAND the industry doesn’t think it is condu- the Indian industry being unaware of its ing long-term loans to states so that they hit before making further investments. seeks it.”

Former Sebi chief Damodaran to

lead panel on VC/PE investments ‘Pace of rate hikes 50 district export hubs likely in FTP
should be calibrated’ Dilasha Seth
dilasha.seth@livemint.com
declined by 1% in August
compared with a year ago.
BENGALURU Queries emailed to the
Reuters tion in the sense that it has department of commerce on

T
feedback@livemint.com continued for a long time and he department of com- Tuesday remained unan-
MUMBAI some inputs costs have been merce will develop 50 swered till press time.
passed on.” districts as export hubs The districts as export hubs

T
he pace of interest rate The RBI has raised rates by that are likely to be part of the initiative is aimed at mobiliz-
increases should be cal- 140 basis points since May foreign trade policy set to be ing each district to achieve its
ibrated from here on to and analysts expect another unveiled on 30 September. potential as an export hub.
ensure economic recovery in 35-50 basis points increase in The move, the first of at Under it, support may be
New Delhi: The government has constituted an expert com- India does not stall as the cen- its next review at the end of least two planned phases, is provided in the form of infra-
mittee to suggest ways for scaling up of VC/PE investments, as tral bank tries to bring infla- this month. aimed at helping domestic structure and logistics,
per a circular issued by finance ministry on 13 September. The tion within its tolerance Unlike in developed mar- producers in these districts e-commerce, marketing,
six-member panel will be headed by former Sebi chairman M. band, monetary policy com- kets like the US, fiscal stimu- scale up and find potential branding, skill development,
Damodaran. The expert committee will examine and suggest mittee member Ashima lus in India has been limited buyers abroad to boost training, testing facilities,
appropriate measures to address regulatory and other issues Goyal said. and labour market conditions exports. research and development/
to enable scaling up investments by Venture Capital and Pri- “We need to be are not tight, The ‘districts as export The districts as export hubs initiative is aimed at mobilizing each technology upgradation,
vate Equity Investment, the ministry said. SAURAV ANAND very careful that RBI has raised Goyal said. hubs’ plan will go for union district to achieve its potential as an export hub. MINT export promotion, and out-
growth is not rates by 140 bps While the cabinet approval with the reach activity.
snuffed out and since May and Indian economy department of commerce Centre paying 60% of the cost ture of ₹1,500 crore by the The department of com-
Vietnam, India look to deepen we don’t go into analysts expect is also seeing likely to move the note to the estimated at ₹50 crore per Centre, if one goes by the ₹50 merce has also been imple-
another decade
economic cooperation another 35-50 bps pent up demand, cabinet in the coming weeks. district. crore per district sought by menting the Trade Infra-
of slowdown,” other indicators “We are trying to make it a “We were proposing 200 the DGFT. structure for Export Scheme
New Delhi: Vietnam came calling for investments to India as rep- Goyal told Reu- increase in its such as industrial part of the upcoming foreign districts of the The DGFT had (TIES) since FY 2017-18, help-
resentatives of the country’s Khanh Hoa Province visited New ters in an inter- next review production have trade policy...the finance total 750, of DGFT had initially initially sug- ing central and state govern-
Delhi. Speaking at an event organized by the Indian chambers of view on Tuesday. signalled some ministry has given clearance which the suggested gested covering ment agencies create appro-
commerce and the foreign ministries of India and Vietnam, repre- Inflation in slowdown. to take up 50 districts in a department of covering 200 200 districts at priate infrastructure for the
sentatives from both countries set their sights squarely on achiev- India has remained above the “We have to watch the data pilot phase. We will move the expenditure has districts at one one go, but the growth of exports.
ing $15 billion in bilateral trade this year. SHASHANK MATTOO RBI’s 2%-6% tolerance band very carefully and in my view proposal to the cabinet soon,” approved 50 in department of The FTP was initially
for eight consecutive months yes, go very slowly and not be said a government official.
go, but it was
the first phase, expenditure rec- scheduled on 1 April 2020,
and rose to 7% in August, in a hurry to reach a terminal If the pilot is successful, the and they have asked to do it in ommended but was postponed by a year
No shortage of fertilizers in the driven by surging costs of rate because the last decade government will expand it to said that subject phases doing it in phases due to covid-19 till 31 March
food items. we have seen that the termi- another 150 districts in the to the good per- and mapping the 2021 and by another six
country, says minister Mandaviya “It has been multiple sup- nal rate was such that it trig- next phase. formance of actual impact months till 30 September
Greater Noida: Union chemicals and fertilizers minister Man- ply shocks I would say,” Goyal gered a slowdown and it really The DGFT had proposed these 50, another 150 will be first. This comes as the gov- 2021 and further to 1 April.
sukh Mandaviya on Tuesday said there is no shortage of crop nutri- said, referring to the current persisted,” Goyal said. the scheme to the department considered,” a government ernment is looking at ways to The government is finally
ents in the country and asserted that there will be no hike in the pri- high level of inflation. “So in my view we have to of expenditure as a centrally official said. boost exports amid declining expected to come up with the
ces of non-urea products. PTI “And there is generaliza- go very slowly from here.” sponsored scheme, with the It amounts to an expendi- global demand. Exports policy on 30 September.

Centre weighs allowing work-from-home in special economic zones CORRECTIONS AND

CLARIFICATIONS
Mint welcomes comments,
Ravi Dutta Mishra in India house information tors discuss impediments to efforts are needed to promote ucts (RoDTEP) and give full suggestions or complaints
ravi.dutt@livemint.com technology (IT) or IT-enabled exports. The meeting was held small artisans, craftsmen and rebates on the taxes that still about errors.
NEW DELHI service firms involved in manu- at a time when exports have artists. remain in the export produc-
Readers can alert the
facturing software, electronic declined on a sequential basis, Meanwhile, Engineering tion chain. He recommended
newsroom to any errors in the

T
he government is consid-
ering extending work-
from-home (WFH) to
100% of the workforce in all
Special Economic Zones (SEZ)
in order to boost services
exports and tackle a shortage of
manpower, commerce minis-
ter Piyush Goyal said on the
sidelines of a board of trade
meeting on Tuesday.
Around two million people
are employed across 350 SEZs,
which contribute to over 25% of
India’s exports.
Notably, a majority of SEZs
items and assembled parts such
as printed circuit boards. “The
situation right now is such that
if you force employees (to join
offices), people move else-
where or change the company.
So, allowing WFH can boost
services exports. This is being
considered for all sectors.
We had allowed work from
home in SEZs during covid-19
which proved beneficial for our
services sector and the exports
jumped sharply. This year the
jump will be even higher.
Global MNCs have robust hir-
although the trade deficit eased
slightly in August to $28.7 bil-
lion from a record $30 billion in
July.
Official estimates suggest
merchandise exports are
expected to grow by 7-8% to at
least $450 billion after register-
Commerce minister Piyush Goyal said that MNCs have robust ing an all-time high of $420 bn
hiring plans from India. PTI in the last financial year.
Confederation of All India
ing plans from India,” com- including contract workers, for Traders (CAIT) secretary gen-
merce minister Piyush Goyal a maximum of one year for eral Praveen Khandelwal called
said. companies operating in SEZs. for reconsidering restrictions
The Centre in July allowed The board of trade meeting imposed on the import of tyres.
WFH to 50% of the employees, saw representative across sec- Khandelwal said that more
Export Promotion Council
(EEPC) India proposed cheaper
export finance for ministry of
micro, small and medium
enterprises (MSMEs), and
guidelines for rupee trade with
Russia in the Board of Trade
meeting. EEPC India Chairman
Mahesh Desai also proposed
withdrawal of export duty on
selected steel items as it will be
especially helpful for MSMEs.
Desai further asked the gov-
ernment to take a relook at the
rates under Refund of Duties
and Taxes on Exported Prod-
including the steel sector under paper by emailing us, with your
RoDTEP as steel is the most full name and address to
widely used raw material in the feedback@livemint.com.
engineering industry.
“Speaking of taxes on It is our policy to promptly
respond to all complaints.
exports, Goyal expressed his Readers dissatisfied with the
concern that the effect of taxes response or concerned about
in the international market was Mint’s journalistic integrity may
that India’s products would write directly to the editor by
become uncompetitive. He sending an email to
urged stakeholders to consider asktheeditor@livemint.com
striving to lower taxes across Mint’s journalistic Code of
sectors and said that overall tax Conduct that governs our
collection was bound to newsroom is available at
improve with lower taxes,” the www.livemint.com
ministry said.

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First published in February 2007 to serve as an unbiased and clear-minded chronicler of the Indian Dream.
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04 WedneSday, 14 SeptemBer 2022
Bengaluru MARK TO MARKET LIVEMINT.COM

S&P BSE Sensex Nifty 50 Nifty 500 Nifty Next 50 Nifty 100 S&P BSE Mid-cap S&P BSE Small Cap
CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE CLOSE PERCENT CHANGE

60,571.08 0.76 18,070.05 0.75 15,669.85 0.59 44,928.65 0.66 18,453.70 0.73 26,252.08 0.32 29,893.97 0.24
PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN PREVIOUS CLOSE OPEN

60,115.13 60,408.29 17,936.35 18,044.45 15,577.40 15,667.35 44,635.65 44,887.40 18,319.80 18,429.05 26,167.43 26,255.12 29,823.68 29,966.31
HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW HIGH LOW

60,635.28 60,381.02 18,088.30 18,015.45 15,686.85 15,635.15 44,986.55 44,723.85 18,471.05 18,393.45 26,345.41 26,226.07 30,027.41 29,869.57

m MINT SHORTS For FMCG cos, all eyes Brahmastra alone can’t
Analysts cut earnings forecasts save PVR, Inox from
for Asian cos on low production
Tokyo: Analysts have cut their 12-month earnings fore-
casts for Asian companies over the past month, under-
mined by a dip in manufacturing activity and concerns
on demand recovery earnings downgrades
over a drop in shipments, especially to China.According Vineetha Sampath & Pallavi Pengonda Harsha Jethmalani
Pricing gains Muted show
to Refinitiv data, Asia’s large and mid-cap companies’ for- vineetha.s@livemint.com harsha.j@htlive.com
In Q1FY23, the Indian FMCG sector’s three-year revenue CAGR was at a Shares of PVR and Inox Leisure
ward 12-month earnings estimates have been cut by 2.8% have underperformed the Nifty

S
seven-quarter high.

S
over the past month. In the past three months, the esti- hares of fast-moving consumer hares of multiplex chains PVR 500 index so far in FY23.
mates have been cut by 5%, the data showed. South goods (FMCG) companies such 10 Ltd and Inox Leisure Ltd were
FMCG sector’s aggregate three-year revenue CAGR (in %) PVR Inox Leisure Nifty 500
Korean and Taiwanese firms led the earnings down- as Hindustan Unilever Ltd down 5% each on Friday, a day 120
grades in the region over the past month, as they faced (HUL), Dabur India Ltd, and 8.3 when Brahmastra: Part One — Shiva
8
cuts of 5.5% and 3.5%, respectively. Japan and China also Nestle India Ltd have risen by 7.1 released. Investors were nervous
followed, with cuts of about 3.4% each.Japan’s factory 18-36% from their 52-week lows seen in amid mixed reviews for the much-
activity grew at its slowest rate in nearly a year in August, the first half of CY22. 6
awaited Ranbir Kapoor and Alia Bhatt 110 99.31
while that of South Korea contracted at its sharpest rate Expectedly, the enthusiasm is around starrer. However, reports now indi-
105.21
in two years, PMIs for both showed. China’s factory activ- the improved margin outlook of FMCG cate that the box office collections
ity also extended dip in August, hit by covid infections, companies with softening raw material 4 have improved, breaching the key
heatwaves, and an embattled property sector. REUTERS prices. This should bring some respite as ₹100 crore mark. By Tuesday, shares 100
companies have faced acute margin pres- of both companies recouped the
sures in the last few quarters because of 2 losses and were just slightly lower
high input costs. Prices of key commodi- than where they were before the
97.45
ties such as crude oil and palm oil have film’s release. 90
dropped by about 29% and 55% from 0
Q1 FY20 Q1 FY23
For multiplexes, rising movie col-
their respective peaks seen in March. lections point to better footfalls. Mul-
HUL and Godrej Consumer Products Ltd Note: a) FMCG is fast-moving consumer goods; CAGR is compound annual growth rate tiplexes have of late felt the heat of the
b) Sum of the revenue of 10 companies: HUL (organic), Nestle India, Dabur India (domestic), GCPL (domestic),
are the key beneficiaries of this softening Marico (domestic), Colgate Palmolive (India), Britannia Industries, Emami, Jyothy Labs and Bajaj Consumer Care
boycott Bollywood trend on social 80
31 Mar 2022 13 Sep 2022
trend. media as audiences reject poor movie Values rebased to 100 Source: Bloomberg
Source: Companies, BNP Paribas
Gross margins are likely to expand content. Therefore, how Brahmastra
from Q3 onwards as the ongoing Septem- SATISH KUMAR/MINT
fared was paramount. However, SATISH KUMAR/MINT

ber quarter (Q2FY23) would see the That said, all eyes would be on the in view of the softening input prices. This despite Brahmastra’s heavy-lifting, improvement in footfalls are running
adverse impact of high-cost inventory. extent of demand recovery in the near-to- trend has started to show in the soaps cat- PVR and Inox are unlikely to replicate high. It remains to be seen whether
But eventually, whether margins reach medium term. “On the macro front, posi- egory with the fall in palm oil prices. ITC the solid show of Q1FY23 earnings these movies curb the impact of the
pre-covid (FY20) levels remains to be tives outweigh negatives with a recovery Ltd took a price correction for the Vivel performance in Q2FY23. boycott Bollywood trend, a crucial
seen. “Assuming normalization of input in consumer confidence, good monsoon, brand to improve competitive position- “Brahmastra’s rising collection fig- near-term monitorable.
costs beyond FY23 and partial reversal of steady goods and services tax collections ing, points out BNP Paribas. Marico has ures provide a temporary relief. It is Meanwhile, PVR and Inox stocks
UK’s unemployment rate fell to 3.6% in the three months the numerous (but calibrated) price and kharif minimum support price cut the prices of Parachute coconut oil only the second movie in Q2FY23 to would also be on investors’ radar for
to July, the Office for National Statistics said. ISTOCK hikes, we expect material gross margin increase that should accelerate growth,” slightly in the view of soft copra prices. cross the ₹100 crore mark, after Thor: their merger, which is expected to
expansion over FY22-24E, bringing it said a report by BNP Paribas Securities A pick-up in rural demand is critical Love and Thunder. This compares bring synergy benefits. However, a
closer to FY20 levels,” said a report by India dated 8 September. and demand trends in the festival season with four-five movies crossing the sustained long-term improvement in
UK unemployment hits lowest Nirmal Bang Institutional Equities dated Improving demand is crucial for vol- need closer tracking. A rise in commodity ₹100 crore mark in earnings performance of
since ’74 but jobs boom is fading 8 September. Gross margin prices could play spoilsport Q1FY23,” said Jinesh Multiplexes have multiplex chains
London: Britain’s jobless rate hit its lowest since 1974 for FMCG companies under IMPROVING PROSPECTS for investor sentiments. Joshi, analyst at Prab- felt the heat of depends on consumers’
but the drop was due mostly to a fall in the size of the Nirmal Bang’s coverage has Meanwhile, with the rise in hudas Lilladher. “We the boycott behaviour. It is impor-
workforce and there were other signs that the country’s contracted by >400bps over SOFTENING raw DEMAND recovery, POTENTIAL rise in share prices of FMCG com- don’t think Brahmastra Bollywood trend tant for audiences to
jobs boom is petering out, adding to the Bank of FY20-22. material prices are especially in the rural commodity prices or panies, valuations have alone would be able to redevelop the habit of
expected to boost market, would be inadequate demand as audiences
England’s inflation headache. The unemployment rate Even so, a potential rise in margins of FMCG crucial for volume recovery are key increased. HUL and Dabur’s plug the gap of a series of watching movies in the-
sank to 3.6% in the three months to July, the Office for advertising and promotion firms Q3 onwards growth outlook risks ahead shares trade at nearly 53 flops of the previous two reject poor atres, instead of OTT
National Statistics said. Economists polled by Reuters expenses may weigh on times and 44 times esti- months,” he said. content platforms, according to
had expected it to hold at 3.8%. However, the fall was not Ebitda margin. Companies mated earnings for FY24, The next big Bolly- Edelweiss Securities Ltd.
a sign of health in Britain’s economy, which is at a risk of may resort to higher advertising and pro- ume growth, which has been relatively respectively, Bloomberg data showed. wood movie is Vikram “In the wake of a dry run
recession. The number of people in employment grew by motion spends to boost volumes. Here, softer across companies. Against this Consumer staples companies are trading Vedha, scheduled to release on 30 in July and August, PVR and Inox face
40,000, less than a third of the increase forecast in the cost-control measures would offer com- backdrop, product price hikes have at a steep premium to their history, said September. Tamil movie Ponniyin potential cuts in full-year FY23 esti-
Reuters poll. “We’re now starting to see signs of a labour fort. “The increased focus on savings and driven revenue growth. the BNP Paribas report. Selvan: I is also slated for release on mates, by us as well as Street,” said an
market losing its momentum,” Jack Kennedy, UK econo- cost efficiencies, especially over the last The FMCG sector’s aggregate three- The main worry would be if demand the same date. The line-up for Edelweiss report dated 12 September.
mist at the global job site Indeed, said. The economic two years (largely because of multi-year year revenue compound annual growth conditions do not improve adequately. Q3FY23 includes Black Panther: So far in FY23, shares of PVR and Inox
inactivity rate - measuring the share of the population inflationary pressure), has led to a leaner rate in Q1FY23 was at 8.3%, which is a sev- However, if the demand environment Wakanda Forever, Avatar: The Way of are down by 1-2.5%, while the Nifty
who are not in work and not looking for work - increased profit and loss account (reduced cost en-quarter high. deteriorates hereon, the margin Water and Chanakya. 500 index has risen by 5.2%. For now,
by 0.4 percentage points on the quarter to 21.7%, its high- structure) for the FMCG coverage uni- Going ahead, volume growth could improvement that the Street is expecting With Q3FY23 being the festive both the stocks could be on a weak
est since the three months to January 2017. REUTERS verse,” said the Nirmal Bang report. also be driven by a reversal of price hikes in the second half of FY23 is at risk. quarter, hopes of a meaningful footing.

Mark to Market writers do not have positions in the companies they have discussed here

OPEC sees Strong FII flows help Nifty cross 18,000 Gold declines as US inflation
oil demand Ujjval Jauhari
data is hotter than expected Foreign portfolio invest- Sugandha Sachdeva, vice

at pre-covid ujjval.j@livemint.com
new delhi
ment (FPI) which were net sell- president, commodity and cur-
ers of equities worth over ₹2.18 rency research, Religare Brok-
trillion during the first half of ing Ltd, said the rupee rose Bloomberg report pulled the rug for gold
level in ’23
A
fter Sensex regained the 2022 have turned net buyers of 0.45% aided by strong portfolio feedback@livemint.com as investors are pricing in
60,000 mark on Mon- equities worth more than inflows and the slide in dollar more Fed tightening. A 75-ba-

G
day, Nifty also breached ₹25,000 crore between 1 July index from two-decade highs. old fell the most in sis-point rate increase is a
Reuters the 18,000 mark after almost and 12 September. The greenback almost a month after done deal for September and it
feedback@livemint.com five months. The Nifty closed at Brent is now trad- The domestic reversed course US inflation data came is starting to look like we might
18,070.05, with gains of 0.75%. ing at $94-95 a economy is following expec- in hotter than expected, main- not see a downshift in Novem-

T
he Organization of the
Petroleum Exporting
Countries (OPEC) on
Tuesday stuck to its forecasts
for robust global oil demand
growth in 2022 and 2023, cit-
ing signs that major economies
were faring better than
expected despite headwinds
such as surging inflation.
Oil demand will increase by
3.1 million barrels per day (bpd)
in 2022 and by 2.7 million bpd
in 2023, unchanged from last
month, OPEC said in a monthly
report.
Oil use has rebounded from
the lows of the pandemic,
though high prices and corona-
virus outbreaks in China have
trimmed 2022 projections. The
downgrades, in OPEC’s view,
have delayed a recovery in oil
use to above 2019 levels until
2023, it said last month.
“Oil demand in 2023 is
The Sensex gained 0.76% to
close at 60,571.08 on Tuesday.
Strong foreign institutional
investor (FII) inflows continued
to drive the markets with sof-
tening crude prices providing
encouragement. The declining
dollar index remained suppor-
tive, helping the rupee to gain
some strength.
Shrikant Chouhan, head of
equity research (retail), Kotak
Securities Ltd, said: “Markets
remained in the thick of action,
aided by strong global cues and
Mid-caps, small-caps continue outperformance despite volatility
Ujjval Jauhari
ujjval.j@livemint.com
new delhi
The Nifty rose 0.75% to close at
18,070.05. BLOOMBERG
FII buying momentum. What is
adding to the fizz is the return
of FIIs into local shares over the
past month or so, and the fall-
ing US dollar index.”
If inflation levels in US shows
some moderation, the markets
may gain ground further, said
experts.
the risk appetite of investors.
Falling commodity and crude
prices and better growth pros-
pects of the Indian economy
barrel, much witnessing strong tations of a cool- taining pressure on the US ber,” said Ed Moya, senior
lower to the levels vigour and the off in inflation and Federal Reserve to keep market analyst at Oanda.
of over $120 a bar- aggressively raising rates. Gold fell 1.1% to $1,706.18 an
same is assisting a eventual soften-
rel seen in June. ing of the US Fed’s The consumer price index rose ounce at 9:42 am in New York,
FPIs were also net steady growth in aggressive policy 0.1% in August from the month The CPI report will keep the after slumping as much as 1.6%
buyers of equities Indian equities stance. “Despite before, surprising the market Fed on a hawkish track. ISTOCK earlier. “Gold has gapped lower
worth ₹2,049.65 the concerns over after the median economist fore- on higher-than-expected CPI,
crore on Monday, a faltering global cast pointed to a small decline. cials were signalling that with 75 basis points now defi-
The confidence of the stock economy, domestic equities The dollar and Treasury yields another 75 basis-point tight- nitely confirmed. The dollar is
market has gained from the are cruising due to improving surged following the report, caus- ening was likely despite infla- surging and may continue to
strength in the Indian econ- risk sentiments which supports ing gold to drop as much as 1.6%, tion moderating earlier in the pressure gold,” said Tai Wong, a
omy.The domestic economy is the appreciation of the rupee, the most since 15 August. summer, and the swaps mar- senior trader at Heraeus Pre-
witnessing strong vigour and is said Sachdev. Besides, stable oil The CPI report will keep the ket is now fully pricing in the cious Metals in New York.
assisting steady growth in prices are aiding the outlook for Fed on a hawkish track ahead supersized hike. Reuters contributed to the
Indian equities, said analysts. the Indian currency. of its meeting next week. Offi- “A shockingly hot inflation story.
at Reliance Securities con- rebound, normal commodity mid-caps to small caps is likely
Strong rebound
curred. Nifty Midcaps index has prices, inflation within targeted to do well,” said Manish Jain,
The gains of 5.64% and 5.89%, respectively, for BSE mid-cap and
small-cap indices are higher than the Sensex’s 3.42% rise in August.
outperformed with 24% return range, and better visibility fund manager, Coffee Can PMS
since mid-June, while the Nifty expected in 2HFY23, Shah said. at Ambit Asset Management.
BSE Mid-caps BSE Small Caps Sensex Nifty-50 (in %)

expected to be supported by a
still-solid economic perform-
ance in major consuming
countries, as well as potential
easing of covid restrictions and
reduced geopolitical uncer-
tainties,” OPEC said in Tues-
day’s report.
The organisation expects
world oil consumption in 2023
to average 102.73 million bpd,
above the pre-pandemic rate
during 2019.
Earlier this year, OPEC had
forecast a move above pre-pan-
demic demand levels in 2022.
M
id-caps and small caps
continued to outper-
form benchmark indi-
ces despite the recent volatility
in the markets. The gains of
5.64% and 5.89%, respectively,
for BSE mid-cap and small-cap
indices are higher than the
Sensex’s 3.42% rise in August.
The trend continued in Sep-
tember. The Sensex has gained
just 1.74% so far in September,
while mid- and small-cap indi-
ces gained 3.32-4.34%.
The rebounding equity mar-
kets improved sentiments and
are some of the factors that sup-
ported investor confidence.
Positive foreign institutional
investor (FII) flows also remain
supportive for the mid-cap and
small-cap rally.
Though mid-caps and small
caps have high beta and higher
risks, higher rewards are also
associated with the asset class
and investors are willing to take
more risks, said experts.
The rebound in mid- and
small caps was also aided by a
catchup rally after a significant
underperformance. Further-
delivered 16% return, Shah Master said the asset class Experts warned that inves-
12
said. Historically should do well as tors should pick quality mid-
9 mid and small The rebounding long as domestic caps, which fell more from their
caps and high equity markets money is positive peaks, besides considering the
6 beta stocks out- have improved along with FIIs. management quality and low
perform when the sentiments, as “As long as crude debt levels as high interest rates
3
Nifty rises. Fur- is stable and FIIs will continue for long. “We rec-
well as the risk
0 ther, lower com- pour in money we ommend investors to invest in
Jul 2022 Aug 2022 Sep 2022 Year to date
modity and oil appetite of will not have issue companies that generate free
Source: Capitaline
prices supported investors if small- and mid- cash flow and have a good busi-
SATISH KUMAR/MINT
mid-cap stocks, cap move up,” ness model,” said Master. Now,
more, earlier, FIIs were selling small caps any buying leads to a which have fallen Master said. we are seeing a buying frenzy in
large caps and domestic inves- run up in mid- and small caps, more during the downturn. “If India is going to do well, if companies not having the right
tors were buying large caps. said Nitish Master, portfolio Outperformance of mid- and we are to see a 7% gross domes- road map for cash flow genera-
Now FII selling is done. With manager at Axis Securities Ltd. small-cap stocks will continue tic product growth this year, tion, or where promoter quality
liquidity very low in mid- and Mitul Shah, head of research with a strong economic everything from large caps to is edgy, he said.
LIVEMINT.COM DEALS, TECH & STARTUPS WedneSday, 14 SeptemBer 2022
Bengaluru 05

m MINT SHORTS
Blockchain startup 5ire acquires
Price IPOs as you like
stake in Network Capital
New Delhi: Blockchain network 5ire has acquired a stake in career
advancement platform Network Capital (NC). Post the deal, Net-
work Capital will be rebranded as NC powered by 5ire and Utkarsh
but disclose fully: Sebi
Amitabh will be its chief marketing officer. 5ire, the 5th-generation
blockchain network, was founded by Pratik Gauri and Prateek
Dwivedi, and web3 financier Vilma Mattila. STAFF WRITER
Shares of new tech firms have fallen sharply since their IPOs last year
ThoughtSpot has opened its third R&D centre in India, located in
BlackSoil invests $8 mn to focus Thiruvananthapuram. ISTOCK
Priyanka Gawande & Ram Sahgal
on deeptech, financial services
ISTOCK
MUMBAI
ThoughtSpot to
T
he Securities and Exchange
Board of India (Sebi) does not
have any role in the pricing of
initial public offerings (IPOs),
invest $150 mn in
said chairperson Madhabi Puri
Buch on Tuesday, even as she stressed on
the need for a detailed disclosure-based
regime for the efficient functioning of the
India over 5 years
capital markets. Shubhobrota Devroy these data savvy, SaaS organi-
“People are free to do what they want to shubhobrota.devroy@livemint.com zations. This exposure to cus-
do but they should make disclosures,” NEW DELHI tomers, paired with an inclu-
Buch said, speaking at a capital markets sive culture that recognizes the

T
event organized by the Federation of houghtSpot Inc., a US contributions of every Spotter,
New Delhi: Venture debt and alternative credit platform, Indian Chambers of Commerce and data analytics startup is at the core of what makes our
BlackSoil Capital has invested over $8 million in Tonbo Industry (Ficci). launched by Indian-ori- customers, and our team, so
Imaging, Paras ARC and Dar Credit, as part of its invest- The comments from the Sebi chief gin entrepreneurs, said it will successful,” said Sudheesh
ment strategy with focus on deeptech and financial services come amid a growing debate on the mar- invest $150 million (about ₹ Nair, chief executive,
sectors. “We are optimistic that our debt capital will help ket regulator’s role in the pricing of IPOs. 1,191 crore) across its operations ThoughtSpot.
these companies take their businesses to the next level,” This follows a sharp drop in shares of sev- in India over the next five years. “The unmatched innova-
said Ankur Bansal, director of BlackSoil. ANUJ SUVARNA eral new age technology firms since they The announcement follows tion and product capabilities
went public in 2021, causing heavy losses Madhabi Buch’s comments come amid debate on Sebi role in IPO pricing. MINT ThoughtSpot setting up a that the team in India is
to investors and raising concerns of research and development designing and delivering con-
Facebook parent Meta to support inflated valuations of such companies investor what accounts for the difference that will help to reduce cost, serve the cus- centre in Thiruvananthapu- tinue to set new industry limits
ahead of their share sales. between ₹100 and ₹450. What has tomer better, have better control and ram, its third in India after Ben- and amaze our customers
40 early-stage XR startups in India “A lot has been said on the pricing of the changed ? It may be internal or external compliances.” It will also help Sebi solve galuru and Hyderabad. around the globe, from growth
New Delhi: Facebook parent Meta will incubate 40 early-stage IPOs of new age technology companies. metrics . Essentially Sebi expects the dis- financial misdoings such as insider trad- With this investment, stage companies to the For-
extended reality (XR) startups from India and provide a grant of Our view is simple at what price you chose closures pertaining to these aspects,” ing, front running, and market manipula- ThoughtSpot looks to tune 5. The proof is
₹20 lakh to each as part of a new accelerator called XR Startup to do your IPO is your business; we have Buch added. tion that have become commonplace in use its product inno- not only in the adop-
Program in collaboration with the ministry of electronics & IT no business to suggest otherwise. The Sebi is also relying on data and technol- the business ecosystem. vation for modern tion and scale of
(MeitY). In addition to the accelerator programme, Meta will also days of the CCI (Controller of Capital ogy for efficient functioning. “Every single Meanwhile, the regulator is evaluating analytics cloud and growth in our busi-
conduct a grand challenge for individual innovators from differ- Issue) are long gone. Parlia- as to what form and manner empower Indian companies to ness, but also in that of our
ent sectors including education, healthcare, gaming and enter- ment has mandated Sebi that MORE TRANSPARENCY NEEDED disclosure should be made to build their business on data, it customers who are able to cre-
tainment, agri-tech, tourism, and climate. ABHIJIT AHASKAR we should have no view on the public on trading in deriv- said. ate new offerings and tap into
the pricing of issues. You are PARLIAMENT has TECHNOLOGY is SEBI is evaluating atives. ThoughtSpot was founded new revenue streams as they
free to price the issue at what- mandated Sebi that
it should have no
the magic bullet that
will help to reduce
how disclosures
should be made to
“India is not a nanny in 2012 by IIT-Kanpur alumni build their business on data,”
Pepperfry appoints two ever price you consider view on the pricing cost, ensure the public on trading state….if somebody wants to Ajeet Singh and Amit Prakash, said Ajeet Singh, co-founder
appropriate,” said Buch. “The of issues trade in the Futures and and a few other Indian-origin and executive chairman,
independent directors specific procedure, however,
compliances in derivatives
Options (F&O) segment, we techies. The startup enables ThoughtSpot.
New Delhi: Furniture retailer Pepperfry on Tuesday is directed by Sebi, which don’t think we should stop everyone within an organiza- In 2019, ThoughtSpot
announced the appointment of OnMobile managing director includes the way IPO documents are filed policy that comes out today is back-tested them,” said Buch when asked whether the tion to limitlessly engage with secured $248 million from a
and chief executive Sanjay Baweja and Stonesoup.in co-founder or the way that they are given in the public by data. There is not now a single piece of regulator was concerned with growing live data, regardless of their group of marquee investors. It
Malini Parmar as independent directors. Pepperfry’s board now domain,” she added. paper that moves within Sebi that is not retail participation in the F&O segment. cloud data platform, making it has raised $670 million so far.
comprises three executive directors and four non-executive “If a company is coming to IPO, three- backed by data. We will eschew dogma “There is information which Sebi is look- easy to achieve granular and ThoughtSpot is backed by
directors. Baweja comes with over three decades of experience six months ago, and has placed its equity and we will embrace data,” she said. ing at and evaluating as to what form and actionable insights through live Lightspeed Ventures, Future
across sectors such as technology, telecommunications and real with some party, assuming a private party She also pointed out that since the mar- manner that (disclosure) needs to be dis- analytics. Fund, Khosla Ventures, Gen-
estate. Parmar joins Pepperfry with more than 17 years of experi- at ₹100 but wishes to come to the market ket dynamics are changing at a fast pace, closed to the public,” she added. “India is the place to build a eral Catalyst and Sapphire Ven-
ence in the IT sector. AMAN RAWAT at ₹ 450...we expect you to disclose to the and that “technology is the ‘magic bullet’ priyanka.gawande@livemint.com platform in partnership with tures among global investors.

India's Soonicorns to see Procol raises $6 mn

growth from B2B segment
With over 100 Soonicorns, the road to 250 Unicorns in the
next 2-4 years is expected to be a smooth ride for India.
to accelerate growth
Together, the 250 are expected to add 300,000 jobs to the
economy in the next 5 years. The important trend though is Shubhobrota Devroy Procol is a platform that helps
the rapid shift towards B2B operating models. The promise shubhobrota.devroy@livemint.com enterprises streamline their
of profitability and revenue, combined with international NEW DELHI manual procurement pro-
growth, is currently driving this shift towards B2B startups. cesses across their fragmented

G
Funding B2B valuations grow urugram-based pro- SME supplier base. It has cli-
Total funding raised: curement startup Pro- ents like Dalmia Bharat,
$29.6 billion col Tech Pvt. Ltd on Havells, Mrs Bectors, Emami,
$16 billion combined valuation of
Tuesday said it has secured Zetwerk and Tata BigBasket.
(30% went to B2B) which 40% belongs to B2B
Series A funding of ₹51 crore ($6 The startup plans to use the
IT spending: The next spurt of IT spends million) from GMO Venture fresh funds to boost solutions
100+ Soonicorns Partners, Alarko Ventures, Esas in solving procurement prob-
Mumbai contributes
contributed about 36% of the total IT
Ventures, FounderBank Capi- lems through its software and
tal and Anchorage business-to-busi-
$350mn spending in B2B followed
by Delhi/NCR & Bengaluru Capital. Existing ness (B2B) market-
in IT spending for 2021
investors Blume Ven- place. “Procol has
Presence: City-wise breakdown Sector: Fintech tures, Beenext and expanded from man-
growth continues Sequoia Surge also participated aging procurement worth ₹ 70
Delhi-NCR in the round. crore to ₹7,000 crore in two
Others
34% in B2B, The round also saw contri- years. We believe that Indian
22 15 22% are SaaS Startups
bution from angel investors businesses will grow multifold

(in %)
31% in BFSI like Kunal Shah (Cred founder), in the coming decade,” said
(B2B + B2C) Mars Shot Ventures (Razorpay Baheti. “Procol has the solution
21 Founders) and Deb Deep Sen- to solve the long-lasting pain in
42 33% Neo-banks, gupta (former SAP India man- India’s $500 billion procure-
Mumbai 14% in retail &
Bengaluru aging director), among others. ment market,” said Ryu Mura-
e-commerce
Source: Edge Insights, the data platform of VCCEdge
Founded by Gaurav Baheti matsu, director and founding
and Sumit Mendiratta in 2018, partner, GMO Venture.

E-repair market could be worth $20 bn

Shouvik Das Nitin Kunkolienker, president
shouvik.das@livemint.com emeritus of Mait, said that for
NEW DELHI such services to grow, incentiv-
izing local manufacturing of

I
ndia needs to formalize the
domestic market for third-
party repair and refurbish-
ment of electronic items to cap-
ture a $20 billion business
opportunity amid rising
demand for refurbished gad-
gets, according to industry
stakeholders.
Ajai Chowdhry, founder of
tech services firm HCL and
chairman of the Electronic
Products Innovation Consor-
tium (EPIC) Foundation, said
there is a growing market for
electronics refurbishing and
repair services. “Just the refur-
bishment market for smart-
phones is estimated to be worth
$10 billion per year,” he said,
adding that put together, the
electronics repair market could
account for $20 billion.
Chowdhry added that initial
steps are being taken to formal-
There is a rising demand for refurbished gadgets and some
at-home services are also available.
ize the repair industry, which
includes moves such as Flip-
kart’s acquisition of refurbish-
ing and repair services startup,
Yantra, in January
this year. While the
examples are still
limited, services
such as Onsite-Go and Urban
Company have started offering
at-home repair services for
smartphones, laptops and
BLOOMBERG
other common gadgets.
Onsite-Go, in fact, also offers
annual maintenance contracts
(AMCs) to service and repair
consumer gadgets.
Industry body
Manufacturers’
Association for
Information Technology (Mait)
presented on 7 September the
benefits of these services to IT
minister Ashwini Vaishnaw.
components could be critical.
“One of the key aspects of
promoting a homegrown
repair services economy is to
ensure that the components
are being sourced locally,
which has not happened exten-
sively so far. India has a robust
supply chain that caters to vari-
ous industries, which can
diversify to procure and manu-
facture components that are
critical for a local repair econ-
omy to grow,” Kunkolienker
said.
Meanwhile, Nitin Gupta,
chief executive of electronic
waste recycling firm Attero
India, said the company has
seen a clear growth in the vol-
ume of e-waste that it collects
and recycles every year though
the benefits of these actions
have not trickled down to com-
panies in India so far.
06 WedneSday, 14 SeptemBer 2022
Bengaluru CORPORATE LIVEMINT.COM

RBI may
hike rates by
up to 50 bps
on inflation
FROM PAGE 1
neutral. SBI’s research showed
that supply side factors, which
were responsible for 65% of CPI
inflation in May and had
dropped to 58% in July, have
increased to 61% in August,
Flipkart, Amazon gear up Large companies
gear up to test IPO
for festive season sales waters after hiatus
FROM PAGE 1
IPO was subscribed 56.7 times and
Online marketplaces line up offers on hopes of a bumper festival season starting 23 September saw a listing day gain of 42%. The
third IPO—Tamilnad Mercantile
Bank—was subscribed 2.8 times.
Suneera Tandon & Aman Rawat Another IPO, Harsha Engineers,
new delhI opens on Wednesday.
Continued buying of Indian

possibly reflecting the increase
in unseasonal rains. Clearly, the
jump in inflation in India con-
tinues to be a byproduct of sup-
ply disruptions, he said.
Although a 35-50 bps rate
hike seems somewhat inevita-
ble now, experts said RBI
would have to tread cautiously
so as to not disrupt the growth
momentum. The economy
grew 13.5% in the first three
months of the financial year,
lower than RBI’s estimate of
16.2%. In fact, RBI governor
Shaktikanta Das said in a recent
interview that RBI would focus
on minimizing the growth sac-
rifice while curbing inflation.
Ghosh of SBI estimates that
the repo rate hike of 140 bps
between May and August will
eventually increase interest costs
by about ₹42,500 crore for retail
and small business borrowers,
thereby impacting growth.
“The government continued
to step up its efforts at contain-
ing supply side inflation with its
steps to ban exports of wheat,
atta and now broken rice, raising
export duty on certain items,
reducing duties on edible oil,
cutting excise duty on petrol and
diesel, and not allowing the oil
marketing companies (OMCs) to
pass on any increases in prices of
petrol and diesel to end users,”
said Indranil Pan, chief econo-
mist, Yes Bank. “Even as growth
surprised on the lower side—
from RBI’s own expected lev-
els—for Q1 FY23, we do not see
the RBI pulling its feet away
from the pedal immediately.”
O
nline marketplaces Ama- shares by foreign institutional
zon and Flipkart are gear- investors (FIIs) is also encour-
ing up for this year’s festi- aging larger issuers to evaluate
val sales beginning 23 Sep- IPO launches.
tember, with the former FIIs have been net buyers of FIIs have been net buyers of equities
running its flagship Big Billion Days till 30 Indian equities since July, hav- since July, having bought over
September, while its rival runs the Great ing bought over ₹64,000 crore ₹64,000 crore shares since then. MINT
Indian Festival for up to a month. worth of shares since then, data
Walmart-backed Flipkart has signed shows. In the six months to 30 ability to launch the deal as they
up Amitabh Bachchan, Alia Bhatt and June, FIIs sold over ₹2 trillion will have to file their red her-
M.S. Dhoni for its sales campaigns, while worth of Indian stocks. “We have ring prospectus with Septem-
Amazon slashed selling fee for new sellers seen several large block trades ber-quarter financials, which
on its platform by 50% earlier this week. go through in recent weeks, may take time to prepare and,
Estimates by consulting firm RedSeer whether in Zomato, Max Health- thus, the companies may miss
suggested that overall online sales during care, Sona Comstar and several the current market window,
the 2022 festival season are likely to grow others where FIIs have shown a the second person said.
by 28% year-on-year to touch $11.8 billion. strong interest in buying large “For companies whose Sebi
It also expects a significant jump in the chunks of stock. Such block approvals are lapsing in Novem-
number of online shoppers. deals are usually seen as a pre- ber or December, this is a good
Retailers said post-pandemic normalcy cursor to primary market activ- opportunity to see if they can tap
could aid demand. This is the first Diwali ity,” the second person said. the markets, as investor interest
in three years where the sentiment is very Retailers said post-pandemic normalcy could aid demand this year. MINT Action in the primary market has returned to IPOs. We expect
upbeat. “A lot of our sellers faced challen- will also be driven to see a good
ges because of shutdowns, and most of ramping up capacity at its largest fulfilm- Billion Day specials, designed by over 90 sumer product and retail sector, EY India. by companies Many of these amount of action
our sellers do business offline and online. ent centre at Haringhata, on the outskirts brands across fashion, electronics, mobile Flipkart and Amazon have asked sellers wanting to utilize IPO-bound in the primary
I think all of this is behind us. So, in some of Kolkata recently. phones, large appliances, personal care, to ramp up stock keeping units (SKUs) the current win- companies may market in mid-Oc-
sense, we are back to a normal festive Amazon said the Great Indian Festival and handicrafts. However, steep inflation despite sluggish online sales over the past dow of opportu- have to revise tober to mid-No-
period,” said Manish Tiwary, country sales will include over 2,000 new product could force Indian households to turn two months, said a founder of a gadgets nity before either vember,” the sec-
their plans in line ond person said.
manager, India consumer business, Ama- launches and selections from brands such cautious on discretionary spends. “While firm which retails its products on both the lapse of their
zon India. This Diwali promises to be big- as Samsung, iQOO, Mi, Redmi, OnePlus, the inflationary pinch to the consumer’s platforms, seeking anonymity. Sebi approvals or with the current To be sure,
ger and better than the last one, Ahead of the festive season, Flip- the expiry of market reality many of these
Tiwary said in a virtual interview. BIG BILLION SALE kart has introduced a ₹50 charge for financial num- IPO-bound com-
E-commerce firms are pulling out customers who have a history of bers. Sebi’s panies may have
all stops to leverage the prolonged E-COMMERCE firms COMPANIES are STEEP inflation FLIPKART has returning products, the seller added. approval for an IPO is valid for to revise their plans in line with
festival period when shoppers from are pulling out all
stops to leverage
also stepping up could force Indian
temporary hiring and households to turn
introduced a ₹50
charge for customers
E-commerce growth slowed due to 12 months. the current market reality.
across India upgrade home applian- the prolonged expanding capacities cautious on who have a history of the high base of last year, revenge According to Sebi norms, the “The reality is that investors
ces, buy new clothes and gift items. festival period at fulfilment centres discretionary spends returning products shopping in offline channels, and financial numbers for a particu- are still cautious and, thus, valua-
Companies are also prepping back- inflationary pressures, said Anand lar quarter are valid for only 135 tion expectations will have to
ends by stepping up temporary hir- Ramanathan, partner, Deloitte India. days and, hence, June finan- remain muted. Most companies
ing, expanding capacities at fulfilment Apple, LG, Sony, Colgate, BoAt, HP, Len- wallet could be a damper, the festive sea- Slowdown is pronounced in categories cials (last completed quarter) of planning launches will have to do
centres, on-boarding new brands and ovo, Fire-Boltt, Noise, TCL, Allen Solly, son promises strong results for the players such as smartphones, daily necessities, companies will be valid only till so at valuations lower than what
strengthening their assortments. Earlier Acer, Biba, Max, Puma and Adidas. The driven by an increase in spending across and personal care, which are facing higher mid-November. If companies they expected at the time of filing
this month, Amazon announced the e-marketplace will work with over 150 categories as normalcy is restored post- volume pressures. However, several do not take advantage of the IPO papers,” said a third invest-
launch of its largest sortation centre in influencers to generate 600 live streams pandemic,” said Angshuman Bhatta- brands could still expect sales to go up by current market window, then ment banker, who also spoke on
Gujarat. Flipkart, on the other hand, is Meanwhile, Flipkart will offer 130 Big charya, partner and national leader, con- 30% to 40%, Ramanathan said. they may see a delay in their condition of anonymity.

Sebi probes private Zetwerk dials existing, new Stocks tank on US inflation woes
funds managing investors for up to $125 mn FROM PAGE 1 rates. Bitcoin tumbled 7%.
In the stock market, all but
traders now see a one-in-five six of the stocks in the S&P
about ₹10,000 cr FROM PAGE 1

money and the pandemic-

The company offers manu-
facturing services to sectors
such as consumer goods,
chance for a rate hike of a full
percentage point by the Fed
next week. That would be
500 fell. Technology and
other high-growth companies
fell more than the rest of the
FROM PAGE 1 fuelled digitization had sent apparel, defence, space and quadruple the size of the usual market because they’re seen
valuations soaring. aerospace. Zetwerk saw its move, and no one in the futures as most at risk from higher
were to ensure tax compliance, Geopolitical tensions, soar- revenues triple to ₹949 crore market was predicting such a rates.
the people cited above said. For ing inflation and rising interest for the financial year ended 31 hike a day earlier. Apple, Microsoft and Ama-
instance, dividend stripping rates have now made investors March 2021 and is likely to Traders now see a better zon all fell at least 4% and were
comes into play as a tax avoid- more cautious towards riskier have posted similar growth in than 60% likelihood the Fed the heaviest weights on the
ance measure, wherein inves- investments, in a marked FY22, according to Acharya. will pull its federal funds rate all market. The communication
tors are known to buy into change in sentiment this year. Currently, Zetwerk gets the way up to a range of 4.25% services sector, which includes
securities just ahead of the divi- In the latest funding round, around 85% of its business to 4.50% by March. A day ear- Bitcoin tumbled 7%. REUTERS Google’s parent company and
dend payout and exit invest- Zetwerk is likely to choose a from the Indian market and lier, they saw less than a 17% other internet and media com-
ment at a loss after the payout domestic fund to maintain bal- Amrit Acharya, co-founder and about 10% from its interna- chance of such a high rate, omy by making it more expen- panies, sank 4.6% for the largest
when the price of the share has ance on its capitalization table chief executive of Zetwerk. tional customers. according to CME Group. sive to buy a house, a car or any- loss out of the 11 sectors that
been adjusted downwards for On valuations, Sebi may be creating or captable, one of the three A spokesperson for Zetwerk The Fed has already raised thing else bought on credit. make up the S&P 500 index.
paying a dividend. Without a methodology to calculate startup people said. “Though there is the year, Amrit Acharya, denied the development. its benchmark interest rate four Mortgage rates have already hit The inflation report arrived
accounting for the dividends, valuations under AIFs. inbound interest from global co-founder and chief executive Emailed queries to spokespeo- times this year, with the last two their highest level since 2008, before trading began on Wall
the investor could report a loss investors and crossover funds, of Zetwerk, said earlier. ple for TCV, Premji Invest and increases by three-quarters of a creating pain for the housing Street, but it sent a thud
on the investment, adjusting ces,” the second person said. the company is inclined to Ebitda refers to a company’s Catamaran, did not elicit any percentage point. The federal industry. The hope is that the through markets worldwide.
for gains elsewhere. The divi- “There is a significant gap accommodate a domestic earnings before interest, tax, response. funds rate is currently in a Fed can pull off the tightrope Treasury yields immediately
dend stripping provisions were between what is applicable to fund,” he added. depreciation and amortization. Business-to-business man- range of 2.25% to 2.50%. walk of slowing the economy leaped on expectations for a
extended to AIFs (now classi- AIFs under regulations and what The company counts funds Founded in 2018 by ufacturing companies such as “The Fed can’t let inflation enough to snuff out high infla- more aggressive Fed. The yield
fied under securities) during angel funds are doing.” such as Avenir, IIFL, Greenoaks Acharya, Srinath Ramak- InfraMarket.com, OfBusiness persist. You have to do whatever tion, but not so much that it on the two-year Treasury,
this year‘s budget. The regulatory programme Capital, Lightspeed Venture krushnan, Rahul Sharma and and Zetwerk have seen robust is necessary to stop prices from creates a painful recession. which tends to track expecta-
On valuations, Sebi may be governing AIFs is designed to Partners, Sequoia Capital and Vishal Chaudhary, Zetwerk growth in the last two to three going up,” said Russell Evans, In the meantime, higher rates tions for Fed actions, leaped to
creating a methodology to cal- distinguish them from retail-fo- Accel as its other investors. helps small and medium years, and with increasing managing principal at Avitas also push down on prices for 3.73% from 3.57% late Monday.
culate startup valuations under cused mutual funds, said Richie The company turned Ebitda- enterprises translate their dig- stress on make in India, the Wealth Management. “This indi- stocks, bonds and other invest- The 10-year yield, which helps
AIFs. Funds have also been Sancheti, founder of law firm positive in the year ended 31 ital designs into physical prod- companies have benefited cates the Fed still has a lot of work ments. Investments seen as the dictate where mortgages and
asked to clarify if some startup Richie Sancheti Associates. March and was set to clock reve- ucts. It operates in more than from India Inc.’s drive to man- to do to bring inflation down.” most expensive or the riskiest are rates for other loans are head-
investments received benefits “The regime reinforces and nue of around ₹3,500 crore for 25 industry segments. ufacture locally. Higher rates hurt the econ- the ones hardest hit by higher ing, rose to 3.43% from 3.36%.
under Department for Promo- fills in the gaps in market-de-
tion of Industry and Internal termined outcomes, primarily
Trade (DPIIT). Besides, Sebi is through disclosure require-
also concerned about the valu- ments and by defining the
ations of many mid-sized initial scope of code of conduct for
public offerings driven by AIF constituents of the AIF.
Vedanta eyes second chip unit after $20bn facility in Gujarat
and venture capital money, the Sebi’s regulatory coverage
people said. provides confidence and flexi- FROM PAGE 1 ground-breaking of India’s first employment opportunities for tion of an extensive analysis of
AIF funds under bility to allow semiconductor manufacturing the youth and generate reve- possible project sites in India
scrutiny are cate- On valuations, funds to serve outsourced semiconductor plant by the end of this year. nue for the state. and across the world over a
gory III funds Sebi may be sophisticated pri- assembly and test (OSAT) facil- The investment will support The 400-acre facility is multiplicity of factors by sec-
under Sebi’s AIF creating a vate fund inves- ity at an investment of ₹60,000 the development of upstream located close to Ahmedabad, toral experts.
regime, including methodology to tors. Sebi, how- crore. Vedanta will hold 60% of and downstream electronics making it easier to get the right The semiconductor plant is an
hedge funds, or
calculate startup ever, has been the Gujarat project, with Fox- manufacturing clusters and talent required for this special- achievement for India, where the
private investment routinely pushing conn owning the rest. establish healthy trade linkages, ized production facility. government has taken several
in public enter- valuations its agenda to pro- The agreements in this Agarwal said. He said the units The semicon- initiatives to
prises (PIPE) funds under AIFs mote more effi- respect were signed in the pres- would supply raw materials to ductor unit will Vedanta’s project is reduce depend-
that invest in pub- ciency, competi- ence of Union telecom and IT the entire chain of industries, be operate on the in line with the govt ence on imports of
lic markets, they tion, and trans- minister Ashwini Vaishnaw. The it electric vehicles, automobiles, 28nm technology vision to achieve electronic goods
added. In addition, category II parency,” Sancheti added. projects are expected to generate cellphones or laptops, promot- Vedanta plans to promote the development of industrial clusters around nodes with a wafer self-reliance in by giving impetus
AIF funds, including private The regulator is also keen to around 100,000 jobs in the state. ing manufacturing in the coun- its chip unit. REUTERS size of 300mm; to domestic manu-
semiconductor
equity and private debt funds, understand how funds price Vedanta’s project is in line try and helping it become a and the display facturing of elec-
and category I AIFs, comprising their schemes and how they with the government’s vision to global electronic giant. Uttar Pradesh, Bihar, Maharash- ernment to establish high-tech manufacturing manufacturing, tronics, semicon-
mostly angel and impact funds, distribute the payouts, the peo- achieve self-reliance in semi- “The Gujarat facility will also tra, and Andhra Pradesh. clusters with requisite infra- unit will produce Vaishnaw said ductor products
have also received notices. ple cited above said. conductor manufacturing, provide opportunities to start- Several investors have indi- structure, including land, semi- Generation 8 dis- and components.
In the past three years, many Similarly, startup valuations Vaishnaw said. “I congratulate ups and other industries to put cated their interest in joining conductor-grade water, high- plays catering to To position India
fund managers have raised capi- are fairly opaque, and AIF invest- Vedanta and Foxconn for taking up their operations and help the Vedanta’s initiative. “The part- quality power, logistics, and a small, medium and large appli- as the global hub for electronics
tal from high-net-worth individ- ments in startups are much this initiative and bringing the location become India’s own Sil- ners are arranging funds inter- skill ecosystem. cations. It will make 40,000 system design and manufactur-
uals and family offices, but they unlike a mutual fund or a portfo- semiconductor plant to India. icon Valley,” Agarwal said. In nally for the project initially, In addition to making India a wafers and 60,000 glass panels ing, the government had notified
have not strictly adhered to Sebi lio management fund invest- The Gujarat plant will go a long addition, Vedanta will promote and new investors would be global partner in the supply per month. four schemes for the develop-
norms, which triggered the scru- ment portfolio. Sebi has been way in helping build a $1 trillion the development of industrial roped in at a later stage,” chain, “the semiconductor fab Brain Ho, vice-president of ment of a sustainable semicon-
tiny. “They have been more trying to study the methodology digital national economy,” he clusters around its chip unit, and Vedanta chairman said. unit will be a game-changer for Foxconn Semiconductor ductor and display ecosystem,
aggressive to generate better for valuations for AIFs, too, the said. In an interview last month, the company has begun talks Vedanta and Foxconn will the economy”. Agarwal said it Group, said selecting the Guj- OSAT/ATMP, in the country
returns at the cost of complian- fund manager cited above said. Vaishnaw said he expected the with the state governments of work closely with the state gov- would create significant arat location was the culmina- with an outlay of ₹76,000 crore.
LIVEMINT.COM
JSW, SMS
Group tie
up to cut
emissions
Subhash Narayan
subhash.narayan@livemint.com
New delhI
J
SW Steel, the flagship com-
pany of the $22-billion JSW
Group partnered with Ger-
many’s engineering and
technology company SMS
Group to explore cutting-edge
solutions, as well as research and
development projects, to
reduce carbon emissions at the
homegrown steelmakers iron
and steelmaking units in India.
The companies will explore
opportunities to reduce carbon
emissions and manufacture
green steel, the company said in
a statement. A memorandum of
understanding was signed
between JSW Steel and Düssel-
dorf-based SMS group GmbH to
implement decarbonisation
projects at JSW’s steel manufac-
turing facilities.
To achieve decarbonization
at the steel plants, SMS group
will offer technology expertise
in design, engineering consult-
ancy and commissioning for
executing various projects.
JSW Steel will ensure access to
its manufacturing units to SMS
group and share details of oper-
ations, including data on the use
of raw materials, consumables
and manpower, for exploring
solutions to implement general
decarbonization projects.
Sajjan Jindal, chairman and
MD, JSW Steel, said, “While the
steel industry accounts for 0.7%
of the global economic output, it
also contributes 7% to global
emission. We need a new trans-
formative approach focused on
the green steel vision. With our
technology partner SMS group,
we are on our way to turning met-
als green. We are also committed
to build and upgrade all our
plants with latest technologies to
ensure a secure and healthy
future for all stakeholders.”
Scan the QR code
or visit livemint.com
to subscribe
CORPORATE WedneSday, 14 SeptemBer 2022
Bengaluru 07
NTPC revives plan to enter Retail sales in malls
set to touch $39 bn
commercial coal mining biz by FY28: Report
Suneera Tandon
suneera.t@livemint.com
New delhI
Without the Centre’s approval, NTPC Mining cannot bid for commercial coal mines
R
etail sales in Indian
malls will grow at a
Subhash Narayan & Rituraj Baruah compound annual
New delhI growth rate (CAGR) of 29% in
FY22-28 to touch $39 billion
S
tate-run NTPC has renewed by FY28, according to esti-
plans to start commercial coal mates by real-estate consult-
mining through its unit, NTPC ancy Knight Frank.
Mining Ltd, and fresh approv- Shopping malls suffered a
als have been sought, said two major setback due to their India has a total mall stock of
officials with knowledge of the matter. sudden closure during cov- 92.9 million sq. ft. MINT
Time is opportune for NTPC to step id-19 lockdowns resulting in
up its play in the prime power sector severe loss of consumption in tor has reached a new level of
fuel. In the past too it had tried to foray FY21. As a result, retail sales in maturity where smaller sized
into commercial coal mining, but it did Indian malls across the top 8 and lower grade develop-
not get the required approvals, they said cities grew 3% to reach $8 bil- ments are giving way to Grade
seeking anonymity. lion in FY22. In FY23, Knight A malls. The existing Grade A
Without the Centre’s approval, NTPC Frank expects retail sales in malls have over 95% occu-
Mining cannot bid for commercial coal malls to surpass pre-covid lev- pancy which is indicative of
mines and that defeats the very purpose els to reach $11 billion, the the demand for quality real
of having a dedicated mining operation. firm said in a report titled estate in this segment. Given
Though the company is planning to Reinventing Indian Shopping that retail malls are experien-
transfer its captive mines to the pro- Malls released Tuesday. tial, more of the future devel-
posed unit, its operations would suffer However, as the severity of opments will want to create
without participating in commercial the pandemic declines and destinations,” said Shishir
mining, they added. malls draw shoppers back to Baijal, chairman and manag-
Among public sector undertakings In the past, NTPC had tried to get into commercial coal mining, but it did not get the required approvals. MINT stores and food courts, the ing director, Knight Frank
(PSUs), Coal India Ltd, Singareni Col- mall environment has been India.
lieries Co. Ltd. and NMDC have been the company has produced 7.36 million The company’s wesbite showed that of Jharkhand, for captive consumption “evolving“ with India has a
permitted to mine coal commercially. tonnes of coal from its captive mines, up it has started coal production from three of coal. Peak annual production capacity leading develop- Shopping malls total mall stock of
“Coal is critical for power plants as 62% from the corresponding period of coal blocks—Pakri Barwadih in Jhark- of the coal blocks is estimated to be 71 ers repositioning suffered a major 92.9 million sq
largely energy generation in India is coal last year.Coal dispatches from NTPC’s hand, Dulanga in Odisha and Talaipalli MMT to fuel approximately 15 GW of destination malls setback due to ft., spread across
based. We already have presence in coal captive mines in FY23 were at 7.52 mil- in Chhattisgarh. In FY21-22, NTPC pro- NTPC’s requirements. as safe havens for their sudden the top eight
mining through the captive mines given lion tonnes as against 5.47 million ton- duced 14.02 million tonnes of coal from The sector comprises public sector shopping and markets—
closure during
to us. A larger play on coal mining is pos- nes in the year ago, up 37%, it said on 2 the three operating mines. Mining oper- mining behemoths Coal India, its sub- entertainment. Ahmedabad,
sible if the operation is given more focus September. ations in the Chatti Bariatu mine started sidiaries, Neyveli Lignite Corp. India Ltd Consequently, covid-19 Bengaluru,
through a dedicated subsidiary,” and Singareni Collieries Co. and pri- Grade A malls, lockdowns Chennai, Hyder-
said one of the two officials cited BACK TO THE MINES vate players such as Adani, JSW and which form 19% abad, Kolkata,
above. Vedanta. or 52 of the 271 M u m b a i ,
“NTPC has never participated in COAL is critical to IN August 2019, the THE foray into coal THE company Emphasis on commercial mining malls in India, continue to National Capital Region
auctions conducted by the ministry India’s energy
security, as most
energy major
incorporated NTPC
mining was made to
strengthen its core
has started coal
production from
of coal follows two crisis situations, perform well, beating pre- (NCR) and Pune. As of H1
of coal for any block for commercial power plants are Mining for handling business and to three of its captive in September-October 2021 and pandemic consumption, foot- 2022, Grade A malls, with
mining,” the second person said coal-based its mining business ensure fuel security coal blocks April-May 2022. With the arrival of falls and occupancy levels. high occupancy, strong ten-
Queries to NTPC, and the minis- summers and high cost of imported In December 2019 India ant mix, good positioning and
tries of power and coal remained coal, India faced a shortage at power had 255 malls; the number active mall management con-
unanswered till press time. According to the NTPC management, in April 2021. Other mines are at the plants with average coal stocks of just has moved up to 271 post- tributed 39% to the overall
In August 2019, the energy major it has taken several steps to increase coal development stage and are expected to seven days. However, with the govern- covid. Due to higher vacancy mall supply.
incorporated NTPC Mining for han- production. The engagement of high- start production soon. ment mandating central and state gen- in some Grade B and C malls, The report pointed to a
dling its mining business. The foray into capacity dumpers as well as an increase NTPC is developing six coal blocks cos to import coal for blending, and developers are re-evaluating shift in formats that includes
coal mining was made to strengthen its in the existing fleet size of excavators has allocated directly to it and one coal block growth in production of domestic coal, leasing options for alternative developers eyeing more
core business and to ensure fuel secu- allowed operational mines to increase of Patratu Vidyut Utpadan Nigam Ltd, a the situation has eased. uses, the report said. neighbourhood malls built
rity. So far in the current financial year, production, it added. joint venture of NTPC with government subhash.narayan@livemint.com “The retail real estate sec- near residential clusters.
Allow us to give you the
simplest investment tip yet.
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08 WedneSday, 14 SeptemBer 2022
Bengaluru GLOBAL LIVEMINT.COM

m MINT SHORTS
Armenia says dozens killed in
Xi, Putin to work together
to counter US global order
border clashes with Azerbaijan
Armenian Prime Minister Nikol Pashinyan said at least 49 of his
country’s soldiers were killed in border clashes with Azerbaijan
on Tuesday in the deadliest fighting since a 2020 war between
the Caucasus nations. While the intensity of the conflict has
declined, “Azerbaijan’s attacks continue,” Pashinyan told law-
makers, saying Armenia had appealed to Russia and other allies
for help. Armenia’s Defense Ministry said Azerbaijani forces
shelled towns in southern and central Armenia and also used The leaders are expected to hold their first in-person meeting since Russia invaded Ukraine in February
unmanned drones in attacks. Azerbaijan’s Defense Ministry
denied it started the conflict and said its forces responded to
“large scale Armenian provocation.” BLOOMBERG Bloomberg efforts to counter NATO’s expansion
feedback@livemint.com and the US-led campaign to keep the
two nations in check, Li also said,

I
Ports, trains face new wave of n the almost 1,000 days since Xi
Jinping last ventured abroad,
strikes once UK mourning ends China has found itself increas-
AFP
ingly isolated within the US-led
world order. He’s finally
re-emerging this week alongside
Russia’s Vladimir Putin to showcase
his vision for a viable alternative.
Xi and Putin this week are
expected to hold their first in-person
chat since Russia invaded Ukraine,
showing that Beijing sees the rela-
tionship as crucial to countering the
US. It will occur on the sidelines of a
Chinese-founded security forum
slated for Thursday and Friday in
Two of Britain’s largest ports are bracing for overlapping Uzbekistan that gathers countries
dockworker walkouts in coming weeks, threatening more ranging from India to Iran -- a group-
disruption to the nation’s trade flows in a dispute over pay. ing that aims to accelerate the forma-
Rail unions are separately poised to revive stoppages on tion of a multipolar world.
hold since the country began a period of mourning follow- Prior to that, Xi on Wednesday will
ing the death of Queen Elizabeth II, with details likely to stop in Kazakhstan, where he
be announced next week after her funeral. While strikes unveiled what would be become his
spurred by soaring inflation were interrupted by the mon- signature Belt-and-Road trade-and-
arch’s death last Thursday, action across numerous indus- infrastructure plan nine years ago.
tries is set to resume in due course. The spate of walkouts That foreign-policy initiative has
will represent a major challenge for new Prime Minister since become a focal point of the US
Liz Truss, already battling the crisis around escalating and its allies in the Group of Seven,
energy bills. BLOOMBERG which in June announced plans to
raise $600 billion in financing so low-
er-income countries have an alterna-
Ether lags Bitcoin in countdown to tive to Chinese cash.
Both stops will reinforce Xi’s vision
revamp of Ethereum blockchain of a world where China can expand its
The cryptocurrency market is flashing some signs of caution interests without fearing the threat of
with just two days to go before a critical software upgrade of the economic or military pressure from
Ethereum network, the sector’s most commercially important the US. The Chinese leader will
blockchain. The wariness is evident in the way Ether, the net- expound on that agenda at a twice-a-
work’s native token, is lagging Bitcoin of late: the second-larg- decade party congress next month,
est digital asset is down about 13% in the past month, compared during which he’s expected to secure
with an 9% drop in Bitcoin. The gap between a gauge of a third term as leader of the world’s
expected volatility in Ether and a similar index for Bitcoin is second-biggest economy.
also elevated. Ether-based investment products saw outflows “Xi Jinping is trying to reorient
of about $62 million last week, accounting for the bulk of the global affairs in a direction that
cash pulled from digital-asset vehicles, according to data from de-centers Western institutions and
CoinShares. BLOOMBERG promotes groupings and institutions
China has so far avoided doing anything that would make it subject to US sanctions or help Russia win the war.
that are more favorable to China’s
interests and worldview,” said Trey
McArver, co-founder of research firm
Trivium China. Xi’s meeting with
Putin, he added, “sends a very clear
signal that China continues to tilt
toward the side of Russia in that con-
flict.”
The stakes are rising for both Xi
and Putin, who declared a “no limits”
friendship just weeks before Russia
invaded Ukraine in February. In
recent days, Putin has seen Ukraine
push back Russian forces and retake
large swathes of land, while Xi has
been under pressure to adopt
stronger measures to prevent Taiwan
from boosting relations with the US
and its allies.
China has so far avoided doing any-
thing that would make it subject to US
sanctions or help Russia win the war,
even as Beijing provides Putin with
diplomatic support and increases
trade with its northern neighbor.
China’s interest in helping Russia
appears more geared toward rebut-
ting US moves that could also one day
be used against Beijing.
After a meeting on Monday with
outgoing Russian Ambassador
Andrey Denisov, top Chinese diplo-
mat Yang Jiechi said the two coun-
tries should work to “promote the
development of the international
order in a more just and reasonable
direction.”
“China has not stepped up to sup-
AP
ply Russia with weapons or advanced
electronics during the war,” said Iikka
Korhonen, head of research at Bank
of Finland Institute for Economies in
Transition. “They are mindful of not
violating these actions, at least not in
an obvious way, so there are limits
about what these so-called allies are
prepared to do.”
Moscow has sought to trumpet
China’s support for the war. Last
week it released statements citing Li
Zhanshu, China’s No. 3 official, tell-
ing Russian lawmakers that Beijing’s
leaders “fully understand the neces-
sity of all the measures taken by Rus-
sia aimed at protecting its key inter-
ests, we are providing our assistance.”
Russia and China will step up
according to the TASS news agency.
“We will battle together their hegem-
ony and the policy of force,” it cited
him as saying. The comments weren’t
reported by China’s Foreign Ministry
or state media.
Putin last week attacked US-led
democracies at an economic forum in
the Russian port city of Vladivostok,
whose participants included Myan-
mar’s sanctioned coup leader and
Indian Prime Minister Narendra
Modi. “Western countries are seeking
to preserve yesterday’s world order
that benefits them and force every-
one to live according to the infamous
‘rules,’ which they concocted them-
selves,” Putin said.
Similar sentiments are likely to be
expressed at the meeting of the
Shanghai Cooperation Organization.
The group, set to meet on 15 and 16
September in the southeastern Uzbek
city of Samarkand.
An appearance by Xi at the forum
will reinforce the idea of an alterna-
tive to US power that includes West-
ern-aligned powers like India and
Turkey, according to Raffaello Pan-
tucci, a senior fellow at the S. Rajar-
atnam School of International Stud-
ies at Nanyang Technological Uni-
versity in Singapore. India has
moved closer to the US in recent
years, most notably through the
Quad grouping, that also includes
Australia and Japan.
Putin aims to use talks with Xi to
expand trade further with China and
to obtain more industrial and techno-
logical imports to fill the hole left by
the absence of Western goods
because of sanctions, said Vasily
Kashin, an expert on Russia-China
ties at Moscow’s Higher School of
Economics.

US inflation tops
forecasts, pointing
to big Fed rate hike
Bloomberg
feedback@livemint.com

U
S consumer prices were
resurgent last month,
dashing hopes of a nas-
DELHI JAL BOARD, GOVT OF NCT OF DELHI cent slowdown and likely
OFFICE OF ADDL. CHIEF ENGINEER (P)-2/EE(E&M)-II assuring another historically
WAZIRABAD WATER WORKS, TIMARPUR, DELHI-110054 large interest-rate hike from
Email: djbeeemii@gmail.com the Federal Reserve.
PRESS NIT No- 12 (2022-23) The consumer price index
NIT Name of Work Estimate Earnest Date of release of Last date/time receipt
increased 0.1% from July, after
No. Cost Money tender in E-procurement of Tender through no change in the prior month,
(Rs.) solution e-procurement solution Labor Department data
12.1 Hiring of staff for 1st 40 MGD Plant at Item Rate 88000/- Tender Id: 22-Sep-2022
Wazirabad Water Works. 2022_DJB_229105_1 up to 01.15 PM showed on Tuesday. From a
Publish Date 09-Sep-2022 year earlier, prices climbed
06.55 PM onward
8.3%, a slight deceleration,
12.2 Painting strengthening and repairing Percentage 83000/- Tender Id: 22-Sep-2022
of superstructure of Barrage at Rate 2022_DJB_229105_2 up to 01.15 PM largely due to recent declines
Wazirabad water works Publish Date 09-Sep-2022 in gasoline prices.
06.55 PM onward
So-called core CPI, which
NIT along with all the terms & conditions is available on website http://govtprocurement.delhi.gov.in strips out the more volatile
ISSUED BY P.R.O. (WATER) “STOP CORONA: Wear Mask, Follow Physical (Yogesh Lohchab) food and energy components,
Advt. No. J.S.V. 331 (2022-23) Distancing, Maintain Hand Hygiene” Executive Engineer (E&M)-II advanced 0.6% from July and
6.3% from a year ago. All meas-
ures came in above forecasts.
Shelter, food and medical care
were among the largest con-
tributors to price growth.
The acceleration in inflation
points to a stubbornly high
cost of living for Americans,
despite some relief at the gas
pump. Price pressures are still
historically elevated and wide-
spread, pointing to a long road
ahead toward the Fed’s infla-
tion target.
Chair Jerome Powell said
last week that the central bank
will act “forthrightly” to
achieve price stability, and
some policy makers voiced
support for another 75 basis-
point rate hike. Officials have
said their decision next week
will be based on the “totality”
of the economic data they have
on hand, which also illustrates
a strong labour market and
weakening consumer spend-
ing. Treasury yields surged,
the S&P 500 index opened
lower and the dollar rose.
Traders boosted bets that the
Fed will raise interest rates by
three-quarters of a percentage
point, now seeing such an out-
come as locked in.
“If there was any doubt at all
about 75 — they’re definitely
Food costs increased 11.4% AFP
going 75” at next week’s Fed-
eral Open Market Committee
meeting, Jay Bryson, chief
economist at Wells Fargo &
Co., said on Bloomberg Televi-
sion. “We thought they’d be
stepping it back to 50 in
November. At this point, you’d
say 75 is certainly on the table
in November.”
Food costs increased 11.4%
from a year ago, the most since
1979. Electricity prices rose
15.8% from 2021, the most
since 1981. Gasoline prices,
meanwhile, fell 10.6% in
August, the biggest monthly
drop in more than two years.
Shelter costs — which are
the biggest services’ compo-
nent and make up about a
third of the overall CPI index
— continue to rise. Overall
shelter costs increased 0.7%
from July and 6.2% from a year
ago, both the most since the
early 1990s.
Persistently high inflation
has dragged down President
Joe Biden’s approval ratings
and threatened Democrats’
chances of retaining their thin
congressional majorities in
November’s midterm elec-
tions. Biden, in a White House
ceremony, plans to argue that
he and his fellow Democrats
have helped steer the econ-
omy back to firmer footing as
they tout a sweeping new cli-
mate, energy and health care
law dubbed the “Inflation
Reduction Act.”
LIVEMINT.COM NEWS WRAP WedneSday, 14 SeptemBer 2022
Bengaluru 09

TWEETS & QUOTES

Vipin Sondhi Rajesh Sawhney Nirmala Sitharaman
Gita Gopinath @vipin_sondhi @rajeshsawhney Union Finance Minister
@GitaGopinath Former MD & CEO, JCB India CEO, GSF Accelerator ...we are open with Indian
First Deputy Managing Whether one manufactures Customer retention is economy, a lot more open in
Director, IMF a paper clip or an automo- far more challenging way we are talking to nations,
Digital assets are evolv- bile, it should be of world than customer acquisi- we are willing to have digital
ing rapidly and regula- class quality...It is about tion.Wealth retention is platform become interopera-
tion needs to keep up pride in one’s workmanship. far more challenging ble between nations to enable
Pride in one’s brand than wealth acquisition cross-border transactions

PM to release NARI SHAKTI PE/VC investments

logistics policy fall 80% to $2.2 bn

P I
rime Minister Narendra Modi will release nvestments by private equity and venture
the national logistics policy on 17 capital funds plummeted 80% to $2.2 billion
September, which is aimed at promoting in August, a 19-month low, a report said on
seamless movement of goods across the Tuesday.
country, commerce and industry minister The month recorded the highest ever exits at
Piyush Goyal said on Tuesday. $3.1 billion, making it the best month from sell-
The policy is expected to focus on several offs perspective, according to the report by
areas such as process re-engineering, industry lobby IVCA and the consultancy firm
digitisation, and multi-modal transport. EY. There were 83 deals in which $2.2 billion
In 2020, the government, in the budget, had was invested by the PEs and VCs in August,
announced that it will soon release the national which included five large deals which raked in
logistics policy.The move assumes significance $972 million for Indian companies, the monthly
as high logistics cost impact competitiveness of report said. The preceding month of July 2022
domestic goods in the international market. saw the venture funds investing $4.1 billion,
“On 17 September, the prime minister is going while the same stood at $11.2 billion in August
to release the country’s logistics policy,” Goyal 2021.
said here while addressing the members of the The consultancy firm’s partner Vivek Soni
board of trade. said Indian PE/VC investment flows have shown
The government has emphasized on the need tepidness after being resilient during the initial
to reduce logistics cost in the country from the part of the year and reached a 19-month low. PTI
current levels of 13-14%of GDP. PTI

Delhi Police Women Pipe Band performs at Red Fort, in New Delhi on Tuesday. PTI

World in ‘wrong direction’ as The workshops are planned in order to promote

the benefits of fortified rice. MINT
Uniqlo India is expanding its retail stores.

Uniqlo India posts

REUTERS

climate impacts worsen: UN Workshops to push

fortified rice sales
profit of ₹21.49 cr
I
n order to promote fortified rice while

J
apanese apparel retailer Uniqlo’s Indian unit
has turned profitable within three years of its
operations.
Uniqlo India Pvt Ltd, which opened its
first store in October 2019 here, reported a profit
after tax (PAT) of ₹21.49 crore for FY22,
according to data provided by business
intelligence platform Tofler.
addressing concerns about the impact of its
A report shows that planet-warming emissions are higher than before the pandemic consumption among some sections of the
population—those vulnerable to thalassemia
and sickle cell anaemia—the Centre has directed
AFP ing records with alarming frequency,” said UN in emissions in 2020 due to lockdowns and travel state governments to organize awareness
feedback@livemint.com Secretary-General Antonio Guterres. restrictions, preliminary data from January-May workshops about fortified rice.
ParIs The UN warned last month that the drought this year shows global CO2 emissions are 1.2% In a statement, the food ministry said it has
gripping the Horn of Africa and threatening mil- higher than before Covid-19. requested Gujarat, Maharashtra, Chhattisgarh,

H
Its income for the financial year ended 31
March, was at ₹391.7 crore, up 63.77% from the
previous year. Uniqlo India had reported a net
loss of ₹36.19 crore on a revenue of ₹239.17 crore
for the financial year ended on 31 March 2021.
Comments from Uniqlo India could not be
obtained by the time of filing of the story.
Uniqlo India is expanding the network of its
retail stores. For this, the company is in the
process of identifying strategic locations in both
metro and non-metro cities. The company
introduced its official online store UNIQLO.com
in India last year to strengthen its presence in
the e-Commerce segment. Uniqlo is a brand of
fast retailing, a leading Japanese retail holding
company with global headquarters in
Tokyo. PTI
umanity is “going in the wrong
direction” on climate change due to
its addiction to fossil fuels, the UN
said on Tuesday in an assessment
showing that planet-warming emis-
sions are higher than before the pandemic.
The UN's World Meteorological Organization
and its Environment Programme warned catas-
trophes will become commonplace should the
world economy fail to decarbonize in line with
what science says is needed to prevent the worst
impacts of global heating.
They pointed to Pakistan's monumental floods
and China's crop-withering heatwave this year as
examples of what to expect.
“Floods, droughts, heatwaves, extreme storms
and wildfires are going from bad to worse, break-
lions with acute food shortages was now likely to This is largely down to large year-on-year Telangana, Rajasthan and Kerala to organize
extend into a fifth year. increases in the United States, India, and most workshops and seminars in sensitive areas of
“There is nothing European countries, tribal belts and districts having populations that
natural about the the assessment are vulnerable to thalassemia and sickle cell
new scale of these The UN warns that Pakistan's found. anaemia. The government is distributing
disasters. They are monumental floods and China's “The science is fortified rice, blended with iron, folic acid and
the price of human- unequivocal: we are vitamin B12, via welfare schemes in a phased
ity's fossil fuel crop-withering heatwave this year going in the wrong manner in order to fight malnutrition and
addiction,” said are examples of what to expect direction,” said anaemia in the country. The Gujarat
Guterres. WMO Secretary- government had conducted a workshop in this
The UN's United General Petteri regard, the food ministry said. SAURAV ANAND
in Science report underscores how, nearly three Taalas.
years since Covid-19 handed governments a “Greenhouse gas concentrations are continu-
unique opportunity to reassess how to power ing to rise, reaching new record highs. Fossil fuel
their economies, countries are ploughing ahead emission rates are now above pre-pandemic lev-
with pollution as normal. els. The past seven years were the warmest on
IRDAI eases norms
It found that after an unprecedented 5.4% fall record.”
for pensioners

T
o bring ease of living for NPS retirees, the
States’ borrowing Insurance Regulatory and Development
‘India to be 3rd largest economy soon’ Authority of India (IRDAI) has relaxed the
cost declines 6 bps requirement of submitting a separate proposal
form for taking the Immediate Annuity
2022, Shah said the Union government is products from proceeds of the National Pension

T he borrowing cost for the states fell for the

fourth consecutive week as the weighted
average cut-off eased 6 basis points (bps) to
7.46% at the weekly auctions on Tuesday. 10
states have raised ₹10,500 cr at the latest
auction of state development loans, which is
1.5% higher than indicated in the borrowing
calendar, a first in a couple of years. Since the
outbreak of covid, states were borrowing much
lower than indicated amount thanks to higher
grants from the central government. Last week
the Centre released ₹58,300 cr as tax
devolution for July, up from ₹47,600 cr each in
the first quarter. Additionally, the Centre had
approved ₹31,500 crore of special assistance
Union home and cooperation
minister Amit Shah.
committed to mainstreaming of
cooperatives, and milk cooperatives in
particular will be expanded to two lakh
more villages by 2024, which means
doubling the coverage area, and this
growth engine will be visible to the world
soon.
“From 11th position held in 2014, we
have moved up to 5th largest economy
position in the world recently. By the end
of this decade, Indian economy is
expected to break in the top three
economies. I can assure you when that
PTI happens, the world will recognize Indian
cooperatives as the new pillar of growth,”
Former German chancellor Angela Merkel will
publish her political memoir in 2024. BLOOMBERG
Merkel to publish
Scheme (NPS). In the current scenario, NPS
retirees submit an exit form to NPS and a
proposal form to insurers at the time of
superannuation. The regulator IRDAI said, “It
has been observed that Pension Fund
Regulatory and Development Authority
(PFRDA) is collecting exhaustive exit form from
the NPS retirees which capture necessary details
which insurance companies require in the
proposal form.”
This way, the exit form of NPS will now be
treated as a proposal form for purchasing
annuities, thereby reducing the time and efforts
of senior citizens and insurers. NAVNEET DUBEY

U
for capital expenditure to 10 states during that
month. The weighted average cut-off has eased
by 6 bps to 7.46% from the past week, despite
the weighted average tenor increasing to 14
years from 13, and the spread between 10-year
state debt and the 10-year G-Secs yield
declined to 37 bps from 39 bps last week,
nion home and cooperation
minister Amit Shah on Tuesday
said that India will become the
third-largest economy in the world by the
end of the decade, with the cooperative
sector playing a pivotal role.
Speaking at IDF World Dairy Summit
political memoir
Shah asserted.
Pointing to the success of dairy
cooperatives, he said, “The model is slated
Govt plans to aid
F
to become more robust in coming years.” ormer German chancellor Angela Merkel
India has about 8 crore dairy farmers, with
cooperatives having expanded to two lakh
will publish her political memoir, written
together with her longtime advisor Beate dairy sector
villages, he said. SAURAV ANAND Baumann, in the autumn of 2024. To be

according to an analysis by Icra Ratings.
PM Modi to welcome eight cheetahs arriving from SA in India
PTI published in the UK by Pan Macmillan, the book
will provide an exclusive, personal insight into
the political life and work of Merkel. Pan
Macmillan secured UK and Commonwealth
rights to the memoir as part of a Holtzbrinck
Publishing Group global publishing deal led by
Kiepenheuer & Witsch, a statement said.The
T
he Union government on Tuesday said
that it is looking beyond milk for value
creation through cow dung and cattle
waste to give additional financial benefits to
milk producers. Speaking at a session at the IDF
World Dairy Summit 2022, the Union minister
of rural development and pachayati raj, Giriraj

E
ight cheetahs will be sent to India from South Africa where they will be
personally welcomed by Prime Minister Narendra Modi on his birthday,
officials said Tuesday, in an ambitious project to reintroduce the speedy
big cats to the country.
India in the past was home to Asiatic cheetahs but the species was declared
extinct domestically by 1952. A prince is believed to have killed the last three
specimens.
However, New Delhi has since 2020 been working to reintroduce the
animals after the Supreme Court announced that African cheetahs, a
different subspecies, could be settled in a “carefully chosen location” on an
experimental basis. The five males and three females will arrive from
Namibia on Saturday and will initially be kept in a quarantine enclosure at the
Kuno National Park in the central state of Madhya Pradesh.
India is also planning to ship in more cheetahs from South Africa at a later
date. AFP
Prime Minister Narendra Modi to receive cheetahs on his birthday.
book will be published in Germany by
Kiepenheuer & Witsch and in the UK by Pan
Macmillan on its Macmillan imprint, and in the
US by Macmillan under its St Martin’s Press
imprint, as well as in many other countries
around the world. Merkel said she is “pleased to
reflect on central decisions and situations of my
political work in my book, written together with
Beate Baumann, and to make them
understandable to a broad public, also with
recourse to my personal history”. Joanna Prior,
CEO of Pan Macmillan, said that after serving as
German chancellor for 16 years and attending
roughly 100 EU summits, Merkel became the
PTI most powerful woman in the world. PTI
Singh said that the dairy cattle waste is being
utilized for bio gas, bio fertilizer, vedic plaster
and paint to ensure that even waste gives the
return to the farmers to buffer their income. To
enhance productivity of cows and buffaloes in
the country, the government is also giving a
boost to artificial insemination. NDDB
subsidiary NDDB Dairy services is a dominant
player in the segment with 5.1 crore semen
straws annually in a market of 12 crore under
superior animal genetics. Dr Sanjeev Balyan,
MoS of fisheries, animal husbandry and dairying
said that an African Swine Flu is affecting the
swine population, and creating problems in the
poultry sector. SWATI LUTHRA
10 WedneSday, 14 SeptemBer 2022
Bengaluru LONG STORY LIVEMINT.COM

reporTAge | TAlkIng poInTS | IdeAS | InSIghT | The BoTToMlIne

WHEN ALGORITHM
IS The MArkeT rISk
Sebi is cracking the whip on algo trading to protect retail investors. But will it thwart market evolution?

Jayshree P Upadhyay
jayshree.p@livemint.com
mumbAi

T
alk of eye-popping returns.
Here’s what they look like.
Till last week, ‘Index Pre-
mium Eater’ advertised a return
on investment (ROI) of 60.81%
in the last one year; ‘Banknifty Fighter’ an
ROI of 49.73%; ‘Index Volatile Vaccine’ a
more moderate 34.63%.
The three are trading strategies on offer
at algo strategy marketplace TradeTron.
They all carry a disclaimer when you read
the fine print.
The strategy of Index Premium Eater,
which is based on options selling, has been
created by an entity called MarketStar on
the marketplace. It is not a Securities and
Exchange Board of India (Sebi)-registered
investment firm or financial advisory.
Similarly, Banknifty Fighter is created by
Algo Wise. “I am not Sebi registered ana-
lyst. No claims, rights reserved. I am not
responsible for your profit or loss,” the
entity discloses. Soon after the risk dis-
claimer, comes three words in a bigger
font and in caps: ‘MAKE MORE
MONEY!!!’.
Algo Wise has 8,102 subscribers on Tra-
deTron; MarketStar three times the num-
ber. We can assume that thousands of
other investors are following many such
curated automated trading strategies—
retail algos allow retail investors to use an
algorithm or computer programme to set
‘buy’ and ‘sell’ criteria for stocks. The pro-
gramme automatically generates orders,
which are next sent to a broker and, at
times, even sent to the stock exchange
directly.
Many also assume that algo trading
democratizes the stock market. Institu-
tional investors, with their deep pockets,
have for years been using algorithmic
trading and high frequency trading. This
places them at a distinct advantage as they
can capitalize on the milliseconds saved in
executing large orders. However, for the
retail investors, there are the hidden risks
of mis-selling as well as technological bot-
tlenecks. These risks were largely ignored
in the last two years of the bull run.
Now, Sebi, India’s market regulator, is
cracking the whip.
In December last year, Sebi issued a dis- Institutional investors, with their deep pockets, have for years been using algorithmic trading and high frequency trading. MINT
cussion paper to formulate a comprehen-
sive framework for retail algo trading. The
rules are yet to be drafted. On 2 September
this year, a circular flagged rampant highs at the end of August, with some Programme Interface, or API. This is a mint TradeTron’s registered office is in San have in place a comprehensive algo trad-
advertising of past returns and profits. broking houses posting a 20-30% rise in plug and play system that allows a trader’s SHORT Jose in the US but the company has a ing framework. It could largely be on the
“It has come to the notice of Sebi that derivatives volumes. software to connect to the broker termi- STORY development centre in Mumbai. lines of the discussion paper brought out
some unregulated platforms are offering According to brokerage firms, many nal. Brokers, at their end, have an order in December. But this worries market par-
algorithmic trading services/ strategies to retail investors are using algo trading management system which is used to Sebi’S dikTaT ticipants.
WHAT
investors for automated execution of strategies for options trading. On the place an order electronically.
trades. Such services and strategies are NSE, only 18.41% of trading is non-algo. The customization for automated trad-
Algo trading is in. But for
O n 2 September, India’s market regu-
lator made it clear that it wants to FearS SurFace
being marketed with claims of high For BSE, 35.45% trading is non-algo. But ing is done by the trader’s software. A sim-
returns on investment. Further, ratings these numbers also include institutional ple customized algo command could be
have been assigned to the strategies, trading. something like this: ‘Buy 100 shares of
retail investors, there
are the hidden risks of
stop the rampant advertising of past
returns and profits. I n the discussion paper, Sebi bracketed
all APIs as algo—in the future, they
After Sebi directed stock brokers to dis- could require exchange approval. Sebi
which could lead to investors being lured When did retail investors begin using Reliance Industries if the price falls to mis-selling. These risks were associate from platforms that make refer- also wants all the strategies to be
by such claims. This may amount to mis- algo trading strategies? ₹2,000’. This algo would generate a trade largely ignored in the last two ence to past or expected future returns by approved by the exchanges and brokers.
selling of such services and strategies to One inflection point was in 2017 when instruction for the brokerage to execute years of the bull run. 9 September, there is a visible reduction in This means that even the slightest tweak
investors,” the regulator stated. discount brokerages such as Zerodha, the trade. such advertising. But, the problem per- in an algo would require approval by both
It directed stock brokers to stop making Upstox and 5paisa started offering algo “If someone does want, they can devise sists. The Telegram channels of strategy the entities.
any direct or indirect reference to past or trading solutions tailored for retail inves- their own trading strategy and plug into NOW writers continue to advertise their profit “APIs are not algos. API is a software
expected future return and disassociate tors. What separates retail algo from insti- Fryers API to execute their strategy. Much and loss metrics. language connecting brokers with the
from platforms that make such references. tutional algo is ‘co-location’—the big boys of the retail algo trading market is with us. Sebi is cracking the whip. It has On their websites, every marketplace trader’s software. These can be audited.
Subsequently, TradeTron sent an email of institutional investing can buy rack Overall, the market is still very nascent. directed stock brokers to stop advertises the broker partners, which There are millions of algos generated by
to all its broker partners stating that it is space within stock exchange premises to Perhaps in single digits (as percentage of making any reference to past or brings them legitimacy. TradeTron, for traders. If all these algo strategies require
removing references to ROI, rating and reduce the lag in getting market data and total trade volumes),” said Tejas Khoday, expected future returns and instance, has 69 broker partners. an approval from the exchanges, it would
statistics information from the strategy executing orders. co-founder and CEO of FYERs, a discount disassociate from platforms that “Well governed brokers were anyway choke the process,” said the first discount
pages. The marketplace, however, did not Nearly 80 brokers are currently provid- brokering firm. make such references. not advertising such performances. Many broking CEO quoted earlier.
respond to e-mailed clarifications sought ing a mechanism to execute algo trades. While brokerages have been providing discount broking firms had asked mar- Typically, a brokerage has little control
by Mint. “For top brokers, about 1-2% of their turn- simple tools to investors to execute such ketplaces to remove their names from the on who uses its API. “We cannot track
These are early days over is generated from automated trades, things are a tad more AND latter’s website. We will whether the trade direc-
in Sebi’s attempt at reg- NSE TRADING MODE retail algo users. Overall, complicated now because of the mush- once again send BSE TRADING MODE tions are coming from a
ulating automated trad- BREAK-UP retail algo trading mar- rooming of algo strategy marketplaces. Sebi wants a comprehensive reminders,” the CEO of a 0.32 BREAK-UP regulated/ unregulated
ing. This isn’t an easy Smart 1.01 ket share would be about Besides, TradeTron, there is AlgoBaba, algo trading framework in place second discount brok- Direct Mobile 0.72 Others Internet entity or from an indi-
order based
job—we will tell you routing Non-Algo 5-6%,” said the CEO of a Algoji and AlgoBulls. As mentioned ear- by the year-end. But the industry ing firm said. market
access trading vidual trader. It is tricky.
why. But first, a peek Mobile discount brokerage firm lier, these marketplaces host strategies is worried. More regulations can Sebi has now asked 6.77 The Sebi paper also lays
18.41 15.47
into the growing retail 20.82
who didn’t want to be from third parties. curtail trading activity, even the exchanges (who are 9.8 Algo
complete onus on bro-
interest in trading itself. Algo
identified. In many cases, software engineers and from savvy investors. supposed to monitor kers to validate and
9.7 (in %) 14.02 (in %)
“Percentage-wise, the those with programming skills write the broker compliance) to monitor algo strategies,
The riSe oF reTail 2.22 number might be small. algo strategies, said industry insiders. We ensure that the circular 1.34 30.13 35.45 which is next to impos-
Direct Smart

R etail investors Internet

flooded India’s based
stock markets during trading
33.83 market
access
Colocation
But, absolute numbers don’t know if the engineers have any Utrade Solutions Pvt Ltd, a fintech com-
are large. This has forced understanding of the markets. The risks pany providing algo engines.
the regulator to work on for a retail investor blindly subscribing to TradeTron, like the traders on its mar-
is implemented in letter order
and spirit and a report routing
submitted within 60 Colocation
Non-Algo
sible. It will increase
compliance costs expo-
nentially,” the second
Source: NSE website Source: BSE Website
the first two years of the a framework. Between such strategies are, therefore, high. ketplace, publishes a disclaimer on its days. Cases of non-com- CEO said.
pandemic. Here, too, the July 2020 and June The strategies are often written and website: “Indian laws require portfolio pliance will attract Yet another concern
numbers are eye-popping. 2022, an estimated one million retail analyzed by the concept of ‘backtest- managers and investment advisory ser- penal action. is around intellectual property (IP). If third
As of August 2022, the number of investors tried algo trading,” said a senior ing’—it is about analyzing past historical vice providers to be registered under Sebi. The regulator appears to be worried party tech platforms and traders need to
demat accounts, one that helps investors regulatory official who didn’t want to be financial data to generate a set of trading US laws do not have any such requirement about both the technological risks as well share their algo with brokers for approv-
hold shares in an electronic format, have identified as well. signals. There are three problems with as long as the advice is not client specific”. as unqualified advisors. als, there is a possibility of the IP being
risen to 100 million. Along with regular the approach. The company further states: “In any “Sebi is still concerned about fat finger compromised—some brokerages can eas-
cash trading, many first-time investors NuaNceS oF The Trade One, bulk of the backtesting today is case, responsibility to be registered, if trades and algos misfiring. These can lead ily replicate the successful algo strategies.
started dabbling in equity derivatives
trading. As the name suggests, this instru- A lgo trading appears simple for the based on data analyzed over the last two- required, to conduct the portfolio man-
investor but at the backend, it is any- three years. The last two years saw an agement business lies with the strategy
ment derives its value from an underlying thing but straightforward. Here’s how it exceptional bull run, which means that creator and investors are advised to check
to systemic risks,” said Khoday. Fat finger “If the circular issued on 2 September
trade is a human error while punching an was the only framework, we could have
order. This can include entering a wrong lived with it. But the indication that more
stock. It is an agreement between parties works. every algo strategy looks attractive. Two, the credentials of the portfolio managers value in terms of price or quantity or even regulations are in the offing will be detri-
to buy or sell shares in the future. Gains There are three key players—the retail past performance cannot guarantee before investing. All due diligence before selection of the wrong execution action mental to the market. It will curtail trading
are made by estimating the future value of investor, the trader or the strategy pro- future returns. Three, the strategy writ- investing in any strategy is the responsi- such as buy or sell. activity of savvy and informed investors,
the shares. Then, there is options trading, vider (like MarketStar and Algo Wise men- ers and the marketplaces remain unregu- bility of the user and Tradetron Inc “For us, it is easier to pass directions to too,” the CEO said.
a variety of equity derivative that gives the tioned earlier), and the brokerages. Retail lated as of now. assumes no part in it as it’s a neutral tech- regulated entities rather than to unregis- Sebi, therefore, has a tough road ahead.
trader the right to buy or sell a specific investors seek and pick the algo trading “There is over-marketing of perform- nology service provider facilitating the tered platforms. Which is why we are ask- It needs to manage the risks of mis-selling
security on a specified date and price. The strategy from traders and the orders are ance and returns. What worked in the past engagement of traders with portfolio ing for a complete dissociation,” said the while ensuring that innovation and mar-
index options trading on the National next executed by the brokerages. cannot, for sure, work in the future,” said managers and not a financial services regulatory official quoted above. ket evolution isn’t stalled. That’s a delicate
Stock Exchange (NSE) touched historic Every broker has an open Application Kunal Nandwani, co-founder and CEO of provider itself”. By the end of this year, Sebi wants to balance.
LIVEMINT.COM MINT MONEY WedneSday, 14 SeptemBer 2022
Bengaluru 11

How much a house costs in Pune Can mutual funds time the
A
house is probably the biggest spend for most Indians.
And with urban population increasing manifold,
buying a house in a large city, which is where most
jobs are likely to be, has become difficult—the main obstacle
being cost. Determining a property’s value is difficult.
Our compilation of property prices of prominent localities
in major cities and surrounding areas across India may
business cycle, outperform?
help you compare and make an informed decision.
Here are the prices of some properties across three bands.

No. of Average unit Average price Approximate

Location
bedrooms size (sq. ft) (₹/sq. ft) price (₹ lakh) Most business cycle funds are of too recent vintage to have a meaningful track record
Under ₹30 lakh
Neil Borate & Satya Sontanam
Chakan 1 BHK 4,000-5,000 19-30
480-600 Neil.b@livemint.com
Challenges of investing in Business Cycle Funds

B
Charoli 1 BHK 370-500 4,200-5,400 16-27
usiness Cycle Funds, as the These funds are not very concentrated in terms of either stocks or sectors despite their supposed
name suggests, are supposed sector focus, and there is little evidence of them being able to make sectoral switches at the right time
Talegaon 1 BHK 420-510 5,000-5,900 21-30
to benefit from timing the
Wagholi 1 BHK 390-430 5,900-7,000 22-30
business cycle. This means Such funds do not have an established record of beating benchmarks
that the funds outperform by Returns (in %)
buying cyclical sectors during an Since inception Beat the
Undri 1 BHK 340-430 6,400-6,800 22-29 Fund Launch date AUM ( cr) (Regular Plans) BSE 500 index
upturn and defensive sectors during a
downturn. Another version of this cate- L&T Business Cycles Fund 20 Aug 2014 570 11.74 12.95
₹30 lakh-₹75 lakh
gory is a fund that can pick companies Tata Business Cycle Fund 4 Aug 2021 945 12.10 12.10
Mahalunge 2 BHK 650-980 5,500-6,000 35-58 at the right time in their life-cycle (early
stage, mid or mature). The reality, how- ICICI Pru Business Cycle Fund 18 Jan 2021 5,095 20.98 18.49
ever, does not bear up to this promise.
NIBM Road 2 BHK 900-1250 5,500-6,000 48-75 Baroda BNP Paribas Business Cycles Fund 15 Sept 2021 930 0.18 5.13
Most business cycle funds are of too
recent vintage to have a meaningful ABSL Business Cycle Fund 3 Dec 2021 2,399 3.27 4.22
Wakad 2 BHK 980-1200 5,800-6,000 56-72
track record, and the one that has a long
record failed to beat the S&P BSE 500. Kotak Business Cycle Fund: NFO Ongoing
Balewadi 2 BHK 550-750 6,300-9,800 34-73
These funds are not very concen- Data as of 9 September
trated in terms of either stocks or sec- India has seen multiple business cycles over the
Tathawade 2 BHK 550-800 6,500-9,400 35-75 past 20 years. The 2002-2007 period marked a
tors despite their supposed sector Most of these funds have higher expense ratios
big boom followed by the 2008 crisis. A second
Above ₹75 lakh focus, and there is little evidence of Expense Expense ratio of expansion began after 2011 that peaked in 2016.
them being able to make sectoral ratio corresponding 10
switches at the right time. Such funds Regular Plans (in %) flexicap fund (in %) 8.95
Viman Nagar 3 BHK 1,000-1,500 7,500-8,000 75-120 8
tend to have higher expense ratios than L&T Business Cycles Fund 2.51 2.06 6
diversified flexi-cap funds (which are 4
Kharadi 3 BHK 1,200-1,800 7,500-8,300 90-150
generally larger) and this is likely to be Tata Business Cycle Fund 2.22 2.14 2 4.05
the main reason why AMCs are keen to 0
GDP growth (in %)
Aundh 4 BHK 1,850-2,200 9,500-10,000 176-200
launch them. ICICI Pru Business Cycle Fund 1.90 1.73 -2
The oldest fund in this category is -4
Koregaon Park 3 BHK 2,000-3,200 12,000-21,600 240-691
L&T Business Cycles Fund, launched Baroda BNP Paribas Business Cycles Fund 2.37 N/A -6
-8
in 2014 on the expectation of an eco- 1997 2021
Baner 3 BHK 1,000-1,800 15,000-19,000 150-342 nomic upturn. “The idea was to 100% ABSL Business Cycle Fund 2.00 1.79
Source: World Bank

Look out for real estate data in this space for cities such as Delhi and NCR, Mumbai, Bengaluru, Chennai, Kolkata, Pune
play cyclicals and eliminate defen-
and Hyderabad. The list is not exhaustive. Data as on 5 September 2022. sives,” Venugopal Manghat, head, Business Cycle Funds are neither sectorially
Top 3 sector exposure in
The average price is the base rate on saleable area, and excludes infrastructure charges and government taxes. equities at L&T Mutual Fund, told concentrated nor stock-wise corresponding flexicap Number of
Source: Cushman and Wakefield Research India Mint. The strategy played out during Fund Top 3 sector exposure (in %) fund (in %) stocks held
the bull run of 2015 and 2017 but failed L&T Business Cycles Fund 51.32 44.48 51
spectacularly in stagnant markets dur-
ing 2018 and 2019. In calendar year Tata Business Cycle Fund 50.67 52.06 47

How are assets divided among 2020, its underperformance was strik-
ing. The fund delivered just 9.32%,
compared to 18.41% of the S&P BSE
ICICI Pru Business Cycle Fund

Baroda BNP Paribas Business Cycles Fund

48.18
47.52 N/A
56.71 61

43

children without a will? 500. The reason, it never shifted from

cyclicals to defensives when the cycle
turned.
ABSL Business Cycle Fund 54.69 55.91 45

Neha Pathak
My father got married in
1959 and had a son and two
daughters from his first
wife. She died in 1974. My
father remarried in 1978
and had two daughters
from his second wife.
My father passed away in
2010 without a will. He had
certain properties in his
name. How will those
assets be distributed
among the children in the
absence of a will?
—Name withheld on request
As per your query, we
assume that your father was a
Hindu and his properties are
self-earned, self- created. Fur-
ther, these properties are not
ancestral in nature. Also, we
assume that there is no right or
interest of any other person in
the property and that the same
were held only by him.
Since your father passed
away without a will, the provi-
sions of Hindu Succession Act,
1956 will be applicable.
Under Hindu Succession
Act, 1956 states “General rules
of succession in the case of
males.—The property of a
male Hindu dying intestate
shall devolve according to the
provisions of this Chapter
ISTOCK
ASK MINT
m of Administration or Succes-
E S TAT E P L A N
(a) firstly, upon the heirs,
being the relatives specified in
class I of the Schedule;
(b) secondly, if there is no
heir of class I, then upon the
heirs, being the relatives speci-
fied in class II of the Schedule;
(c) thirdly, if there is no heir
of any of the two classes, then
upon the agnates of the
deceased; and
(d) lastly, if there is no
agnate, then upon the cog-
nates of the deceased.”
Thus, when a Hindu male
dies without a will, it is known
as dying intestate.
In case of your father, he has
passed away intestate and all of
you are the Class I heirs i.e
widow (second wife) and all his
five children (all the daughters
and sons).
All of you will be entitled to
his property in equal propor-
tions i.e 1/6th portion devolv-
ing upon each one of you. In
case any of your brother or sis-
ter has pre-deceased your
father then the share of such
pre-deceased brother or sister
would devolve on his or her
children in equal proportion.
Further, based on the loca-
tion of property, your family
would have to procure Letters
sion Certificate from the Court
having competent jurisdic-
tion.
Once your family procures
Letters of Administration or
Succession Certificate, the
bequeath has to be recorded
with the sub-registrar of assur-
ance or the appropriate regis-
tration authority.
Neha Pathak is head of Trust
& Estate Planning at Motilal
Oswal Private Wealth
Do you have a personal
finance query? Send in your
queries at
mintmoney@livemint.com
and get them answered by
industry experts.
Manghat says the fund has not
moved into sectors like consumer sta-
ples, IT and pharma in almost eight
years of its existence since the ‘eco-
nomic upcycle continues’. “We don’t
believe in playing the 1-2 year kind of
slowdowns,” Manghat said. Overall,
L&T Business Cycles Fund has deliv-
ered a CAGR of 11.74% (till 9 Sept 2022)
since inception, lower than the 12.95%
of the S&P BSE 500.
The other four schemes in this cate-
gory are of more recent vintage. ICICI
Prudential AMC launched its scheme at
the start of 2021, a timing that proved
fortuitous. The fund has delivered
20.98% since launch compared to
18.49% on the S&P BSE 500 (till 9 Sep-
tember 2022). The fund counts finan-
cials, energy, automobile, construction
and healthcare as its top five sectors.
The fund’s manager, Anish Tawakley,
told Mint that overall deviation from
the index would be over 50% and there
could be many sectors and industries
where it will have nil weightage. ICICI
Prudential Business Cycle Fund previ-
ously took exposure to metals but is
avoiding FMCG, metals and unsecured
consumer loans. According to Tawak-
ley, the scheme was able to catch the
auto sector at the bottom of its cycle.
Later in 2021, three other funds
under this theme were launched: Tata
Business Cycles Fund, Baroda BNP
Paribas Business Cycles Fund in
August and September 2021, respec-
tively, and Aditya Birla Sun Life Busi-
ness Cycles Fund in December 2021.
Was this good timing? 2021 was
marked by a sharp rebound from the
The top sectors in these funds are quite similar to the Nifty
L&T Business Tata Business ICICI Pru Business Baroda BNP Paribas ABSL Business
Nifty Cycles Fund Cycle Fund Cycle Fund Business Cycles Fund Cycle Fund
Financial Financial Financial Financial Financial Financial
Energy Capital Goods Energy Energy Tech Consumer stamples
Tech Construction Construction Automobile Energy Tech
Source: Value Research
Covid-19 lows and fuelled by loose late stage of their growth. The fund will again done well over the last one year
monetary policy in the US and else- seek to assemble a portfolio of compa- but underperformed over longer ten-
where and this situation was reversed nies at different stages in their life ure (3 and 5 years). Looking at the lim-
by the surge in inflation in 2022. Two cycle, adopt a core and satellite ited track record, we observe that, over
of the three funds have posted lacklus- approach—the core part trying to catch the last one year, most of the business
tre returns, delivering 4-5% gains since longer cycles, and the satellite part the cycle funds have done well with the
inception and failing to beat their shorter ones. bulk of the outperformance coming
benchmarks. Tata Business Cycle Experts in the personal finance space from industrials and consumer cyclical
Fund, posted a gain of 12.10% since are cautious on this category. They sectors where these funds were signifi-
inception, almost exactly expect the existing diver- cantly overweight relative to a bench-
the same as the S&P BSE sified funds of AMCs to mark,” said Roopali Prabhu, CIO and
500 over the same period. Business cycle take the business cycle co-head, products and solutions, Sanc-
Kotak Business Cycle funds still need to into account. A special tum Wealth.
Fund is currently in the build a track business cycle fund can “We think business cycle funds can,
process of its New Fund record and thus amount to a mere at best, be used as a tool to add over-
Offer (NFO). According to
highlight ability to replication of an existing weight positions to sectors in favour.
Nilesh Shah, CEO, Kotak fund, but with a higher Diversified equity mutual funds tend to
Mahindra Asset Manage- add value to the expense ratio. A Mint anal- reflect sector views of the fund house
ment Company, the fund portfolios ysis of the portfolios of over a period of time. Also, diversified
will be able to follow the such funds shows higher funds have been more consistent, enjoy
strategy that was being expense ratios and portfo- a much longer track record and offer a
followed by the erstwhile Kotak Select lios that are not very different from more comprehensive set of choices.
Focus Fund (now Kotak Flexi Cap), diversified funds of the same AMCs. Business cycle funds still need to build
going strong on high conviction sec- “Most actively managed funds‘ portfo- a track record and highlight their abil-
tors. Kotak Flexi Cap is now forced to lios are typically expected to anyway ity to add value to client’s portfolios.
be large cap-oriented because of its align with business cycles, unless it We prefer well-run diversified funds
size, according to Shah, necessitating a seeks a value, contra or theme-specific with a strong track record over busi-
new scheme for this sort of strategy, a play,” said Nirav Karkera, head- ness cycle funds currently,” she added.
gap that Kotak Business Cycle Fund research, Fisdom. “L&T Business cycle, Without such a track record, a business
can now fulfil. According to Shah, com- the only fund in this category that has cycle fund can amount to just buying an
panies can be in the early, middle or more than a 5-year track record, has existing fund at a higher cost.

WHAT TO CONSIDER WHILE OPTING FOR THESE NEW ADD-ONS IN MOTOR INSURANCE
ISTOCK
party for death or bodily injury, or damage to third party prop- because even if some of your vehicles are used less, you will not
erty. The premium for own damage is dependent on the insured have to pay higher premium amount for own damage cover. If the
POWER declared value (IDV), engine capacity and age of the vehicle. The
third-party premium is decided by the regulator, Insurance Reg-
vehicle is used less, you will be charged a lower premium and
vice-versa. People who prefer using public transport more than
POINT ulatory and Development Authority of India (Irdai). But, now, the private vehicles, especially in metro cities or are working from
motor insurance market is changing. There are options like ‘Pay home, can also consider these covers. Go Digit General Insurance
PA L L AV I S E T H As You Go’ and ‘Pay As You Drive’ available in the market. company is the first insurer to offer this as an add-on cover to the
‘Own Damage’ part of the policy. This cover will be available very
We welcome your views and comments at PaY aS You Go anD PaY aS You Drive soon in the market. Do note that the
mintmoney@livemint.com Under ‘Pay As You Go’ option, you would be charged as per the Such covers are third-party premium would not be
vehicle’s mileage. So, you must declare how many kilometres you good for people affected by these coverages as that is

S
anjana topped her school in class 12 and got admission to
her dream college. As promised, her parents gave her per-
mission to drive to college, around 30 km from their home.
She travels 60 km per day and on weekends goes on road trips
with family and friends. On the other hand, Ashish, a retired mili-
tary officer, prefers to walk instead of driving over short distan-
ces. He rarely uses his car and drives only during the weekends,
that too for a maximum of 10-15 km per week.
Do Sanjana and Ashish (the names and example herein are only
for the purpose of illustration) share anything in common? Yes,
the insurance premium of their cars that are similar in terms of
model and age, is the same. Despite a huge difference in usage,
they must pay the same premiums. Isn’t this unfair? But, this is
how the motor insurance market has been operating in India.
Motor insurance policies cover damage to the owner’s vehicle,
and the owners’ legal liability to pay compensation to a third
will be driving the vehicle during the policy period and the insur-
ance company will charge you accordingly. If your vehicle runs
for more, you can top up the premium with the insurer.
Under ‘Pay As You Drive’, a good driver is rewarded with
bonuses and discounts. If you have a poor driving history, you
may be charged higher premium. Here, average speeds, braking
techniques used, etc. ,will be traced through the telematics devi-
ces installed in the vehicle.
Before you buy these covers, here are two points to consider.
First, you must choose your kilometre slab carefully. As per your
average usage of the car, you can declare the kilometre slab for
your vehicle. If you have chosen a lower slab like 5,000 km in a
policy period but drive more than 5,000 km, the insurance com-
pany will not provide cover unless you top-up the kilometre slab
before the expiry of the threshold limits.
Second, while the telematics device will be installed by the
determined by Irdai.
with multiple Due to the limited usage of vehicles
vehicles or during Covid, many people renewed
those using only the compulsory third party cover.
public transport ‘Pay As You Go’ cover can motivate
people to buy own damage cover as the
premium will be based on the vehicle’s
insurance company, it may increase your overall premium as the mileage. It can help in increasing the motor insurance penetra-
cost of the device can be included in the insurance premium. tion in the country.
However, it will still be beneficial as compared to a traditional The conditions of road in India may not be ideal for ‘Pay As You
comprehensive plan. The telematics device will share the driving Drive’ coverage. Also, many people may not be comfortable shar-
behaviour with the insurance company on a daily basis and you ing their data through telematics devices. Insurance companies
can expect some discounts if your driving history is good. may need to find some innovative solutions for such challenges
that they could face in the Indian market.
WHo SHoulD conSiDer tHeSe coverS Dr Pallavi Seth is an assistant professor at Amity School of Insur-
People owning multiple vehicles should go for these covers ance Banking & Actuarial Science, Amity University, Noida.
12 WedNeSday, 14 SeptemBer 2022
BeNgaluru VIEWS LIVEMINT.COM

OUR VIEW MY VIEW | ON THE OTHEr HANd

REUTERS

Walmart, Netflix and Spotify are

placed well for triple-win merger
The retailer could take on Amazon Prime by bundling content while the other two gain heft as well

vey, as per which 62% of American
households are members of Amazon
Prime and on an average spend $1,400
annually on buying goods and services
from Amazon, which is twice the average
amount spent by non-Prime shoppers.
What’s happening here? As Judge
writes: “A consumer may join Prime just
for the free movies… Once that commit-
VIVEK KAUL ment is made, however, the consumer
is the author of ‘Bad Money’. can enjoy delivery that is not only
incredibly fast but seemingly free on
everything labelled ‘Prime’. This makes
it that much more costly for a consumer
Over a period of time, as Galloway puts
it, “Apple is also in a position to offer a
Prime-like rundle.” It can offer games,
apps, new phones, new products, etc,
for a certain monthly fee.
These rundles are breaking down
business models and challenging the
existing way of doing things. Take Wal-
mart. The success of Amazon Prime
clearly worries it and probably pushed
the mega-retailer to get into a deal with
the streaming service Paramount +.
As a part of this deal, members of Wal-
mart +, the retailer’s answer to Amazon

Don’t curb rice exports I

to choose to go anywhere else.” The
marginal cost, every time an Amazon
f you happened to log on to Amazon Prime member buys a product, watches
India’s app in the first week of Sep- a serial or even listens to a song, is zero.
tember, chances are you would have This gets the consumer hooked on to
Prime, will get access to content on Para-
mount +. In addition, being a member of
Walmart + already allows members free
delivery from the store as well as free
shipping of online orders and a lower

in anxiety over evidence seen an advertisement for The Rings of

Power, a fantasy TV series based on
J.R.R. Tolkien’s novel The Lord of the
Rings and its appendices. In an April
Amazon.
Also, with free delivery on everything
labelled Prime, customers don’t like
to buy goods from third-party sellers
price while buying fuel. Other than Wal-
mart, entertainment giant Disney is
looking at rundles. As The Economist
recently put it: “Some wonder if entry to
2021 news report, The Hollywood selling on Amazon who charge for its parks could one day form part of a
Reporter had said that The Rings of delivery. Third-party sellers can get Disney mega-bundle.”
Export barriers imposed by India’s government on this foodgrain seem driven by a dodgy Power will be the largest TV series ever around this problem by paying Amazon Finally, where does all this leave pure
made, with Amazon spending $465 a fee to get listed under Prime and play content companies like Netflix,
cost-versus-benefit analysis. In such cases, it is better to err on the side of market freedom million just on the first season. become eligible for free shipping. which offers video content, and Spotify,
So, why is Amazon producing a serial This helps Amazon in two ways. The which is into music and other audio
and spending so much money on it? company makes some money from the content? They clearly do not have the
The answer lies in the business model listing-fee paid by third-party sellers. deep pockets of the larger companies

O
nly a few months after a wheat
export clamp threw traders out
of gear, scenes of chaos are
playing out at India’s ports
again. This time, it is our rice
traders who have been left
holding the bag. As much as 1 million tonnes
of outbound rice is estimated to be stuck, as
traders grapple with the government’s sudden
curbs on exporting this staple. While trade in
par-boiled and basmati rice will go on uninter-
rupted, the Centre last week imposed a 20%
export duty on some varieties and a complete
ban on broken-rice shipments. Exporters can’t
pass on the burden to buyers, who are naturally
refusing to pay more. Contracts drawn up
months ago cannot be redone in days. Nor is it
costless to send back consignments ferried
from rice-growing regions to the coasts. This
policy jolt was avoidable. While it has delivered
an instant shock to traders and exporters, rice
retention could also dampen farmer incomes
down the line, should our hold-back exceed
the harvest shortfall that was cited to justify it.
short at a time of high food inflation. Deficient that is now at the heart of Amazon and But more importantly, the network they are competing with. For starters,
rains in some paddy-sowing states and a clear other companies looking to turn into effect of the business model gets as Galloway puts it, it makes sense for
even bigger technology behemoths. stronger. As Judge writes: “More items Netflix and Spotify to merge.
shrinkage in acreage this season had fed official In order to watch The Rings of Power, shipped free and fast because they’re The trouble is that this might not be
worries of an output drop of 10-12 million one needs to have access to Amazon labelled ‘Prime’ leads more people to enough for their long-term survival. In
tonnes, an estimate that was subsequently Prime. An annual subscription costs become Prime members, which in turn August, the streaming service Disney+
revised downwards to half that figure, casting ₹1,499 in India and $139 in the US. entices yet more third-party sellers to along with ESPN+ and Hulu overtook
doubt on the rigour of the Centre’s shortfall Along with being able to watch movies choose Amazon distribution.” And so Netflix, when it comes to total number
and TV serials, subscribers of Amazon the cycle works, in the process making of subscribers. Both ESPN and Hulu are
estimation methods. After all, abundant har- Prime are entitled to free shipping Amazon bigger and more powerful. majorly owned by Disney. Disney
vests are expected in other states. Also, our when they buy something directly from Scott Galloway, an American profes- expects Disney+ to overtake Netflix on
central buffer stocks are down from 31.7 million Amazon or from a third-party listed on sor of marketing, calls this subscription- its own by 2024.
tonnes at the start of July to 24.5 million tonnes it, with the order being fulfilled by based business model a ‘rundle’, which It might just make more sense for the
this month, but this is still almost twice the Amazon. One also has access to Amazon is short for a recurring revenue bundle. combined entity of Netflix and Spotify
Music, Kindle Books and early access to Amazon is not the only company going to be bought by Walmart, which clearly
country’s must-keep minimum level. So, did select lightning deals. down this route. Apple, which primarily needs to plug the video content gap in
the government overreact? Wholesale prices The moot point here is that Amazon makes phones and computers, has also its rundle. While the deal with Para-
have their own tale to tell. While rice rates Prime is a very powerful marketing tool. got into the streaming business with mount+ might work for the time being,
showed an anomaly by firming up after the In her book Direct: The Rise of the Middle- Apple TV+, is producing a host of video it may simply not be enough in the long-
monsoon covered our landmass, and a price man Economy and the Power of Going to content, and is trying to keep its existing term if Walmart seriously wants to take
Source, Kathryn Judge cites a 2019 sur- users in the overall Apple ecosystem. on Amazon in the digital domain.
slump in response to such curbs was only to be
expected, scarcity flares did not streak across
the charts. This makes it look like a case of
bolting the barn more in fear than on evidence.
On balance, then, our gains in terms of supply
assurance and price stability will likely be too
modest to make up for the disruption caused, www.livemint.com
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune* Friday, September 14, 2012 Vol.6 No.220 `3.00 in Delhi­NCR/`4.00 outside Delhi­NCR 24 PAGES
+ 4 MARKETS PAGES

India’s reputation as a reliable trade partner not just to domestic exporters, but also over- Lone bid for Deccan
SPORTS:
Chargers rejected >7
NATION: Information commissions need
judicial members: apex court >4

was hurt already by the Centre’s call in May to seas markets. It’s not farm produce alone that EXCLUSIVE PARTNER
LEGAL: A short history of Indian
freedom of speech >20
MEDIA: Network18 aims for zero
debt with rights issues >8

stop wheat exports soon after it declared India has been hit by snap barriers that fail to account SENSEX 18,021.16 Æ 21.13

COAL CONTROVERSY
NIFTY 5,435.35 Æ 4.35 DOLLAR `55.42 Æ `0.21 EURO `71.38 Æ `0.16

TED S. WARREN/AP

Govt raises
GOLD `32,000 æ `95 OIL $116.44 Æ $.100

QUICK EDIT The task is... not so much

Allocation of diesel price, Do trust

would “feed the world” in response to the for the spanner they throw into routine busi- four blocks
puts limit on
LPG subsidy
B Y A MRIT R AJ,
A SIT R ANJAN M ISHRA
strangers
I t was advertising
legend David Ogilvy
who said: “The consumer
is not a moron, she is
your wife.” Someone
should have paraphrased
|to see what no one has
cancelled
&

global food crunch caused by the Ukraine war. ness processes. The Centre has lately slipped
U TPAL B HASKAR that for India’s coal
························· minister Sriprakash
NEW DELHI Jaiswal, replacing

yet seen; but to think

Move likely to intensify
criticism over coal block
I t may yet blink, but the gov-
ernment’s efforts to cut its
oil subsidy bill by `20,300
consumer with voter.
No one seems to have
done that. So, after the
crore by increasing the price of Central Bureau of
NBFCs helped diesel and limiting the supply
of subsidized cooking gas may
Investigation named
Manoj Jayaswal of the

The latest move is a bigger reputational blow. into micro-management mode at the slightest
allocations; meetings
of IMG to continue,
with next one on Friday
companies well be at the forefront of ef- Abhijeet Group in its
forts to shore up the fisc and complaint regarding
corner blocks send out a strong message.
A meeting of the cabinet is
irregular allotment of
captive coal blocks, the
for a fee scheduled for Friday evening minister denied that he

what nobody has yet

B Y R UCHIRA S INGH and the proposal to allow for- was associated with
ruchira.s@livemint.com B Y J OEL R EBELLO, eign airlines to invest in Indian Jayaswal at all.
························· A VEEK D ATTA & ones is on its agenda; the buzz Then, after Times Now
NEW DELHI U TPAL B HASKAR in New Delhi’s power circles is television channel

Wheat was not as big a deal as rice, of which hint of an inflationary shortage. Steel export C oal minister Sriprakash
Jaiswal cancelled the al-
lotment of coal blocks to
four companies and decided to
encash the bank guarantee of
one of them, the coal ministry
said on Thursday, in what
····················· that foreign investment in re- produced documents
MUMBAI/NEW DELHI
tail will soon be allowed; and showing that Jayaswal
O ne of the mysteries of
the unravelling coal
scam in India is how rela-
the finance ministry has
warned, not once, but twice, of
the imminence of hard meas-
had named the minister
an arbitrator in his fight
with his brothers, the
tively unknown and ures (analysts have interpreted coal minister said this
small-time companies this to mean an increase in ex- was done without his

thought, about that

seemed to be a tacit admission managed to acquire the cise duty, and the reintroduc- knowledge. It is unclear
of a faulty natural resources balance sheet strength re- tion of a surcharge on income as to how he was named

India has been the world’s top exporter, having curbs are another recent example. The very
policy and holding out the pros-
pect of more such terminations.
The move is likely to intensify
criticism over the government’s
coal block allocations, which
the Comptroller and Auditor
General of India (CAG) said
may have led to notional losses
quired to apply for cap-
tive coal blocks.
The answer, well known
to most people who move
in banking and finance
circles, is that some non-
banking financial compa-
nies (NBFCs) played a
Big stimulus: US Federal Reserve chairman Ben Bernanke. The Fed tax). arbitrator if he didn’t
launched another aggressive stimulus programme on Thursday, saying On Thursday, in a necessary know about it or indeed,
it will buy $40 billion of mortgage debt per month and continue to but hugely unpopular move, if he didn’t know
purchase assets until the outlook for jobs improves substantially. US the government announced an Jayaswal well. That’s as
stocks climbed and Treasuries erased their advance after the increase of `5 a litre (the actu- brazen as it gets and it
announcement; crude oil also rose. Indian markets had risen to a al price varies across cities) in leaves Jaiswal with only
seven­month high on Thursday in anticipation of a new stimulus one option: to go.
package. REUTERS For updates, go to www.livemint.com TURN TO PAGE 3®

shipped 21.2 million tonnes of it in 2021-22. uncertainty of being subject to such orders
of `1.86 trillion, analysts said. crucial role by lending

which everybody sees.

“This move of cancelling four
blocks shows they are rectifying
things, but it is also an admis-
sion that the process was
wrong,” said Pralay Kanungo,
head of the Centre for Political
Studies at Jawaharlal Nehru
University. “Even if they cancel
their net worth to the coal
block applicants for aug-
menting their own—for a
fee. Later, these NBFCs IntelleCash
exited the consortium.
“It is a common, but
reprehensible practice,”
acquires
said Anish De, chief exec-
Arohan MFI

The latest curbs will affect nearly half that vol- ends up raising the overall cost of doing busi-
more blocks, the big issues will
be kept alive and become an is-
sue for election.” State elections
are due this year and next, while
the next general election is
scheduled to be held in 2014.
utive of Mercados EMI
Asia, an energy consulting
firm. B Y D INESH U NNIKRISHNAN
The IL&FS Group’s dinesh.n@livemint.com
IL&FS Infrastructure De- ·························
velopment Corp. Ltd MUMBAI

Thursday’s cancellations
came a day after an inter-minis-
terial group (IMG) reviewed the
(IIDC) and IDFC Ltd are
two NBFCs that seem to
have done this, although
I ntelleCash Microfinance
Network Co. Pvt. Ltd, a sub-
sidiary of investment banking

ume, enough to throw food adequacy askew in ness and goes against the precepts of an open
cases of private block owners.
The CAG report tabled in Par-
liament on 17 August had also
alleged a lack of transparency
the first denied it had and services and advisory firm Intel-
the second declined to lectual Capital Advisory Serv-
comment. ices Pvt. Ltd (Intellecap), has
According to an adver- taken a controlling stake in Kolk-

and objectivity in the allocation
of the coal reserves totalling
43.35 billion tonnes.
Among the blocks cancelled
was the Bramhadih block in
TURN TO PAGE 2®
Mining Ltd; Chinora and Waro-
E RWI N SC HRÖD I N G E R
ata-based microlender Arohan
Financial Services Pvt. Ltd
through a series of complex
transactions for `52 crore.
It’s the first sizeable acquisi-

many countries, even spell a crisis. The Centre, economy; that loopholes exist and waivers can
Jharkhand allotted to Castron ra (Southern Part) blocks in Ma-
harashtra given to Field Mining
and Ispat Ltd; and Lalgarh
(North) block in Jharkhand al-
lotted to Domco Smokeless Fu-
els Pvt. Ltd, the coal ministry re-
lease said. The Marki Mangli-II,
III and IV block allotment in
Maharashtra to Shri Virangana
tion in India’s microfinance sec-
tor since it ran into a crisis after
Andhra Pradesh in October 2010
passed a law that restricted the
operations of microlenders in
the state, which then accounted
for one-quarter of the industry’s
assets.
Analysts said the deal may sig-

of course, must ensure we have enough for our- be handed out only remind us of the pre-1991
Steels Ltd was cancelled and the
bank guarantee encashed, the
coal ministry release added.
Aside from this, the coal min-
istry asked Monet Ispat and En-
ergy Ltd to submit a bank guar-
antee to the equivalent of the
royalty sum for three years. At
the time of the allocation of the
nal the start of consolidation
among microfinance institutions
(MFIs), which have been
weighed down by bad loans and
seen funding dry up.
Mumbai-based IntelleCash
has bought a 56% stake in Aro-
han, said Anurag Agrawal, co-
founder, chief operating officer

selves. Its free food handouts have been of aid era of discretion and distortion. As for inflation
Utkal B2 block in 1999, this key and director of Intellecap.
provision had been overlooked. Arohan’s net worth is estimat-
IMG is reviewing the cases of ed at `40 crore and loan book at
Mint is also available for R7 with
Hindustan Times in Delhi-NCR only
TURN TO PAGE 2® TURN TO PAGE 3®

to India’s underfed and it cannot afford to run control, it’s a job best left to the central bank.

MY VIEW | EX MACHINA

Open data sharing is the best way to step up innovation

cury—a liquid 14 times heavier than water—
RAHUL MATTHAN making his tube just 76 centimetres long and
relatively portable. News of Torricelli’s
improvement caught the attention of Blaise
Pascal in France who was wondering
whether this could be used to prove that air
considering that alchemists were, just like all that had already been carried out, making stagnation that prevented alchemy from
the characters mentioned above, inveterate the same mistakes that had already been evolving into chemistry.
experimenters—constantly trying out new made. Bereft of access to the hive mind, Over covid, a number of tech companies
techniques and catalysts to convert base alchemy sputtered and died. pledged to grant access to their intellectual
metal into gold. What’s more, many of the An open, collaborative approach almost property for anyone who wanted to use it to
people responsible for the landmark physics always trumps closed, sequestered experi- solve problems created by the pandemic. I

I
n the early 1600s, Giovanni Batista Baliani,
a Genoese mathematician and physicist,
made an unusual observation. He noticed
that mechanical pumps could draw water no
higher than 34 feet up a hill. Baliani discussed
this with fellow scientist Galileo Galilee, who
said that this was because the “power of the
vacuum” could only support water up to a
pressure varied at different altitudes. The
higher you go, the less should be the weight
of air pressing down on the barometer—so
surely the length of mercury in the tube
would be smaller. To test this, he asked
Florin Perier to climb the Puy de Dome
mountain and take measurements at the top.
In 1684, Perier observed that the column
experiments of the time—Isaac Newton and mentation. During the covid pandemic, the don’t know how many people took advan-
Robert Boyle et al—were single biggest reason why tage of the offer, but this is exactly the sort of
themselves avid alche- we were able to develop open access we need. We need more access
mists. Why then did Our incentive test kits as quickly as we did to workflows, data sets and models so that a
alchemy fade away while was the complete genomic broader range of participants can innovate
physics flourished? models should sequence of the virus was on them. We need new inventors to be
According to science his- made available on open encouraged to, in turn, share their innova-
torian David Wootton, the
be tweaked for platforms within days. It is tions widely—recognising that unless we all

is a partner at Trilegal and also

has a podcast by the name Ex
Machina. His Twitter handle is
@matthan
certain height.
Galileo was wrong, but the discussion
caught the attention of Gasparo Berti in
Rome who thought this might be a useful
way to create a vacuum. So he built a 35 foot
long tube, plugged it at both ends and filled
it with water. He then immersed one end of
the tube in a trough of water and removed
the plug from the submerged end. Water
immediately rushed out of the tube till there
was exactly 34 feet of the water in the tube -
leaving a vacuum at the top. He concluded
that the pressure of air on the surface of the
water in the trough was supporting the col-
umn of water in the tube.
Torricelli substituted water with mer-
of mercury stood at 62.7 centimetres at the
top of Puy Dome, proving that air pressure
dropped the further up you go. Fourteen
years later, Robert Boyle compiled all this
into a law that would forever carry his name.
I first read about the transcontinental his-
tory of the barometer in Tim Harford’s mar-
vellous book The Data Detective. Harford was
using the story to illustrate the collaborative
energies that characterized the study of phys-
ics during the Scientific Revolution—which
gave us many of the discoveries that our study
of the science is based on to this day.
But even as physics was thriving, the other
popular science of the day—alchemy—was
dying a quiet death. This was surprising,
difference was one of
approach. Physics was con-
innovators to also why vaccines were
developed in record time.
build on the work of others, we will be
doomed to work in narrow silos.
ducted in an atmosphere of
radical openness, with
share findings But open access remains
the exception rather than
If that requires redesigning existing
incentives, we should find ways to do so. For
experiments fully docu- and innovate the rule. Nowhere is this instance, we could consider contributory
mented and rapidly dis- more evident than in tech, royalties that will allow those on whose
seminated to all who were together where algorithms of all intellectual property a new innovation was
interested in the subject. sorts—search, newsfeed, based to receive a proportion of the revenue
Alchemy, on the other algorithmic advertising, that appropriately recognizes their contri-
hand, took place in secrecy—lest knowledge natural language processing, image recogni- bution but at the same time provides enough
of one person’s experiments would allow tion and the like—are zealously guarded to of a monetary incentive for new inventors to
another to discover the secret to making gold. preserve commercial advantage. As a result, invest the time and effort required to inno-
It is this suspicious, closeted approach new entrants have to build from scratch, vate. We need to allow more re-mixing if we
that resulted in alchemy’s eventual demise. unable to leverage progress that has already are to spur innovation. Because one thing is
Without an opportunity to learn from oth- been made. Not only is this inefficient, it is certain—if we don’t invent together, we will
ers, alchemists often repeated experiments bound to result in the sort of intellectual eventually not invent at all.
LIVEMINT.COM VIEWS WedneSday, 14 SepTemBer 2022
Bengaluru 13

THEIR VIEW M I N T C U R AT O R

Use a collaborative governance The ‘lipstick index’ is back as

post-pandemic makeup soars
model to tackle climate change Cosmetics and scents are booming as covid-shifted trends gain pace

Let’s dump the state-versus-market dichotomy and learn from participatory processes behind the Montreal Protocol’s success

ISTOCKPHOTO

ANDREA FELSTED
is a Bloomberg Opinion columnist covering
consumer goods and the retail industry.

DANI RODRIk
is professor of international political economy
at Harvard University’s John F. Kennedy School
of Government, and the author of ‘Straight Talk
on Trade: Ideas for a Sane World Economy’.

T
he Lipstick Index is back. The term
was coined during the 2001 reces-
sion by Leonard Lauder, then the

O
ur world is undergoing an eco-
nomic transition that will require
effective government action on
many fronts to manage climate
change, ensure public health and
rebuild our middle classes through
good jobs and innovation. But are our governments
up to it? There is wide scepticism about govern-
ments’ ability to lead and achieve positive change.
Such doubts may be well-placed. Polarization
and authoritarian populism, which are mutually
reinforcing, have overrun the public sphere in
many countries and undermined the capacity of
societies to mount collective action, both domestic
and multilateral, against common problems.
Moreover, a longer-standing concern about gov-
ernment is that it has neither sufficient information
nor the capabilities necessary to achieve positive
structural change in the economy. Give govern-
ments too much power, the argument goes, and
they will direct resources toward the wrong places
and become captive tools of special interests. This
argument lies at the heart of neoliberalism, and it
will have to be overcome for any successor para-
digm—like productivism—to succeed.
A more accurate account of state capabilities rec-
ognizes that they are neither inherited nor static.
Rather, once appropriate priorities are set, they
develop over time through experience, learning
and trust-building with private entities. For public
officials, the relevant question is not “Do we have
the capacity?” but, “Have we established the right
priorities and the correct mode of governance?”
Sceptics might say that this sounds good in theory
but remains unachievable in practice. Just look
around, and you can find failures of public govern-
ance almost everywhere—locally, nationally and
globally. But as Columbia Law School’s Charles
Sabel and David Victor of the University of Califor-
nia, San Diego, show in a new book, effective gov-
ernance models do exist and have already made a
big difference. The practice is there; it is the theory
that is lacking.
Sabel and Victor focus on climate change, which
is the greatest policy challenge of our time. It is also
an area where governance is doubly difficult: regu-
lations must not only be effective at the national
level, they also must be negotiated globally among
states with different interests and circumstances.
Sabel and Victor build their argument on the
example of the 1987 Montreal Protocol, which has
succeeded in curbing ozone-depleting substances
(ODS) to the point where the ozone layer is now on
course to full recovery. From the outset, ozone
depletion and climate change looked like similar
challenges, because both involve significant
scientific and technological uncertainty and major
differences among the positions of advanced and
developing economies. That is why the 1992 United
Nations Framework Convention on Climate
Change (UNFCCC), the first global climate agree-
ment, took the Montreal Protocol as its model.
The Montreal Protocol and the UNFCCC both
started out as very ‘thin’ regimes, relying on broad
commitments to cut emissions (of ODS and green-
house gases, respectively) by a certain date, but with
little operational content. But the two regimes
evolved differently. While the Montreal Protocol
made steady progress by bringing firms and govern-
ments together to tackle concrete technological
problems, climate-change agreements have often
ended up stalled in global negotiations.
Sabel and Victor call attention to a key difference
between the two regimes: the Montreal Protocol
created sectoral committees in which ODS-emit-
ting firms joined national regulators and scientists
in seeking technological alternatives. These groups
started small, but they expanded and multiplied as
knowledge was accumulated, capabilities were
acquired and trust was built among parties. This
approach worked because the problem solving was
devolved to local actors—namely, firms with the
requisite technological know-how. When innova-
tion stalled, targets were reset. The result was a
virtuous loop of on-the-ground innovation and
top-level goal setting. Under the climate regime, by
contrast, firms have been kept at arm’s length from
regulators, owing to fears that they would capture
the process. But this has entrenched conflicts of
interest and hampered innovation.
The Montreal Protocol is not the only successful
case of what Sabel and Victor call “experimental
governance.” Additional examples can be found
across a wide range of national and sub-national
programmes, from the US Advanced Research Pro-
jects Agency–Energy (ARPA-E) to Ireland’s agricul-
tural-pollution regime. In each case, ground-level
experimentation is coupled with higher-level goal
setting. The successful practices that emerge from
these collaborations are then routinized through
dissemination and standard setting.
Nor are the success stories limited to environ-
mental policy. ARPA-E, after all, is modelled on the
Defense Advanced Research Projects Agency
(DARPA), the US agency responsible for some of the
landmark innovations of our time, including the
internet and GPS. At the local level, the most suc-
cessful initiatives to revitalize communities and
create jobs take the form of private-public collabo-
rations that bring together training programmes,
businesses, non-profit groups and public officials to
create new pathways to economic opportunity.
Effective national industrial policies take a similar
collaborative, cross-sectoral approach.
As Sabel and Victor explain, the general strategy
in all these domains is to start out with ambitious,
somewhat ill-defined goals. Programme leaders
must acknowledge deep uncertainty and hence the
likelihood of mistakes and false starts. There must
be incentives for the parties with the most detailed
and accurate information (typically firms) to look
for solutions, which means that public agencies
must establish some combination of sticks (the
threat of regulation) and carrots (incentives and
public inputs).
Since success depends on frequent reassessments
and revisions, setting milestones and monitoring
progress is crucial. When solutions do emerge, they
can be generalized in the form of standards or regu-
lations. Innovation lies at the centre of this process,
because higher living standards (including a cleaner
environment and better jobs) are possible only
through enhanced productivity. This kind of policy-
making differs from current approaches. From the
experimental-governance perspective, the ‘state
versus market’ dichotomy is simply irrelevant.
States and markets are complementary. Econo-
mists’ standard top-down, principal-agent model of
regulation becomes unhelpful. To succeed, a new
paradigm like productivism will have to transcend
the stale ideologies of the past. Fortunately, the
models of governance that it needs already exist,
and in abundance. ©2022/PROJECTSYNDICATE
chairman of Estee Lauder. He noted that
lipstick sales rose in the autumn of that
year, indicating that women facing an
uncertain economic environment turn to
beauty products as an affordable treat.
Then the financial crisis of 2008-09
spawned the Foundation Index, as women
prioritized flawless skin over a perfect
pout. This time around, get ready for the
Perfume Index, or perhaps the Bouncy
Blowout effect. Fragrance or hair care sales
may be more reflective of a shift from
extravagant purchases to cheaper indul-
gences in the post-pandemic era.
Makeup sales are booming. As masks
come off, lipstick has been leading the way
in both the US and Europe. But cosmetics
demand isn’t confined to lipstick. The natu-
ral aesthetic, characterized by glowing skin,
has generated interest for new makeup, as
has an increasingly popular more dramatic
look—think bold, coloured eyeliner and
gems from the TV show Euphoria.
Many consumers neglected their makeup
bags while they stayed at home during
covid, much like they did with their dressier
wardrobes. Skincare, which had outpaced
makeup for several years, became even
more important. But the beauty baton is
now being passed back to colour cosmetics.
Economic considerations do play a part.
Despite crumbling consumer confidence,
sales have grown. And beauty is less affected
by spiralling input costs. Aside from the
packaging, energy is a relatively small com-
ponent in producing makeup, and products
take up little room in expensive shipping
containers. Add in the buffer of fat margins,
and the average price of US premium
beauty products rose just 2% year-on-year
in the period from January to 27 August,
according to the NPD Group. Compare that
with the 10.9% headline rate of inflation in
food and 5.1% in apparel in July in the US.
That makes beauty a more accessible lux-
ury. And although many shoppers are
reaching for lipstick, others are turning to
perfume for a pick-me-up. “We call it the
fragrance index, or fragrance effect,” Coty
CEO Sue Nabi told investors recently. The
company is seeing no sign of trading down.
In fact, consumers are moving upmarket to
more concentrated versions of desirable
scents, she said. Fragrance sales are also sur-
ging at Estee Lauder, L’Oreal SA and US
retailer Ulta Beauty. Demand is aided by the
fact that consumers bought fragrance
online during the pandemic. The beauty
giants had already begun to shift their
Fragrances are a classic entry point to the
market for luxury products MINT
emphasis away from celebrity scents and
toward more artisanal, personalized per-
fumes, which appealed to millennial and
Gen Z buyers. Fragrance became a way for
people to lift their moods while stuck at
home — it was another part of the self-care
regime that also benefited skincare.
But unlike demand for face creams and
masks, reopening has been good for scent
sales. Fewer people have time for a 10-step
skin routine anymore, but there’s more rea-
son to restock on fragrance as we go back to
work and to parties. Shifts in taste are being
seen, too. For example, while sales of men’s
fragrances in Europe rose 21% year on year
between January and July, aftershave was
flat, according to IRI.
Designer perfume has long been a point
of entry into high-end goods. Sneakers and
streetwear have taken over to some extent,
but with inflation squeezing out marginal
luxury buyers, the role of fragrance may be
revived. Can’t afford a Prada bag? How
about a bottle of its new Paradoxe perfume?
Another difference with past periods of
economic uncertainty is the explosion of
premium hair care. Socializing again means
more need for styling products. At the same
time, consumers haven’t given up the treat-
ments like hair masks that they discovered
during lockdowns. Hair care has gotten a
massive boost from social media. There are
endless TikTok videos on how to achieve
curtain bangs and beach waves, for
instance. The undisputed star of ‘HairTok’
is the Dyson Airwrap. But at more than
$500, the tool is far from an affordable treat.
A $30 bottle of Olaplex oil is a cheaper way
to get shiny hair. Its sales rose almost 40% in
the second quarter. Another category to
watch will be home hair colour.
Social media will play a big part in deter-
mining what categories benefit from the lip-
stick effect. This presents a challenge for
beauty manufacturers and retailers,
because if a product goes viral, they may
face a sudden spike in demand. Take Clini-
que’s Almost Lipstick in Black Honey. The
universally flattering shade was launched in
1971, but became a TikTok sensation last
year, causing demand to outstrip supply.
But for high-end beauty, this can be no
bad thing. As in the luxury industry, some-
times scarcity is exactly what’s needed to
send consumers into a frenzy and the Lip-
stick Index soaring. ©BLOOMBERG

MY VIEW | PEN DRIVE

Hot takes from hot seats don’t always yield hot brands
have swum to work even in this scenario,
SHEPHALI BHATT while the other would have kept interviews
for that particular day “to test their hustle”.
Online outrage has a shelf life of one-or-
two days at most, we often hear. This is partly
true, but it’s also a myth. The internet does
It is embarrassingly easy to get ‘likes’ and
‘follows’ on platforms like LinkedIn now to
the point that “This would have killed on
LinkedIn” or “This is killing on LinkedIn” is
a running joke format on tech Twitter.
What’s no joke is that last month an Israel-
work with you.” Often, the founder-CEOs
they approach have fewer followers than
they do.
It makes you wonder if the current spate of
hot takes from multiple startup founders
over the last few weeks is attributable to the
media on the occasion they are critical of
your business, as you won’t need them to do
your public relations anymore.
However, the way these hot takes are
being panned en masse also shows that des-
perate attempts at building social media cred

R
ecently, a startup founder-CEO was
‘cancelled’ on social media after the
individual advised, via a LinkedIn post,
20-somethings to put in 18 hours a day at
work and stop whining. The post was dissed
by so many that the founder had to announce
a sabbatical from the platform. Even as this
incident caught international media atten-
move on to the next target of outrage at warp
speed. However, it never forgets. The trolling
is not as intense–it cools off over time, but
doesn’t go away. Ghosts of trolls past could
keep haunting you, till you’re reduced to a
meme format. That’s what seems to have
happened with these two founders, whose
hot takes on hustling gave netizens a free
based marketer, Tom Orbach, rolled out a growing pressure among this cadre to turn (fast) can somehow boomerang and draw
website called LinkedIn from leaders into thought negative attention not just towards them, but
Viral Post Generator leaders. Because if it’s that also the companies they lead. ‘Any publicity
which uses artificial intel- When too many easy to gain traction online, is good publicity’ doesn’t always apply to
ligence to analyse hun- you could be faulted for not internet fame.
dreds of thousands of viral leaders post utilizing the system that While it’s reasonable for anyone to want
posts on the professional has been designed to help to build an internet persona and gain from
networking platform to
hot takes online, you grow your internet it, perhaps those with high-stake jobs need

covers internet culture

tion, another founder put up a LinkedIn post
bragging about scheduling hiring interviews
and the creator economy
for Mint
at odd hours to test applicants’ determina-
tion to get the job. This was widely criticized
for various reasons, including its exclusion-
ary disposition towards working women
with familial responsibilities.
A fortnight later, you’d think people would
have forgotten it all. Far from it. Last week, a
unicorn founder put out a Twitter post about
being evacuated in a tractor as tony parts of
Bengaluru were submerged by a continuous
downpour in the country’s startup capital. In
reply, some users commented how the
ambassador of an 18-hour workday would
pass to adjudge them and their workplace
culture negatively. For many, they have
become a case study on what not to do.
Meanwhile, the CEO of the 18-hour-work-
day fame took a break from the LinkedIn
sabbatical to tell followers that, regardless of
the trolling, the episode had earned the com-
pany a few crores in free publicity. That’s
what it comes down to, isn’t it?
Once upon a digital time, social media was
used to build or rebuild connections. Today,
it is used to build your own brand. From
Twitter’s threadbois to LinkedIn’s thought
leaders, everyone harps on hot takes or ram-
blings packaged as gyaan to be ‘seen’.
create a template for more
users to produce such
words go banal
‘cringe posts’ at scale. The
tool was even acquired for
and thought
an undisclosed amount by leadership
a US-based LinkedIn-fo-
cused startup, Taplio, in turns elusive
little time.
Notwithstanding the
means, these ‘likes’ and ‘follows’ do bring
people a certain degree of internet clout.
Instead of cold-emailing hot startups and
tech companies asking for a job, it empowers
them to directly message their founders/
CEOs online with a confident, “I want to
currency. The word is that
adding hashtags like
#LinkedInforCreators or
#LinkedInNews increases
the chances of your post
getting picked up and pro-
moted by the platform’s
editorial teams as well.
The benefits of becom-
ing a popular founder-CEO online are obvi-
ous: it can help you attract talent and inves-
tors faster, especially in an environment
where both are hard to come by. Further, it
allows you to become your own distribution
machine, which means you can diss the
to be more discerning of the kind of dis-
course they are getting behind at a time
when we’re well into the third year of a pan-
demic and have seen everything from the
Great Resignation to the ‘quiet quitting’
wave hit our professional lives. If everyone
starts using growth hacks and viral post gen-
erators to build personal brands, one won-
ders if our online brand will hold any value
in the real world.
To borrow from Jon Snow of Game of
Thrones and contextualise it: When enough
leaders post hot takes, words stop meaning
anything. Then there are no more thought
leaders, only better and better trash talkers.
14 WedneSday, 14 SeptemBer 2022
Bengaluru BUSINESS OF LIFE SPORTS LIVEMINT.COM

US Open: Tennis can

finally look to the future
US Open winners Carlos
Alcaraz and Iga Swiatek
are exciting talents who
will only get better. Their
wins show that it’s time
to move past nostalgia
Erling Haaland has been in sensational form for City. AFP
Deepti Patwardhan
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Will Haaland
C
arlos Alcaraz arrived at this year’s
US Open a teen prodigy and one of
the possible title challengers. He
left New York a Grand Slam
champion and the youngest No.1
in the world, since rankings began in 1973.
lead Man City to
While the 19-year-old Spaniard has been one
of the most promising talents in recent times, he
jumped the line of title contenders to triumph at
European glory?
this year’s US Open. His 6-4, 2-6, 7-6 (1), 6-3 win
over Norway’s Casper Ruud, who is now World
No.2, brought to a close a typically chaotic US
Erling Haaland’s City face the striker’s
Open, which crowned two new singles champi- former side Borussia Dortmund
ons—Iga Swiatek won the women’s title—said
goodbye to a legend, and played host to some
theatre of the absurd when Nick Kyrgios AFP
accused fans of smoking marijuana in the stands.

The opening week of US Open 2022 was all
about Serena Williams’ dance into the sunset,
and the American came dressed for the occa-
sion. Clad in a black, diamond-encrusted
ensemble, the 40-year-old displayed some vin-
tage feistiness in the three matches she played.
The best of the lot was the 7-6, 2-6, 6-2 win over
second seed Anett Kontaveit. Despite another
fighting performance in the third round, she
bowed out to Australia’s Ajla Tomljanovic. “It
takes a lot of work to get here,” Williams said
after her run. “Clearly I’m still capable. It takes
a lot more than that. I’m ready to, like, be a mom,
explore a different version of Serena.”
IGA SWIATEK IN CHARGE
Women’s tennis has thrown up a carousel of
champions in recent years: including Elena
Rybakina, a Russian-born player now represent-
ing Kazakhstan, who won this year’s Wimble-
don. And while the spotlight remained squarely
on Williams in the opening week, the women’s
draw lost marquee players like Naomi Osaka,
Simona Halep, defending champion Emma
Raducanu and Rybakina in the opening round.
As the women’s game contemplates a future
without Williams, Iga Swiatek once again
showed that she is ready to lead the pack. The
power-hitting Pole already has two French
Open titles to her name. But she is proving that
she has the tools to succeed on other surfaces as
well. After taking over the top spot from Ash-
leigh Barty in March this year, the 21-year-old
began a chapter of dominance that is going from
strength to strength. She put together a winning
streak of 37 matches, and has won a total of
seven tournaments this year, and has become
the first player, since Angelique Kerber in 2016,
to win two Grand Slams in a calendar year.
Swiatek, whose winning streak of 37 was
snapped at Wimbledon, didn’t enter the US
Open with the brightest of prospects. The US
Open introduced a lighter tennis ball for the
women’s events, and the Pole publicly slammed
the move as sexist, admitting that she was strug-
gling to control her shots. But it has been a year
of transformation for Swiatek. Unlike her
French Open triumphs, where she was in
supreme form, losing just one set in 14 matches,
the US Open win was more about looking for
solutions, problem-solving on the go. She was
struggling to find perfection in her game, so she
B
orussia Dortmund know only too well of Erling Haaland’s
ability to destroy defences in the Champions League, but
the German giants may die by the sword they previously
lived by when they visit Manchester City on Wednesday.
Haaland blossomed into one of the world’s most feared strikers
in Germany, scoring 86 goals in 89 games for Dortmund. Eight
games into his City career, the giant Norway striker with a devas-
US Open 2022 winners Carlos Alcaraz and Iga Swiatek are exciting players with their careers ahead of them. PHOTOGRAPHS BY AFP tating turn of speed has already scored 12 times for the English
champions. “His numbers in all his career, not just here but when
went with nous and grit. the men’s Grand Slam tally at 22, lacked match- Michelle Obama was one of the many Ameri- he was in previous teams, is quite similar,” said City boss Pep
“I finally accepted that I’m going to make sharpness. While he had recovered from one cans cheering on ‘Big Foe’ as he took on Alcaraz Guardiola after Haaland struck twice in a 4-0 win at Sevilla to kick
those mistakes,” she said after beat- set down in the first two rounds, he didn’t in the semi-final. The Spaniard had rallied from off City’s latest quest to break their Champions League duck. “He
ing Ons Jabeur 6-2, 7-6 in the have enough firepower against an a match point down in the fourth set to beat has an incredible sense of goal.”
final. “It’s not going to be like on inspired Frances Tiafoe. 21-year-old Jannik Sinner 6-3, 6-7, 6-7 7-5, 6-3, Haaland’s bargain £51 million buyout clause meant he had his
slow surface where I can build a Son of immigrant parents from in what was possibly the match of the tourna- choice of clubs after he had outgrown his surroundings in the
rally, then be really calm and just Sierra Leone, Tiafoe was living the ment, in the previous round. But Alcaraz Bundesliga. Dortmund may provide the perfect breeding ground
finish. It’s going to be more risk and American Dream this US Open. Not showed no signs of fatigue as he took down the for Europe’s top talents to develop in the early years of their
less control. So, I accepted that. That only did he knock out Nadal in four home favourite in another five-set thriller. career, but they cannot compete financially with the continent’s
was the thing that actually let me be sets, the 24-year-old made it to the At the other end of the draw, Ruud quietly wealthiest clubs, nor satisfy the ambitions of the world’s best
more free.” final four of a major for the very first progressed, like he usually does, into the sum- players in the long term. Haaland followed in the footsteps of
time. His coach, former player mit clash. His low-key, cool appearance is a Jadon Sancho, Christian Pulisic, Ousmane Dembele, Pierre-
CARLOS ALCARAZ STEPS UP Wayne Ferreira, admitted complete contrast to his intense game. Born in Emerick Aubameyang, Robert Lewan-
Even though a younger genera- that he had to make Tia- Norway, Ruud’s game has been smelted in the Haaland’s haul dowski and Mario Goetze as stars of the
tion have been knocking on foe give up on candy dust bowls of Spain. The 23-year-old defeated in Champions future to fly the nest after briefly leav-
the door for some time now, and cookies to whet Karen Khachanov to enter his second Grand ing their mark in western Germany.
Rafael Nadal and Novak his appetite for big- Slam final of the year, and like Alcaraz, had a League is the However, losing Haaland may prove
Djokovic had locked down ticket showdowns. chance to take over as No.1. reason Man City the biggest loss of all with the 22-year-
the first three Grand Slams When Tiafoe Alcaraz versus Ruud thus became the young- were desperate old threatening to rewrite records set
of 2022. While Nadal won was asked about est men’s Grand Slam final since the 2008 Aus- to sign him by Cristiano Ronaldo and Lionel Messi
the first two for the first time the Next Gen, and tralian Open. Both the players take big cuts from that many believed would remain
in his career, Djokovic life after the ‘Big 3’ the baseline and can retrieve almost every ball. intact for generations. Haaland’s dou-
retained his Wimbledon title. in men’s tennis, he What set Alcaraz apart was his sense of adven- ble against Sevilla took his tally in the Champions League to 25
But the US Open, which stated that there ture. Not only was he always looking to dictate goals in 20 games. At the same stage of their careers, Ronaldo, the
has been the most Open of would be more the point, but also test and tease his opponent competition’s all-time top goalscorer with 140, was yet to score,
slams in men’s tennis in the like ‘Big 12’ in the with his variety. The drop shot he conjured to while Messi struck eight times in his first 20 matches in Europe’s
last 15 years, continues to coming years. end an intense rally and break Ruud in the elite club competition.
defy order. In Carlos Alca- The tennis opening game of the third set was just one of his Haaland’s haul in the Champions League was also why City
raz, it crowned a third world caught a staggering skill-set. were so desperate to sign him as the successor to the club’s all-
first-time champion in a glimpse of this The Spaniard hit 55 winners and won 34 of time top goalscorer Sergio Aguero. Under Guardiola, City have
row after Dominic Thiem as US Open 45 net points to finally defeat Ruud in a high- won four Premier League titles in the past five years and six in
in 2020 and Daniil Med- 2022 became quality final. Alcaraz, described by his coach total stretching back over the past decade. Yet, the billions
vedev in 2021. the first Slam former No.1 Juan Carlos Ferrero as ‘thin as spa- invested in the club from Abu Dhabi since 2008 have so far fallen
The 36-year-old since the 2004 ghetti’ when they started working together four short when it comes to winning the Champions League.
Nadal had started the French Open years ago, ended up with a record playing time Any doubts that the recruitment of a superstar could destabil-
tournament as a firm with no Roger of 23 hours and 39 minutes to earn his first ise the collective effort that has characterised City’s success
title favourite. An Federer, Nadal major. “I want to be in the top for many, many under Guardiola have been blown away within weeks. “This
abdominal injury or Djok- weeks and I hope many years,” he said after his fella is going to break virtually every goalscoring record there
had seen him ovic in the win. “I’m going to work hard again after this is,” tweeted former England striker Michael Owen. “He’s too
withdraw from quarterfi- week, these amazing two weeks. I’m going to big, too quick, clinical in front of goal and he’s playing in a team
the Wimbledon nals. None of this year’s fight (to) have more of this.” The tournament that create dozens of chances.” Dortmund know what is coming.
semi-finals and the final eight had ever won a that began heavy on nostalgia ended with a Halting the momentum of the man they used to call their own
Spaniard, who leads major. promise of a new dawn. is another matter.

India’s T20 World Cup squad is lopsided and incomplete

By ignoring Mohammed evened the odds by posting scores in only 17 T20 games for India since his debut ball partner to Bumrah on Australian
excess of 170. But it was the bowling that in 2014; Bhuvneshwar Kumar has played pitches.
Shami’s pace in favour of let the team down in the two matches that 77 since 2012. Shami has often proved Arshdeep Singh can crank up an occa-
medium pacers, counted the most. expensive but surely a bowler with his sional ball past 140kmph, but he’s in the
India were poised for a win against Pak- exceptional skills could have been nur- team mainly as a death overs specialist
selectors have made istan. The latter needed 26 runs in the last tured better with more exposure. His 152 because of his accuracy with yorkers.
things difficult for India two overs and had two new batsmen at the
crease—the inexperienced Khushdil Shah
ODI wickets at an economy rate of 5.6,
coupled with his IPL performances over
Harshal Patel is another medium-pacer in
the sub-140kmph category who relies
and Asif Ali. This was also the case in the the last four years, warranted a longer run mostly on slower ball variations. That
Sumit Chakraberty other match, with Sri Lanka four down, in the T20 team, especially seeing how leaves Bumrah as the only genuine fast
feedback@livemint.com while needing 21 in the last two overs. long a rope other seniors have got. bowler in the Indian squad for the World
These were winning positions for India, Shami took 3 for 31, including the wick- Cup, not counting Hardik Pandya who

I
ndia’s selectors have packed the T20
World Cup squad with medium pacers
who rely more on swing and variation
than on speed and bounce. This defies
logic, considering the hard wickets in Aus-
tralia where the World Cup will be played.
The selectors have also turned a deaf ear
to the siren that went off in the Asia Cup
where a medium pace bowling unit failed
to defend scores of 173 against Sri Lanka
and 181 against Pakistan.
India lost the toss in both those crucial
Super 4 stage encounters in Dubai where
batting first has been a disadvantage in
bowling-friendly conditions. But Sri
Lanka showed it could be done, by
defending 170 with a comfortable margin
of 23 runs in the final against Pakistan.
Any score of over 170 wasn’t easy to chase
at that venue, so India’s batting had
but in both cases, the 19th over went terri-
bly wrong.
Bhuvneshwar Kumar conceded 19 runs
in the 19th over against Pakistan, leaving
the young Arshdeep Singh the daunting
task of defending just 7 runs in the final
over. He took it to the penultimate ball, to
no avail. It was the same story against Sri
Lanka. Kumar gave away 14 runs in the
19th over, leaving only 7 runs for Singh’s
final over. Kumar’s leg-cutters and
attempts to bowl full outside off-stump
were too feeble in conditions that called
for fast yorkers and bouncers.
Strangely enough, Mohammed Shami
has played no part in India’s T20 plans this
year, despite all the experimentation and
rotation of players. He did perform poorly
in the World Cup opener against Pakistan
last year, but so did everyone else in the
ets of the dangerous Ben Stokes and Jos
Buttler—complementing Jasprit Bum-
rah’s 6 for 19—to demolish England for 110
at the Oval in July. This performance
should have reaffirmed to the selectors
that the Shami-Bumrah pairing is a lethal
opening combination in all formats of the
game. They also make for a formidable
death overs duo of yorker exponents. And
yet, despite Bumrah’s absence, Shami
The decision to not include Mohammed Shami may backfire in Australia. AP wasn’t taken to the Asia Cup as India’s
pace spearhead.
squad. That a bowler of his class hasn’t in Gujarat Titans winning the IPL title this Bhuvneshwar Kumar has amped up his
played a single T20 game for India since, year. He took 20 wickets in 16 games at a pace a bit since returning to the team last
speaks volumes about the arbitrary selec- decent economy rate of 8, which was way year after a hernia surgery. And this has
tion that has been the bane of India’s ICC better than Bhuvneshwar’s 12 wickets made him more potent with the new ball
tournament campaigns since 2011. from 14 games. And Shami has consistently in conditions that are conducive for seam
Shami’s 140+ kmph speed, his unerring delivered similar performances in the pre- and swing bowling, like in England and
seam position, and the ability to deliver vious three IPL seasons. And yet, this Dubai. But he still bowls at below
fast yorkers accurately were instrumental experienced world class pacer has played 140kmph, which is below par for a new
plays as an all-rounder rather than a spe-
cialist pacer. Shami could have easily
replaced one of these medium pacers in
the main squad. He could still force the
hand of the selectors in the upcoming
series against Australia and South Africa,
but for that, he has to be allowed to play.
Another dubious call by the selectors is
to include the spin trio of Yuzvendra Cha-
hal, Ravichandran Ashwin, and Axar Patel.
Neither Ashwin nor Patel has been a wick-
et-taker of note in the middle overs this
year, and Chahal can unravel under attack
as he did against Pakistan. Ravi Bishnoi,
whose style is different from the loopy leg-
spin of Chahal, could have taken one of the
slots. A Chahal-Bishnoi combination in
the playing 11 would have been interesting
in Australia where leg-spinners have
thrived more than finger spinners.