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RESUMING OPERATIONS RULES BEING FLOUTED

Auto, phone, durable firms
continue to remain shut
Delay in local
clearances,
incomplete supply
chain and closure
of front-end sales
key reasons for
firms in a wait-and-
watch mode
FE BUREAUS
Mumbai/Pune/New
Delhi/Chennai/Hyderabad
/Kolkata, April 20
THE GOVERNMENT MAY
have given a green signal for
restarting some segments of
industrial activity in a stag-
gered manner from Monday
byfollowing a set of listed pro-
tocols, but large sections of
manufacturing industry,bar-
ring the ones dealing in essen-
tial commodities, are still in a
wait and watch mode.
While some states like
Delhi, Maharashtra, Tamil
Nadu, Karnataka and Telan-
gana,have extended the lock-
down and are yet to give the
necessary permissions to
operate, companies are also
adopting a cautious approach
and are not in a hurry to com-
mence production.
Some, like in the auto sec-
tor or durables, don't see any
reason to begin operations
unless the full supply chain is
able to function.
As a result,the auto cluster
in the NCR region (Gurgaon
● EMERGENCY RELIEF
Construction work starts at the Mankhurd flyover in Mumbai on Monday
We are still assessing
whether we need to
restart operations. It
makes little sense to
start without assessing
whether our vendors can
function or not.
—RC BHARGAVA, MARUTI SUZUKI
INDIA CHAIRMAN
and Greater Noida), Tamil
Nadu (Sriperumbudur), and
Maharashtra (Chakan-Tale-
gaon-Ranjangaon), will con-
tinue to be shut for some
more time as manufacturers
like Maruti Suzuki India,
Hyundai Motor India, Honda
Cars, Mahindra and Mahin-
dra, Bajaj Auto and Tata
Motors, are yet to take a deci-
Centre steps in, sends teams to monitor
‘specially serious’ districts in four states
Oppn-ruled Bengal,
Maha and Rajasthan
on the list with MP;
7 of 11 districts
from Bengal, others
are hotspots
DEEPTIMAN TIWARY &
ABANTIKA GHOSH
New Delhi, April 20
A DAY AFTER it directed
Kerala to rectify its lockdown
relaxations saying some of the
concessions diluted national
guidelines, the central govern-
ment appeared to be on a colli-
sion course with more states,
puttingunderstrainacommon
exit strategy that the Prime
PRASHANT NADKAR Minister had urged states to
help frame in the country’swar
against Covid-19.
We don't have any On Monday, the Centre
requirement to open our informed West Bengal,Maha-
automotive plant rashtra,Rajasthan — all ruled
immediately and none of by the Opposition — and
our plants fall in relaxed Madhya Pradesh that lock-
zones. Our suppliers are down measures were being
also in the red zone. routinely flouted in their dis-
tricts, and was sending six
—PAWAN GOENKA,
newly constituted Inter-Min-
MAHINDRA & MAHINDRA MD
isterial Central Teams (IMCT)
for on-the-spot assessment of
sion on restarting operations. our vendors can function or the situation there.
The reason is either some not.” Mahindra and Mahin- The IMCTs,which will sub-
local permissions have still not dra, MD, Pawan Goenka told mit a report to the Centre,have
comeorthesupplychainneeds
more time to get activated.
CNBC TV18, “We don't have
any requirement to open our
been authorised to issue nec-
essary directions to state
Says Maruti Suzuki India automotive plant immedi- authorities for redressal.
chairman RC Bhargava, “We ately and none of our plants Headed by Additional Secre-
are still assessing whether we fall in relaxed zones.Our sup- tary rank officers from the
need to restart operations. It pliers are also in the red zone.” Centre,the IMCTswill start the
makes little sense to start inspection visits within three
without assessing whether Continued on Page 2 days of the order.
TMC-ruled West Bengal’s
initial response was frosty,
VIRAL IMPACT questioning the deployment
China protests India’s new FDI rules; Social distancing
Kant says start-ups not to suffer
FE BUREAU
New Delhi, April 20 DIFFERENT
STROKES
TWO DAYSAFTERIndiatight-
ened its foreign direct invest-
ment(FDI)policyforbordering
countries to curb“opportunis-
tic takeovers/acquisitions” of
its firms hit hard by the pan-
demic, China on Monday said
the move violates the WTO’s
principle of non-discrimina-
tion and is against the general
trend of free trade.
However,in an interview to
CNBC-TV18, Niti Aayog chief
executiveAmitabhKantdown-
playedthecriticism,sayingthe
government circular relates to
Police out in a Kolkata fruit market to enforce curbs
Kerala rolls back Govt braces for a second wave
some relaxations in late May after lockdown eases
THE KERALA GOVERNMENT
onMondayrolledbackeasingof
certain Covid-19-related curbs
in select zones, after the state
chief secretary received a letter
fromtheUnionhomeministry,
expressing concerns over the
is needed for a
year, says
Srinath Reddy
■ Kant says intention is not
to stop FDI but to do a bit
of due diligence before nod
■ FDI makes up for only
30% of China's $8-billion
investments in India; its FDI
only 0.5% of such inflows
into India since Apr 2000
only FDI and is unlikely to
impactChineseinvestmentsin
Indian start-ups.
Continued on Page 2
PARTHA PAUL
ABANTIKA GHOSH
New Delhi, April 20
EVEN AS THE Union govern-
ment is looking at various
options for“gradual”lifting of
the lockdown post-May 3 and
SARTHAK RAY
New Delhi, April 20
EVEN AS EVIDENCE grows
that averylarge share of those
infected with Covid-19 could
be asymptomatic and this, in
turn, suggests India needs a
dramatic increase in its test-
ing,Public Health Foundation
of India (PHFI) president Sri-
nath Reddyfeels this is not the
solution; Reddyis also a mem-
ber of the executive group of
the International Steering
Committee of WHO’s Covid-
19 Solidarity trial.
In an interview to this
newspaper (see interview,
Page 6), Reddy says social dis-
tancingwill need to be in force
for a year if we are to mean-
ingfully combat the virus.
Reddy spoke of how it is
very difficult to catch asymp-
tomatics, unless individuals
get themselves tested on
demand, or the public health
authorities organise testing in
a cluster.
Continued on Page 2
is 7.5 days, up from the 3.4
days before the lockdown.
The Union government
hopes that it will increase to
10 days by the end of the
week, and 12 days by the first
week of May.

SEIS sops for services

of the IMCTs and suggesting relaxations, reports fe Bureau hopes that the doubling time “At ourworst,our doubling

Infosys to freeze thatit“mightnotbeconsistent

with the spirit of federalism”.
inThiruvananthapuram.The
letter also said relaxations
of Covid-19 caseswill increase
to 12 days by then, sources
time was 3.4 days. We are
expecting to touch 12 byApril-

exporters to continue amounted to dilution of the said the Centre is preparing end or early May, but after

BANIKINKAR PATTANAYAK avirus pandemic,he added.

hiring, salary hikes Continued on Page 2

New Delhi, April 20
THE GOVERNMENT WILL
likely rethink its position and
grant exporters benefits under
Through the SEIS, the gov-
ernment offers domestic
exporters duty credit scrips at
5-7% of the net foreign
exchange earned, depending
SRINATH SRINIVASAN
Bengaluru, April 20
IT MAJOR INFOSYS will delay
taking on board new recruits
COVID-19 UPDATE
Centre’slockdownguidelinesas
well as an observation of the
Supreme Court.
for a second wave in late
May or early June, as restric-
tions are eased in more parts
that, as we gradually start to
open up — the lockdown will
definitely not be lifted in one
Report card Following this, the earlier of the country. go, only districts that qualify
Revenue Net profit (` crore) 17,656 decision to allow barber shops On Monday, the health will see relaxations, that
Operating margin (%) Rhs TOTAL CASES and dine-in restaurants to ministry said the doubling too graded — there will be a
reopen in non-hotspots has time — an epidemiological gradual increase (in cases),”
559
25,000 22.2
21.9 been withdrawn. metric of how long an infec- said a source.
23,267
23,092

the Service Exports From India
Scheme (SEIS) for some more
time to help them tide overthe
pandemic impact, an official
on the nature ofservices.Trade
analysts say the actual outgo
undertheSEIScouldbearound
`3,000-4,000 crore a year,
andwilltemporarilyfreezehir- 20,000 21.9 tious disease takes for the
DEATHS SO FAR 1,540 NEWCASES
ing, hikes and promotions in Detailed report on Page 2 number of cases to double — Continued on Page 2
the wake of the disruption due 15,000 21.2 21.6
to the global pandemic. “We
Maha allows 1.3 lakh cane cutters to return to their villages
10,000 21.3
4,457

4,321

source told FE. It may also use althoughlatestofficialdataare
incentives under the scheme not available.
to promote sectors like
tourism, battered by coron- Continued on Page 2
WTI crude falls 92% to
$1.42, lowest on record
West Texas Intermediate
crude fell 92.2% to $1.42
a barrel on Monday, hit-
ting the lowest on record
with its seventh consec-
utive decline and the
biggest fall on record.
Brent was down $1.50, or
5.3%, to $26.58 a barrel.
have no regrets in doing so. It
willhelpuscomeoutofthecri-
sisstronger,”NilanjanRoy,CFO,
said on Monday.
Lastweek,TCS,thecountry’s
biggestexporterofsoftwareser-
vices, had said it would not
retrenchanyemployeesthough
there would be no increments
thisyear.TheTCS management
said it would take on board the
40,000 recruits. Salil Parekh,
CEO, Infosys, observed that
while the company was yet to
BUNKER DOWN
Wealthy Americans activate Odisha, Maha eye loans from
5,000 21.0
NANDA KASABE As per the Friday directive,as many as district,” according to the directive.
0 20.7 Pune, April 20 38 sugar mills which employed these The government has ordered sugar
Q3FY20 Q4FY20
% chg workers will give the authorities details factories to make arrangements to
(q-o-q) 20 bps 70 bps THE MAHARASHTRA GOVERNMENT suchasnativevillage,tehsilanddistrictof transport the sugarcane cutters. Facto-
has decided to allow over 1.3 lakh the labourers to facilitate the movement. ries are directed to have medical exami-
gaugethefullimpactofthepan-
demic, near term margin pres-
migrant sugarcane workers to return to
theirnativevillages,afterpropermedical
These workers and their families have
beenlivinginthesheltersprovidedbythe
nations conducted to check for symp-
toms of pneumonia,cough and fever,in
sures across verticals and geo-
graphies could be expected.
examination to ensure that the move
won’t undermine the efforts to contain
millers for more than 14 days.“They will
have to undergo a medical check-up and
the absence of which, travel arrange-
ments are to be made for their return.
Covid-19. The sugar mills will arrange thelistsenttothecollectoroftheirpresent
Continued on Page 2 andbeartheexpensesfortheirtransport. residenceandtothecollectorofthenative Continued on Page 2
Full report on Page 4
LOW-COST FUNDS

pandemic escape plans rich PSUs instead of market

QuickPicks OLIVIA CARVILLE
New York, April 20
PRASANTA SAHU
New Delhi, April 20 The state's Given the high
revenues are bond yields,
ICICI Bank seeks impounding AS CORONAVIRUS INFEC-
TIONS tore across the US in
INSTANCES OF SOME state
governments resorting to
going to the state will
of ships operated by HLT unit early March, a Silicon Valley
executive called the survival
market borrowings at exorbi-
tant costs seem to have
suffer
heavily if
also look at
the possibility
ICICI BANK is seeking the impounding of two shelter manufacturer Rising S prompted a few states to look lockdown of borrowing
vessels operated by Ocean Tankers, a unit of Co. He wanted to know how to for alternative ways to finance
Singapore oil-trading company Hin Leong Trading openthesecretdoortohismul- their coronavirus-related continues for long…We from
(HLT), a bank source said on Monday, reports timillion-dollar bunker 11 feet expenditure. may therefore borrow government
Reuters. The tankers, Wu Yi San and Chang Bai San, were underground in NewZealand. Atleasttwostates—Odisha from the corpus available bodies.
carrying cargoes financed by ICICI, the source said, adding The tech chief had never and Maharashtra — are going with OMBADC. —RAJIV MITTAL,
that the bank had about $100-million exposure to HLT. used the bunker and couldn’t to seek soft loans from their —ASHOK MEENA, MAHARASHTRA
rememberhowtounlockit,said cash-rich public sector under- ODISHA FINANCE SECRETARY FINANCE SECRETARY

Developers, architects should be GaryLynch,generalmanagerof

Texas-based Rising S Co. “He
ashamed of creating slums: Tata wanted to verify the combina-
tionforthedoorandwasasking
NOTED INDUSTRIALIST Ratan Tata on Monday questions about the power and
lambasted developers and architects for treating the hot water heater and
slums as "residue" of the city, reports PTI. whetherheneededtotakeextra
According to him, it is one of the reasons for the water or air filters,” Lynch said.
rapid spread of the deadly Covid-19 pandemic in the The businessman runs a com-
megapolis. He also said the city builders should be ashamed panyin theBayAreabut livesin
of creating vertical slums across the cities. PAGE 5 New York, which was fast
Employees work on the frame of an underground steel bunker
at the Rising S manufacturing facility in Murchison,Texas
takings soon.
The idea is to reduce mar-
becoming the world’s coron- still there.” For years, New
ket dependence at this junc-
ture, when several states are from Odisha Mineral Bearing “OMBADC may not be able
avirus epicentre. Zealand has featured promi- frontloadingtheirborrowings, Areas Development Corpora- to quickly spend the entire
“HewentouttoNewZealand nentlyinthedoomsdaysurvival which, along with the risk- tion (OMBADC), a state gov- fundsinitscustodycreatedout
toescapeeverythingthat’shap- plans of wealthy Americans averse attitude of the banks,is ernment undertaking with of penalties imposed on min-
pening,”Lynchsaid,decliningto worried that, say, a killer germ causing bond yields to rise. which a robust corpus of ing firms.We can borrow from
identify the bunker owner might paralyse theworld. Ashok Meena, Odisha’s `17,000 crore is lying un- it for the time being,”he said.
because he keeps his client lists finance secretary, told FE utilised, to tide over current
private.“AndasfarasIknow,he’s Continued on Page 2 that the state might borrow financial difficulty. Continued on Page 2
 2 FINANCIAL EXPRESS
Economy
TUESDAY, APRIL 21, 2020
Quick
View
5 lakh testing
kits arriving
from S Korea
INDIA IS PROCURING five
lakh coronavirus testing
kits from South Korea to
meet their growing
demand in view of rising
cases of the infection,
officials said on Monday.
Net enrolments
with EPFO fall
THE NET NEW enrolments
with the EPFO dipped to
10.34 lakh in February
2020 from 10.71 lakh in
the previous month,
according to its payroll
data,providing an
employment perspective
in the formal sector.
Resuming
operations: Auto,
phone, durable
firms continue to
remain shut
TWO-WHEELER MANUFAC-
TURERHeroMotoCorphascat-
egorically said that it will not
start production before May 3,
the period till when the lock-
downisinforce.Chennai-based
TVS Motors is awaiting clear-
ances before commencing
operations.
Similarly, mobile phone
manufacturing units are also
yet to start operations as they
are awaiting permission from
local authorities.
Indian Cellular & Electron-
icsAssociation(ICEA)chairman
Pankaj Mohindroo said,“It will
taketimetogearup,about7-10
days, but the mobile phone
companies are going to restart
manufacturing.Necessaryper-
mission is to be given by the
state governments and that
process is going on in UP,
Haryana, Tamil Nadu,Andhra
Pradesh, Telangana and Kar-
nataka. Mobile industry is
geared up to start. If requisite
permissions by states come
then we can expect manufac-
turing to start by maybe end of
Apri.l”
Consumer Electronics and
Appliances Manufacturers
Association(CEAMA)president
KamalNandisaid,“Ithinkmost
of the brands have enough
stocks in their warehouses as
well as with trade partners so I
think in starting manufactur-
ingnow,thechallengewouldbe
where to ship out the stock.
Therefore,inorderofsequence,
unlessthemarketopensupand
sales start, I do not think man-
ufacturing activity will start in
a bigway”.
There are a few companies
which have partially resumed
operations like Thermax and
Forbes Marshall.Thermax had
commenced operations at its
facilities at Paudh (Maharash-
tra) and at Dahej and Jhagadia
(Gujarat) since April 6 as it was
classified under essential ser-
vices.MS Unnikrishnan,MD &
CEO,Thermax,said,"Wearecur-
rentlyoperating between 25 to
40% of the capacity. We are
experiencing constraints in
terms of material and labour
movementstemmingfromthe
lockdown.However,weareable
tomanagedispatcheswithnec-
essary approvals from con-
cerned government authori-
ties. Right now, the focus is on
safeguarding lives over any-
thing else".
Naushad Forbes, co- chair-
man,Forbes Marshall,said they
had re-started manufacturing
in one of theirunits in a limited
way. Forbes said the main con-
straintsarethattherearelotsof
last mile delivery issues.
"Though permitted, getting
people transported to work is a
challenge as each policeman
interpretstheruleshimself-the
main challenge is logistics and
transport of material and get-
tingthesupplychainoperating.”
Similarly, in Kolkata, Birla
Corporation, the MP Birla
Group's flagship, said it has
receivedpermissiontore-com-
menceoperationsatmostofits
cementplants.Accordingly,the
● `46,000 CR SANCTIONED
Despite tax deficit,states
givenApril share as budgeted
FE BUREAU
New Delhi, April 20
IN WHAT COULD provide
some relief to the states
affected by the revenue
crunch,the Centre on Monday
sanctioned `46,038 crore as
theApril instalment of devolu-
tion of states’ share in central
taxes, based on the FY21 Bud-
get estimate (BE).
“To assist states effec-
tively address situation aris-
ing out of Covid-19 global
pandemic, as a special dis-
pensation, the calculation of
net proceeds of shareable
taxes has been kept
unchanged as per Budget
2020-21,” the finance min-
istry tweeted.
The inter-se share is as per
the recommendations of the
15th Finance Commission.
mother plants are gearing up
for production.However,it will
take a fewdays to come fullyon
stream - for workforce mobili-
sation, logistics and supply
chainrestoration."Rampingup
production is less of an issue -
the key variable is demand -
which may take some time to
gaintractionandbasedonhow
construction activity picks up
post lockdown," Birla Corpora-
tionCOOSandipGhosetoldFE.
B Thiagarajan, managing
director,BlueStarIndia,told FE
thatitcanresumeoperationsin
factories onlyonce retailers are
opened.“I do not need material
because enough is in the field.
Mywarehousesarefull,around
80trucksofminearewaitingall
around the country since the
lockdown came into effect, so
only if the retailers are allowed
to open, there is point of me
manufacturing.”
Low-cost funds:
Odisha, Maha
eye loans from
rich PSUs instead
of market
MAHARASHTRA, WHICH is
expectinghugeshortfallinrev-
enuereceiptsinatleastthefirst
three months of this fiscal, is
also looking at the option of
tappingcashsurpluseswiththe
statePSUsforadditionalfunds.
The state’s finance secretary
(expenditure)RajivKumarMit-
tal confirmed this to FE, but
refused to elaborate further.
As reported by FE recently,
the Odisha government has
asked the Centre to remove the
30% cap on the use of the Dis-
trict Mineral Funds to fight
Covid-19 in each affected dis-
trict. The move indicates the
willingness of the state,which
has the largest DMF corpus
among the Indian states (with
unutilised balance of Rs 7,000
crore), to use this resource
rather liberally to give succour
to people impacted bythe pan-
demic. Use of DMF doesn’t
entailanybudgetaryoutgosoit
is fiscallymore prudent.
EventhoughOdishaisarev-
enue surplus state and can
manage its finances for
Q1FY21 by reprioritising
spending, it has to borrow
thereafter if tax revenues con-
tinue to be much lower than
budgeted,Meena said.
OMBADC has created a
huge corpus since 2017 after
Supreme Court ordered that
mining companies pay penal-
ties for extracting iron and
manganeseorebeyondthelim-
its approved under environ-
mentclearancerules.OMBADC
is required to use these funds
forspecified purposes like sup-
ply of safe drinking water,edu-
cation and skill development,
health services, livelihood pro-
motion, etc, in eight mining-
affected districts of the state.
The funds are, however, in the
veryearlystagesutilisationand,
therefore, a large amount is
lyingwith the undertaking.
Adhering to the FRBM-
mandated fiscal deficit ceiling
of 3% of GSDP, Odisha has
peggeditsgrossborrowingatRs
24,450 crore and net borrow-
ingataboutRs18,000crorefor
FY21.To manage its finances,
the state may postpone capital
As per extant norms, tax
devolutions are made in
14 instalments to states in
a year, one in each month
up to February and three
instalments in March
Accordingly,UttarPradeshwill
get `8,255 crore, followed by
Bihar (`4,632 crore), Madhya
Pradesh (`3,631 crore), West
expenditure, a handsome Rs
35,209croreearmarkedforthe
full year till finances improve,
Meena said.
LikeMaharashtraandTelan-
gana, Odisha has also been
forced to cut expenditure and
defer some others, including
salarypayments to manage the
financesatthecurrentjuncture.
Some other states like Kerala,
which are likelyto borrowmore
than their FY21 plan, are look-
ingforavenuessuchassecuring
loans from the Asian Develop-
ment Bank and World Bank to
supplement market loans.
Hard-pressed, some states
are even disregarding the exor-
bitant costs such fund-raising
entails, in a clearly risk-averse,
jittery market.While the RBI’s
indicativecalendarputtheceil-
ing for market borrowings by
the state governments in
Q1FY21 (April-June) at Rs 1.27
lakhcrore,56%higherthanthe
statedevelopmentloans(SDLs)
raised by them in the year-ago
quarter, on April 7, in the first
instance of SDL auction in the
newfiscalyear,19statesamong
them raised a total amount of
Rs 32,560 crore, against Rs
37,500croresoughtbythem.In
fact, the bonds sold by these
states on that day were 44%
higherthan the indicative total
in the RBI calendar.
With many states planning
to front-load borrowings in
Q1FY21, the RBI on Friday
enhanced the ways and means
advances (WMAs) for them by
60% (from the level as on
March 31) to about Rs 51,560
croreforH1FY21,toencourage
the states to spread out their
borrowings. SofarinApril,Ker-
ala has utilised 91% of its
Q1FY21 SDLquota of Rs 6,500
crore, Odisha 67% of its share
of Rs 4,500 crore and Maha-
rashtra 40% of its quota of Rs
17,500 crore. Rating agency
ICRA has estimated a 25%-
30% increase in net SDL
issuance to Rs 6.2-6.4 lakh
crore in FY21 from the level of
Rs 5 lakh crore in FY20. It has
estimatedgrossSDLissuanceto
rise by nearly 19%-23% to Rs
7.6-7.8 lakh crore in FY2021,
from Rs 6.3 lakh crore in FY20.
Marketanalystsreckonthat
thestatesandtheCentrewould
go for very substantial extra
borrowings over and above
theirbudget estimates,a possi-
bilitywhich is getting priced in
the bond auctions already.
SEIS sops for
services exporters
to continue
BEFORETHE Covid-19 spread,
commerce and industry min-
ister Piyush Goyal had in Feb-
ruarywarned of abolishing the
SEIS, saying the scheme had-
n’t contributed to a rise in ser-
vices exports and that a few
playerswere cornering a major
chunk of the incentives.
Recently,when the commerce
ministryextended thevalidity
of the foreign trade policy
(FTP) for 2015-20 by a year
through March 2021,benefits
under a similar scheme for
merchandise exporters —
MEIS — were allowed to con-
tinue. But it said a call on
whether to extend the SEIS
validitywould be taken soon.
However, given that the US
Bengal (`3,462 crore) and
Rajasthan (`2,753 crore).
For FY21,the 15th Finance
Commission has also virtually
kept unchanged tax devolu-
tion to states at 42% of the
divisible pool after adjusting 1
percentage point forthe needs
oftheerstwhilestateofJammu
and Kashmir.
The April devolution as per
FY21BEindicatesthattheCen-
tre has provided more funds
than it should have, as tax
receipts have badly been
affected due to Covid-19.
Extra transfers could be
adjusted in future instal-
ments.
As per extant norms, tax
devolutions are made in 14
instalments to states in a year,
one in each month up to Feb-
ruaryand three instalments in
March.
From the Front Page
and the EU,India’s top two ser-
vicesexportmarkets,havebeen
hammered by the pandemic,
thegovernmentiscontemplat-
ing easing its stance temporar-
ily,possiblywithtougherriders,
according to the source cited
earlier.Aseniorcommercemin-
istry official, however, said a
decision on this matter would
be finalised soon.
India’s services exports rose
just over 4% year-on-year in
FY20to$214billion,whilemer-
chandise exports contracted by
close to 5% to $314 billion,
accordingtoaquickestimateby
the commerce ministry.While
merchandise trade witnessed a
deficit of $153 billion in FY20,
thesurplusinservicestradewas
tothetuneof$83billion,which
narrowed the overall trade
deficit to $70 billion.
Highlighting that industry
has to get out of the mindset of
subsidies, as these are detri-
mental to the country’s long-
term interests, Goyal had in
February made a case for dis-
continuingtheSEISattheearli-
est possible opportunity: “For
example,wenowgivesubsidies
on services exports.I have gone
throughthelistingreatdetails,
barely 2,200 companies take
that subsidy.Some of them are
such large names, making
1000s of crores of rupees of
profit,that there is no business
of giving them a subsidy," he
said. However, given the
changed scenario, services
exporters need continued sup-
port to survive.
Analysts say the govern-
ment must come out with a
revamped SEIS, if it so desires,
only when it announces the
next FTP. Until then, any deci-
sion to continue with the cur-
rentpolicywillbegood,asitwill
lendstabilityandpredictability
in the policy regime for these
exporters.
After a mid-term review of
thecurrentFTP,thegovernment
had in December 2017
announced additional incen-
tivesworthRs8,450croreayear
to boost both merchandise and
services exports. The higher
incentiveundertheSEISforser-
viceslikebusiness,legalaccount-
ing, architecture, engineering,
education,hospital, hotels and
restaurants would cost the
exchequerRs1,140croreayear,
thecommerceministryhadsaid.
Infosys to freeze
hiring,salary hikes
THE IT major, which
announced Q4FY20 results on
Monday, expects the momen-
tum to slow before picking up
again aftera fewquarters.
Pravin Rao, COO, Infosys,
said 93% of the company’s
employees are currently work-
ing remotely from homes.“We
arenotlookingatfurloughsand
will honour all our hiring com-
mitments,” Rao said. He added
theofficeswillopeninaphased
manner, with less than 5% of
the work force expected to
returntoofficesinaspanof3to
5weeks.
Social distancing
is needed for a
year, says Srinath
Reddy
HE CITED Boston 25 (a digital
Kerala rolls back some relaxations
FE BUREAU
Thiruvananthapuram, April 20
THE KERALA GOVERNMENT
on Monday rolled back easing
of certain Covid-19-related
curbs in select zones, after the
state chief secretaryreceived a
letter from the Union home
ministry, expressing concerns
over the relaxations.The letter
also said relaxations
amounted to dilution of the
Centre's lockdown guidelines
aswell as an observation of the
Supreme Court.
Following this, the earlier
decision to allow barber shops
and dine-in restaurants to
reopen in non-hotspots has
been withdrawn.
“We are discussing what
can be done. If needed, neces-
sary modifications will be
made,” Kerala chief secretary
TomJosehadearliertoldmedi-
apersons.
Chief minister Pinarayi
Vijayan said there is no possi-
bilityofafrictionwiththeCen-
video news outlet) reporting
that, of 397 people in a home-
less shelter in Boston,146 peo-
ple tested positive and all of
them exhibited no symptoms.
A population-wide testing,
Reddy says, or even large-scale
testing,is neitheradvisable nor
feasible given the requirement
for testing kits, reagents, lab
personnel,protectivegear,sam-
ple collection paraphernalia,
etc. Indeed, he adds, you need
continued testing to see if an
infectedpersonistrulycuredor
ifanuninfectedpersonremains
so, given the reports of asymp-
tomatic infection, in the long
run.It doesn’t help that no test
isfullyperfectandyouhavethe
presence of false positives and
negatives.
In the event, Reddy recom-
mendsIndiacarryontestingas
it is now,with ICMR reviewing
and updating the strategy as
andwhennecessary.Apartfrom
that, continue with social dis-
tancingforwhateverdurationit
isdeemednecessary.Peoplewill
also need to adopt the advised
hygiene practices to keep the
virus at bay.Most important,to
protect our elderly and other
high-vulnerability groups –
those with diabetes, COPD,
hypertensionandcoronarydis-
eases – we must have some
household and individual risk-
profilingfromdataonunderly-
ingdiseases.Toprotecttherural
areas from transmission from
the urban areas, minimise
transport linkages (other than
those for emergency purposes)
between urban areas, where
Covid-19 in India is at present
concentrated, and the rural
areas which are unexposed to
thevirusfromforeigntravellers
ortheircontacts.
WealthyAmericans
activate pandemic
escape plans
ISOLATED AT the edge of the
earth, more than 1,000 miles
off the southern coast of Aus-
tralia, New Zealand is home to
about4.9millionpeople,about
a fifth as many as the NewYork
metro area.
Inrecentweeks,thecountryhas
been lauded for its response to
the pandemic. It enforced a
four-week lockdown early, and
todayhas more recoveries than
cases.Only12 people have died
from the disease.The US death
tollstandsatmorethan39,000,
meaning that country’s death
ratepercapitaisabout50times
higher. BLOOMBERG
China protests
India’s new FDI
rules; Kant says
start-ups not to
suffer
GIVEN THE crash in valuations
of liquidity-starved domestic
companies in the wake of the
Covid-19outbreak,thegovern-
mentisrequiredtodosomedue
diligence on FDI proposals for
their takeover, Kant said,
explainingtherationalebehind
the decision. Even the US and
the EU have initiated similar
steps,hesaid.Greenfieldinvest-
ments from China won’t face
any trouble and that Chinese
manufacturers in India must
EXPERTVIEW
Chief minister
Pinarayi Vijayan
tre regarding lockdown guide-
lines.Thestateisabidingbythe
Centre's directions in the right
earnest.Iftherearesomestate-
specific alterations needed in
select areas,thatwill be imple-
mented in coordination with
the Centre and with its con-
sent,Vijayan said.
The letter from Union
home secretary Ajay Bhalla,
written on April 19, said the
decision to allow the relax-
ations “amounted to dilution
of guidelines issued by the
use the country as a base for
exports,he added.
As such, FDI accounted for
less than 30% of Chinese
investmentsworth$8billionin
India until December2019.
According to a DPIIT press
note on April 18, any FDI by
investors from the bordering
countrieswillnowrequireprior
government clearance, even if
foreign investments for that
sector are placed under the
automatic route. Importantly,
the notification also covers any
transfer of investments or
future FDI resulting in benefi-
cial ownership falling with
firms from the bordering
nations.
Prior to the move, all FDI
proposals from only Pakistan
and Bangladesh were required
to be cleared by the govern-
ment. Over 90% of the coun-
try's FDI comes through the
automatic route.
On Monday, a Chinese
embassy spokesperson in New
Delhi said: "We hope India
would revise relevant discrimi-
natory practices, treat invest-
mentsfromdifferentcountries
equally,and foster an open,fair
and equitable business envi-
ronment."
His statement also high-
lighted that as of December
2019, China’s cumulative
investment in India has
exceeded $8 billion,“far more
than the total investments of
India’s other border-sharing
countries".
It,however,didn’t point out
that FDI inflows from China
have remained meagre and its
venture investments in Indian
start-ups,in any case,are unaf-
fectedbythelatestFDIcircular.
According to a recent report
by researchers Amit Bhandari
andAashnaAgarwal,China has
entered the Indian market
through venture investments
instart-upsandpenetratedthe
online ecosystem with its pop-
ular smartphones and their
applications. Chinese tech
investorshaveputanestimated
$4billionintoIndianstart-ups.
Over the five years ending
March 2020, 18 of India’s 30
unicorns are now Chinese-
funded."TikTok,the video app,
has200millionsubscribersand
hasovertakenYouTubeinIndia.
Alibaba, Tencent and
ByteDance rival the US pene-
tration of Facebook, Amazon
and Google in India. Chinese
smartphones like Oppo and
Xiaomi lead the Indian market
with an estimated 72% share,
leaving Samsung and Apple
behind."
AsreportedbyFE,giventhat
many Indian firms which were
alreadyunderstressevenbefore
the pandemic can potentially
turninsolventnow,thegovern-
ment worries that cash-rich
Chinese investors could ramp
up acquisition efforts, taking
undue advantage of a drastic
drop in these firms'valuations.
Centre steps in,
sends teams to
monitor‘specially
serious’ districts
in four states
CHIEF MINISTER Mamata
Banerjee,takingtoTwitter,said:
“We welcome all constructive
WWW.FINANCIALEXPRESS.COM
The unfortunate truth about jobs in almost every
economy in the world is that they are easily lost but
hard to win back. The more jobs that are lost today,
the slower will be the recovery.
— S&P Global Ratings
CM Pinarayi Vijayan said
there is no possibility of a
friction with the Centre
regarding lockdown
guidelines
Home Ministry and violation
of its April 15 order issued
under the Disaster Manage-
ment Act 2005”.
The state government
believes that the Centre might
have had misunderstood Ker-
ala's plan.“There is no dilution
of lockdown guidelines from
Kerala's side. We will give an
explanation, sorting out the
misunderstanding,” state
tourism minister Kadakam-
pally Surendran said.
According to the neworder,
barber shops and dine-in
restaurants would not be
allowed, though there would
benorestrictionsonthebarber
visiting the customer at his
home, or take-aways from
restaurants. The state govern-
support & suggestions, espe-
cially from the Central Govt in
negating the #Covid19 crisis.
However, the basis on which
Centre is proposing to deploy
IMCTs in select districts across
India including few in WB
underDisasterMgmtAct 2005
is unclear. I urge both Honb’le
Prime Minister @Naren-
draModi Ji & Home Minister
@AmitShah Ji to share the cri-
terion used forthis.Until then I
am afraid,wewould not be able
to move ahead on this as with-
outvalidreasonsthismightnot
be consistent with the spirit of
federalism.”
Incidentally, West Bengal
and Maharashtra are among
the handful of states where
doubling time of COVID-19
cases is currently less than the
national average of 7.5. Dou-
bling time is an epidemiologi-
cal metric of how fast an infec-
tious disease is spreading.
Govt braces for a
second wave in
late May after
lockdown eases
THE SOURCE added: “We are
looking at a second peak in late
May or early June,but now that
awarenesslevelsaresohighand
people are gradually getting
used to the idea of social dis-
tancing, masks, etc, we do not
anticipate the doubling time
dipping to below 5 days at that
point.”
It is likely that the cases will
be concentrated around urban
and peri-urban areas, where
COVID-19managementwillbe
less challenging than in rural
areas.
“However as Mumbai,
Indore and Chandigarh have
shown us, there are so many
unforeseen developments in
this battle.
Sometimes cities that are
expected to do well explode,
whileatothertimescitieswhere
youexpectaproblemtohappen
somehow manage to hold it
together,”said the source.
There is a sense that area-
specific lockdowns and relax-
ationswill have to be the norm,
dependingontheriseandfallin
cases,till Septemberat least.
While the government
hopesthatthesecondwavewill
nottouchtheMarchhighof3.4
days doubling time, it will still
mean a rise in fresh cases that
willneedneedclinicalmanage-
ment,contacttracing,isolation,
quarantine,testing etc.
However,the medical infra-
structure - including hospital
beds, PPEs and ventilators - is
expected to be better prepared
in June than itwas in March.
While there is no clarity yet
on the criteria for lifting the
lockdown post-May 3, the
HealthMinistry’sclassification
of districts into red,orange and
green is being carefully
watched.
Inherlettertothestateslast
week, Union Health Secretary
Preeti Sudan had said: “Con-
tainment operation would be
deemed over when there is no
case reported in 28 days from
an area after the last case tests
negative. Hotspots (designated
redzones)willbeassumedtobe
undertaking effective contain-
ment activities, if no case is
reported in the next 14 days
ment has also rolled back its
decision to allow persons pil-
lion riding on two-wheelers if
riders are close kin.
After receiving the letter
fromtheCentre,Vijayansaidin
a tweet: “From today on, some
areas will see relaxations. We
are not past the danger and
must remain cautious. The
lockdown must have made
some of our life skills rusty;
take extra precaution. Wash
hands.Wearmasks.Social Dis-
tancing.”
Only four north Kerala dis-
tricts – Kasargod, Kannur,
Kozhikode and Malappuram
– are in the red zone. In the
rest of the state, hospitals,
pharmacies, shops selling
agriculture, pisciculture and
plantation products are
allowed. So are construction
activities and financial insti-
tutions, though subject to
social distancing rules.
However, large gatherings
are not permitted even in the
orange and green zones.
(designated orange zones) and
will be deemed successful in
containment, if no case is
reported for 28 days (desig-
nated green zones).”
The red zones are areas
whichaccountfor80percentof
the cases in the country, or 80
percentofthecasesinastate,or
where the doubling time is less
than fourdays.
Currently,thereare321dis-
trictswithnocases;77havenot
reported cases for 7 days; 62
have not reported for 14 days;
17 for 21 days; and 3 districts
(Mahe, Kodagu and Pauri
Garhwal) have not reported
cases for28 days.
However, officials pointed
outthattheclassificationofdis-
trictsintored,orangeandgreen
zonesis quite fragile,as a single
case may send a district back
into the red zone.
The government is also
looking at international mod-
els, such as South Korea and
China,to get an idea about how
tostructurelifeafterlockdown.
“Thebroadcriteriaforlifting
restrictions is clear - where the
epidemic has been suppressed,
there is a certain level of pre-
parednessonthepartofthedis-
trictadministration,andpeople
have adjusted to the new nor-
mal of social distancing and
other behaviour changes,” said
an official.
Maharashtra cane
cutters to return
to own villages
WHILETHEdistrictmagistrates
(DMs) have been instructed to
initiatetheprocess,thefactories
are required to bear the cost of
theirtransport,andthefoodand
water required during the jour-
ney.Inordertofacilitatethepas-
sage of their vehicles through
the curfew, factories have also
been directed to intimate the
police and the local authorities
ofthedistrictstheywillbepass-
ing through,in advance.
Theorderalsodirectsthevil-
lagesarpanchs(heads)topermit
these workers to enter theirvil-
lages, and to make an official
note recording their entry.Fac-
tories will have to take the
receiving report from these
sarpanchsandsubmitthesame
to the DMs, confirming to
authorities that these workers
have reached back to their vil-
lages.
Maharashtra typically sees
migration by labourers after
Diwali from drought-prone
Marathwada, especially Beed
district,toworkinthesugarcane
fields of western Maharashtra.
The season lasts till March.This
year, they have been unable to
travel back home due to the
lockdown.
BB Thombare, president,
WesternIndiaSugarMillsAsso-
ciation (WISMA), confirmed
thatmostoftheworkersarecur-
rently in Western Maharashtra
where some factories are still
crushingcane.Oncetheadmin-
istrative process is complete,
they should be leaving for their
villages soon,he said.
Maharashtra Rajya Ustod
Mukadam Vahtuk Sanghatana
president Srirang Bhange said
that this process could take
another three to four days and
the shifting of workers should
beginsoon.
WWW.FINANCIALEXPRESS.COM
FINANCIAL EXPRESS
● VIRUS SPREAD
Fitch cuts India’s FY21 GDP
growth forecast to 1.8%
PRESS TRUST OF INDIA
New Delhi, April 20
FITCH SOLUTIONS ON Mon-
day cut India’s economic
growth forecast for the finan-
cialyear2020-21 to 1.8% say-
ing private consumption is
likely to contract due to large-
scale loss of income in the face
of worsening domestic out-
break of Covid-19.
“Over the past week, we
have continued to adjust down
our country-specific real GDP
growth forecasts on the back
of persistent low oil prices and
the widening spread of Covid-
19. Our forecasts remain fluid
and, even despite the recent
downward revisions, we be-
lieve that the risks remain
skewed to the downside," the
rating agency said.
For India, it said the real
GDP growth rate for 2020-21
(April 2020 to March 2021)
NDB meet: Sitharaman favours
hike in emergency financing
FE BUREAU
New Delhi, April 20
FINANCE MINISTER NIRMALA
Sitharaman on Monday called
forenhancingtheemergencyfi-
nancing facility of the New De-
velopment Bank (NDB), based
ontherequirementsofmember
nations to fight the pandemic.
Addressing the fifth annual
meeting of the board of gover-
nors of NDB via video confer-
ence, the minister said: “The
bank has financial capacity to
Govt gives blanket extension of timeline for
renewable projects affected by lockdown
VIKAS SRIVASTAVA
Mumbai, April 20
The ministry of new and re-
newable energy (MNRE) has
given all renewable projects in
the pipeline a blanket exten-
sion in the deadline for the pe-
riod of lockdown plus addi-
tional 30 days for
normalisation.
The move came after re-
newable companies made rep-
resentations to the govern-
ment seeking a blanket
extension for six months to
overcome supply-side disrup-
tions in completing the pro-
jects.
The MNRE in a notification
dated April 17 said: “The re-
newable energyimplementing
agencies may grant extension
P-notes investment falls
to over 15-year low of
`48,000 cr till Mar-end
PRESS TRUST OF INDIA
New Delhi, April 20
INVESTMENTS THROUGH PAR-
TICIPATORY notes (P-notes) in
the domestic capital market
plunged to an over 15-year low
of `48,006 crore at the end of
March amid high volatility in
broader markets on concerns
over coronavirus-triggered re-
cession.
The decline in fund inflow
through P-notes comes after
two successive months of posi-
tive investments.
P-notes investment stood at
`67,281 crore and `68,862
crore at the end of January and
February,respectively.
P-notes are issued by regis-
teredforeignportfolioinvestors
(FPIs) to overseas investorswho
wish to be part of the Indian
stock market without register-
ing themselves directly. They,
however, need to go through a
due diligence process.
According to Sebi data, the
value of P-note investments in
Indian markets — equity, debt,
hybrid securities and deriva-
tives — stood at `48,006 crore
untilMarch,whilethesamewas
at `68,862 crore at the end of
February.
This was the lowest level of
investmentsinceOctober2004
when the total value of P-note
investments in Indian markets
stood at `44,586 crore.
Of the total `48,006 crore
invested through the route,
`37,859 crore was invested in
equities, `9,889 crore in debt,
`153 crore in the derivatives
GDP
has been revised down to 1.8%
from 4.6%,previously.
“We now expect private
consumption to contract,ver-
sus a weak expansion previ-
ously, due to large scale loss of
income across the economy in
the face of aworsening domes-
tic outbreak of Covid-19,” it
said.
Fitch Solutions also antici-
pated a deeper contraction in
fixed investments as busi-
nesses choose to cut back on
enhance the emergencyfacility
up to $10 billion for price-re-
lated assistance. Therefore,
based on the demand from
member countries, this facility
should be enhanced.”
She also encouraged the
NDBtotakeappropriatestepsto
jointheG-20forum,alongwith
the multilateral development
banks and international finan-
cial institutions.She also hailed
NDB’seffortsinfast-trackingfi-
nancial aid to BRICS countries,
including India, under the
According to the MNRE,
around 33 GW of capacity
is in the pipeline. There
are around 8-9 GW of
solar projects and 2-3 GW
of wind projects which
are in pipeline and
scheduled for
commissioning this year
of time for RE projects, on ac-
count of lockdown due to
Covid-19,equivalent to the pe-
riod of lockdown and addi-
tional 30 days for normalisa-
tion after end of such
lockdown.Thus,the extension
will be for the period of lock-
down plus 30 days.This will be
a blanket extension — there
According to Sebi data, the
value of P-note investments in
Indian markets stood at
`48,006 crore until March,
while the same was at
`68,862 crore at February-end
segment and `104 crore in hy-
brid securities. Fund inflow
through this route stood at
`67,281 crore and `64,537
crore in January 2020 and De-
cember2019respectively.How-
ever, it was at `69,670 crore in
Novemberlastyear.
Investment in January in-
creased after hitting a nearly
11-year low at the end of De-
cember 2019, when the total
value of P-note investments in
Indian markets stood at
`64,537 crore.
This lower quantum of in-
vestmentthroughP-notesroute
could be attributed to liber-
alised norms for FPIs by Sebi,
market experts noted.Earlierin
September, Securities and Ex-
change Board of India (Sebi)
simplified KYC requirements
and registration process for
FPIs. Besides, the regulator
broad-based the classification
of such investors.
capital expenditure to con-
serve cash amid elevated eco-
nomic uncertainty.
“The slow roll-out of fiscal
stimulus bythe central govern-
ment will only exacerbate In-
dia’s economicwoes,” it added.
For China, it revised down-
wards its 2020 real GDP fore-
cast to 1.1% from 2.6% previ-
ously, to reflect the impact of a
worsening global economic
outlook.
“Real GDP (of China) con-
tracted by a sharp 6.8% y-o-y
in Q1 2020, and our current
forecast reflects our view that
private consumption and net
exports will continue to drag
heavily,” it said. “Meanwhile,
targeted fiscal stimulus should
see fixed investment growth
come in relatively flat, while
strong government consump-
tion will provide the bulk of
support and prevent a full-
year contraction in 2020.”
emergency assistance pro-
gramme. So far, NDB has ap-
proved 14 projects worth
$4,183 million in India. The
ministeralsodweltonIndia’sef-
fortsonsupplyingcriticalmedi-
cine to needy nations to help
themtacklethepandemic.NDB
wassetupin2015bytheBRICS
countries (Brazil,Russia,India,
ChinaandSouthAfrica).Withits
subscribed capital base of $50
billion,NDBaimstomobilisere-
sources for infrastructure and
sustainable development.
will be no requirement of case-
to-case examination. There
will be no need to ask for any
evidence for extension due to
lockdown.”
State renewable energy de-
partments,including agencies
under power and energy de-
partments, dealing in renew-
able energy may also treat the
Govt lays down
quota allocation
procedure for
calcined pet
coke import for
2020-21
PRESS TRUST OF INDIA
New Delhi, April 20
THE GOVERNMENT HAS laid
out a detailed procedure for al-
location of quota for import of
calcined pet coke to be used in
the aluminium industryforthe
financialyear2020-21.
“Procedure for allocation of
quotaforimportofcalcinedpet
cokeforuseascalcinedpetcoke
in aluminium industryandraw
petcokeforCPCmanufacturing
industryfortheyear2020-21is
notified,”the Directorate Gen-
eralofForeignTrade(DGFT)has
said in a public notice. In Octo-
ber 2018,the government per-
mittedimportsofcertainquan-
tity of pet coke, used for fuel
purpose, for anode making by
the aluminium industry.
According to the conditions
and modalities of application
forimportofpetcoke,theDGFT
saidthatalleligibleentitiesthat
wants to avail quota may apply
forimportlicencealongwithca-
pacityoftheunit.Theyalsohave
toobtainavalidconsentcertifi-
cate from state pollution con-
trol board.
“Completed online applica-
tion form and document-
s...must reach on or before May
5...If documents received are
found in order,application will
be considered in Exim Facilita-
tion Committee for import of
restricted items and the con-
cerned jurisdictional regional
authority will grant authorisa-
tion,” it has said.
Bank loan fraud: ED Vashi APMC fruit mkt resumes
attaches over hundred operations after 9-day break
assets worth `175 cr
PRESS TRUST OF INDIA
New Delhi, April 20
THE ENFORCEMENT DIREC-
TORATE (ED) has attached
124 immovable properties
worth more than `175 crore
of a West Bengal-based com-
pany in connection with a
money laundering probe
linked to an alleged bank
fraud case, the agency said on
Monday.
It said a provisional order
for attachment of the assets of
Prakash Vanijya has been is-
sued under the Prevention of
Money Laundering Act
(PMLA), its director Mannoj
Kumar Jain and others for al-
legedly cheating the Central
Bank of India of `234 crore
loan amount.
Of the 124 properties at-
tached by the ED, 11 are in
Chhattisgarh, 10 in West Ben-
gal’s capital Kolkata and three
in Jalpaiguri.The total value of
the properties is `175.29
crore, the ED said in a state-
ment.
The federal agency said it
launched a PMLA probe
against the company and its
officials after going through a
CBI FIR and the properties
were traced after “unfolding
layered transactions”.
Probe found, the ED said,
that Letter of Credit (LC) facil-
ity was obtained by accused
Mannoj Kumar Jain and this
was “misused” as LCs were is-
sued without any underlying
transactions by using ficti-
tious and shell companies and
without any real business or
trade.
“The LCs so opened were
discounted by Jain through
fictitious beneficiary compa-
lockdown as force majeure and
may consider granting appro-
priate period of extension on
account of such lockdown,the
notification said.
The MNRE, on March 20,
had announced that “delay on
account of disruption of the
supply chains due to spread of
coronavirus in China or any
ED said a provisional
order has been issued
under the Prevention of
Money Laundering Act for
attachment of the assets
of Prakash Vanijya, its
director Mannoj Kumar
Jain and others for
allegedly cheating the
Central Bank of India of
`234 crore loan amount
nies and funds were received
back by him by round-trip-
ping through his shell compa-
nies,” it alleged.
“These released funds
from bank were used for per-
sonal purpose and for settling
other liabilities through kite
flying operations,” it said.
The agency added that the
accused, after availing credit
facilities from bank,started ac-
quiring
properties.
immovable
“The purchase price of
these properties were highly
undervalued and balance
amount were paid in cash.
These cash amounts were ille-
gally generated out of de-
frauded amount from the
banks,” it said.
Some of these properties
were then offered as “collat-
eral securities”to bank for en-
hancing the credit limit, it
said.
Probe in the case is ongo-
ing, the ED said.
other country” would be seen
as a force majeure event. Pro-
ject developerswill not have to
pay any penalty for missing
commissioning deadlines, if
they can prove that consign-
ments got delayed byglobal re-
strictions in freight move-
ments stemming from
Covid-19.
A force majeure means ex-
traordinary events or circum-
stances beyond human con-
trol.
All projects in pipeline are
expected to avail of this bene-
fit. According to the MNRE,
around 33 GWof capacityis in
the pipeline.There are around
8-9 GWof solarprojects and 2-
3 GW of wind projects which
are in pipeline and scheduled
for commissioning this year.
TUESDAY, APRIL 21, 2020
ECONOMY 3
The onion and potato market, and vegetables and foodgrains market of Vashi APMC had
already begun functioning last week
NANDA KASABE and the hotel industry. have been completelystopped,
Pune, April 20 Anil Chavan, secretary, he said.
Mumbai APMC, said the Vehicles will be allowed
VASHI AGRICULTURE PRO- wholesale fruit market would from 9 pm to 5 am in the mar-
DUCE Market Committee’s be allowed to operate subject ket,he said.SanjayPansare,di-
fruit market in Mumbai has re- to conditions of social distanc- rect, Mumbai APMC, con-
sumed operations with some ing being followed by the visi- firmed that the market has
restrictions on Monday after a
break of nearly nine days.
The onion and potato mar-
tors. Only 250 vehicles will be
permitted inside the market,
he informed.“A separate area
resumed operations and some
250 vehicles had brought
fruits into the market. These
ket, and vegetables and food-
grains market have alreadybe-
gun functioning since last
has been provided for 50 vehi-
cles at the open plot of the
State Transport Corporation
include 100vehicles fortrans-
porting mangoes, 70 vehicles
for oranges and sweet limes,
week after the intervention of for fruits such as musk melon 15vehicles forgrapes,15vehi-
minister Eknath Shinde dur- and water melons.” cles for papaya, 5 vehicles for
ing the lockdown period. Onlywholesale buyers who chikoo (sapota),15vehicles for
These markets had shut make purchases not less than pineapple, 15 vehicles for wa-
from April 11 after a scare `15,000 will be allowed to en- termelon,5vehicles forpome-
among traders and Mathadi ter the market,Chavan said. granates and 10 vehicles for
workers about the spread of Traders and commission imported fruits.
Covid-19 as social distancing agents have been given the re- While the APMC has per-
norms were not being fol- sponsibilityof maintaining so- mitted only wholesale buyers
lowed by visitors to the mar- cial distancing outside their at the Vashi market, another
ket. shops and the market com- direct farmer-to-seller market
Vashi APMC is the largest mittee authorities can take for fruits and vegetables was
supplier of fruit, vegetables, necessary action for defying planned to begin at Khargarh's
foodgrains, spices, onions and the norms,he said. Central Park Maidan from
potatoes to Mumbai and caters Traders are not allowed to Monday. Chavan said this had
to smaller market across the ripen mangoes in the market. been postponed for adminis-
city as well as retailers,caterers Any kind of retail operations trative reasons.
QUANTUM BUILD-TECH LIMITED NOTICE
CIN: L72200TG1998PLC030071
Registered Office: 8-1-405/A/66,
Dream Valley, Near O.U Colony, Shaikpet,
ABB POWER PRODUCTS AND SYSTEMS
Hyderabad, Telangana – 500104. INDIA LIMITED
Ph. 040-23568766, 23568990 CIN: U31904KA2019PLC121597
Email: info@quantumbuild.com Website:
www.quantumbuild.com Regd. Office: 8th Floor, Brigade Opus, 70/401, Kodigehalli
Main Road, Bengaluru 560 092, Karnataka, India
NOTICE OF BOARD MEETING
Phone: 80 2204 1800, Email: in-investorhelpdesk_appsil@abb.com
Web: https://new.abb.com/grid/appsil
Notice is hereby given pursuant to
Regulation 29 of the SEBI (Listing
Obligations and Disclosure Notice is hereby given pursuant to Regulation 47 of SEBI
Requirements) Regulations 2015 a (Listing Obligations and Disclosure Requirements) Regulations,
meeting of Board of Directors of
Quantum Build-Tech Limited will be 2015 that a meeting of Board of Directors of the Company will
held on Monday, the 27th day of be held on Thursday, April 30, 2020 inter alia, to consider and
April, 2020 at the Registered Office approve the Un-audited financial results for the quarter ended
of the Company, to take on record, March 2020 (Q1 FY2020).
amongst other things, to consider and
approve the draft of Scheme of
This information is available on the website of the Company
Reduction of Capital and other things i.e. https://new.abb.com/grid/appsil and also on the website
related thereto. of the Stock Exchanges, www.nseindia.com (National Stock
Exchange of India limited) and www.bseindia.com (BSE
For further details, refer to the Limited), where the equity shares of the Company are listed.
Company’s website:
http://www.quantumbuild.com/investor For ABB Power Products and
and the Stock Exchange website: Systems India Limited
www.bseindia.com
Poovanna Ammatanda
For Quantum Build-Tech Limited General Counsel, Company Secretary
Sd/-
Guduru Satyanarayana
and Compliance Officer
Managing Director FCS 4741
Place: Hyderabad DIN: 02051710 Date: April 20, 2020
Place: Bengaluru
Date: 20.04.2020
NOTICE CUM ADDENDUM NO. 15/2020
THIS NOTICE CUM ADDENDUM SETS OUT THE CHANGES TO BE MADE IN THE STATEMENT
OF ADDITIONAL INFORMATION (“SAI”), SCHEME INFORMATION DOCUMENT (“SID”) AND KEY
INFORMATION MEMORANDUM (“KIM”) OF ALL THE SCHEMES OF MIRAE ASSET MUTUAL FUND
(“MAMF”)
1. TRANSACTIONS THROUGH ELECTRONIC MODE:
NOTICE is hereby given that further to our notice cum addendum dated March 22, 2020 and
March 25, 2020, the following amendments are being implemented w.e.f April 21, 2020:
While all Investors are again encouraged to transact through the available online mode; however,
KYC compliant investors who wish to transact for the first time in any scheme of Mirae Asset Mutual
Fund, would need to submit the following at transact@miraeasset.com:
● Scan copy of signed Common Application Form duly filled in and complete in all respects.
● Copy of the cheque to ascertain the account from which the Funds will be transferred to the respective
scheme collection account.
The time of receipt of funds in the scheme’s collection account and the time of receipt of application at
AMC’s server shall be taken into consideration for the purpose of NAV applicability.
Further, requests for Systematic Transfer Plan (STP) can be sent at transact@miraeasset.com which
should be accompanied by signed STP form, wherein investors will need to mention the Transaction
Type as STP followed by the Folio number in the subject line of the email. The intended transaction
will need to be emailed from the Investors registered email address.
In these unprecedented times in the interest of investors, the AMC reserves the right to process any
other type of transaction on a case to case basis post carrying out necessary validations at its end.
2. INTRODUCTION OF SIP PAUSE FACILITY (“the Facility”):
Any existing investor who has an ongoing SIP will have an option to Pause the SIP with effect from
April 21, 2020. The investor will have to submit the signed SIP Pause facility form duly complete in all
respects to avail this Facility.
The features, terms and conditions for availing the SIP Pause Facility are as follows:
● The SIP Pause Facility is available for SIP registration with monthly frequency only.
● The request for SIP Pause should be submitted at least 10 days prior to the subsequent SIP date.
● The request for SIP Pause can be for either 3 instalments or 6 instalments.
● Investor can opt for the SIP Pause facility only once during the tenure of a particular SIP.
● The SIP shall continue from the subsequent instalment after the completion of Pause period
automatically.
The AMC reserves the right to change / modify the terms and conditions of the Facility or withdraw the
Facility at a later date. Please refer to the SIP Pause Facility Form and instructions before enrolment.
This notice cum addendum forms an integral part of SAI, SIDs and KIMs of the Scheme(s) of MAMF,
as amended from time to time. All the other terms and conditions of SAI, SIDs and KIMs of the
Scheme(s) will remain unchanged.
For and on behalf of the Board of Directors of
MIRAE ASSET INVESTMENT MANAGERS (INDIA) PVT. LTD.
(Asset Management Company for Mirae Asset Mutual Fund)
Place : Mumbai Sd/-
Date : April 20, 2020 AUTHORISED SIGNATORY
MIRAE ASSET MUTUAL FUND (Investment Manager: Mirae Asset Investment Managers (India)
Private Limited) (CIN: U65990MH2019PTC324625).
Registered & Corporate Office: 606, Windsor, Off CST Road, Kalina, Santacruz (E), Mumbai - 400098.

1800 2090 777 (Toll free),  customercare@miraeasset.com www.miraeassetmf.co.in
Mutual Fund investments are subject to market risks,
read all scheme related documents carefully.
 4 FINANCIAL EXPRESS
Companies
TUESDAY, APRIL 21, 2020
Quick
View
Tata Motors’ Jan-Mar
global wholesales
decline by 35%
TATA MOTORS on Monday said its
group global wholesales,including
Jaguar Land Rover,stood at at
2,31,929 units in the January-March
quarter,lower by 35% over last year.
The company said its global
wholesales of all passenger vehicles
in the fourth quarter of 2019-20
were at 1,59,321 units lower by 26%
from the year-ago period,Tata
Motors said in a statement.
Yatra.com implements
temporarypaycuts
ONLINE TRAVEL firm Yatra.com is
implementing temporary pay-cuts
for its employees including some
being put on leave without pay from
April 16 to June 30 due to the impact
of the Covid-19 pandemic.The
company,however,said these
measures are"temporary"and being
taken to avoid layoffs,and it remains
optimistic for the future.
Europe’sA&MGroupenters
IndiainJVwithOberoiGroup
EUROPEAN INFRA playerA&M
Development Group has inked a joint
venture with Delhi-based engineering
and construction player Oberoi Group
to enter the country. The joint
venture,Oberoi-A&M Infra-
Consortium,will also handle the Saarc
operations of the European group and
will be formed as a consortium in
association with the Nasdaq-listed
American conglomerate Polaris
Energy Resources.
Truckers’bodylaunchesapp
togetdriversback onroad
TO HELPnormalise transportof goods,
including essentials,theAll IndiaTran-
sportersWelfareAssociation(AITWA)
has provided over800 driverswith e-
passes in the first 24 hours afterit
launched an app to helpthem come
back to trucks parked at different
locations in the country.“We are confi-
dent in a fewdays,a good numberof
truckswill come backon the roadwith
the use of this service,”AITWApresi-
dent MahendraArya said.Over100
transporters have on-boarded the app.
Wockhardt’s antibiotic gets
USFDA’s QIDPdesignation
DRUG FIRMWockhardt on Monday
said it hasreceived QualifiedInfectious
DiseaseProduct (QIDP) designation
from the US health regulatorforits
combination antibiotic,WCK6777.The
QIDPstatus is granted to drugs that are
effective against a set of multi-drug
resistant pathogens identified bythe
Centre forDiseaseControl,USA,which
have a high degree of unmet need in
the treatment of patientsinfected by
such pathogens,Wockhardt said in a
filing to the BSE.
Nalco gets mining lease
for Utkal-D coal block
NATIONALALUMINIUM Company
(Nalco) has been granted the mining
lease forUtkal-D coal block in Odisha.
The steel and mines departmentof the
Odisha government granted the lease
to the Navratna CPSE through a
notificationissued onApril16.As per
the notification,the mining leaseof
Utkal-D block is overan area of 301.28
hectare in Kosala,Nandichood,
Similisahi and Raijharanvillages under
Chendipadatehsil ofAngul district.
KalyanJewellerstosellgold
onlineforAkshayaTritiya
KALYAN JEWELLERS on Monday
announced the launch of its‘gold
ownership certificate’that can be
purchased on the website on or before
AkshayaTritiya.Customers can
purchase gold from 2 g upwards and
the gold ownership certificate will be
sent to them on the dayofAkshaya
Tritiyavia email,WhatsApp or other
customer recommended platforms,
CMDTS Kalyanaraman said.
● CORONA BLOW
Infosys suspends revenue
forecast amid uncertainty
SRINATH SRINIVASAN
Bengaluru, April 20
IN LINEWITH its peers,Infosys on Monday
refrained from giving a guidance on rev-
enues and margins for the new fiscal. It
anticipatesnear-termchallengesinitsbusi-
nessasawidesetofindustrieshavebeendis-
rupted bythe coronavirus pandemic.
InfosysCEOSalilParekhsaid,“Giventhe
uncertainenvironmentwiththeglobalpan-
demic,we do not feel it will be appropriate
toprovideanannualguidanceatthisstage.
Asaresult,wearesuspendingthepracticeof
giving revenue growth and margin guid-
ance forFY21.”
Thecompanyhassuccessfullyfacilitated
93% of itsworkforce towork from home.
WhileInfosysdidnotgiveanydetailson
howmuch of an impact the Covid-19 crisis
wouldhaveonitsrevenuesinthenewfiscal,
Parekh does expect margins to come under
pressure.“There will be near-term margin
pressure.We have a cash reserve of $3.6 bil-
lion and we have no debt.With this,we are
positioned to take on the crisis effectively.”
Despite its strong balance sheet, the
company is taking several measures to cut
costs.“We will be delaying onboarding new
hires,temporarilyfreezinghiring,hikesand
promotion.Wehavenoregretsindoingso.It
will help us come out of the crisis stronger,”
Infosys CFO Nilanjan Roy said, adding
that all commitments made on hiring will
be honoured.
Thecompanyalsosaidsomeofitsclients
had asked for deferrals on payment and it
wouldtaketheseuponacase-to-casebasis.
The company said it had brought down its
Softbank, O2 among successful bidders for 2 GW solar projects
PRESS TRUST OF INDIA
New Delhi, April 20
SOFTBANK, O2, AXIS Energy Ventures,
EDEN Renewables and Avaada Energy
haveemergedsuccessfulbiddersfor2,000
megawatt (MW) solar energy projects,
entailing an investment of `11,000 crore.
The auction, conducted by NHPC, con-
cluded last week.
“SoftBank got the maximum 600 MW
in the auction conducted by state-run
NHPC followed by Axis Energy Ventures
(Brookfield promoted) at 400 MW, O2
(Temasek promoted) at 380 MW and
EDEN Renewables at 300 MWat a tariff of
`2.55 per unit each,”a source said.
The source added that Avaada Energy
was also the successful bidderat `2.56 per
Institutional investments Hit by liquidity crunch, SAIL directs
in real estate down 58% employees to tighten belt, realise dues
in January-March: Report
FE BUREAU
New Delhi, April 20
INSTITUTIONAL INVESTMENTS IN real
estate fell sharply by 58% year-on-year at
$712 million (around `5,400 crore) during
January-March 2020 as the sector got bat-
teredontwofronts,areportbyJLLIndiahas
said. Investors adopted a wait-and-watch
policy following the crisis at DHFL and Yes
Bank,whichgotfurtherextendedonaccount
ofthenovelcoronavirusoutbreak,itsaid.
The real estate industry has been facing
one of its toughest times and attracting
funds from institutional investors is one of
them.Total investments in FY19-20 have
been the lowest in four years, declining by
13%y-o-yto$4.26billion(around`32,600
crore),the reportsaid.
JLLIndiacountryhead&CEORameshNair
said: “The impact of Covid-19 has been
unthinkable in its scope. Investors are
expectedtoremaininawait-and-watchmode,
with caution and risk aversion expected to
drivethedominantbehaviourofinstitutional
realestateinvestorsoverthenextfewquarters.
Theyear2020willbeoneofredemptionasthe
worldrecoversfromoneofitsmostchalleng-
ingperiodsinrecenthistory.”
The change in investment climate also
Report card
15,000 ($ million) Revenue Net profit
12,500
21.7
10,000
7,500
20.5
5,000
3,131 3,210
2,500
546 569
0 19.5
Q1FY20 Q2FY20
% chg
(q-o-q)
100 bps 120 bps
day sales outstanding (DSO) in the March
quarteritselfandwithsufficientcashonthe
balance sheet, it was not worried.“A few of
the clients have asked for payment exten-
sion.They are in retail and as such we can't
sayhowitwill affect ourQ1FY21 numbers.
We are in the initial stages of the conversa-
tion,” Royadded.
On the business front, the company is
seeingincreasedinterestfromclientsinthe
area of cloud,virtualisation,cost reduction
programmes and workforce transforma-
tion.However,Infosys does not see a quick
recoveryfora couple of quarters.
“No recovery in sight for at least 2-3
quarters. BFSI, aviation, media and enter-
tainment and manufacturing will face
challenges.5G rollout and applicationswill
be delayed.This is going to be true across
geographies,” chief operating officerPravin
Rao said.
Mounting debt
reflectsintheassetallocationwithinvestors
parkingmorefundsinofficespaces.Invest-
mentsintheofficesectorroseto$2.9billion
in FY19-20from $1.8 billion in FY18-19.
The JLL report pointed out that an
emerging trend in India’s office markets is
a shift towards investments in value-add
and opportunistic deals over core assets.
“Theanalysisofcore,value-addandoppor-
tunistic investments indicate that out of
$4.4 billion invested in office space during
2018 and 2019, investors have been
aggressively chasing returns as options of
leased quality office spaces have reduced
overtheyears,”it said.
Besides,investors are also entering into
joint ventures, platform deals or forward
sales with more complexities to manage
risks in under-construction projects.
Sovereignwealth funds (SWFs) held $29
billion worth of assets under custody (AUC)
inIndiaasofDecember2019withrealestate
accounting for 22% of the AUC,or $6.6 bil-
lion.
The Union Budget had announced con-
cessionsforSWFsinvestingininfrastructure
(whichincludeaffordablehousingandlogis-
tics),butrecentdeclinesincrudepricesmay
impact SWF surplus capital available for
investments,the report said.
Operating margin (%) RHS
12,780
21.9
21.1 21.3
3,243 3,197
2,338 20.0
626 590
Q3FY20 Q4FY20 Full year
20 bps 80 bps 150 bps y-o-y
TheimpactoftheCovidcrisisisvisiblein
the company's fourth-quarter numbers.In
dollar terms, the company's revenues fell
1.4% sequentiallyto $3.19 billion,while in
constant currency, revenues fell by 0.8%
sequentially.Forthe March quarter,Infosys
postedarevenueof?23,267croreandanet
profit of ?4,335 crore with an operating
marginof21.2%—a70bpsdeclinesequen-
tially.Digitalrevenuesnowaccountfor42%
oftheoverallrevenues.Growthacrossbusi-
ness segments and geographies remained
flat during the quarter ended March 31.
However,thelandscapeissettochangewith
the crisis,in the coming quarters.
The company,which is yet to receive a
cleanchitfromSebiintheongoingwhistle-
blowercase,said it has provided all the nec-
essaryinformation that the market regula-
tor asked for and that the management is
cooperating fully.
SURYA SARATHI RAY
New Delhi, April 20
FACING LIQUIDITY CRUNCH because
of the Covid-19 crisis, SAIL chairman
Anil Kumar Chaudhary has asked
employees to review each expense and
conserve cash, and follow up rigorously
with customers to promote sales and
realise outstanding dues.
He has also asked them to focus
on production at the least possible vari-
able cost.
The steelmaker has seen piling-up of
inventories and cash flows drying
because of the lockdown.
In a written message addressed to
employees on April 16, Chaudhary said:
“With cash collections being meagre and
inventories increasing to a level of over
1.7 million tonne (MT) for finished steel,
thereby, blocking cash worth over more
than `8,000 crore, SAIL is facing a diffi-
cult situation.
“We are a company with huge fixed
costs and need optimum level of pro-
duction to be maintained so as to absorb
such costs. While it is understandable
that profitability will take a severe
beating in the coming months, it is the
liquidity situation which is of immedi-
ate concern.”
Employees have been directed to
reach out to customers and maintain
BMW India CEO Rudratej Singh no more
FE BUREAU
Chennai, April 20
BMW GROUP INDIA president and CEO
Rudratej Singh passed away on Monday.
He was 46. Sources said he died of a car-
diac arrest.
“The companywith profound sorrow,
announces the demise of Rudratej Singh
(46), president and chief executive offi-
cer on April 20,2020,”BMW Group India
said in a statement.
The group’s chief financial officer,
Arlindo Teixeira, has been appointed the
WWW.FINANCIALEXPRESS.COM
AMENDMENTTO FDI POLICY
Vipin Sondhi, MD & CEO, Ashok Leyland
❝The government’s decision to amend the FDI policy to
put a blanket ban on investments...from countries that
share a border with India is a positive step in these
uncertain times. It’ll enable safeguarding of Indian
businesses against opportunistic takeover threats.
Airtel to pay basic income of
nearly 25,000 staff working with
distributors, retail franchisees
FE BUREAU
New Delhi, April 20
BHARTI AIRTEL HAS decided to pay the
basic income for April of nearly 25,000
employees of its distribution partners and
22.5 franchisees.
MostoftheAirtelretailstoreshavebeen
22.0
closed because of the countrywide lock-
21.5 down since March 25.The companysaid it
is providing this one-time support to its
21.0 partners to tide overthis tough time.“This
is an endeavour to ensure your Airtel
20.5
Friends get their basic income. You are
therefore requested to pass the basic
monthlypayto allyourstaff forthe month
ofApril,”Airtel Delhi CEO said in a letter to
distribution partners.
Sources said all the circle CEOs have
written similar letters to distributors of
their states.
The company, however, did not
disclose the amount which will be utilised
unit for320 MW(against theirbid for600
MW). The E-RA (e-reverse auction) was
conducted among seven bidders with
aggregate (offer) capacity of 3,140 MW.
Against the total allocated capacity of
2,000 MW, the lowest e-RA tariff of `
2.55-`2.56 perunitwas achieved against
the initial quoted tariff of ` 2.71-` 2.78
per unit.
In spite of the complete lockdown due
toCovid-19,NHPCsuccessfullycompleted
the E-RA. The success of this auction
assumes significance in view of India’s
ambitious target of having 100 gigawatt
(GW) solar energy by 2022.
“The bidding was aggressive and low
market demand was trying to drive the
price down.Our bid was competitive,and
we are happy that we won against some
In a written message to employees,
SAIL chairman says profitability will
be badly hit in the coming months,
but adds it is the liquidity situation
which needs immediate response
continuous offtake of finished steel
from the plants so that cash flows are
maintained and consequences of a liq-
uidity crunch are avoided.They have also
been asked to maximise sales through
export channels.
Steel companies, in general, started
seeing deferment of orders since the
lockdown started on March 25.
According to rating agency Crisil, on
a quarterly basis, steel demand would
be a washout in the first quarter of the
current fiscal.
SAIL is also sitting on a huge debt.
According to Bloomberg, as in Septem-
ber 2019 end, the PSU had `48,181.35
BMW India CEO Rudratej Singh
reportedly suffered a cardiac arrest
❝
for the payments.
Airtelsaiditissensitivetowardsthefact
thatthissuddenlockdownhasreducedthe
operations and returns of its distributors.
“This is done with an endeavour to ensure
thatyourFSEs(fieldserviceexecutives)and
other frontline colleagues get their basic
income,”the company said.
At a time when the disruptions owing
to the pandemic have sharply impacted
businessinseveralcategories,thecompany
has also recentlycovered the employees of
its distributors under the Covid-19 med-
icalinsuranceprogramme.“Inawayweare
fortunate that we are associated with an
industry that helps keep the ‘lights on’ at
both national and social level,”Airtel said.
Airtel and other telecom operators
have also provided `600 crore worth of
benefits to prepaid customers in terms
of validity extension and additional
talktime to remain connected in times of
the lockdown.
tough competition. On the back of a
highly conducive policy environment, a
steady influx of capital, falling prices
and newtechnologies,Indiawill continue
its exponential growth in its renewable
energy (RE) sector,” Avaada Energy
chairman Vineet Mittal said in a state-
ment on Monday.
In a tweet earlier, power minister RK
Singh had said,“During the lockdown,we
kept our interaction with stakeholders
alive through virtual platforms and also
brought out new bids.”He added that this
tariff“istheresultofseveralmeasuresthat
we have undertaken during the past few
months to enhance the confidence of
investors and to promote ease of doing
business”.“We stand committed to min-
imising the risk to investors,”he added.
(` crore)
42,021
41,434
38,901
48,181
FY17 FY18 FY19 FY20* *Up to Sept 30, 2019
Source: Bloomberg
crore, up from `41,433.88 crore as in
March 2019 end.
In his message, Chaudhary has also
said priority should be on producing
steel at the least possible variable cost so
that even if the company sells at reduced
prices in the current depressed market
conditions, there will still be some posi-
tive contribution.
Special emphasis will be on fulfilling
demands as per customers’ need.
SAIL will also focus on maintenance,
including preponement of capital
repairs, in the time of slowdown and
prepare for a quick launch once the cri-
sis is over.
interim president, the statement added.
“His demise comes at a crucial junc-
tion when BMW Group India was in
midst of implementing strategic mea-
sures for strengthening the dealer net-
work across India,” the automaker said.
Singh had joined BMW India in
August 2019.Popularly known as‘Rudy’,
had more than 25 years of work experi-
ence. Prior to joining BMW, he served as
the president of Eicher Motors’ motor-
cycle arm, Royal Enfield, from January
2015 to 2019. He quit Royal Enfield in
January 2019.
WWW.FINANCIALEXPRESS.COM
FINANCIAL EXPRESS
● `9,000-CR BANK FRAUD
Mallya loses UK HC appeal,clock set for extradition
UK High Court rules that
the ex-boss of Kingfisher
Airlines has a prima facie
case to answer in the
Indian courts
ADITI KHANNA
London/New Delhi, April 20
EMBATTLED LIQUOR BARON Vijay
Mallya on Monday lost a crucial appeal
againsthisextraditiontoIndiawiththeUK
HighCourtrulingthattheex-bossofKing-
fisher Airlines did have a prima facie case
to answer in the Indian courts over the
alleged`9,000-crorefraudassociatedwith
loanssoughtfromIndianbanksforhisnow
defunct airline.
The dismissal of the HC appeal effec-
tivelyclears the decks forMallya’s extradi-
tion to India to face the charges in the
Indiancourts,with14daysforhimtoapply
for permission to appeal to the UK
Supreme Court.
If he does apply, the UK Home Office
wouldwait forthe outcome of that appeal.
But if he does not, under the India-UK
Extradition Treaty, it would then be
expectedtoformallycertifythecourtorder
forthe64-year-oldMallyatobeextradited
to India within 28 days.
“Wehaveheldthereisaprimafaciecase
CIL raises trigger level to 80%,coaxes EV industry logs 20% growth
power plants to use more domestic fuel in FY20, expects demand
FE BUREAU
Kolkata, April 20
IN A BID to give some more relief to the
power companies amid the Covid-19
pandemic, public-sector miner Coal
India (CIL) has decided to increase the
supply trigger level from 75% to 80% of
the annual contracted quantity (ACQ).
ACIL official said the new trigger level
is not binding on consumers and those
willing to continue at a 75% trigger level
may continue to do so. But the new trig-
ger level would help the plants running
at a higher plant load factor (PLF) source
more coal domestically and CILwill have
to supply the extra quantity under a new
agreement.
This could, however, lessen the
demand for e-auction coal,which fetches
CIL a premium above the notified price.
The CIL official said increasing trig-
ger level is likely to encourage higher lift-
ing.
Coal stock at the pitheads are at an
all-time high of 75 million tonnes.
Though demand from the power sector
has been recently falling, the govern-
ment wants to ensure thermal power
plants don’t have to import coal.
The increase in trigger level has been
done under the existing provisions of the
AirAsia India cuts staff pay by up to 20%
PRESS TRUST OF INDIA
Mumbai, April 20
AIRASIAINDIAHAScuttheAprilsalaryofits
staff by up to 20% to tackle the airline's
finances amid the suspension of all com-
mercial services till May 3 due to the lock-
down,a source said.
Those drawing `50,000 per month or
less have been spared from thewage cut.
The Bengaluru-headquartered budget
carrier is the latest to join the other domes-
tic airlines such as IndiGo,SpiceJet andVis-
tara,who have already taken similar mea-
sures to cut fixed cost amid grounding of
theirfleet.
“AirAsia India has cut the April salary of
itsemployeesbyupto20%.Theseniorman-
agementwilltakeapaycutof20%whilethe
wagesoftheexecutivesfallinginotherscat-
egorieshavebeenreducedby17%,13%and
Lockdown to curb
flashlight maker’s
ability to meet demand
EVEREADYINDUSTRIES INDIAmaynotbe
able to produce enough flashlights in time
forthenation’scrucialfarmingseasonasthe
lockdown to combat the coronavirus
impedesfactoriesandworkers.Almost40%
offlashlightsaleshappenbetweenApriland
July, said Amritanshu Khaitan, MDof
Eveready.That’s when crops are harvested
andsowed,andoneofthemostpopularuses
of the company’s products is on farms.
“If we are not able to manufacture just
now, then to meet the flashlight demand
going forwardwill be challenging,” Khaitan
said by phone. The Kolkata-based firm
claims to hold a majority share of the orga-
nized flashlights market. Its shares have
risenmorethan30%sinceMarch24,when
PM Modi announced the lockdown,versus
an18%advanceinthebenchmarkindex.As
muchas60%ofthemarketinIndiaisunor-
ganised and competes with Chinese goods,
thoughthesealsomaybemissingcurrently.
Khaitan said the supply chain is still
restricted due to the lockdown and it isn’t
easy to get approval from local authorities
for the company’s dealers to travel and ser-
vice the market. Evereadyhasyet to receive
permissions to operate as India eases some
restrictionsfromMonday.—BLOOMBERG
both of misrepresentation and of conspir-
acy,andthusthereisalsoaprimafaciecase
of money laundering,”the HC concluded.
This marks a major turning point for
the Central Bureau of Investigation (CBI)
and Enforcement Directorate (ED) case
againstthebusinessman,whohasbeenon
bail in the UK since his arrest on an extra-
dition warrant inApril 2017.
The ex-Kingfisher Airlines boss had
appealed to the higher court against his
extradition ordered by the Westminster
Magistrates’CourtinLondoninDecember
2018,andthensignedoffbythenUKhome
secretary Sajid Javid in February last year,
atathree-dayhearinginFebruarythisyear.
Lord Justice Stephen Irwin and Justice
ElisabethLaing,thetwo-memberbenchat
the Royal Courts of Justice in London pre-
siding over the appeal, dismissed it in a
judgement handed down this week
remotely due to the current coronavirus
lockdown.
“Weconsiderthatwhilethescopeofthe
prima facie case found by the SDJ (Senior
DistrictJudgeEmmaArbuthnot)isinsome
respects wider than that alleged by the
Respondent in India (CBI and ED),there is
a prima facie case which, in seven impor-
tant respects, coincides with the allega-
tions in India,”the judges noted.
They detail seven main points around
which they based their decision to concur
withArbuthnot’s extradition order.
Basedonthedocumentssettingoutthe
Coal stock at the pitheads is at an all-time high of 75 million tonne
Fuel Supply Agreement (FSA) and those
willing to opt for the higher trigger level
will have to do a side agreement with CIL.
The CIL subsidiaries have been asked to
implement the increased trigger level
with immediate effect.
CIL’s FSAs with power utilities stand
round 560 mt.
Of this, 270 mt of FSAs belong to
power plants commissioned prior to the
New Coal Distribution Policy (NCDP)
regime whose trigger level was 90% of
Those drawing `50,000 per month or less have been spared from the wage cut
7%,respectively,” the sourcewho is privyto
the development told PTI.
However, employees who are earning
`50,000 per month or less have not been
RATAN TATA SPEAKS
‘Developers should be ashamed of creating slums’
PRESS TRUST OF INDIA
Mumbai, April 20
NOTED INDUSTRIALIST RATAN Tata on
Monday lambasted developers and archi-
tects for treating slums as “residue”of the
city,which, according to him, is one of the
reasons for the rapid spread of the deadly
Covid-19 pandemic in the megapolis.
He also said the city builders should be
ashamed of creating vertical slums across
the cities.
“Affordablehousingandslumelimina-
tionaretwosurprisinglyconflictingissues.
We’re trying to remove slums from seem-
ingly unsuitable living conditions by relo-
cating them to other locations which are
20-30 miles away on one hand and on the
other where there are no jobs for the
uprooted people.
“Thehigh-valuehousingunitsthathave
come up at a place where the slum once
stoodmakestheslumsaresidueofdevelop-
ment,” Tata rued at an online discussion
organised byCorpgini.
Tata,who always wanted to be an archi-
tect,said builders and architects have built
verticalslums,whichhaveneitheradequate
Embattled liquor tycoon Vijay Mallya
has 14 days to apply for permission to
appeal to the UK Supreme Court
Indian government’s case against Mallya,
thejudgessaidtheyfoundthattheloansin
question were disbursed as the result of a
conspiracy between the named conspira-
torsandthattheyweremadedespiteKing-
fisher Airline’s weak financials, negative
net worth and low credit rating.
“The Appellant (Mallya) was party to
false representations to induce the loans
that funds would be inducted by way of
unsecuredloans,globaldepositoryreceipts
and equity,”theynote.
“TheAppellantwaspartytofalserepre-
sentations about inward investment, an
ACQ. For those FSAs amounting to 290
mt commissioned after NCDP, the trig-
ger level was 75% of ACQ. If all eligible
power utilities agree for increase of trig-
ger level to 80%, FSAs for the ongoing
fiscal could see an increase of 14 mt.
The CIL official said coal companies
should increase the level of delivery to
the power plants as supplies less than the
committed trigger level would attract
penalty. On the other hand, power gen-
erators will get more coal under FSA.
given anypaycut as of now,he said.
AirAsia India spokesperson refused to
comment on the developments when con-
tacted.
❝
The big gain for developers
comes from the high-value
housing that comes up in
the areas where the slum
once stood, and I think
what has happened in the
Covid issue is that for the
first time, the low-value
structures that we have
built in close proximity are
now the very cause of the
❝ with slum rehabilitation.
spread of the virus
— RATAN TATA , INDUSTRIALIST
fresh air,hygieneoropen space.
“Thebiggainfordeveloperscomesfrom
thehigh-valuehousingthatcomesupinthe
areaswheretheslumstoodonceandIthink
whathashappenedintheCovidissueisthat
exaggerated brand value, misleading
growth forecasts, inconsistent business
plans.TheAppellant’s dishonest intention
not to repay the loans is shown by his later
conductintryingtoavoidthepersonaland
corporate guarantees,”they said.
Mallya’s legal team had sought to chal-
lenge the Indian government’s case on
multiplegrounds,includingwhethertheir
clientwouldbesafeatBarrack12inArthur
Road Jail in Mumbai where he is to be held
on extradition.
Most of the grounds had already been
dismissed by the HC, with permission
granted to appeal only on one ground —
challenging the Indian government’s
prima facie case against Mallya of fraudu-
lent intentions in acquiring bank loans.
“Mallya has 14 days to apply for per-
mission to appeal to the Supreme Court.If
he doesn’t appeal — removal within 28
days thereafter. If he does appeal,we wait
for the outcome on that application,” said
a spokesperson forthe Crown Prosecution
Service, which represented the Indian
authorities in the UK courts.
InFebruary,Mallyahadagainreiterated
his message for the Indian banks to take
back 100% of the principal amount owed
to them. Reacting to the UK High Court’s
ruling, the CBI said it was a significant
achievement for continuing the war
against economic fugitives.“It is a signifi-
cant achievement in continuing war
against economic fugitiveswho have been
spurt after lockdown
FE BUREAU
Chennai, April 20
THE ELECTRICVEHICLE (EV) industryhas
clocked20%growthinfinancialyear2019-
20(FY20)to156,000unitsagainst130,000
unitssoldinthepreviousfiscalyear.Ofthis,
152,000weretwo-wheelers,3,400carsand
600 buses.
The corresponding figures forFY2018-
19 were 126,000 two-wheelers,3,600 cars
and around 400 buses making a total of
130,000 units.The 20% growth has been
largelyonaccountof thetwo-wheelers.The
figure does not include e-rickshaws,which
stillfallsundertheunorganisedsectorwith
a reported sale of around 90,000 units.The
corresponding figures of the e-rickshaws
sold in the previous financial year have not
been documented, said Society of Manu-
facturers of Electric Vehicles (SMEV) in a
release on Monday.
Of the total number of electric two-
wheelers (E2Ws) sold in FY2019-20, 97%
wereelectricscootersandasmallvolumeof
motorcycles and electric cycles constituted
theremaining3%.Low-speedscootersthat
pick up a max speed of 25km/hour and do
not need registration with the transport
authoritiesconstitutedawhopping90%of
all the E2Ws sold.
In the electric four-wheeler segment,
3,400 units were sold in the period under
consideration compared to 3,600 units in
the previous financial year.The decrease in
number is attributed mainly to the lack of
bulk purchase of e-cars in FY 2019-20 and
discontinuation of one of the leading car
models.The acceptability of electric cars in
thepremiumsegment in thesecondhalfof
the yearwas a positive signal of a quantum
jump of a much higher volume of e-cars in
FY2020-21.
The e-taxi segment is also beginning to
getsometraction,thoughtherangeofe-cars
andlackofchargingspotsareadeterrentin
the growth of the e-taxi segment. E-buses
wentintoayo-yoofbigcommitmentsbythe
stategovernmentsnottranslatingintopur-
chases.
On the sales report,SohinderGill,direc-
tor-general of SMEV,said,“The EVindustry
is taking shape and we believe that despite
theCovid-19outbreak,theFY2020-21will
be a defining year for all the EV segments.
WhiletheEVindustryissurelygoingtoface
for the first time, the low-value structures
thatwehavebuiltincloseproximityarenow
theverycause of the spread of thevirus.
“Thepandemichasunderlinedtheprob-
lemthatslumscreateforeveryoneduetothe
absence of enough fresh air, enough open
spaceandtheissuesofbeinguprootedfrom
yourwork,”the82-year-oldindustryveteran
said.Initsendeavourtoprovidehousingfor
all the government has been encouraging
developers to undertake more affordable
housing projects across the country along
However, Mumbai continues to house
large slum dwellings with the Dharavi
slums,measuringjustabout2.4sqkmbeing
the largest and is home to an estimated 1
million of the 12 million denizens of the
megapolis, which has become one of the
most infected areas of the city.
Dharavi, the largest informal economy
ofthefinancialcapitalwithanestimated$1
billion in annual GDP has come to a total
standstillduetothelockdown.Dharaviisthe
largest slum clusterin entireAsia.
With around 140 coronavirus cases
detectedintheslum,expertsarefearingthe
numbers to rise significantly in the days to
TUESDAY, APRIL 21, 2020
COMPANIES 5
Street Signs
ICICI Bank
Shares decline after
S&P revises its outlook 3.84%
managing to stay away from the judicial
process in the country,” CBI spokesperson to negative from stable
RK Gaur said in New Delhi.
Mallya,declared a fugitive byIndia,has 378.9
been based in the UK since March 2016
andremainsonbailonanextraditionwar- 377.4
rant executed three years ago by Scotland
Yard onApril 18,2017.
InherverdictinDecember2018,Judge 361.5
Arbuthnot had ruled that the“flashy”for-
mer KingfisherAirlines boss had a“case to
answer” in the Indian courts. She found 357.2
there was “clear evidence of dispersal and Open Close
misapplication of the loan funds”.
India and the UK have an extradition InterGlobe
treaty signed in 1992 and in force since
November 1993. Two major extraditions Scrip slides after 6.05%
have taken place under this treaty so far — DGCA directs to
Samirbhai Vinubhai Patel, who was sent stop bookings before
back to India in 2016 to face trial in con- lockdown is lifted
nection with his involvement in the post- 1,041.25
Godhra riots of 2002, and more recently
allegedbookieSanjeevChawla,sentbackin 1,040.3
February this year to face match-fixing
charges.
As India falls under the Category 2 set 1,004.5
ofcountrieswithintheUK'sExtraditionAct
2003, any decision of the courts must be 999
endorsed by the UK Home Secretary - who Open Close
has the authorityto order extradition.
AsMallya'sextraditionhasbeensigned
off by the minister at the time, only a for- Indian Hotels
malcertificationwillnowberequiredonce
all avenues of appeal have been exhausted Shares gain as the 1.24%
in the UK. —PTI company is about to
raise `150 crore via
NCDs from Axis Bank
84.8
82.4 81.5
81.15
Open Close
GREEN GROWTH National Aluminium
■ Against 130,000 units sold in
the previous fiscal year, this
Stock rallies on 6.88%
mining lease for
year’s figure is 156,000 units
Utkal-D coal block
■ 152,000 two-wheelers, 3,400 in Odisha
cars and 600 buses were sold in
FY20 34.5
34.2
■ The corresponding figures for
FY 2018-19 were 126,000 two-
wheelers, 3,600 cars and around
400 buses making a total of
130,000 units 33
■ Of the total number of E2Ws 32.4
sold in FY20, 97% were electric Open Close
scooters and a small volume of
motorcycles and electric cycles
constituted the remaining 3%
Quick
View
the brunt of Covid19 like any other auto-
motive business, the clearer skies and the
cleanerairin eventheworstpollutingcities
iscertainlyleavingapermanentimpression
on the minds of the customers about how
theycanbreatheeasyandremainhealthyif
the societymoves towards e-mobility.”
“The latest Harvard research of how Covid-19: Ad
PM2.5 pollution can multiply the risk of
bookings on TV
Coviddeathsisastarkrealityofhowthepol-
lutantsoftheICvehiclescanharmusandis
certainly going to make the policymakers
channels ‘halved’
think on how to accelerate the EV growth.I ADVERTISING BOOKINGS ONTV
feel,given the right impetus bythe govern- channelshave halved because of the
ment and the industry,the EVindustry can Covid-19pandemic andthere are
springbackfasterthantheailingICvehicles delays in payments from brands as
segment.A pertinent factor that may work well,an umbrella bodyof broadcasters
in favour of E2Ws post-Covid would be the said on Monday.The outbreak has also
choiceofswitchingoverfromcrowdedmass halted production of ongoingshows,
transporttothesensiblypricedelectrictwo- cancellation of live sporting events like
wheelerswithalmostthesamecostofcom- the IPLand also scheduled
muting,as of public transport,” he added. advertisements,the Indian Broadcast-
Accordingtohim,“Fewexperimentslike ing Foundation (IBF) said.The bodyhas
E2Ws being sold without the batteries and written to Union information and
customer paying for the batteries as a fuel, broadcastingministerPrakash
e-commerce companies realising the eco- Javadekar,seeking a slewof relief or
nomic benefits of EVs and converting their stimulus measures forthe industry.
fleets, e-carts becoming convenient and
cost-effectivemeansofshortdistancelogis- Fortis appointsAnil
tics,e-taxi fleets beginning to make money Vinayak as group COO
due to lower operating costs may bring
aroundtheinflectionpointintheEVindus- FORTIS HEALTHCARE ON Monday
tryin FY21-22.” said it had appointedAnilVinayak as
group chief operatingofficer.Vinayak,
whowill be based out of Gurugram,
will lead operations forFortis at a gro-
up level.“With a proven track record as
a successful leaderin operations,he
has consistentlydelivered results over
theyears.Vinayak also has a deep
understanding of marketingopera-
tions,” Fortis MD and CEOAshutosh
come.“Howcanweexpectapersontolivein Raghuvanshi said in a statement.
such an environment that we created for
low-costhousing?Wouldwebefairtowards Nafed despatches
the occupants for the lifestyle and hygiene pulses for distribution
that is offered?”Tata asked the architects.
Nearly5,000participantsacrossthesec- NAFED,THE NODAL agency of the
torparticipated in thewebinar. government for distributing 1 kg of
Hewentontosaythat“ifweareproudof pulses to eligible households under
what we do,then we should be ashamed of the Prime Minister Garib Kalyan
whatwehavedonetocitiesbecausewehave Yojana,has issued/despatched over
triedtobuildanimagewewanttoprojectof 1.07 lakh tonne of pulses to the
ourselves publicly and also try to hide the states for distribution.
rest andwe get offendedwhen people criti-
cise us for that”. He also emphasised that
thereshouldbeare-examinationofwhatwe
would consider as acceptable standard in
terms of forqualityof life.
“It seems to stop at the areas with the
Hyundai India donates
`7 crore to PM-Cares
HYUNDAI MOTORINDIA (HMIL)on
Mondaysaidit hada donated `7 crore
slumsarebeingreplacedandIusetheword to the PM CARES Fund,extendingits
againtheresidueistheslum.It’slikeputting supportto the citizens to overcome the
the garbage together and calling it a com- Covid-19crisis.SS Kim,MD & CEO of
munitypushing it 20-30 miles out making Hyundai MotorIndia,said,“Thecore
itdifficulttosurvive.Soperhapsthereought values of ourfoundation inspire us to
to be a revision in terms of the fact that we strive forthe betterment of society.
aredealingwith,”hesaid.Tatasaidthiscom- Ourcontribution to the PM CARES Fu-
munity wants to be a part of the new India nd stands testament to solidaritywe
and the architects and developers are holdwith the peopleof India,amidst
dogged bythat issue. this crisis.”
 6 FINANCIAL EXPRESS WWW.FINANCIALEXPRESS.COM

Opinion
CENTRAL ROLE

❝
Chief minister of West Bengal, Mamata Banerjee
We welcome all constructive support & suggestions,
especially from the Central Govt in negating the
Covid-19 crisis. However, the basis on which Centre is
❝
proposing to deploy IMCTs ... is unclear
TUESDAY, APRIL 21, 2020

RationalExpectations INDIA SHOULD MOVE AHEAD WITH THE UNDETERRED RESOLVE OFADOPTING CONTEXT-DEFINED
● COVID-19 RESPONSE
AND REGIONALLY-DIFFERENTIATED STRATEGIES, UNDISTRACTED BY CRITICS
SUNIL
JAIN
sunil.jain@expressindia.com
@thesuniljain
Covid, critics
Making China-FDI and contradictions
restrictions work
E
VENAS INDIA is reviewing sons, mostly young, retested positive
ways to nuance the second after at least 14 days of follow-up
stage of the lockdown after discharge. False positive?

How do you reconcile inviting Chinese mobile-producers

with some relaxations and
looks ahead to define the
K SRINATH Testing rates are not always good
predictors of effective epidemic con-
with putting restrictions on FDI? Policy needs fine-tuning path to follow after May 3,steps taken REDDY trol. Kerala tested less than Delhi and
so far, continue to attract criticism far less than the US or the UK, but is

G
President, Public Health Foundation of India
IVENTHE FUROREoverthePeople’sBankofChina(PBC)buyinga1%stake from several experts and media com- Views are personal being hailed as India’s success story in
in HDFC Bank,it is just aswell that the government announced a policy“for mentators. How justified are they? epidemic control.Astriking contrast is
curbing opportunistic takeovers/acquisitions of Indian companies due to The often self-contradictory cri- offered by Belgium and Bolivia,which
thecurrent Covid-19 pandemic”.A1% stake in HDFC Bankvia the FPI route tiques harp on several themes: (1) Beyond this reining in of viral ease and diabetes weigh against us.If have the same population size.Bolivia
wouldn’tgivePBCanyleverage,butFPIrulesallowforthistoriseto10%.Combinedwith lockdown was unnecessary or transmission, there were several the large rural component of our pop- performed only2.4% of the numberof
thepossibilityofotherChineseentitiesbuying,thiscouldgivetheChinesegovernment unhelpful, as India was not at high other positives that bide well: public ulation is at less risk, there is also a tests performed by Belgium. Yet,
some serious leverage. Indeed,with even more Indian assets likely to be auctioned off risk or is at such a high risk that lock- health and health system capacity duty to provide protection from Bolivia has had only 31 Covid deaths
afterthepandemic,theCentrewouldbewaryofChineseentities—especiallygiventheir down will not help anyway; (2) India’s emerged as policy priorities, with unrestricted urban ingress that car- compared to 5,453 in Belgium at the
government/military link—picking up too many assets for a song.A recent Brookings weak health system will not be able to strong societal recognition of their ries the virus. last count. Clearly, many socio-demo-
India report (brook.gs/2RMFlBl) notes how Chinese firms are investing in all manner of handle the inevitable surge, so lock- value; domestic capacity is being It is also ironical that both who say graphic and climatic differences exist
areas from mobile phones and construction equipment to real estate and automobiles, down will achieve nothing; (3) only ramped up to reduce dependence on that India is at high risk and thosewho between the two countries.That iswhy
and increasingly,in startups.Over800 Chinese firms operate in India right now. extensive countrywide testing of external sources of supply for active opine that we are at low risk, fault us context becomes important in devel-
Adirect confrontationwith China is tough,but the press note on the changes was symptomatic and asymptomatic per- pharmaceutical ingredients,personal for ‘low testing rates’. oping predictive epi-
quite blunt when it said“an entity of a country,which shares land border with India sons will help,without specifying the protection equipment, testing kits, Testing is not the only demiological models or
orwhere the beneficial owner of an investment into India is situated in or is a citizen testing criteria or estimating the vaccines, and advanced medical arrow in the quiver of diagnostic tests. Fancy
Graduated step
of any such country, can invest only under the Government route”. In other words, resources needed; (4) there is nothing devices such as ventilators; citizen public health. Syn- decontextualised mod-
Chinese investment is welcome, but Indian government must approve each one you can do about it—so sit back and participation and social solidarity are dromic surveillance,and down from els—whether in fashion
through an FIPB process. leave it to herd immunity, without being fostered, best exemplified by hospital admissions are lockdown and or epidemiology—may
How long India can sustain this stance remains to be seen,especially if,as is always estimating how much time it will take Kerala; multi-sectoral administrative other sources ofvaluable continued social walk well on the ramp,
possible,the majorpowers decide not to punish China forits role in the pandemic,and and at what cost of human life. coordination has moved from being information to gauge but don't wearwell in the
There is no doubt that a rigorous an aspirational, but, elusive chimera the spread of the epi-
distancing will be real world.
the possibilitythat theviruswas man-made.Right now,the US seems to be readying to
betough,butitisunclearhowthiswillplayout.IndiahasallowedHuaweitoconductits lockdown carries social and economic to a cohesive operational reality; pri- demic.Testing has logis- needed to achieve a Countrywide herd
5G trials despite US opposition to the Chinese player. But, in the past too, India back- costs for individuals and communi- vate sector participation from both tic constraints of kits, safe path to herd immunity will take a
pedalledafter,atonetime,hintingthatthefirm’sactivitieswerelinkedtoChineseintel- ties. The impact on migrant workers, its health and non-health compo- labs and personnel, immunity or vaccine long while to develop. It
ligencework.And,whenIndiansuppliersprotestedtheimportofChinesepowerequip- and the urban poor in informal occu- nents was energised for providing which are being over- has to happen through
mentfundedbyveryliberalsuppliers’creditseveralyearsago,thegovernmentchoseto pations is particularly distressing. It medical and social services; an amaz- come.Even so,ICMR has protection, both streamlined exposure to
ignore this.Dongfang Electric,one of China’s big power companies,Brookings reports, would have been best to assist the ingly smooth Centre-state consen- reported that only 1 in over a year away avoid an initial explo-
has signed deals forinstalling 28,000 MWworth of power migrant workers to return home, as sus-building process and a pleasing 24 tests has yielded a sion of cases that will
generatorsandplanstobuilditsfirstproductionfacilityin they were very unlikely to have been switch of warring political parties positive result.The huge overwhelm the health
India,with a $2 bn investment plan overfiveyears. India has removed virus carriers due to the low probabil- from acerbic attacks to expressions of resource needs of case system. Wang Xinghuan,
WhetherIndiacansticktoitscurrentpositionwillprob- restrictions on ity of their occupations or dwellings a united national resolve boosted detection,through testing as the prin- head of Wuhan’s Zhongnan hospital,
ably also be influenced by China’s ability to stir trouble at bringing them in proximity to the public confidence. cipal approach, must be realistically says that herd immunity is a long way
theborder.And,whatifChinaoffersconcessionslikegreater
China in the past as returning foreign travellers or their Advocates of a nihilistic approach estimated before raising the chant of off in China, judging from the low
market access for Indian firms, or some of its big mobile well; any anti- contacts. The urban poor too, could do not see the obvious contradiction ‘widespread testing’ to a high pitch. levels of antibodies in the general
phonemakersoffertomovemoreproductiontoIndia,orif China-FDI policy have been supported in a more between simultaneously saying that Enthusiastic advocates of testing population.It is self-contradictory to
Indianfirmslobbythegovernmentforliberaltreatmentof must be calibrated. humane way. India is at low risk and predicting that also do not recognise the extent of advocate a passive path to herd
low-cost Chinese firmswith generous suppliers’credit? However, these lapses do not we cannot escape the disastrous false positives and false negatives immunity while doubting our health
ItisdifficulttogetafixonChineseinvestmentinIndia, And nothing can negate the logic of the lockdown. It surge because of a weak health sys- that diagnostic tests carry in differ- system’s capacity to handle a surge.
sincealotcouldbecomingviaSingapore,orthroughfunds work till India fixes yielded benefits in applying the tem. They fail to recognise that the ent population groups with varied Even a herd should not be stampeded
whereacertainbeneficialinterestcouldbeChinese;Sebiis its policies to give brakes on viral dissemination: it did lockdown period offered time to bet- prior probabilities of exposure or dis- by waving the branding iron of
supposed to be probing this.India’s official data showthat its own firms a level reduce the rate of rise of positive ter organise and scale up the capacity ease. This is a Bayesian reality that immunity. Graduated step down
just 1.5-2% of FDI has come in from China and Hong cases as a fraction of tests performed; of our health and social systems to affects population-wide testing. from lockdown and continued social
Kong—$800mnofthetotal$45bnoffreshequityflowsin playing field there was no sharp surge in hospital meet a possible surge. With OECD South Korea has recently reported distancing will be needed to achieve
FY19, and $6.5 bn of the $456 bn that has come in since admissions for severe acute respira- countries overwhelmed and mod- 190 cases which first tested positive, a safe path to herd immunity or vac-
April2000.ArecentpaperbyGatewayHouse(bit.ly/2ywFwK1) tory infections (SARI); in areas where ellers predicting over a million Indian later twice tested negative and then cine protection,both over a year away.
estimatesChinahasinvested$4bninIndiantechstartups,resultingin18ofIndia’stop household syndromic surveillance deaths,a do-nothing approach would again tested positive! The scientists In the meanwhile,India should move
30unicorns having Chinese funding.Inaddition,Chinese smartphonemanufacturers for ‘influenza-like illness’ (ILI) was have been indefensible. If the there are unable to say whether these ahead with the undeterred resolve of
alreadyhaveatwo-thirdsshareofIndia’smobilephonemarket.In2018,GatewayHouse carried out,no red flags were raised to younger age of the population is in are ‘reinfections’, ‘reactivated infec- adopting context defined and region-
says, around half of the total app downloads on—iOS and Google—in India were apps indicate a deluge; the rate of rise of our favour, the high numbers and tions’ or ‘false positives’ in the first ally differentiated strategies, undis-
with Chinese investments,such as SHAREit,TikTok,and UC Browser. deaths was nowhere close to that pre- early onset of risk enhancing co-mor- place. A recent publication from tracted by the carping of both nihilis-
The Brookings paper,quoting the Chinese commerce ministry,puts the numberat dicted by alarmist models. bidities like hypertension, heart dis- China reported that 14.5% of per- tic and alarmist critics.
$6.4 bn in 2014-2017 (this includes Fosun’s $1.1 bn to buy Gland Pharma),and says
thisisanunderestimate.ThebiginvestmentsthatcometomindareAlibaba’s$860mn
inPaytm,and$500mninSnapdeal,alongwithSoftBankandFoxconn;Tencent’s$400
mn in Ola,$700 mn in Flipkart,$175 mn in Hike Messenger,and $145 mn in Practo.
While Gateway House quotes a study that shows Chinese apps ask for 45% more
LETTERS TO
permissions—accesstocontacts,cameras,microphones,etc—thanthoserequestedby
thetop50globalapps,thisishardlyrelevantsincenoneofthesefirmsarebasedoutof
India.TherealissueiswhetherChineseinvestorsareinsistingthe firmsshare thedata
gathered with them; perhaps,that is something the authorities need to examine.
Now for the fishing rod THE EDITOR
If India is to bemorevigilantwith Chineseinvestors,it must carve out no-go areas; Preventing predatory
without such rules, it will be impossible to ever clear Chinese investments in the To ensure that those at the
take overs
startupworld,whichrequiresquickdecisionsonfunding.FutureChineseinvestment,
forinstance,canbekeptoutofthefintechspacebecauseitinteractswithIndia’sbank-
bottom of the economic MANECK The move by the Union
pyramid have sustenance,
ing system,out of biotech,defence (including drones),telecom (networks,not equip-
ment), and such select areas, but may be allowed in the taxi business, in retail, food immediate and significant aid
DAVAR government as part of a change in
its foreign direct investment (FDI)
delivery,entertainment,etc. policy to make its approval
Chairman, Services Export Promotion
Morethanthat,sinceChinaisoneofthefewcountriesthathavethemoneytoinvest must be provided to businesses Council. Views are personal mandatory for foreign investments
rightnow,ifIndia’sstartupsaren’ttobestarvedoffunds,asMohandasPaiandSiddarth from countries sharing land border
Paihavearguedinthisnewspaper,thegovernmentwillhavetoensureIndianinvestors with India, has come at a time
getalevelplayingfieldversusglobalonesintermsoftaxtreatment,andothersuchfacil- WHILE GOVERNMENTS AT the Cen- and jewellery.There is an opportunity banks charged interest on interest when apprehensions are being
ities (bit.ly/3eaCpYB). Indeed, till the operating environment in India gets less hostile, tre and the states have been exem- to fill a vacuum created by trust issues during the moratorium period. Fur- raised by many over the growing
more startups will be incorporated in countries like Singapore; then, India can’t even plaryin the adoption and execution of with, and sentiment against, China. ther, there were no instructions to tendency of Chinese firms
hope to keep a check on Chinese investing in these firms. strategies to contain Covid-19, espe- But, most of these sectors are labour- banks to pass on the benefits to con- showing conspicuous willingness
Atamacrolevel,ifIndiawantstokeepChineseinvestmentatnon-threateninglev- cially in a country as difficult and intensive, with thin margins. The sig- sumers by compulsorily effecting a and interest to buy huge stakes in
els, it needs sweeping reforms.Apart from the obvious reforms to make India more diverse as India,the lack of any coher- nal they emit is clear—without an 2% rate cut on interest. Similarly, a Indian entities in these pressing
competitive,and fixing the government’s anti-industry bias (bit.ly/2Kl3M4I),policy- ent plan and packages to resuscitate infusion of serious cash,it is a question suggestion made by the author, and times of Covid-19 pandemic.
makinghastobecomealotmorecoherent.Youcan’t,forinstance,hopetoattractIndian businesses and industry in its after- of survival. And, exports are a micro- also by others, of speedy release of IT While the change in FDI policy, it is
fintechplayerswhile,atthesametime,abolishingMDRcommissionsthesecompanies math is distinctly worrying. As finely cosm of the industry at large. and GST refunds was implemented aimed at curbing opportunistic
live off.If price controls continue to hobble domestic pharmaceutical firms,theywill attuned as it has been to the conse- The underlying message is that only for the former upto `5 lakh, a take overs and acquisitions of
havenowheretoturntobuttolow-costChineseAPI,andifyoukeepsqueezingtelecom quences of Covid-19,and its spread,if businesses will be shuttered if help is mere band-aid for businesses. Indian companies due to the
players,or don’t allow electricity boards and power producers to get paid adequately, unchecked, the government’s piece- not at hand. A report estimated that Most countries have come out current Covid-19 pandemic, the
they, too,will turn to low-cost Chinese suppliers.The only way to keep Chinese firms meal approach to subsequent eco- 70% of those employed with huge economic message is loud and clear that
from developing a chokehold here is to allow local firms,as well as those from the US, nomic rehabilitation does not inspire in the travel and tourism packages as percentages there is no separating commerce
Europe,andJapanto dowell;India’scurrentpolicies,itsohappens,aretailor-madefor confidence for the future. sector, including avia- One grapples with of their GDP, offering and security in dealing with China.
mainlyChinese firms to do well. And, it is a future fraught with tion,and food and bever- uncertainties of a crucial support, espe- HDFC bank had recently informed
human tragedy,which,if not immedi- age,will be on the streets. cially to the MSME sec- that stock exchanges that
ately attended to, will result in In the US, unemploy- future without tor. It is time we also People's Bank of China now holds

LowLEVEL unprecedented suffering and depri-

vation.Even now,days away from lift-
ing the lockdown,starvation stares in
ment has increased from
historiclowstoover15%,
employment. The stepped up to end the
psyche has been uncertainty.Even neigh-
with more than 22 mil- damaged, and only bouring Bangladesh has
1.01 percent stake in the
company. The growing perception
that Chinese companies with an
The Covid-19 pandemic is no time to indulge in the the face of thousandswho are subsist- lion people on the dole.In
bold fiscal
announced a package for access to easy money and strong
ing on one meal in two and three days, India,thesituationwillbe its apparel sector, offer- political support in Beijing appears
e-commerce versus brick&mortar debate their children lacking milk and pro- catastrophic, with no measures will ing to pay salaries as a to be taking economic advantage
tein-rich diets. safety net. If businesses ensure this damage loan to be repaid over a of other nations misery cannot be

A
TATIMEWHEN a balance between the need forCovid-19 lockdowns and the Union commerce minister, Piyush fail, government diktats is not permanent period with 2% interest. faulted. Apart from seeking
impactthesewillhaveontheeconomyisneeded,thegovernmentreversingits Goyal, and the commerce ministry not to fire employees will There is another accountability from China for
April 15 notification that allowed e-commerce companies to resume sale of have had a series of digital exchanges be empty rhetoric. human dimension we letting health emergency in one of
non-essential items seems to have little to dowith the public health aspect of about the problems faced byexporters, The steps taken, though well- have not considered aswe grapplewith its cities to become a global
allowingonlyessentialservices.ItcomesagainstthebackgroundoftheConfederationof and foreign exchange earners. The meaning, have had little impact. It is thetangiblesofcontainment.Thisisthe pandemic, many countries are
All IndiaTraders (CAIT) having petitionedvarious central ministries,including MHA,to action taken within the ministry has humane to provide immediate suste- hugepsychologicalproblemcreatedby now rethinking their very nature of
bar the sale of non-essential items by e-retailers to ensure parity with non-essential been literally lightning quick, with nance to the bottom of the pyramid, being cooped up at home. With little commercial engagement with
(chieflyelectronicgoods)brick-and-mortarretailersthatremainsubjecttothelockdown. solutions and coordination being but what good is it to feed someone productive activity, the mind grapples China. As far as India is concerned,
The home ministryhad allowed listed e-commerce companies to operate fromApril effective even before the meeting was fish forone day,yet take awaythe fish- with uncertainties of a future without we need to frame a very
20,withtheconditionthattheir“vehicles...willbeallowedtoplywithnecessarypermis- over. While this serves to ease bottle- ing rod, using which, they can feed employment and earnings, and the comprehensive strategy to deal
sions.”Thiswasinterpretedtomeanfullrangeofservicesprovidedbye-tailers.However, necks, the core issue of liquidity themselves for a long time? consequentresponsibilitiesofafamily. with rising China's strategic
commerce ministerPiyush Goyal justified the limiting of this to essential goods onlyin remains unsolved. India’s merchan- RBI’s initial announcement of a Thepsychehasbeendamaged,andonly economic onslaught sooner
theinterestofalevel playingfieldforbrick-and-mortar.Competitionregulatorsaround dise exports are largely powered by moratorium and repo rate cuts gave bold fiscal measures will ensure this than later.
the world are having to prioritise supply-chains remaining functional.The crisis is not SMEs, especially, in sectors such as the appearance of some succour,espe- damage is not permanent. — M Jeyaram, Sholavandan
the time to playup the digitalversus brick-and-mortardivide.The decision leaves many apparel, leather, textiles, carpets, cially to the salaried class with EMI The battle against the virus will be
goods that could facilitate remoteworkingwith no link at the retail end. handicrafts, sports goods, and gems burdens, only to be dashed when won.Now,for the war for our future. ●Write to us at feletters@expressindia.com

R.N.I. Reg. No. 6188/61 Printed for the proprietors, The Indian Express (P) Ltd by Vaidehi Chintaman Thakar at The Indian Express (P) Ltd Press, Plot No. EL-208, TTC Industrial Area, Mahape, Navi Mumbai-400 710 and published from Express Towers, Nariman Point, Mumbai-400 021. Editorial & Administrative Offices: Express Towers, Nariman Point, Mumbai-400 021. Phone: 22022627/67440000. Fax: 022-22856323.
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WWW.FINANCIALEXPRESS.COM
FINANCIAL EXPRESS
● PANDEMIC PACKAGE 2.0
Steering the
country out
of the storm
Covid-19 has dramatically changed India’s
growth-inflation dynamics. RBI must further
expand the depth and breadth of the measures
taken so far. It has to keep the powder dry to
resort to more ‘never say never’ measures, and
some in collaboration with the government
T
HE SLEW OF monetary and
regulatory measures
announced by the Reserve
BankofIndia(RBI),wellbefore
the much-awaited govern-
ment’s follow-on fiscal stimulus pro-
gramme, underscores the resolve of the
centralbanktoproactivelyrespondtothe
evolvingGreatVirusCrisis(GVC)through
both conventional and unconventional
measures.
Assessment and advisory of the
central bank
Covid-19 has dramatically changed
India’s growth-inflation dynamics. The
International Monetary Fund’s (IMF)
projections show India’s GDP growth in
2020-21 at 1.9%, the highest among
G20nations,evenasinflationisexpected
to edge down; this is scant comfort.
The banking sectorwill,undoubtedly,
Atop scientist at the Indian Council ofMed-
ical Research (ICMR) has said that nearly
80%oftheSARSCoV-2infectedinthecoun-
try could be asymptomatic,and this a major
concern forthe country.So,even as we move
on a phased exit from the lockdown, the
Covid-19 challenge for India could just get
tougher. In a conversation with FE’s
Sarthak Ray, the president of the Public
Health Foundation of India, Dr K Srinath
Reddy, who is also a member of the execu-
tive group of the International Steering
Committee of WHO’s Covid-19 SOLIDAR-
ITYtrial,talked about the issue ofdetection
ofasymptomatic cases,what India needs to
doprotectitsvulnerable,andhowsocialdis-
tancing will need to be in force for a year if
we are to meaningfully combat Covid-19.
Edited excerpts:
WhatareasymptomaticCovid-19cases?
Howare these different from pre-symp-
tomatic cases?
Asymptomatic cases are those that are
testing positive for Covid-19 without
them having shown any of the symptoms
that are typical of the disease. Some of
these cases may be pre-symptomatic, i.e.
they could have undergone testing at a
time in infectionwhen theyare not show-
ing symptoms, but may show symptoms
later.Inothercases,i.e.ifthesearenotfalse
positives,there is a chance that these indi-
viduals have been exposed to SARS CoV-2,
buttheirimmunesystemmanagedtobeat
the infection.
Are asymptomatic cases being reported
widely? Is there any trend emerging
around these cases?
HR
KHAN
The author is retired deputy governor, Reserve
Bank of India. Views are personal
experience severe stress as the impact of
the GVC unfolds on its asset quality,even
though many of the liquidity-enhance-
ment measures including the reduction
in cash reserve ratio (CRR), long-term
repo operations (LTRO) and targeted
LTRO will have a positive impact.
Instruments and incentives for
liquidity and credit flows
RBI’s package of March 27, 2020,
largely bypassed the critical segments of
SMEs,NBFCs,smallerplayers and MFIs—
hence the announcement of TLTRO 2.0
(Rs 50,000 crore), which is expected to
alleviate the liquiditywoes of NBFCs and
MFIs that are likely to face severe con-
straints in servicing loan and bond oblig-
ations.In orderto ensure betteraccess to
smaller entities,50% of the TLTRO kitty
is to go to small and mid-sized entities.
However, the caveat that banks must
‘We should not shed our armour’
It is very difficult to catch asympto-
matics unless individuals get themselves
tested on demand, or public health
authorities organise testing in a cluster.
The Delhi chief minister recently talked
about asymptomatic cases, Boston 25 (a
digital video news outlet) has reported
that, of 397 people in a homeless shelter
in Boston, 146 tested positive and all of
them exhibited no symptoms. In Santa
Clara, California, 3,300 people volun-
teered forantibodytesting forCovid-19—
extrapolating from the test results using
various models, CNBC reports, the study
found that anywhere between 2.5% and
4.2% in Santa Clara could have antibodies
to the virus, indicating they had been
exposed to the virus but perhaps either
remained asymptomatic or developed
very mild symptoms that they didn’t sus-
pect Covid-19.
It is difficult to comment on a trend—
the only thing that can be said with some
degree of certaintyis that asymptomatics
are largely below 50-45 years of age.
InboththeSantaClaraandBostoncases,
testing led to identifying asympto-
matics. Is that what the government
should be looking at—wider testing?
See, as both examples should tell you,
this works for individuals volunteering to
test despite not having symptoms, or on
testingbeingundertakenforacluster.So,if
there is on-demand testing, or if the gov-
investininvestment-gradepaperislikely
to limit access to small NBFCs and MFIs
who may not be of investment grade.
Likewise, the special refinance win-
dowof Rs 50,000 crore at the repo rate to
all-India financial institutions like
NABARD,SIDBI and NHB to support flow
ofcredittocriticalsectorslikeagriculture
and rural development, SMEs and
HFCs/MFIs is a welcome step.
The objective behind further reduc-
tion in the reverse repo rate is to incen-
tivise banksto deploytheirsurplusfunds
for credit rather than place them with
RBI. Given the current phase of extreme
uncertaintyand risk-aversion,partlydue
to lingering fears of vigilance and
enforcementaction,it ispossiblethesur-
plus may be diverted to government
securities(bothCentre and states),whose
issuances will go up sharply in view of
higher expenditure in times of com-
pressed revenue collections.
IncreasingtheWMA(waysandmeans
advances)limitsofstatesbyanother30%
in the first half of 2020-21 mayalso help
in sale of SDLs as these need not be
bunched up in the first half
of the year. Perhaps more
substantive,out-of-the-box
measures would have to be More radical
considered down the line. measures including as the gross NPAs of banks
These could include further
a variant of ‘bad
enhancement of temporary
loan limits by way of SDF banks’/UTI bailout where between 15% and
(special drawing facility) to fund-like structures 20% of the total advances.
states against their Sinking may have to be
and Guarantee Funds
maintained with RBI,
considered as gross sures, will be necessary to
OMOs in SDLs,central gov- NPAs of banks are support credit growth
ernment borrowing on expected to rise
behalf of states, more fre- from 10% now to
quent OMOs matching the
lumpy borrowings by the
15-20% of total
central government, fur- advances
ther regulatory relaxations
to banks holding govern-
ment bonds, resource mobilisation out-
side market borrowingsthrough tax-free
bondsand,finally,themotherofallinter-
ventions—private placement of part of
government’s bond issuances with RBI,
i.e.monetisation.
Regulatory relaxations with
prudential safeguards
The majorregulatoryrelief allowed to
banks/borrowers is that the moratorium
will be deemed as a standstill period.
Hence, overdue accounts that have not
yet become NPAs (as overdue has not
reached90daysas onFebruary29,2020)
will not turn NPAs during the morato-
rium period.As a prudential measure to
RECORD CAFE: K SRINATH REDDY
ernmentidentifiesaclusterfortestingand
rolls this out,you will catch some asymp-
tomatic cases.A population-wide testing,
orevenlarge-scaletesting,isneitheradvis-
able nor feasible.You will have to consider
ILLUSTRATION: ROHNIT PHORE
protect banks against slippages after the
moratorium,theywill have to make 10%
provision for such accounts. This may
nullify some of the forbearance benefits
and impact the profitability of banks.
However, this will provide resilience to
banks in case the accounts eventually
become NPAs.
Measures such as the freeze on divi-
dend payouts from profits for financial
year 2019-20, subject to review at the
end of the second quarter, reduction in
the liquidity coverage ratio (LCR) from
100% to 80%,and extension in the date
of commencement of commercial oper-
ations (DCCO) for NBFCs with exposure
to real estate by a year should also ease
the pressure on banks/NBFCs.
Going forward
Given the current uncertainty, an
additional period of 90 days, over and
above the existing norm of 210 days pre-
scribed for having a resolution plan for
resolution of large stressed accounts,has
been allowed.Going forward,the frame-
work may require a closer review. More
radical measures including
avariantof‘badbanks’/UTI
bailout fund like structures
may have to be considered
are expected to rise from
about 10% now to any-
This,togetherwithahostof
unfinished reform mea-
needed for rebuilding the
economy.
RBI must further
expand the depth and
breadth of the measures
taken so far.Importantly,it
has to keep the powder dry
to resort to more ‘never say never’ mea-
sures,and some in collaborationwith the
government—for example, higher guar-
anteecoverage/first losssupport forSME
loans,repo in corporate bondswith safe-
guards and,finally,dipping into its large
buffers held as cushion against ‘rainy
days’ of severe financial stability risks in
RBI’seconomiccapitalpool.Thiswaspre-
sciently recognised by the expert com-
mittee set up last year to look at the Eco-
nomic Capital Framework of RBI under
the chairmanship of former Governor
Bimal Jalan. One remains sanguine as
Governor Shaktikanta Das has unequiv-
ocallycommittedtodo‘whateverittakes’
to steer the country out of the storm.
ILLUSTRATION: SHYAM KUMAR PRASAD
the logistical and resource demand this
places—on the requirement for testing
kits, reagents, lab personnel, protective
gear,samplecollectionparaphernalia,etc—
andaskdoesIndiahavethecapacityforthis
TUESDAY, APRIL 21, 2020
OPINION 7
No love for
thy neighbour
VAIBHAV KAKKAR
& SAHIL ARORA
Kakkar is partner and Arora is senior associate, L&L Partners (formerly
Luthra & Luthra Law Offices). Views are personal
Spooked govt builds the great (FDI) wall
A
GOVERNMENT THAT HAD made it a habit to
announce big-bang reforms to attract foreign
investors,onApril 17 took what could go down
as its boldest foreign policydecision.Byissuing
Press Note 3 of 2020, it has made all FDI from
countries sharing a‘land border’with India subject to prior
government approval.Previously,apart from investment in
select sectors,the requirement forpriorapproval arose only
forinvestments originating from Pakistan and Bangladesh.
While the intent to prevent ‘opportunistic’ investment
from Chinese sources in domestic market is clear,the move
raises manyquestions.The Press Notewill become effective
once a formal amendment is made to the rules underFEMA.
What provoked the government?
TheSensexreporteditssharpestfallinthepreviousquar-
ter.Of the 538 stocks from BSE 500 and Nifty 500,114 saw
their price halved, with 221 stocks having fallen 30-50%.
The government appears to have been spooked by the Peo-
ple’s Bank of China raising its stake in India’s largest non-
banking mortgage provider HDFC and amid warning calls
byMSMEstopreventa‘shoppingspree’byChineseinvestors
of heavily discounted Indian companies.
India is not alone.Withvaluations theworld overhit and
in an attempt to prevent predatory behaviour by Chinese
firms,Australia,Spain and Germanytightened rules around
foreign takeover,without specifically singling out China.
The language in the Press Note covers onlyFDI from Chi-
nese sources and doesn’t impose restrictions on FPI from
China—i.e. once the FEMA notification is issued, invest-
ments in unlisted companies and investments in excess of
10% in listed Indian companies would require prior gov-
ernment approval,but FPI (investment of less than 10% in
listed Indian companies) is not impacted by the Press Note.
Question of beneficial ownership
Apart from entities registered in China and Chinese cit-
izens,the Press Note covers investment from entitieswhich
are‘beneficiallyowned’bysuch Chinese entities orcitizens.
However,it has not clarified the mannerinwhich‘beneficial
ownership’ would be determined. Given that most large
funds may be substantially funded by or controlled by Chi-
neseentitiesorcitizens,yet notmajorityowned bythem,the
rules to determine‘beneficial ownership’would be crucial.
Special Administrative Regions (SARs) of China
In the past, when the government prohibited Chinese
investorsfromacquiringimmovablepropertyinIndiawith-
out priorapproval from RBI,theyalso specificallycalled out
Hong Kong and Macau within such restrictions, owing to
them being SARs. However, the Press Note currently places
these restrictions only on China, and it remains to be seen
whether Chinese SARs will be painted with the same brush.
Worry for existing Chinese investors
The FEMA notification would likely be prospective in
nature. So, existing investments from China (like Alibaba’s
and Tencent’s investments in e-commerce firms) would be
grandfathered and should require no post facto approval.
However, given that most Indian companies are in need of
fund-raising,thegovernmentwouldneed toclarifywhether
a rights issue, wherein Chinese investors only acquire pro
ratashareholdinganddon’tincreasetheirpercentageshare-
holding in a company,would also require prior approval?
What next?
While the government would term the move as an act of
self-defenceandonethatfollowsglobalpattern,thispre-emp-
tiveeconomicstrikewouldimpactforeigninvestmentinflows
and could follow a Chinese retribution against Indian com-
panies with investments in China. However, in times of a
global pandemic, one can hardly cast a shadow on the gov-
ernment’smotive.Asthecountrybracesforthefalloutofthis
decision, it is imperative for the government’s bold move to
beimmediatelyfollowedbyacomprehensiveFEMAnotifica-
tionandSEBIclarificationthataddressestheaboveconcerns.
So, what should be our strategy assum-
ing there are a significant number of
asymptomatics in the population?
Let testing continue as it is at present,
with the ICMR reviewing and updating
and can it realisticallydevelop such capac- the strategyas andwhen necessary.Apart
ity or arrange for the requirement to be from that, there is a need to continue
met? More so, given you need continued with social distancing practices forwhat-
testing to see if the person is truly cured. ever duration deemed necessary. People
The otherfactorto consideris howfre- will also need to adopt the advised
quentlyyou will be testing the same set of hygiene practices to keep the virus at bay.
people. After all, testing true negative Most important, however,will be to pro-
today is not a guarantee that a person tect our elderly and other high-vulnera-
wouldn’t get infected tomorrow. bility groups, such as those with comor-
Indeed, that brings us to the nature of bidities like diabetes, COPD,
testingandtheresultsthemselves.Notest- hypertension and coronary diseases—for
ingmechanismis100%failsafe.So,imag- this, perhaps, we need to have some
ine a scenario in which a person tests false household and individual risk-profiling
positive and is assumed to be asympto- from data on underlying diseases. It will
matic—he is then quarantined (though to also be necessary to protect rural areas
zero effect since he didn’t have the infec- from transmission from urban areas; to
tion in the first place) and then tests nega- that end,while ensuring supply of essen-
tive after the quarantine in both the first tials in villages, the government has to
and the confirmatory test (again, because minimise transport linkages (other than
he never had the infection in the first those for emergency purposes) between
place).Thiswouldmakehimconfidentthat urban areas,where Covid-19 in India is at
he has somehow developed adequate present concentrated, and rural areas
immunity, and he would drop his guard, that are unexposed to the virus from for-
unaware that he never had the infection eign travellers or their contacts.
and could still contract it.While we don’t
know that true asymptomatics could be What is the outlook on how long social
viral shedders or not—i.e. whether they distancing has to be practised in India?
could still end up infecting other people— We have to be ready for some forms of
we also don’t know if they aren’t. This social distancingforanotheryear,sincewe
means if theyare going towalk about hav- do not knowyet if the virus will flare up in
ing testedfalse negative,there are chances winter.Untilwearesurethatitisquiescent
theywillbespreadingittootherpeople.So, or curbed through a vaccine or herd
testing iswithout doubtveryuseful,but at immunity,we cannot let down our guard.
thepopulationlevelorevenatalargescale, We need not be in chains, but we should
it simplymay not be the answer. not shed our armour.
 8 FINANCIAL EXPRESS WWW.FINANCIALEXPRESS.COM

International
TURBULENTTIMES

❝
Kristalina Georgieva, IMF managing director
The countries that are now worst hit by the
pandemic are not necessarily the ones that will be
worst hit economically. I am most worried about
❝
the developing and emerging countries
TUESDAY, APRIL 21, 2020

● ORIGIN OF SPECIES Alibaba to invest $28 bn Novartis to

Wuhan lab denies any link in cloud infrastructure help vet
malaria drug
to first corona outbreak REUTERS
Shanghai, April 20

ALIBABA SAID IT will invest 200 billion

The US-China blame game
has helped fuel scrutiny of
the lab studying bat-borne
coronaviruses
AGENICES
Beijing, April 20
A TOP WUHAN laboratory official has
denied anyrole in spreading the newcoro-
navirus,in the most high profile response
from a facility at the centre of months of
speculation about how the previously
unknown animal disease made the leap
to humans.
Yuan Zhiming, director of the Wuhan
National Biosafety Laboratory, hit back at
those promoting theories that the virus
had escaped from the facility and caused
the outbreak in the central Chinese city.
“There is absolutely no way that the virus
originated from our institute,” Yuan said
in an interview Saturday with the state-
run China Global Television Network.
Yuan rejected theories that the yet-to-
be identified “Patient Zero” for Covid-19
hadcontactwiththeinstitute,sayingnone
of its employees, retirees or student
researcherswere known to be infected.He
said US Senator Tom Cotton, an Arkansas
Republican,and Washington Post journal-
ists were among those “deliberately lead-
ing people”to mistrust the facility and its
“P4”top-level-security pathogen lab.
US President Donald Trump again
fanned speculation about the origins of
thevirus at a Saturdaynews conference,in
which he said China should face conse-
quences if it was“knowingly responsible”
for the outbreak. The US president has at
times referred to the disease as a“Chinese
virus,” a term he said he embraced after a
Chinese foreign ministry spokesman
tweeted an unsubstantiated theoryabout
US Army athletes introducing the
MAPPING THE VIRUS
Global cases
2.4 million
Deaths
166,200
US not testing enough for
states to reopen: Experts
Europe tries to ease lockdowns
with eye on new cases
Antibody treatments may be
best hope until vaccine
Widespread US testing may be
unlikely until September
Sweden says controversial
virus strategy proving effective
UAE plans to test all citizens,
residents
pathogen to Wuhan.
The US-China blame game has helped
fuel scrutiny of the Wuhan lab,which was
studying bat-borne coronaviruses like the
one that causes Covid-19
Beijing calls for stronger
testing regime
China’s health authority called for a
Democrats and the Trump administration are nearing
agreement on an aid deal as large as $500 billion
Anthony Fauci, the US’s top infectious disease expert,
warned those demonstrating against lockdowns that
reopening too soon could cause even more harm
German chancellor Angela Merkel warned that the
country shouldn’t move too quickly with a further
easing of its social distancing measures, or it risks
having to fall back on a stricter national lockdown
Gilead Sciences was downgraded to equal-weight from
overweight at Wells Fargo Securities, which cited
valuation after a recent surge. The rally was fueled by a
report that an experimental drug for the novel
coronavirus is helping speed recoveries in hospitalised
patients
AJapanese professor of infectious disease says he is
“very pessimistic” the postponed Tokyo Olympics can
open in 15 months
Boris Johnson is resisting pressure to ease the U.K.’s
coronavirus lockdown too soon, fearing a second wave
of the pandemic could hit the country
stronger and more rigorous testing regime
to ensure that the virus does not escape
detection, whether in travellers arriving
from abroad orfrom otherparts of China.
All localities must improve their test-
ing capabilities,including those at border
crossings, and report any epidemic infor-
mation in a timely manner, the National
Health Commission cited its director Ma
Xiaowei as saying.
yuan ($28 billion) in its cloud infrastruc-
ture overthreeyears - a plan that follows a
boom in demand for business software as
thecoronavirusoutbreakpeakedinChina.
The companysaid in a statement itwill
spend the funds on semiconductor and
operating system development as well as
building out its data centre infrastructure.
While most of China’s white collar
employees were working from home
throughout February,the country’s dom-
inant cloud player saw usage surge for its
software,most notably DingTalk,a work-
place chat app used by both businesses
and schools.
Atonepoint,userscomplainedoflagson
the app due to the high volume of activity.
The company acknowledged the issues on
Weibo,the Chinesesocial networking site.
Alibaba Cloud Intelligence president
Jeff Zhang said in the statement that the
Covid-19 pandemic“has posed additional
stress on the overall economy across sec-
tors” and the company hoped the invest-
mentwould help businesses"speed up the
recovery process".
Alibaba's cloud division is one of its
fastest growing businesses. Fourth-quar-
ter revenue climbed 62% to 10.7 billion
yuan,thefirsttimeithastopped10 billion
yuan in a single quarter.
The tech giant commanded 46.4% of
China's cloud market in the fourth quarter,
Australia to force Facebook & Google
to pay media outlets for news content
BLOOMBERG
April 20
GOOGLE AND FACEBOOK will be forced
to pay media companies in Australia for
publishingtheirnews underwhatthegov-
ernment says is a world-first mandatory
code of conduct.
SILVER LINING
■ The tech giant commanded
46.4% of China's cloud market in
the fourth quarter
■ Users complained of lags on
the app due to high volume of
activity on its chat app DingTalk
■ Alibaba’s cloud unit also aided
the Hangzhou government in
creating and rolling out a digital
health-monitoring system
accordingtoresearchfirmCanalys.Tencent
CloudandBaiduCloud,whichhavealsoseen
demand for their products surge,had 18%
and 8.8% of the market respectively.
Duringthefirstquarter,Alibaba’scloud
unitalso aidedthe Hangzhougovernment
in creatingand rollingouta digitalhealth-
monitoring system that rates one's expo-
sure to the virus using red, yellow, and
green colour codes. The system was later
rolled out nationwide.
for Covid-19
BLOOMBERG
April 20
NOVARTIS WILL RUN a US study of the
malaria drug hydroxychloroquine for
Covid-19, the latest effort to determine
whether the hyped medicine can help in
the battle against the pandemic.
The 65-year-old medicine will be
tested against a placebo alone and in com-
binationwith the antibiotic azithromycin
in a study of about 440 hospitalized
patients, the Swiss drugmaker said Mon-
day.Novartis hopes to have results as soon
as early summer.
Withnodrugsproventodefeatthenew
coronavirus, doctors are using medicines
developed for other ailments and report-
ing some successes that then need to be
verified or debunked in clinical trials.
“We really need to find out whether
hydroxychloroquine is an effective treat-
ment for Covid-19 and answer the ques-
tion in a scientifically rigorous way,” John
Tsai,Novartis’s head of global drug devel-
opment, said in an interview.“Otherwise
this may go unanswered, or we’ll have
results that point in different directions.”
Hydroxychloroquine, endorsed by
Trumpaftershowingpromiseinasmallbut
unconventional study in France, is among
the treatments that have sparked hope.
aftereffortsinFranceandSpainhadfailed.
The payment model could be based on the
cost of preparing journalistic content, or
the value added to the digital platform by
using it,he said.
Facebook said it was disappointed by
the announcement, as it had been work-
ing to reach a voluntary agreement and

Quick In Russia, a black market for Treasurer Josh Frydenberg said Mon-
day that negotiations between the tech
had already announced investments to
support news organisations struggling

View
giants and traditional media platforms with declining advertising revenue.

HIV drug to try on corona had made limited progress toward reach-
ingavoluntaryarrangementandthecom-
petition watchdog would unveil a draft
code by the end of July.
Australia’s government has pledged to
Coronavirus takes tackle the“powerimbalance”between the
toll on global M&A digital giants and traditional media,
addingtoabarrageofglobalactionagainst
FORTHE FIRSTtime since September Google and Facebook.
2004,no mergerand acquisition deal Regulatorsworldwidehavebeentrying
worth more than $1 billionwas to loosen the tech giants’ grip on every-
announcedworldwide lastweek, thingfromadvertisingandsearchengines
according to dataproviderRefinitiv,as to news,data and elections.
thevirus stiflesglobal M&A.
Australia’s government has pledged
to tackle the “power imbalance”
between the digital giants and
traditional media, adding to a
barrage of global action against
Google and Facebook
Frydenberg said the government was
“veryconscious of the challenges”of forc-
ingthecompaniestopayfornewscontent,
“Webelievethatstronginnovationand
more transparency around the distribu-
tion of news content is critical to building
a sustainable news ecosystem,” Will Eas-
ton,Facebook’smanagingdirectorforAus-
tralia and New Zealand, said in a state-
ment.“We’ve invested millions of dollars
locally to support Australian publishers
through content arrangements, partner-
ships and training for the industry and
hope the code will protect the interests of
millions of Australians and small busi-
nesses that use our services every day.”

China Mobile lost 4 m

subscribers in Q1
DuPont gets Norway’s $1-trn wealth fund
CHINA MOBILE’S WIRELESS user
base shrank in the first quarter as the
$3-bn financing snared by scandal over its CEO
spread of the new coronavirus shut
down China’s economy and prompted
package, limits BLOOMBERG
millions to cancel services at the
country’s largest mobile carrier.
REUTERS
Moscow, April 20
“Three months ago, people were buy-
ing Kaletra from us without much enthu- few investments Oslo, April 20

Subscriptions fell by 3.98 million in
the three months ended March,the
state-owned carrier said in a
statement Monday.Net income fell
0.8% to $3.3 billion.
Facebook eyes entry into
payments in Indonesia
THREE INDONESIAN DIGITAL
fintech firms are working with
Facebook Inc to apply for regulatory
approval to launch mobile payments
in the country, an official at the
financial regulator said.The plan, if
approved, could be among the first
such service under the firm’s unified
payment service Facebook Pay it
unveiled in November.
ABLACK MARKEThasdevelopedinRussia
foran antiviral HIVdrug explored as a pos-
sible treatment for Covid-19, the respira-
torydiseasecausedbythenewcoronavirus,
according to sellers, HIV activists and the
head of the drug’s main Russian producer.
More than 20 trials around the world
are testing Kaletra as a COVID-19 treat-
ment or post-exposure prophylaxis.
Russia’sHealthMinistryrecommended
it as a possible treatment for Covid-19 at
theendofJanuaryafterreportsfromChina
that it was beneficial, but later added that
its efficacywas uncertain.
That did not deter speculators who bet
thatshortagesofthedrug,alsoproducedas
a generic in Russia under the name Kali-
davir,mightariseasthecoronavirusspread.
siasm for 900 roubles ($12) a box,” one
online trader of HIV drugs said.
“Now, anticipating (supply) interrup-
tions,people are buying between 100 and
700 boxes from us,at 3,800 roubles a box.
Mainly, people are buying (Kaletra) with
the aim of reselling it foraveryhigh price.”
Resellers can get 7,000-8,000 roubles
per box,the trader said - and that frenzyis
worrying some HIV-positive people.
The number of new coronavirus cases
in Russia began rising sharplythis month,
and on Monday it reported a daily rise of
4,268 cases,bringing the nationwide tally
to 47,121.
Kaletra,aswithmanyotherprescription-
onlyHIVtreatmentsinRussia,ispurchased
in bulk by the government and distributed
to registered HIVpatients forfree.
BLOOMBERG
April 20
DUPONTSECURED $3 BILLIONinfinanc-
ing to help it ride out the coronavirus that
has decimated demand in the automotive
industryandotherendmarkets.Themaker
ofmaterialsusedincarinteriorsandhead-
lampssecuredanewrevolvingcreditfacil-
ityvaluedat$1billionandarranged$2bil-
lion in financing to meet debt maturing in
November.It is also delaying some invest-
ment and idling several plants after the
virus outbreak brought swaths of the car
industryto a standstill.
“Asthispandemicexpandsglobally,the
uncertainty around demand in select end
markets continues,”CEO Ed Breen said.
THE WORLD’S BIGGEST sovereign
wealth fund faces serious questions over
theconductof itsoutgoingchief executive
and the selection process of his successor
amid a scandal involving a luxuryjet and a
private performance by Sting.
CEO Yngve Slyngstad has had to
explain why he accepted a flight paid for
by Nicolai Tangen, the hedge-fund man-
agerwhowaseventuallytappedtosucceed CEO Yngve Slyngstad
him.The development has nowprompted
Norwegian authorities to look into con- Norges Bank’s activities,” the head of the
vening an emergencymeeting to examine Supervisory Council,Julie Brodtkorb,said
more closely the circumstances under in a text message on Monday.
which Tangen was selected. The revelations have stunned Norwe-
The watchdog of Norway’s central gians and created the appearance of scan-
bank,which oversees the $1 trillion fund, dal around one of the country’s most
willtrytofindoutwhethertheevents“rep- revered institutions. Tangen’s appoint-
resent a breach of regulations applying to ment had already raised questions.

SELECTIONS FROM
judge linked to pis has challenged the EUROPE problem stems from pis’s changes to the
order in Poland’s constitutional court, EPIDEMOCRACY courts. Besides the disciplinary chamber
which is currently dominated by govern- that the ecj ordered to be suspended, the
ment-friendly judges. But that court has
no authorityin the case: the ecj is the final
arbiter of EU law. Its orders “cannot be
A postal vote in Poland government established a chamber of
“extraordinary control” whose duties
include certifying elections.Critics charge

could entrench populists

ALMOSTUNNOTICEDAMIDthecovid-19
crisis,lastweek the European Court of Jus-
tice (ECJ)took a modest step towards stop-
pingaEuropeanUnionmemberfromslid-
ing into autocracy.Eversinceitwon power
in 2015,Poland’s populist Lawand Justice
party(PIS)hasbeentryingto getcontrolof
the country’s courts, while independent
judges appeal to the eu to block it.OnApril
9th the ecj ordered Poland to suspend
immediately the disciplinary chamber of
its Supreme Court,a bodythat can punish
judges,and to freeze a new law restricting
judicial independence. The European
court said theseviolated EU treaties guar-
anteeing the rule of law.
The government is not giving up. A
questioned on the basis of national con-
stitutions, national law or rulings of
national courts”, says a European Com-
mission spokesman. If Poland sets aside
theverdict,itwill be defying the court,the
commission and the structure of the eu.
Itisshapinguptobeafatefulspringfor
Polish democracy. As in many European
countries,anationallockdownhasbeenin
effect since mid-March to prevent the
spread of Covid-19. But Poland is sched-
uled to holda presidential election on May
10th.Insomecountriesoppositionparties
worrythatanelectionmightbesuspended;
in Poland,theyare angryit is going ahead.
Andrzej Duda, the PIS-backed incum-
bent,faces five main challengers,ranging
from the centre-left to the far right. His
chief rival is Malgorzata Kidawa-Blonska
Thanks to covid-19, the opposition can barely campaign
of the centrist Civic Platform party. Polls
put Mr Duda far in the lead, but perhaps
shortofthe50%-plusneededtowininthe
first round. The opposition charges that
the lockdown’s ban on public events
makesitimpossibleforthemtocampaign.
That suits Jaroslaw Kaczynski, pis’s
leader,just fine.Hewants to hold the elec-
tionbeforedisenchantmentwiththecrisis
can hurt the government’s approval rat-
ing.Bills restricting abortion and sex edu-
cation are moving ahead too,nowthat the
demonstrations that stopped them in
2018 are barred.
The government almost split over the
public-health risk of staging the election:
the leader of Porozumienie,a junior coali-
tion party, called for it to be postponed.
Ignored, he resigned on April 6th, but his
party stayed in the coalition.
Later that day, pis passed a bill to shift
the entire election to postal voting. Postal
unions warn that this is impossible: they
would have to handle 30m voting pack-
Andrzej Duda, Poland president
ages,up from 43,000 in the previous pres-
idential election in 2015. They are also
leeryoftheinfectionrisksuchahugeoper-
ation would pose to their workers. One
group is calling for a postal strike on elec-
tion day if the government goes through
with it.Apoll lastweek showed 78% of the
publicwant thevoting postponed.
If the election goes ahead,low turnout
andvoting mishaps are expected.Another
that it,too,is invalid undereu law,render-
ing the election illegitimate.
Poland’s government may evade these
conflicts.The independent-minded presi-
dent of the Supreme Court,long a thorn in
pis’s side, finishes her term at the end of
April, and Duda can appoint a more sym-
pathetic one.That could smooth anytrou-
ble overthe election.As forthe eu,its tools
are limited.
The ECJ can impose fines if Poland
defies its order.Otherstates could make it
clear that Poland will fare less well in the
apportionment of pandemic recovery aid
and the eu’s multi-year budget. With
covid-19onitsmind,Polandmayhaveless
appetite for fights over the rule of law.
Then again,so may the EU.¦
©The Economist Newspaper Limited
 9 FINANCIAL EXPRESS
Personal Finance
TUESDAY, APRIL 21, 2020
● EQUITY INVESTMENTS
It’s the right time to review your portfolio
Investing in high-quality
companies and proven MF
schemes always pays in the
long term and these would
be the first to recover
DEEPAK JASANI
THE FEAR GAUGE in the Indian equity
market has moved up significantly amid
concerns about the impact of the coron-
avirus outbreak.The domestic stock mar-
kethasseenadeepcorrectionrecently.The
wholeworld is battling a health crisiswith
central banks and governments across the
world redrawing their priorities to tackle
the economic fallout from the virus.
The International Monetary Fund
expects the world GDP to shrink by 3%
in 2020 and the Indian economy is
expected to grow by 1.9% for CY
2020.Some economists feel that the cur-
rent crisis is even worse than the global
financial crisis of 2008.
These are tough times for investors as
thestockmarkethasseensharpcorrection
of 37% in Nifty. However, some smart
selective recovery/stabilityiswitnessed in
the last few sessions/weeks due to
improved global sentiments. Corrections
like this are the best time to accumulate
quality stocks.
● YOUR QUERIES
Dhaval Kapadia
NRIs can’t adjust
TDS on capital
gains against basic
exemption limit
● I am a NRI and invest in Indian
mutual funds online.There is a huge
TDS deduction on funds’capital gain.
How can I get the TDS back as my
income in India is less than the
minimum tax slab of `2.5 lakh?
—Suman Chakraborty
Resident investors in stocks and
mutual funds are not subjected to TDS,
but NRIs are.Short-term capital gains
from equity-oriented investments are
subject to a TDS of 15% (excluding cess),
while non-equity oriented investments
(such as debt funds) are subject to TDS of
30%.Long-term gains are subject to a
TDS of 10% for equity-
oriented investments,
and of 20% post
indexation for other
than equity-oriented
investments.NRIs,
unlike resident
MUTUAL individuals,do not have
FUNDS the option to adjust
their capital gains
(either long-term or short term) against
the basic exemption limit of `2.5 lakh.
Hence,you cannot claim the TDS back.
You may avoid double taxation on
your income by claiming tax relief if
India has signed the Double Taxation
Avoidance Treaty (DTAA) with the
country of your residence.Under DTAA,
there are two methods to claim tax relief
– exemption method and tax credit
method.Under exemption method,NRIs
are taxed in only one country and
exempted in another.Under tax credit
method,where the income is taxed in
both countries,tax relief can be claimed
in the country of residence.Consult your
tax advisor for specific tax advice based
on your individual situation.
● My investment in banks,FDs and
central government schemes are due
for renewal,but cut in interest rates
will reduce my income.What strategy
should I adopt as a retired person?
—Dipak Chakraborty
Assuming a conservative risk profile
given your age and withdrawal needs,
you can go for portfolio mix of 15% in
equities (large caps) and 85% in fixed
income with a high credit quality.Equity
exposure will lend growth to portfolio.A
portion (30-40%) of fixed income port-
folio can be invested in tax free bonds of
PSUs,annuities,senior citizen FDs/ PO
deposits,which offer fixed interest rates
for longer periods of time.Assuming 5%
inflation rate,maintaining current life-
style may deplete your corpus after 13
years.For a 20-year lifespan,you need to
restrict your monthlywithdrawals to
`30,000 per month.
The writer is director,Investment
Advisory,Morningstar Investment Adviser
(India).Send your queries to
fepersonalfinance@expressindia.com
Review your portfolio
We have seen in the past that some
businesses bounce back quickly after the
shock. Investors should focus on quality
companies; and should not shyawayfrom
booking losses in fundamentally weak
companies. Companies with a strong bal-
ance sheet (cash, low debt), steady and
robust business models, businesses with
low competitive intensity and most
important, good corporate governance
will be able to weather the storm better
than otherswhich maytake a long time to
recover or have to shut shop. Revisiting
and reviewing your portfolio is utmost
importance in such times.
Likewise,mutualfundinvestorsshould
at regular intervals undertake due dili-
gence and review their schemes’ perfor-
mance to weed out underperformers,
rebalance their portfolio and adhere to
their asset allocation strategy. Booking
profitswhen equityvaluationsrise (upset-
ting the planned asset allocation pattern),
will help entering again at lower levels.
Rebalancing and strictlyadhering to asset
allocation should be practised once every
six months.
A simple alternative would be to
redeem equity units accumulated over
two to four years which have yielded
decent return of 12-15% per annum and
parking the redeemed amount in shorter
duration funds.Stopping the running sys-
tematicinvestmentplan(SIP)andstarting
a new SIP,therebybooking profits,raising
Investor
● HDFC BANK RATING: BUY
A stable performance in the last quarter
Prudential provisioning
to ensure steady earnings
trajectory; FY21/22e EPS
cut by 2% due to present
crisis; ‘Buy’ maintained
HDFC BANK (HDFCB) reported healthy
business growth in Q4FY20, led by con-
tinued strength in its corporate portfolio
while retail growth was soft. Operating
performance stood flat as margin expan-
sionwasoffsetbylowerfeeincomedueto
the COVID-19 impact. Further, the bank
has made contingent provisions of
`15.5 bn, which affected earnings. We
have fine-tuned our other income esti-
mates factoring in the current trends,
whichhasresultedin~2%cuteachinour
FY21e/ FY22e earnings.Maintain Buy.
Stable earnings performance
HDFCBreportedasteadyquarterwithPAT
growth of ~18% y-o-y (-7% q-o-q), sup-
portedbyNIIgrowthof16%y-o-y(7%q-
o-q) as margins increased 10bp q-o-q to
4.3%. However, provisions spiked to
`37.8bn (+24% q-o-q) as the bank made
contingent provision of `15.5 bn toward
COVID-19.ForFY20:NII/PPoP/PATgrew
16/23/25%y-o-yto `562/ 487/263 bn.
Core fee income growth moderated to
~15%y-o-yto`42bnaffectedbythelock-
down,which resulted in loss of fees/other
income of `4.5 bn. C/I ratio increased to
39%(+110bpq-o-q)whilePPoPstoodflat
● TVS MOTOR COMPANY RATING: BUY
Norton to boost premium capabilities
Near-term concerns exist over Covid-19; ‘Buy’ retained with unchanged TP of `447
TVS MOTOR COMPANY (TVSM) has
announceditsacquisitionoficonicBritish
motorcycle,Norton,asitpurchasedassets
of Norton Motorcycles (in administra-
tion),inanall-cashdealworthGBP16mn.
TVSM has been progressing well in the
domestic premium product market
some cash that can be tactically deployed
temporarilyin debt till a lumpsum invest-
ment opportunity arrives in equity space
will help in optimising investors’ returns
from SIPs and avoid investorregret of see-
ing high returns on un-booked SIPswhich
crash suddenly in bad markets.
Fall in value
There is no way to know the trough of
the market especially in such times. Con-
q-o-q) at `129.6 bn (+20%y-o-y).
Loansgrew21%y-o-y,ledbycorporate
loans (+29% y-o-y) while retail loan
growth was soft at 14.6% y-o-y.Deposits
increased 24% y-o-y while CASA mix
soared to 42.2% (+270bp q-o-q).
Slippages stood at `31.5 bn (1.3%
annualised) while some of the overdue
accountsavailedmoratorium,whichoth-
erwise would have slipped during the
quarter, resulting in ~6/21% q-o-q
decline in GNPA/NNPA. Thus, GNPA/
NNPAratiosdeclinedby16bpy-o-y/12bp
q-o-q(10bp/6bpbenefitduetothemora-
torium). As a result, PCR improved by
~530bp q-o-q to 72%.
(>150cc) with brand Apache in a tie-up
(forsub-500cc segment)with BMW.
In the medium term, the deal pro-
vides: (i) strong brands, which aid entry
into the lucrative cruiser bike segment;
(ii) established engine (>500cc) technol-
ogy; and (iii) new export opportunities.
WWW.FINANCIALEXPRESS.COM
❝
ON STOCKS
Ajit Mishra, VP, Research, Religare Broking
As earnings season progresses, stock specific
movement would remain high. Continue with a
cautious approach and prefer hedged bets.
❝
● TAX TALK
ADHIL SHETTY
Investment
overthepastfewweeksandoncetheseval-
ues bounce back, the returns will look
tips for those
more respectable. Investors who have
beingdoingSIPforthelasttwoyears,three
years, five years and in some cases even
opting for new
seven years have seen negative or single
digit returns now.
tax regime
However, investors should not judge
the outcome of their SIP investments THE NATIONWIDE LOCKDOWN over the
when markets have deeply corrected.The Covid-19 pandemic shouldn’t ideally dis-
SIPreturns (XIRR)are subjecttoend-point tract you from the fact that we are in April
bias,wherein all the investmentsyou have that also marks the beginning of the new
made during your SIP tenure is assumed Financial Year2020-21.In fact,you should
to have redeemed at such dirty cheap utilisethistimetoplanyourtax-savingmea-
low levels and thus the return picture suresforthecurrentfinancialyear.Thefirst
would be gloomy. Taking investment thing you need to finalise is the tax system
action based on such returnswould not be you should follow: the old one with higher
a wise decision. slab rates but multiple tax deduction bene-
Investors should be selective about fits orthe newonewith lowerslab rates but
their stock picks and/or MF schemes and no tax-deduction benefits.You’ll be well-
invest in a staggered manner.Investing in advised to make your choice after compar-
high-quality companies/proven MF ing your tax outgo under both the systems
schemes always pays in the long term and factoring in allyourtax-savingmeasures.
thesewould be the first to recover.Aggres- The new tax system doesn’t allow tax
ILLUSTRATION: SHYAM KUMAR PRASAD
sive investors can deploy 40% of their benefits under Section 80C,so you have to
sidering the uncertainty of the situation, fresh funds at these levels and spread the strategise your investments very smartly.
investors might have to experience some remaining over 4-6 months. Investors The new system shouldn’t be seen as a rea-
more pain in the coming weeks and when should remember that volatility is part son not to invest just because there are no
the second and third order effects of the and parcel of equity investing. We have tax incentives attached to them.In fact,the
pandemic are witnessed, assessed and seen such deep corrections in the past and newsystemallowsyoutoinvestfreelyasper
more clarityon the extent of the spread of this may not be the last time.We have also your financial goals and risk appetite with-
the virus is evident. seen markets touching new highs after outworrying about tax-saving goals.
Existing investors in SIP schemes may such deep corrections. Here a few key things taxpayers joining
be disappointed at first glance as the SIP the new tax system should keep in mind
returns may not look exciting. However, The writer is head, while investing.
this is the result of a fall in stock values HDFC securities Research
Tax-saving Investment
Financials & Valuations (` bn) ILLUSTRATION: SHYAM KUMAR PRASAD
Y/E March 2020E 2021E 2022E
Prioritise your financial goals
Your investment decisions should be
NII 561.9 668.9 772.9 guided byyourfinancial goals,risk appetite
OP 487.5 576.1 660.1
NP 262.6 302.7 360.6
and liquidity needs first and tax-saving
compunctions last.Even as you opt for the
NIM (%) 4.2 4.3 4.3
new regime, continue to invest towards
EPS (`) 48.0 55.2 65.8
high-prioritygoals.You can invest forother
EPS Gr. (%) 21.2 14.9 19.2
financial goals too if you have the required
BV/Sh. (`) 311.8 357.4 412.9
ABV/Sh. (`) 297.9 338.5 392.9
capital,buttheprimaryfocusshouldbeyour
Ratios most crucial financial goals like raising the
RoE (%) 16.4 16.5 17.1 down payment fund for a house, raising a
RoA (%) 1.9 1.9 1.9 fund foryourchildren’s education orbuild-
Payout (%) 25.0 17.4 15.6 ing an adequate retirement fund.
Valuations
P/E (X) 18.9 16.5 13.8 Invest in tax-efficient instruments
P/BV (X) 2.9 2.5 2.2 Buyinvestmentsthatprovidehighpost-
P/ABV (X) 3.1 2.7 2.3 tax returns. For example, PPF offers you
Div. Yield (%) 1.3 1.1 1.1 returnsof7.1%perannumcompletelytax-
Source: Motilal Oswal estimates free whereas an 8% FD may offer you only
5.6%ifyou’reinthe30%slab.PPFisanEEE
instrument, meaning the sum invested,
Highlights of mgmt commentary impactedduetoCOVID-19.Althoughthe returnsearnedandmaturitywithdrawalare
COVID-19impact:Underthestresscase, RBI moratorium supports asset quality, alltax-free.Similarly,long-termcapitalgains
we expect ~9% of the SME portfolio to be credit cost is expected to stay elevated frominvestmentsinequityinstrumentsare
vulnerable and see maximum potential while provisioning buffers should limit taxed at 10%,which may be less than your
GNPA impact of ~50bp.Of the retail cus- the overall impact on earnings.A strong actual slab rate, while LTCG from debt
tomers applying for moratorium, ~95- liabilityfranchisewouldsupportmargins mutual funds are taxed at 20.6% with
98% are not in default (0 dpd) as of 29th whilehigherliquiditylevelswouldenable indexationbenefit.
Feb’20. the bank to ride out the current crisis and
CEOchange:AdityaPuriissettoretire gain further market share.We, thus, esti- Diversify and invest in instalments
on 26th Oct’20; the bank has finalised mate loan book/PAT to deliver CAGR of When you invest in the new financial
threecandidatesandwouldbeapplyingto 16/17% over FY20-22e. Management year,you must take measures to minimise
the RBI forapproval. succession remains a big event to watch investment risks to bag desired returns.
out for. Maintain Buy with PT of `1,200 This balance can be struck by diversifying
Valuations andview (3.0x Sep’21eABV). your investments across various asset
HDFCB’sbusinessgrowthremainsrobust classes. For
despite economic activity getting MOTILAL OSWAL example, equity You lose most of
investments are your tax
currentlyhighly deductions in the
Year to Mar (Consol) the Norton deal indicates management volatile,FDs and new regime.
FY19 FY20E FY21E FY22E focus remains on creating long-term small savings Nevertheless, as
Revenue value.We maintain Buy. schemes are
(` mn) 201,600 190,204 200,584 221,820 Brief about Norton: (a) The all-cash offering a low you invest, go for
Net Income dealwith Norton Motorcycles isvalued at return; but gold investments that
(` mn) 7,254 6,895 8,448 11,208 2x its EV/revenue on FY18 basis; (b) Nor- had seen great provide high
Rec. EPS (`) 15.3 14.5 17.8 23.6 ton has brands in segments ranging from appreciation in post-tax returns
% Chg Y-o-Y 9.1 (5.0) 22.5 32.7 performancebikestocruisers;(c)revenues the last year.
P/E (x) 18.9 19.8 16.2 12.2 grew20%y-o-yinFY18toGBP6.7mn;(d) When the mar-
CEPS (`) 23.5 24.8 28.3 34.7
revenue mix is well diversified with kets revive, equity and other asset classes
EV/E (x) 9.8 9.3 8.4 7.2
exports accounting for ~79%; (e) Norton can start giving you higher returns again
Dividend
has been investing in new products; (f) it and gold prices may flatline. So, aim to
Yield (%) 1.3 1.6 2.0 2.5
RoCE (%) 11.6 11.0 11.2 12.6
went into administration following a invest in different asset classes keeping in
RoE (%) 23.1 19.0 20.5 23.6 winding-up petition filed by the UK tax mind your financial goals, liquidity
Source: Company data, I-Sec research authorities;(g)inthelastfewyears,Norton requirements and risk appetite.Also, aim
had been gaining entry in Asian markets to invest in instalments (like SIPs) to bet-
which can nowbe boosted byTVSM. ter manage your liquidity. In fact, you
Dealboostspremiumcapabilities: might be able to bag more mutual fund
WebelievetheNortonacquisitionshould unitsinthecurrentmarketthroughanSIP
be looked at from a typical capital bud-
geting lense (buyvs build).In the context
of capabilities and opportunities, it pro-
at discounted rateswhich can unlock high
returns when redeemed later.
videsTVSMwithamuchcheaperrouteto Invest in the name of your parents
elevate its position. It could provide it a Investinthenameofyourseniorcitizen
firmlaunchpadtocombineitsstrongcost parentsprovidedtheyfallunderalowertax
andqualityfocuswithNorton’sproducts, bracket than yours.Most banks allow pref-
In the near term, however, top technologyandbrandstoexplorethepre- erential rates for senior citizen depositors.
investor concerns revolve around: mium domestic market as well as export Moreover,giftsmadetoyourparentsarenei-
(i)thepossibleimpactofCovid-19onthe opportunities on a larger scale.We have ther taxable in your hand or your parent’s
sector and (ii) whether cashflow con- unchanged TP of `447/share (valuing hand under the I-T Act, nor clubbing of
straints could affect business in the standalone business on 22x FY22EPS). income applies to the income earned from
medium term.We believe TVSM is likely such giftswhichyou give toyourparents.
to encounterthese headwinds; however, ICICI SECURITIES
The authoris CEO,BankBazaar.com
 10 FINANCIAL EXPRESS
Markets
TUESDAY, APRIL 21, 2020
Money Matters
G-SEC
The benchmark yield fell 0.138%
due to buying support
6.209
6.138
Mar 31 Apr 20
`/$
The rupee depreciated 0.18%
on global cues
76.537
75.627
Inverted scale
Mar 31 Apr 20
=/$
C tical supplement show that the RBI has
The euro fell against 0.19%
the US dollar
1.103
1.085
Mar 31 Apr 20
Quick
View
Aegon Custody sells
HDFC Bank shares
worth over `72 cr
AEGON CUSTODY BV on Monday sold
shares of HDFC Bank worth over `72
crore through an open market
transaction.According to the block
deal data available on BSE,Aegon
Custody BV-MM Emerging Markets
Fund sold a total of 7,99,386 shares
of the bank.The shares were sold on
an average price of `910.3,valuing
the transaction at `72.76 crore,the
data showed.These shares were
bought byTKP Investments BV-Aegon
Custody B V-RE AGMM Emerging
Markets Fund.
A clarification
WITH REFERENCE to the report
‘Punjab & Sind Bank to raise up to
`1,500 crore via QIP,pref shares’,
which appeared in the edition dated
April 16,the bank has clarified that
the amount to be raised through QIP
is `500 crore.
RBI asks banks,
NBFCs to carry out
money laundering
risk assessment
PRESS TRUST OF INDIA
Mumbai, April 20
THE RBI ON Monday asked banks and
NBFCstocarryoutmoneylaundering(ML)
and terrorist financing (TF) risk assess-
ment exercise periodically.
The central bank said it has added a
new section in the Master Directions on
KYC. This requires its regulated entities
(REs) to carry out ML and TF risk assess-
ment exercise periodically to identify,
assess and take effective measures to mit-
igate its money laundering and terrorist
financing risk forclients,countries orgeo-
graphic areas, products, services, and
transactions or delivery channels.
“While assessing the ML/TF risk, the
REs are required to take cognizance of the
overall sector-specific vulnerabilities, if
any, that the regulator/supervisor may
sharewith REs from time to time,”the RBI
said in a circular.Further,the internal risk
assessment carried out by the regulated
entityshould be commensurate to its size,
geographical presence, complexity of
activities/structure,it added.
Entities regulated by the RBI include,
banks, All India Financial Institutions,
NBFCs,and all payment system providers.
● OMO TRANSACTIONS
Bonds rally in anticipation of
T-Bill, bond-buying by RBI
FE BUREAU
Mumbai, April 20
BONDS RALLIED ON Monday with mar-
ket participants anticipating that the
Reserve Bank of India (RBI) will continue
its treasury bills (T-Bills) and government
bond-buying from the primary as well as
the secondary market in the coming
weeks,therebyprovidingsomerelieftothe
overhang related to potential additional
borrowing by the government in recent
times. The benchmark yield closed 14
basis points down at 6.209% to hit the
lowest level in three weeks.
Reports had indicated that the central
bank has been buying treasury bills and
government bonds from the primary as
well as the secondary market. The exact
detailsoftheprimarymarkettransactions
could not be ascertained.
However, data from the weekly statis-
conducted `14,660 crore worth of open
market operation (OMO) purchases from
the market between April 7 and April 9.
Multiple experts said this `14,660 crore
worth of buying by RBI is likely to have
been in T-Bills.
“The borrowing is going to be huge this
fiscal and therefore the market has been
expecting the RBI to buy bonds which
seems to have commenced.Though mar-
ket participantswere expecting the RBI to
directly buy bonds from the auctions, the
central market is seemingly doing it
through primary dealers and through the
secondary market transactions. The rally
KMB may raise `8,000 cr
via equity dilution
FE BUREAU
Mumbai, April 20
KOTAK MAHINDRA BANK (KMB) may
raise `8,000croreviaequitydilution,ana-
lysts said,following the announcement it
made on Sunday. This amount would be
raised through a 4% stake sale,given that
the lender’s market capitalisation is at
`2 lakh crore.
Sector experts say that the fund-rais-
ing is targeted mainly at dilution of the
promoter’s stake in order to comply with
regulatoryrequirements.On February18,
the RBI had allowed KMB a six-month
timeline – up to August – to reduce pro-
moter shareholding to 26%.At the end of
December, promoter Uday Kotak held
29.96% stake in the bank.
After August 2020, the promoter will
not buy any additional shares of the bank
till the stake drops to 15%.“Thereafter,the
promoters will not purchase any further
paidupvotingequityshares’ofthebanktill
thepercentageofpromoters’shareholding
reaches 15% of PUVESC (paid-up voting
equity share capital) of the bank or such
higher percentage as may be permitted by
RBI from time to time,” KMB had told the
exchanges on January30.
Market is viewing the fund-raising
announcement in a positive light as the
lender’smovetobuildupcapitalreservesis
being seen as a sensible move at a time of
uncertainty. KMB’s shares ended 0.75%
lower than their previous close at
`1,177.55 on the BSE on Monday.
Somemarketwatcherswereoftheview
that the fresh capital could help KMB pre-
pare for likely acquisitions.“They will be
building capital foracquisitions.There are
enough companies with a good asset base
ICICI Bank launches voice
banking services on Amazon
Alexa, Google Assistant
PRESS TRUST OF INDIA
New Delhi, April 20
ICICI BANK ON Monday said it has
launched voice assistance-based banking
services for its customers and they can
check balance, seek credit card details as
well as ask other queries among others
through this application.
The bank said it has integrated its arti-
ficial intelligence (AI)-powered multi-
channel chatbot iPal with Amazon Alexa
and Google Assistant through which its
retail banking customers can undertake
host of banking services through voice
commands.
This novel facility offers customers
yet another way to connect with their
bank from home at a time when they are
advised to stay indoors in the wake of the
nationwide lockdown,ICICI Bank said in
a release.
Theprivatesectorlendersaidthevoice-
based facility comes close on the heels of
its new digital initiatives such as What-
sApp chat-based ICICIStack aimed at pro-
10-yr bond yield (%)
Intra-day, April 20
6.33
6.296 Prev close: 6.347
6.30
6.27
6.24 6.209
6.21
6.18
6.15
Open Close
inbonds on Mondaywas largelyled bythis
and we believe the RBI bond-buying is
likely to continue in coming times,”said a
primary dealer who did not wish to be
named.
A noteworthy thing is the increase in
the weekly T-Bill borrowing quantum.
According to the revised T-Bill borrowing
calendarforQ1FY21,the government has
increased its weekly borrowing via these
instruments to `45,000 crore from the
earlier notified `25,000 crore.As a result,
the government is now set to borrow `5
lakh crore in Q1FY21 via T-Bills.
Experts say that this could be a new
strategy by the government where a good
part of the potential additional borrowing
could be conductedvia short-term instru-
ments given the prevailing high liquidity
conditions.
“If you look at the revised Q1 T-bill
which are nowtrading at averylowvalua-
tion,” said a banking analyst who did not
want to be named.
Most analysts agree that KMB does not
need capital to take care of its provision-
ing needs. At the end of December 2019,
the bank had a capital adequacy ratio
(CAR) of 18.21% against the regulatory
requirement of 11.075%. KMB’s Tier-1
ratio was 17.7%.
The reduction of promoter sharehold-
ing in KMB had become a majorflashpoint
between the bank and the RBI before both
relaxed theirpositions in Januarythisyear.
Kotak was supposed to reduce his stake in
thebankto20%byDecember31,2018and
to15%byMarch31,2020.InAugust2018,
the bank had proposed issuing perpetual
non-cumulativepreferenceshares(PNCPS)
to cut promoterstake to 19.7% and enable
the promoter to hold on to their voting
rights. The RBI shot down the proposal.
KMB then moved court against the regula-
tor. On January 30, 2020, KMB finally said
that it had decided to limit the promoter’s
voting rights at 15%,April 1 onwards.This
followed the RBI’s decision to allow the
bank an additional six months time to cut
promoterstaketo26%.KMBalsowithdrew
the court case against the regulator.
viding uninterrupted banking services for
both retail and business customers.
It said theWhatsApp-based ICICIStack
offers nearly 500 services that covers
almost all banking requirements includ-
ing digital account opening, loan solu-
tions,paymentsolutions,investmentsand
care solutions.
To get the benefit of the voice banking
offering,customers need to download the
Alexa/GoogleAssistantandlinktheirICICI
Bank account through a secure two factor
authentication process.
Anup Bagchi, executive director, ICICI
Bank, said the lender recently rolled out
ICICIStacktofacilitatecroresofcustomers
to continue all theirbanking,digitallyand
from a remote location,without visiting a
bank branch.
“Now,we have introduced voice bank-
ing on two of the most popularvoice assis-
tants in the world. Our retail customers
can execute a host of their banking
requirements from their home securely
and 24x7, without visiting a branch,”
Bagchi said.
EXPERTVIEW
issuance calendar, the additional bor-
rowing by the government stands at
`2.74 lakh crore in Q1 after considering
the redemptions of existing T-bills and
cash management bills (CMBs). It looks
like the government is embarking on a
strategy where they are going to rack up
the short-term borrowing this year and
fund a large part of the deficit using these
borrowings because liquidity is so high
and the RBI has reduced the reverse repo
rate.It seems it is easierto sell large quan-
tum of T-bills now,” said a treasury exec-
utive at a bank.
Lastweek,thecentralbankreducedthe
reverse repo rate by 25 basis points to
3.75%. Experts say it would be a smart
strategy to monetise some of the higher
fiscal deficit via short-term borrowings
through T-Bills, given that banks are sit-
ting on higher liquidity.
Ananth Narayan, professor of finance
at SPJIMR, said that between higher
expenditure and lower revenues, the
actual fiscal deficit is going to be much
higherthanexpectedandtheRBIwillhave
no choice but to eventually buy bonds.
“This means OMO and OMO-type
transactions will be inevitable. The gov-
ernment can also look towards managing
some of its additional borrowing via T-
bills, which is a very smart idea. By doing
short-term borrowings, you can make
banks also participate, who are sitting on
highliquidityand preferto stayawayfrom
duration risk in current times.As a result,
the high quantum of T-bills will find tak-
ers,”Narayan said.
Sebi extends
F&O curbs
till May 28
FE BUREAU
Mumbai, April 20
THE SECURITIES AND ExchangeBoard of
India (Sebi) on Monday said regulatory
measures on short-selling announced to
curb volatility in the market would con-
tinuetillMay28.Sebihadannouncedaslew
of measures in the view of a sharp increase
involatilityinthemarketfollowingtheout-
break of the coronavirus pandemic.
OnMarch20,Sebihadannouncedsome
measures keeping in view the objective of
ensuring orderly trading and settlement,
effective risk management,price discovery
and maintenance of market integrity.
Sebi had said in March that derivative
exposureofinvestorsshouldnotexceedthe
value of their cash holdings and that mar-
gins forF&O stockswould be raised to 40%
in a phased manner. The move was
announcedtocontrolthespeculationinthe
Indian markets due to the sharp correction
indomesticaswellasinternationalindices.
Thecurbsonshort-sellingwereapplica-
bletoMFs,foreignportfolioinvestors(FPIs),
trading members (their proprietary books
andclientsholdinginstocks).Themeasures
takenbySebionMarch20werefollowedby
a nationwide lockdown announced by the
primeminister.Afterassessingthesituation
ofCovid-19pandemicinIndia,theMHAhas
recentlyextendedthelockdowninthecoun-
tryup to May3.
According to Sebi, as the stock markets
areexpectedtobevolatileinthenearfuture
owing to concerns relating to novel coron-
avirus and the resultant fear of economic
slowdown,ithasbeendecidedthatthemea-
suresimplementedsinceMarch23willcon-
tinueto bein force till May28.
Exchanges to use
encumbrance to
shortlist securities for
surveillance action
LEADING STOCK EXCHANGES BSE and
NSE have decided to take into account all
encumbrances to shortlist securities for
surveillance action in respect of compa-
nies having high level of promoterpledge.
The decision was taken in a joint
meeting of exchanges and markets regu-
lator Sebi held on April 13.It was decided
to cover the potential risk to the securi-
ties encumbrance will be used for short-
listing of securities under the surveil-
lance action.
Encumbrance shall mean any restric-
tion on the free and marketable title to the
shareswhetherbywayof pledge,lien,neg-
ative lien, non disposal undertaking or
any other covenant, transaction, condi-
tion or arrangement, by whatever name
called,executed directly or indirectly.
“For the purpose of shortlisting of
securities under the said measure, the
stock exchanges shall take into account all
encumbrances viz., the sum total of all
kind of encumbrances (bywhatevername
called) as on date of shortlisting of secu-
rities,” the exchanges said in similar
worded circulars. –PTI
WWW.FINANCIALEXPRESS.COM
Demand for longer-tenor corporate bonds from
insurers and pension funds is expected to fall as
they shift allocations to state bonds after the
recent surge in yields.
—Manoj Jaju, chief investment officer,
Bharti AXA General Insurance
Indices erase most gains;
HDFC twins, RIL surge
PRESS TRUST OF INDIA
Mumbai, April 20
BENCHMARKS SENSEX AND Nifty
stepped back from the day’s highs to set-
tle on a flat note on Monday,with gains in
HDFC twins, RIL and IT shares pausing
slide on the indices,as investors look for a
new direction amid continued uncer-
tainty surrounding Covid-19.
The 30-share BSE Sensex closed higher
for the third consecutive session, after
swinging between gains and losses during
the day.At close, the Sensex was up 59.28
points,or 0.19% at 31,648.
The NSE barometer Nifty was down
4.90 points, or 0.05%, at 9,261.85. Index
heavyweights HDFC twins and Reliance
Industries mainly saved the day.IT stocks
also closed with gains.
HDFC Bank was the top gainer in the
Sensex pack, rallying nearly 4%, after the
lenderposteda15.4%riseinconsolidated
netprofitat`7,280.22crorefortheMarch
quarter on healthy interest income.
Infosys jumped over3% ahead of its quar-
terlyearnings,scheduled to be announced
later in the day.
Sun Pharma, NTPC, HCL Tech, Tech
Mahindra, HDFC, RIL and TCS also closed
Rupee drops 14p to close at 76.53
PRESS TRUST OF INDIA
Mumbai, April 20
THE RUPEE FELL 14 paise to settle at
76.53 against the dollar on Monday amid
strengthening oftheUS currencyoverseas
and a sharp rise in coronavirus cases in the
country.
Forex traders said a firm US dollar
weighedonthelocalunit.Besides,investor
sentiment remains fragile amid concerns
over the impact of coronavirus outbreak
on the domestic aswell as the global econ-
omy. At the interbank foreign exchange,
the rupee opened strong at 76.43, but
soon lost ground and finally settled at
76.53,registering a fall of 14 paise overits
previous close.
ANALYST CORNER
Jubilant Foodworks: ‘Add’
with a fair value of `1,800
KOTAK INSTITUTIONAL EQUITIES
WE EXPECT Domino’s to be among
the key early/sharp-recovery stories in
the consumer discretionary space in
the post-Covid phase. Even as dine-in
business could stay hit for a while, we
believe Domino’s delivery sales should
start picking up much sooner.
Domino’s own delivery fleet, brand
strength and effective communication
should serve as competitive
differentiators as consumers look for
comfort on food/delivery safety from
the food delivery players. Reiterate
'add' with a revised fair value of
`1,800/share (from `1,900).
The food services space in India has
been a tough space, anyway.
Restaurants (standalone or chain), fine
dining or casual dining or quick
service, earnings above cost of capital
are far and few in between. This is an
important aspect to bear in mind
when assessing the direct and
derivative impact of the Covid
situation on the food services
business.
Cholamandalam: Maintain
‘buy’ with a TP of `225
MOTILAL OSWAL
CHOLAMANDALAM INVESTMENT and
Finance (CIFC) released an update on
its Q4FY20 performance amid the
Covid-19 challenge. Disbursements
declined 23% q-o-q/ 35% y-o-y to `58
bn (similar drop witnessed in VF and
LAP). With Covid-19 having impacted
the past 10-15 days of the quarter,
disbursements should not have
declined more than 10-15% y-o-y, in
our opinion.
The larger-than-expected decline
indicates underlying weakness in CV
demand despite the migration to BS-6
and lack of vehicle supply at the dealer
level. As a result, AUM was flat q-o-q
(up 12% y-o-y) at `606 bn. The
company provided an update on the
expected trend in its monthly cash
inflows/outflows.
As per the update, disbursements
are expected to hover around `60 bn
in H1FY21, ~40% of the run-rate. As a
result, we estimate 17% decline in
disbursements to `243 bn in FY21.
The company has `64 bn in cash and
equivalents on its balance sheet, plus
another `45 bn in undrawn bank lines.
HDFC Bank
Intra-day on BSE (`), Apr 20
965
Prev close: 910.40
955
952.25 946
945
935
925
Open Close
with gains. On the other hand, Axis Bank
was the top laggard,followed byITC,ICICI
Bank, IndusInd Bank and Maruti Suzuki.
Sectorally,BSE IT,energy,teck,oil and gas,
power and realty indices ended up to
2.67% higher, while metal, telecom,
FMCG and auto indices fell up to 3.4%.
Broader BSE midcap closed 0.21%
lower, while smallcap index finished
0.80%higher.“Uncertaintyruledthemar-
kets and lack of direction from earnings
results or the global markets meant that
the Indian benchmark indices ended flat
after a volatile trading day,” said Vinod
Nair, head of research at Geojit Financial
Services.
During the session,the rupeewitnessed
high volatility and touched a high of 76.43
anda lowof 76.68 against the US dollar.
Domestic stocks closed almost flat after
volatile trade. After swinging over 566
points during the day, the 30-share index
ended 59.28 points, or 0.19%, higher at
31,648.The NSE Nifty settled 4.90 points,
or0.05%,lowerat 9,261.85.
The dollar index, which gauges the
greenback's strength against a basket of six
currencies, rose by 0.15% to 99.93. The
numberofcasesaroundtheworldlinkedto
the new coronavirus has crossed over 24
lakh. In India, more than 17,200 coron-
avirus cases have beenreported,so far.
Brentcrudefutures,theglobaloilbench-
mark,fell 3.81%to $27.01 perbarrel.
We summarize our top- level
thoughts below: The already-high
mortality rate in the industry will
increase further in the short term,
especially in the fine and casual dining
space. Even after the lockdown is
lifted, we believe restaurants will be
asked to operate with significant
reduction in seating capacity for a
reasonably long time. This, plus the
lingering consumer reluctance to dine
in, could put significant pressure on
the cash flow situation of several
restaurants, in our view.
Not all food formats lend
themselves well to delivery, we note.
Some food items travel better than
others. Confidence in food safety and
delivery process will start featuring
high on the attributes consumers seek
from the food delivery industry.
Trusted, well-entrenched brands have
a natural edge over no-name
dark/ghost/cloud kitchens on this
front, in our view. This should mean a
pause/ reduction and then slow
growth on the supply side in the
delivery space.
Even with lower collections in April
and May due to the loan moratorium,
its on-balance sheet liquidity would
suffice up to Aug ’20. Typically, CIFC
receives `20 bn in loan repayments
every month. In April and May, it
expects to collect only `4 bn each.
This implies 80% of customers (by
value) have availed the loan
moratorium. Note that the company
has not availed moratoria on its
borrowing commitments.
While CIFC did not give any
numbers or commentary on asset
quality, the company stated it had
contacted all its customers and noted
95% of its HCVs were at their locations.
The lower-than-expected
disbursements in Q4FY20 cannot be
attributed to the Covid-19 impact
alone, in our view. We believe they
also point to structural issues, such as
lack of demand in the CV segment and
temporary issues such as unavailability
of stock at the dealer level.
As a result of slowing AUM growth
and higher credit costs, we cut our
FY21/FY22 EPS estimates by ~25%.
Maintain 'buy' with a target price of
`225 (1.7x FY22E BVPS).