MING SSEEOO: Fe, Na, NCS 12201620 Putehed vey lorie ey Business India THE MAGAZINE OF THE CORPORATE WORLD = INDEGENE CREEL La} = SIEGWERK INDIA IDs Cy 5 Resembles a scrapyardSAMSUNG Get ready to lead the gaming revolution. Live the game with Samsung Gaming Monitors. ee zel tc rae recent meo’s) o-Vfol:i fcr oi) fp som ao ee de = Refresh Rate oO Ips ee a ai een feat) ee aren LD Pant ieee een eo) PeeANESS INDIA # THE MAGAZINE OF THE CORFORATE WORLD From the Publisher ber St fe gh sah Sergi ing ts 8 ie ‘ete inst Pcp conde Festa nasenpe thn Motoper py ae febrero Greniae fer bag rts etn nt Batic gens Seemieniee ence eae = EeSlamaaurnamnae eu onsatete tan mucronate aan aaa Ss= Sap teimemctanes STerpin aera WE ARE ON wannusnsiningroypcom Pi aoe eley ‘The Insolvency and Bankruptcy Code, 2016, has been amended six times already in its short fe. And now there Isa proposal to set up an inter: ‘nisterial committee to review it functioning and suggest further changes. In the meantime, the Reserve Bank has come out with yet another eicular toanks, setting out the concitions for renegotiating ad setting with ‘defaulting companies, including wilful defaulter, hoping thatthe banks ‘would be able to realise larger amounts than they have been realising by “Gragging companies into insolvency under the Code, {had been hailed by many, particulary in government, as a modern bbankruptey code and a major reform and a crucial step to facilitate doing ‘busines And fe was touted as protecting al legitimate interests, in 9 company {hat was falling or on the verge of insolvency: allowing for maximum recovery, preserving assets, and jobs and hopefully keep valuable companies running productively. For many years now, the provisions for winding up under the Companies ‘Acts were deemed to be inadequate and unsuitable to the task of handling ‘company insolvencls. There were several previous attempts with special legislation and separate courts ara tribunals setup too, exclusively for recovery of debts, particularly bank dues Staring with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick industrial ‘Companies Act, passed way back in 1985! But inspite of the best intentions the NPAS ofthe banks kepe growing to enormous proportions. And in the ‘meantime, companies, including the labour, suppliers, creditors and even ‘the hapless shareholders, were pushed info a nevernever land, while the ‘companies lay terminally sick, but never reaching the final closure. In parallel, the RBI, mainly concerned about banks’ dues ony, came out with Scheme after scheme and circular after circular, to help banks write off and econstruct the waitten-dovin dics, But to ite aval ‘The IBC has many deep Naws, Its true that of the 6 500+ cases filed, nearly 700 cases have been resolved ~ with an average recovery of only $2 per cent for secured and other admitted! creditors, leaving out scores of trade and unsecured creditors. In the case of real estate companies, the buyers who advanced funds have been stranded, with the Supreme Court intervening, ‘Sometimes, And in many cases the amounts realised are jus about liquidation ‘Values, which are 5-10 percent ofthe total dues. And even in several of those ‘cases ational asots have Deen wasted sway. Jet Airways ia clase example of whats wrong, A word clas altne, capable ‘of taking on Emirates and Singapore Allines has withered aay overt, Ieaving shell The taf were left sanded, an even seveal arcratt have ‘been altingon the gro for over 2 yeas, whe the bickering contin, fer the‘succesfl esoltion for pase on the rupee. And thete no sig of takeoff yet! One main reason Is that ayearafter the Code, Arn Jaen sf moral indation amended the Act ar prot om ng ininsove ings. The promoter would have happy agreed i the Panis took 40 percent Pate They would have eaigd 20 ines the resoktion amount In the US aiines have fied fr bankruptey ona Feay ‘evening and resumed flying on Monday morning! “The US and UK have time-tested bankruptcy procedures, And given the same ‘common law heritage, it would have been much better to follow similar processes. The recoveries would e greater, and much faster; the staff would Debetter protected. And thete would be no waste of national assets heat 4. Pav aon sun 12:35, 2008Contents USINESS INDIA # THE MAGAZINE OF THE CORFORATE WORLD + No. US2 ‘COVER FEATURE 22 IBC in severe distress, with poor results Is IBC caming a dubious distinction? ‘The much touted umbrella legislation for insolvency is heading towards becoming a law that is incapable of, producing results, oe: ‘oe ee Oa can VA TECH WABAG 36. SIEGWERK INDIA a4 Given the favourable environment and the government’ {nereasing focus on water, the company is all set to scale Siegwerk India i strengthening its position in the new highs printing inks and coatings market INDEGENE 40 VUMMUDI BANGARU JEWELLERS 48 Atthe foreftont of the Trust explains brand Vammiis enduring progeess Ife sciences outsourcing space, Indegene i= breathing new life into the sector suns 12°95, 2008Contents Russias rupee problem When efforts are being made to oat a Dries currency s the idea of internationaising upee premature? ve Government & Politics +g ap nop poate, pute «Gow pepang the ground Estate + International so hebeaisto the United Sats iving space forhie maiden State Visi \\ Editorials ‘6 fein tal funds need to diversi The msing dots in the NSEL ca ae ally being connected, Wi juste ineserved? + Business Notes 1“ Hows es up subseuen to store Developers explore + Startup 56 Inftadlus echnologes set torevohtonee the job and talent sate ecosystem “Environment 57. ood & gece vison + Automobiles 58 With the srs of Hondas ew UN; the Hewat, theres ow intense competion in thermsizesegarent stl equipped te meet ‘echneogia callenges Luxury oP French wate brand Cerra 18st potters Tan 54 “Most banks have ediced cash ad balances ‘pith RB significantly ‘+ Nolumes are ling it money markets ‘Neve uelines for dig! banking uns 66 neste destination “Interview N THIS ISSUE Business Notet Bn Suinewmeninthe News corporat Reports % Cover Feature 2 Gowcrnment& Plies ” Listening Post 0 sary ° Pans Page 2 People ot Selections a Spl Report 0 snip 56 ‘rechnobgy 2 suns 12535, 2008Editorials Pakistan’s Ambani speaks up Mian Mohammad Mansha calls for trade resumption Iven the military establishment's intol- -rance for political dissent in Pakistan, itis not often that one hears statements about forging better ties with India. While seo- tons of the civil society continue to empha- Sise upon the importance of sports, cultural, Bollywood and people-to-people ties between ‘the two counties, iis rate for businessmen to speak up. True, Industry chambers from both Sides used to meet and exchange notes cariet [but that too has now become a thing ofthe past. ‘That is why the recentlyaired views of Mian Mohammad Mansha (chairman, Nishat group, ‘one of Pakistan’ largest business conglomerates 'S owner, MCB Bank) to the Dawn newspaper are important. Mansha Is no exdinary mortal he Is known as Pakistan's Ambani, He is also a well-respected philanthropist. The activities of his Nishat group touch every aspect of the life of Pakistanis, sit has interests in textiles, bank- Ing, power generation, cement production and teal estate tonamea few. His current net worth {s said to be about $5 billion, Hailing India’s progress, Mansha said in the interviews that, unlike Pakistan, India was a part fof just one International Monetary Fund pro- gramme since 1991 andl has never looked back foreign companies are flocking to India,” he remarked, "This s because Indians have imple- ‘mented tough reforms to facilitate investors and Investment "Talking about border and business {ssues with India, Mansha said that, f China can have business ties with India, despite bor er alterations, so should Pakistan. He urged Pakistan to forge better tes with India, Tis is not the first time that this Paki- stani billionaire has spoken up on the needs to Improve relations with India. At platforms lke the Lahore Chambers of Commerce & Indus- try, he has repeatedly advised both the neigh= ours to resolve their disputes through talks, so that they can resume trade Guspended since August 2019 after India ended the special status ‘of Jammu & Kashmir by abrogating Article 370) to fight poverty in the region. Mansha’s pitch Js that, if Pakistan’s economic situation does rot improve, the country may sink into a Big- ser morass. Pakistan should also take a regional approach to economic development like Europe kd. Europe fought two great wars, but ulti ‘mately setted for peace and regional devel ‘opment. It made progress due to trade across borders, Last year, Mansha created a futter by say- ing that backchannels were working between India and Pakistan and that would yield good results. He also claimed that, if things went wel, it would not take a month for Prime Min- ister Modi to visit Pakistan, Our Ministry of External Affalrs then refused to be drawn into a discussion and said It does not comment on observations from private individuals about Indo-Pak relations. And Modi, of course, did ‘ot visit Pakistan. It unlikely that he will do s0 now with the Lok Sabha election looming next year, But what is impeling the likes of Mansha to root for better ties at this point of time? Pake Istan and the Shehbaz Sharif government are Ina tight spot. The IMF's bailout package is taking 2 long time in coming, The IMF wants that the countries which had pledged mone: tary support to Pakistan ‘should actually com- plete and materialise those commitments, but this is not happening. Saudi Arabia, which has bailed out Pakistan on several occasions in the past, has now refused to provide any further {nterest-free loans to it until Islamabad signs a deal with the IMF. ‘While China (wich accounts for about 30 per cent of Pakistan's debt, will provide a $1 billion loan to Islamabad through the Indus- twial & Commercial Bank of China, this lean will reportedly attract an interest of 4 per cent, ‘which is four times the lending rates of inter: national lending bodies. Beijing has other sold reasons to extend conditional financial assistance to Islamabad. Firstly, as it has the ‘maximum financial exposure in Pakistan, an IMF bailout for Islamabad is in China's inter ests to ensure that Its capital in Pakistan isn't wiped out. Till now, Pakistan was labouring under the impression that it can obtain loans from the IMF and other quarters on its own terms (with a ttle nudge from the US). But this isn’t happening. The IMF may have financially balled out Pakistan 22 times in the past with- cout ensuring that it exercises fiscal prudence. However, this time the IMF has decided to ensure that Islamabad Is made more acount. able before disbursing the loan. ‘The IM message for Pakistan is clear ~ there are no fige lunches! Pakistan's top business mind is seeing the light, even If the politicians and the generals are not : suse 12°35, 2000Editorials Water Funds Indian mutual funds need to diversify their thematic funds to include sectors that address social importance and present future growth opportunities enough of them to channelise investments Jim power, infastracture, banks, and othe 15, One sector crying out for investments is the water sector. One may argue that green bonds do take care of that sector, but water as a sector Js sufficiently lage enough to be treated as an Independent sector. While green bonds of ESG bonds basically look at factors impacting the climate and entities mitigating the risks of eli _mate change a well asthe companies involved, water asa sector isnot totally dependent on eli ‘mate change. It has more to do with smarter usage, transportation, better handling of the resource, better governance, conservation, pres- ervation, recycling and treating waste water. While governments globally are seized of the problems and do their mite, water as a resource equires collective action and. collaboration. Water security s even more important than fuel security as there are ample alternative resources {to fuel like oll and coal. Globally, there are sev- eral water funds In existence, Countries in Latin America have pioneered water funds since 2000. Over the last two decades these funds have refined and transformed thele vision to contribute to the water security of Latin Amer ica. Those funds, among other objectives, also facilitate pooling funds to invest costeffectively ‘marge projects. Latin America has almost 40 of the 60 global water funds. “There ate also afew funds which have been Aoated to invest in the opportunites in emers- ing markets. Pictet Asset Management (total AUM over £202 billion) is one such fund. Tt looks atboth waterand air issues with a focussed ‘emphasis on emerging markets, The ESG funds ate still relatively small with a total AUM esti ‘mated at $1 tillion. Water funds are half ofthis ‘or around $500 billion. Besides Latin America ‘water funds exist in USA, Australia, Middle East and Africa, India, sadly does not figure in this list. Most investments in the country related to Dung water projects are largely government- funded, The last significant water funding was carried out forthe Narmada Project through the Sardar Sarovar Narmada Nigam Limited bonds The Project, which is stil a work in progress, will finally be completed by 2025 at a cost of 175,000 crore. Besides, there are several munici- pal corporations which are raising funds, albelt fon a miuch smaller scale, through the isue of bonds. In many of these cases the interest is S=: bonds are not new and there are subsided by the central government. ‘Water funds, however, have a more broad: based approach and are not limited to water and water-related projects as they alo invest in ‘other adjacent industries, And contrary to pop- tular perception the eatehment for investments Js quite large. Incbullt water transportation, for instance engineering and design, products, technology companies, pipes, pumps, EPC com panies (many of them are increasingly taking part in the execution of projets) which under fake the actual completion of the project and thereafter the actual operation and mainte- nance work, abo provide for a good stream of income. The same is true for industrial waste sewage, sanitation, treatment an recycling of water. Funds can also partner with government and quasi-governiment bodies, Dedicated Alter nate Investment Funds investing only in water companies should also be considered. Given the looming shortage of fresh water both in urban and rural areas, there will not be any dearth of opportunities for deployment Each SPV could itself be an opportunity. Besides project investments, the possibility of sustained Inflow of funds for water could spur more com panies lke TataClean to focus on water, and list them on the bourses, The government, which is currently the biggest investor in creating water Infrastructue, can also list their initlatives on the bourses to get a perennial stream of funds. Like the Namami Ganga project, other proj cts for various rivers could also be initiated Namami Ganga, which is the flagship project of the government, started in 2014 with funds ff 220,000 crore, and has 288 projects, Besides vers, irrigation is another area which could do with predictable supplies of water, fresh water fr treated water, Conservation of watersheds Which was the primary reason behind Latin Water Funds, could also be setup. India has spe: cialised PSUs lke Engineers India for oll proj- fects and RITES for Railway projects but it does not have listed companies for technology and esigning of water projects. TSU could well Inspire the private sector to mimic the govern: ‘ment and set up consulting bodies, “Mutual funds and AIF need to act swiftly to set up water funds, Otherwise, similar to private equity funds, which are predominanty global, water projects will also attract investments by ‘global funds and another major opportunity for domestic investors will have been wasted. « g sone 12.35, 2028Editorials Hope for justice ‘The missing dots in the NSEL case are finally being connected. Will justice be served? ‘ore often than not misguided invest- gations and litigations have derailed four criminal justice system, particu Jatly as far as economic offences are concerned. Those who have been cheated have to often wait years fr justice to be served. However, there is one case which appears to be different. The 2013 payment default case at the National Spot Exchange Limited (NSEL) seems to be defying the trend; things are mov- Ing fast and itis slowly emerging that those who ‘were involved but previously overlooked are ‘now being held accountable by the judiciary. The dots are being connected, ‘When the payment crisis came to light, the now defunct NSEL which was India’s fits elec- tonic commodity exchange for ‘pot delivery’ of contracts, including agricultural products, hhad already been operating for about S years since its launch in October 2008. It had secured permission from the Ministry of Consumer Affairs under the Centeal Government to com> ‘mence trading in 16 states n India, Te NSEL had been successful in convincing the government ofthe day that it would ease the pressure on farmers to sell their proceeds at low prices due to lack of warehousing and it began by providing delivery-based spot trading in $2 agrl-commodites, There Is no doubt that had it Continued successfully, it Would have alleviated the agri-crisis and tackled the high agri-com- ‘modity prices the country is currently facing. [Bt that is another topic. In this context, the role of the brokers regs: tered on NSEL becomes apparent. They would have undoubtedly sensed an opportunity to make riskfree returns, and this resulted in fran tic trading activity driven by the enticing offers provided by the brokers to thei clients, Just like In equity trading, brokers acted as intermediar- tes between the exchange and the clients, faci: stating the buying and selling of stocks on their Dealt and settling payments ‘These brokers convinced igh net worth Individuals and retail traders to participate in trading on the NSEL. On the other side, com- panies engaged in the processing of agricultural goods entered the matket to buy and sell con- tracts with the clients of top brokerage houses, guaranteeing the delivery of goods within 11 days as per the NSFL contract cyele However, when the brokers realised the potential for easy and high profits from the ‘goods they had purchased and sold prior to set ‘lement, they seldom came through with deliv ‘ery of goods. This deceptive practice continued, resulting in brokerages and processing compa fies accumulating a substantial sum of close to 26,000 crore, Eventually, regulators took notice, land chaos ensued. Interestingly, the brokerage ‘and agri-processnig companies were not appre hhended; instead, they managed to shift blame ‘onto the exchange, The Forward Markets Com: mission (FMC), the regulatory body, aso falled to impartially investigate the matter The police did apprehend several promoters ‘of agri-processing firms who had worked with the brokers, Among them were Kailash Agar wal of Ark Imports, Prashant Borugu of Metcor Alloys, Narayan Rao of NCS Sugars, BVH Prasad fof Juggernaut Projects Ltd, Varun Gupta and ‘Chandramotian Singhal of Vimiladevi Agrotech, ‘and Ghantakameshwat Rao of Spincot Textile. However, It took several years to establish ‘the role of intermediaries in the payment crisis. ‘Only in 2018, through its charge sheet, dd the Economic Offences Wing (EOW) accuse three broking entities and three directors, categoris ing them as Financial Fstablishments under the Maharashtra Protection of Interest of Depos- itors (In Financial Establishments) Act, 1999 (MPID Ac. Recently, the special MPID Court declared Nirmal Jain, director of India Infoline Com- modities Ltd (ICL) Preeti Gupta, director of Anand Rathi Commodities Lid (ARCL} and Shiney George, director of Geojit Comtrade Ltd (GCL), as accused in the NSEL payment default criss, Roop Kishor Bhoota, diector of [ARCL; Anand Rathi Financial Services Ltd, the promoter of ARCL; FL Finance Ltd (formetly known as IIFL, the promoter of ICL; and Man: ‘sh Gupta, director of GCL, were also accused in the NSEL case by the MPID Court, With this ‘order, all accused persons will now face tral in the NSEL case, ‘Aswegotoprint, the MPID Courthasdirected the FOW to investigate the involvement of for- mer FMC chairman Ramesh Abhishek in the ‘case and submit a report within 40 days, Tt now appears that several loose ends are ‘connecting, and the investigators will estab- lish relationships between individuals that previously seemed unrelated, Finally, cheated Investors ean hold onto hope for justice being delivered, even if it unfolds slowly but surely. « suse 12535, 2028‘you ae really ored of those regular travel rips nd are eager tory out some adventure activities, the heart ofthe country, Madhya ‘Pradesh has alt for you. The site offers many thing and soft adventure activites to tourists, Fram sky diving, scuba diving, rafting, ‘trekking, jungle safaris, camping, andhertage walks tofood walk, thereis something for everyone. Cee en ee tec ict ae Oe OO IT mo mee eed Boca re bce ae Re ou RSE Rota ee et RCT Ce Eo ‘Tiger Satarin Madhya Pradesh Encounter tigers and ther animals ona wit safari tourin six tiger sanctuaries in Madhya. Pradesh namely Kanha, Bandhaygarh Satpura, Pench, Panna and Sanjay Dubus, The only place you could find Cheeta nds at Kuno National Parkin Sheopur disc. Sky Dvingin jain Every yearin January, shy diving esti Is organised in Ujan where vistors Can sky ve from over 0.000 feet and enjoy he auspieous view ofthe ‘eigious capital o! MadhyaPradesh. (Orch iver ating River aingsanoter cxcing sport can «4, be enjoyed by (< adventure seekers in" Orchha’s Botwa River. Ths acy rat only aves you a tv but also ofers a beau vw the royal Orhha-chatis an the exotic sors of the ver. The best time to go rating in Orca is fromAupusto February at Kerwa Oam in ‘The Kerwa Dam in Bhopal is known {oritsdiverseactvtos. Tho mostpopular J the ying fox zp Inn. The 2p ine here is ‘one of the longest double zip ines in ini. So why wat? Exeencethe tl fide te cable carn Bhedaghat Viewing Marble Rocks and Dhuandhar Watetal via Cable ide from Bhedaghat is the most rewarding experiance for any tours. In action to ding the cable car you can also sail among the marble rooks fora closer look. The ful moon makes saiing even more ‘memorable as you witness the towering rocks natural tink at ight Bicycle Safarin Van Vihar ‘Van Vibar Nationa Parkin the capita of Machya Pradesh, Bhopal is blessed withthe densest forests and abundant wii, Beye saar in Bhopats Van Vinar National Prk gives you the chance to ‘@parencethe states rch bodies. Enjoy Boating and Kaycking in Bhopal ‘The best way to relax is ona boat surounded by nature, Explore boating and cruising opportunites at Bhopal’ Boat Clb. Kayaking fs another exciting watersport that requires aloto slo perform, Parasailing, paragliding and climbing on Pachmarhikils Situated at the mounting height, Madhya Pradesh’s most verdant charm Pacha also known as Satpura ki Reni rules the range of Sapura. ‘estedinthehilsandfiled with scenic beauty all around, Pachmarhi nat only has spirtual spots and gushing watetals but also have @ lot of adventure. Parasailing and araglding are exciting and adrenaline pumging sports. Other acts that tito the landscape of Pachmati ae rock climbing and trekking, Trebkingtallsin the woods There are numerous treks eveioped for the tourists to enjoy camping in the nature including the Forsyth Trek and Jatashankar trek of Pachmarhi, the CChiakho trek in Narsinghgam and the lanapav Tekin Indore. Other than these famous treks, camping sites are also developed at Orchha, Pana, Pachmati, Kanha and Indore ‘Adventurous Mega Festivals NMP Tourism conducts annual mega festivals at Hanuwantya (Jal Mabotsav), Ganchi Sagar (Gandhi Sagar Rating Festival) and Mandu (Mandy Utsav) where various adventure acivates and recreational actives are organized incuding Hot Air baloonina, paramotoringparagiingparasaling, jt sking, kayakingete. forthe visitors atthe festivals. fier the enormous success ofthese events MP Tourism is set to develop Orca Kuno, Tamia, Alt, Barg| am and Chander forthe conduction ofthese mega festivals in 2023- 2024, Get ready to discover some truly exciting and serene adventures to satiate yourtrstin Machya Pradesh potListe ing Post Betting on luxury Godrej Properties is planning 10 acquire a 744-acre land parcel at New Alipore, a premium residen- tial locality in Kolkata, from West Bengal Housing Infrastructure Devel- ‘opment Corporation Lid, having been declared as the highest bidder in its fe-auction. The company will develop this land parcel as @ luxury group housing project. New Alipore has an established physical and social infra- structure. The location offers excel- Tent connectivity to all major social and commercial hubs of Kolkata city. The demand for luxury realty has been strong over the past few years. This will be developer's second lux: ury development in the city. Buoyed by the growing demand, the Mumba- based developer has clocked the best fever performance during 2022-23 - it added 18 new projects, with an esti. Imated revenue potential of 232,000 crore, higher than is guidance of £15,000 crore of estimated booking value for 222-23, Newer opportunities Alleargo Logistics has completed the acquisition of remaining 30 per cent stake, In Gat-Kintetsu Express (GKEPL) for 2406.71 rome. Alleargo’s subsilary, Gati, already holds 70 per cent stake in GKEPL, which Isa lead ing express logistics player in India, with presence in Surface express di tribution, Air express distribution and Supply chain management solutions With the conclusion of this transac. ton, Alcatgo, along with Gatl, now hnolds 100 per cent stakes in GKEPL. and assumes complete control. In Addition to this, the company had ear. lice bought out minority stake of its partner in the contract logistics busi hness under Alleargo Supply Chain, Aleaggo’s contract logistics bust- ness is engaged in managing invento- des and providing third party supply chain solutions to marquee Indian land international customers across chemical, auto, e-commerce and other Industries. These acquisitions are in line with the company's strategy t0 sharpen the focus on high growth ‘opportunities in express andl contract logistics business in India, This move will also facilitate simplification of the corporate structure, Getting spacy Ak part of the K Rahela Corp group, Chalet Hotels Led (CHL) is an owner: developerassst manageroperstor of high-end hotels in key metro cities in Inia. The CHL portfolio comprises seven operating hotels, including 2 hotel with a covlocated serviced Fes fence, which Is situated. acoss the markets ofthe Mumbal Metropolitan Region, Hyderabad, Bengaluru. and Pane. On the development front, the company is sid to have competed, fon the hospitality side, 88 rooms at Novotel Pune, the commercial use of ‘which would start as soon a ftrceives fccupancy certificate for the building And New Westin Hitec Hyderabad, with 168 rooms, isin the process of being handed over tothe operator and wwouk! be operational soon. At Wes- tin Mumba, Powai, the newly reno. vated rooms have been handed over to the hotel team in January 2023. A luxury hotel atthe Delhi Airport, with shout 400 rooms, is expected to got completed in 2028-26. The 140-700m fexpansion at Marriott in Bengal is inthe fnl design stage and would be submitted for approval soon. Mean While, on the commercial office eal state front, the commercial tower at Westin Complex, Powal, Is in a stage of completion ard would be handed fer in the next quarter toa team for Jeasing of space. And with regard to the commercial tower in the Mariott Complex, Bengaluru, the hand-over to tenants has already commenced Recentiy, it had also acquited an S0-room resort in Khondala, expand: ing its owned asst portfolio im the Jelsue segment and signed definitive agreements for an enterprise value of X133 crore, The resort Is spread over 78 actes, and the resort land is owned by Sonmil Industries Pvt Lid, while the hotel structure and its business ae owned by The Dukes Retreat Pvt i. The company plans to expand the room inventory by about 50 rooms. According to’a souree, the company hhas multiple projects in final stages of completion, with a capital spend ‘of over 21,200 crore till March 2023, ‘These assets will start contributing to the company’s performance, going forward, The new hotel in Hyderabad, the residential asset in Bengaluru and the office asets in Mamba and Ben- 4galuru are likely to make material Improvement in the company’s finan- ‘Gal performance Order book build-up “The main business of H.G, Infra Engl neering Is infrastructure construction, ‘development and management, which includes providing engineering, pro- ‘curement and construction (EPC) ser ‘ices on a fixed-sum turnkey’ basis and. undertaking civil construction and related infrastructure projects. As on March 2023, the company’s order book position remained strong. at %12,766 ‘crore, of which, orders worth £11,300 ‘crore are for highvray projects, wile the remaining 21,466 crore cover other sec tors. During Q 2022-23, the company declared further ordets totalling about £5}000 crore. “The company continues to maintain an order book ratio of 2.9 times, For all the 12 HAM project, the total equity requirement anticipated til 2025-26 stands at 21,612 crore, out of ‘which, an investment of 736 crore has ‘been completed as of March 2023, and 4 projection of investment in further projets for 440 crore Is anticipated in 2023-24. Meanwhile, the company is planning to enter drinking water prof fects (under Jal Jeevan Mission), which Should aid. segmental diversification {going forward. Recently, it has received letter of acceptance (Lod) from DYCE-C- ‘CNB: Engineering/ North Central Rall- ‘way for Redevelopment of the central rallway station at Kanpur on EPC mode “The company has bid for a project cost ‘0 2685.10 crore, with the construction Period estimated at 36 months. As indi ‘ated by recent order wins for three non road projets, the company continues to ‘emphasise the importance of diversfica- tion and aims to have 20-25 per cent of its order book comprise non road proj ‘cts within the next two fo three years. ‘A budget of 298,000 crore has also been, set aside by the government for the ‘monetisaton and expansion of airports ‘over the next five yeas I suns 12°95, 2000Businessmen in the News Uses ney Maruti Suzuki tndia Lin ited (MSIL) has announced launch of its highly antic pated ofesoader Jimny” at a farting price of 212.74 lakh, The Jimny will be avallable for deliveries across all NEXA fowrooms In the country. Announeing the launch of the Jimny, Hisashi Takeuchi, managing dicetor CEO, Maruti Suzuki India said, ‘We are privileged to intto- sauce the legendary Jimny, a symbol of adventure, into the Indian market, With is ime- Jess design and excepeiinal fottsoad capabilites powered bby Suouki® ALUGRIP. TRO {GWD) technology, the Jimay has ben breaking serene As global debut in 1970. The launch of Jimny” (five-doo) marks an exhilarating mile: fone in our SUV portfolio and ‘wil play an important role La ‘ur foal of becoming the cou tay’ largest SUV maker Weare Aetighted with the response it has received trom both po spective customers and ert fevalike, Weare confident thet Jimny will empower eustom- fers to explore tnehated tex. Morles and power through al obstacles with a #Never TurnBack attitude” “India holds significant poston for Suzuk! Motor Corporation not ‘only asa domestie markt but also as a global export base I gives me immense pleasure tovannounce that India ll proudly servo a5 the mother plant Tor the Jimay (Gve- {doo and willbe the fst mar et for ts launch. This truly reaffirm our commitment t0 ‘Make-Inindla for the world” headed . Technologies, « Tas Motor subsiian, has na arated 22 industry 4.0 tech ology centres actoss Tamil ‘Nadu to upsill youth on lt fest manulacturing. technolo: ies The technology centres ‘rere inaugurated by MLK, Sta in, chief minister, Tamall Nod tan event beld in Oragagam, henna in the presence of N. Chandrasekaran, chait ‘many Tata Sons, Waren Hares, MD & CEO, Tata Technologies, intatve wil erable the poor and rural students, a8 slo th south inthe tate, to get tein Ing at low cost and become capable of meeting the exper: titlone of the Industries, the CEM said in his addres at the Inaugural funetion. “Indla Jn-a unique postion because talent is needed for Arica rth three manufactur ing facilities in. Nasi, Kandla, and Vapi and a global presence In 14 countries, Cap Mat Foods. completss 25 years, Some of its marquee cepika Warrier, chiet narketing oicer, Dia {geo India, isset to step down Ser a three-year stint at the ‘company. Ruchita Jal, cur rently EVP anal portfolio head, Asmyld 4.0 asa piey owurisa asm Intelligence. India. has_max mum talent and iis found ‘more in Tamil Nak,” said (Chandrasekaran Tata Technol gies is engaged in engineering Services outsourcing and prod Lut development and providing TT services tothe global man facturing induties Itt to be recalled that Tata Technologies Signed an’ Memorandum of Agreement (Moa) with the Tamil Nada government in products are Ching’s. Secret Scheswan "Chtney, knstant Soup, Chinese Masala, Ch ree Sauces, Hakka. Noodles, Smith & Jones Ketchup, among thers, It has also unc three produets that add zing to Indian palates. Comment= ng on the silver jubilee suc- cess, Ajay Gupta, founder, haimman’ & MD, Capital Foods sald, “We have been able to drive home our innov- Son’ =a farsighted disruptive approach that combines con: ‘mer insights with innovative product development and mar etn. It Is our innowison that hae made us one of Inds ‘marketing, at the company twill succeed Warren "31 ly 2023 6 my last day at Disgeor Fchira Jey will take over athe CMO for Diageo Ini ftective August 2023" Ware ber sald. She joined Diageo India fo 2020 from packaged foods snd beverages Company Pepsico India to lead the mar keting division at Diageo. As CMO, Wari oversaw mar 4eting and Innovation for Diageo tndiaSaleohol and bes erage portfolio. Prior jining Diageo, she spent 20 years with Pepsico, where she was insttu- mental’ in. driving strategie Jane 2022 to transform 71 gov ernment Industrial Tralaing Institutes (IIs) across Tamil [Nadu into technology centres with modeen infrstrctae and teaning facilities to meet the Industry 40 standards Tata Technologies sald, besides catering tothe advanced skill requirements of students, these technology centres wil aso act 28 technology and industrial Fhubs for MSMEs, : fesesegrowing_ food comps ties alata forprint We innovate by tacking conse crs evolving tastes ad cl tay ens: kyon txising consumer west mand entalinda, has aso Stinounced making iglicant kets. The compary launched sever band wateting ca tales of te at pein fhe Wanveer Singh: The brad dso anche campaigns such at Det Cine Fan ta and. Pasa Masa Ra oct c evelopment, innovation, brand” equity enhancement And resource allocation across ‘range of beverages, and juice based drinks, AtTepsico, War rier held positions, inching that ofthe MO & CEO at Nour JshCo Beverages; vie pres. den, nutrtion category for Pepsico Ini, 8 well 8 Pep siCo AMENA (sia, the Midle- EastandNorth Ais} basedin Dubailand a the CMO fr Pep siCo India, where she handled 2 portfolio of over 20 brands, Including Lay's, Karka Quaker ‘Oats, Pepst, Moun. tain Dew, among others. « suns 12-25, 2000Businessmen in the News vie alznew BMW ‘M2 launched recently India and fs available ina pe tol variant at an exshowroom price of 2985 lakh This compact Iwo-door, fourseater high performance sports car Will be avalable in the country as 2° Completty BulltUp (CBU) ‘model from today onwards, Vikram Pawa, president, BMW Group India said, "The new EMW M2 embodies an ‘unadalterted racing pasion hat owners can enjoy day in, ‘ayant tbulldson the brands tradition of ulta-sporty mod: cls with compact dimensions The expressive looks ofthe rnew BMW M2 act as 2 clear signpost to sport driving plea fre and stem pelmarlly fom {s eatremely powerful propor tions, ‘The car melds exter: inary speed with maximum control "ensuring a smooth, ‘dynamic dive no mater how faryou push the limits” © International Lim: fted hae achieved, remark able success in F¥23, With fan astounding 44 per cent irowth computed the pre- lous seal year, the compa ny’ total income fas soared toan impressive 10128 core. Maximus fas demonstrated fxceptional resilience, maine faining its EBIDTA margins for 2022.28 and showessing Consistent and seady grove In is top line. Nowbly, the company. achieved a. signll- feant lap of 4D por cent in EBIDTA, amounting to 810.82 roe, which clearly highlights Its unwavering progres. This temarkable. growth in reve: ‘nue and EBIDTA has directly resulted In a surge of over 33 percent in the company’s PAT, Teaching an Impresve €728 ‘rove for 2022-33, surpassing the achievements of 2021-22 “By surpassing the 2100 crore milestone in. topsiine reve ‘uc, Maximus has not only sgt but exceeded targets for 2022-23, paving the way for an exciting future” says Milind Joshi, CIO, Maximus Intemational" La." Maxims hhas consistently maintained a stable growth rate throughout All quatters of 2022-23, show. ‘casing its ability to overcome challenges while remaining profitable since its inception, ‘Asa leading manutacturerand ‘istbutor of specialty lube fants, with a strong presence fn the African and Sbddle- astern markets, the company is well-positioned to seize new ‘opportunities “and achieve coven greater heights ° Ivan Menezes, the Chief Executive Offices (CEO) of, Spirits major Diageo passed way last fortnight, at the age fof 63, He is survived by Bis ‘wife Shban! apd his ehildren, Rohini and Nikhibani. ene es wae set to rece a the end ff this month and was in the hospital receiving ‘treatment for’ conaltlons Including. 3 stomach ulcer, CEO-designate Debra Crew would assume the top role on an interim basis immediately, Diageo informs. ‘Menezes was born fn Pune in July 1950" He was educated at St Stephen's College, Delhi, Indian Insite of Manage™ iment, Ahmedabad and North western University’s. Kellogg School of Management. His father Manuel Menezes, was fe chairman of the Indian Raikeay Hoard and his brother Victor Mencees isthe former chaleman & CEO, Citibank, ‘Menezes joined Diageo In Ivan Menezes (1959-2023) 1997 and eld various senior Positions inluding che! oper Stingofficer&chateman, Latin America & the Cadibean: chairman, Asia-Pacific; pres Ident & CEO, Diageo’ Nosth America; and chet operating lotticer, Diageo North America He became the CEO in July 2013, sueceeding Pauls. Wal. tuve director of the US-based fashion retailer Conch. Mere 25 was Knlghted In the 2023, ‘New Year Honours for services tobusiness and equ ‘The Indian-born boss had shaped ‘Diageo to become fone of the best-performing, Iost trusted and respected ‘consumer companies" and hhad created "a cultore that enabled everyone 10 thrive.” attirms Javier Ferran, chale ‘man, Diageo. ‘Menezes began his career ng. colle, confection- ‘ishwashers and efrg feritors, but, at the age of 38, hhe decided the drinks indus tty mas his best bet. It was 3 ‘welLtimed move, just months before the merge of Guinness and Grand Metropolitan, one of the alcohol trade’ biggest, eal : suns 12.25, 2002Business Notes Northward journey Housing prices go up subsequent to strong demand fight cities in India increased 8 per cent yeory amidst strong hhowsing demand and consistent qual- ity launches by top developers. This wvas revealed by Housing Price-Tracker Report Ql 2023, jointly commissioned bby CREDAL-Colliers-LiasesForas. Delhi-NCR saw the highest increase In residential pries at 16 per cent yor y, followed by Kolkata and Bengal- ‘ura with 15 per cent and 14 per cent y-o-y increase, respectively. Despite ising interest rates, housing prices have been on the rise, led by consi tent demand seen since last year. AS the interest rates are now expected t0 hhave peaked, a pause in the rising repo rate palred with healthy domestic eco- nomic outlook will Keep the market sentiment upbeat, says the report. “Owing to an ecosystem condus cive to buying, the homebuyers’ sen- iments have been quite positive for the past few quarters," affirms Boman Irani, presklent, CREDAL, “This is also validated by the sheer volume of sales that we have been witnessing in the recent past, especially in Tier I cities across India. Despite the rise in hous ing prices, which is primarily owing t0 rising raw material costs and this con- sistent demand, we expect the strong, momentum to continue as consumers have shown a clear appetite to buy now, bigger houses with better ameni- ties “especialy in the post pandemic era. There 1s also a greater thrust on ‘green development’ projects, with homebuyers inclined towards sustain- able houses that are beneficial not just to the environment but also Bnan- cially in the long term” New launches The top eight cits hhave continued to witness arse in ew launches, as developers planned to tap the rising demand, owing to which the ‘overall unsold inventory rose 12 percent y-o-y. With a spurt in new launches, about 95 percent of the unsold units in the top cities were under construction. Hyderabad saw the highest jump in ‘unsold inventory levels, at 38 per cent y-0-. At the same time Delhi NCR, Ben gakuru and Chennai saw a dip in unsold Inventory, on the back of significant rse Jn sales, MMR continued to account for the maximum share in unsold inven- tory at 37 per cent, followed by Pune at 13 percent. "The residential realestate in India hnas bounced back post the pandemic and continues iis strong, momen= tum since the last year” informs Peush Jain, managing director, occu pet services, Colliers India. “Aided by increased preference for home ‘ownership, relative affordability, qual- ity supply, the sector has remained resilient, offsetting the challenges posed by higher interest rates amidst ‘global headisinds. Given the positive =; market fundamentals, both end-users ind investors can find their sweet spot in this sturdy market. Amidst this upswing, housing prices in India wit reseed an & per cent y-ory rise during the fist quarter of 2023" ‘Meanwhile, size continues to mat. ter for Indian’ homebuyer, even after relative market_normalcy has been restored post the Covid-19 pandemic. The latest Anarock data indicates that average flat sizes in fresh supply hit ting the top seven cities grew 7 per ‘cent in the last five years from about 1,150 5q ftin 2018 to, say, 1,225 39 tin 1 2022-23. In 2023, the average Mat size in these cities stood at 1,185 sq ft, a agalnst 1,170 5q ft In 2021. “MMR is the only city where aver age flat sizes have reduced in the last five years from 932 sq ft in 2018 to 743 sq ft in OL 2022-23. In these five years, only the year 2020 saw aver- ‘age flat sizes in MMR see an annual rise of 21 per cont against 2019. Since 2020, homes in the region have been Shrinking.” says Anuj Purl, chairman, Anarock group. ‘Among the top seven cities, NCR saw the highest growth in average Hat size Inthe last ive years ~ from about 1,280 Sq fin 2018 to about 1,700 5q tin QL 2022-23. Developers in NCR are closely tracking demand and launching bigger homes in ths region. Hyderabad has the highest average lat size at about 2,200 sq ft in Ql 2122-23, followed by NCR with about 1,700 sqft In Chennai and Bengaluru, the average fla sizes stand at about 1,175 sq ft and 1,300 5 respec- tively, while In Pune, the average Nat size clocks in at about 1,013 9q ft “Before Covid19, apartment sizes ‘were shrinking annually to meet the ‘demand for compact homes prevalent he central con- y and millennial preference for low-maintenance homes. ‘The year 2020 saw an. abrupt reversal ‘of buyer preferences. With a sudden ‘emphasis on the WFH and study-trom- home culture, fa sizes began increasing for the fist time in four years une 12-95, 2002Business Notes BANK RESULTS Cash cut sults of most of the listed banks fe out. Out of the 24 banks, 16 of them have reduced cash and balances ‘with RBI significantly: Among the top is SBI, ithas reduced its balance by 271,178, crore, followed by ICICI Bank, which nna slashed its balance by £40,997 crore ‘Out of the 24 banks, eight bunks have increased their cash balance with RBI The total increase of all these ght bbanks put together is 9,503 crore. Con- ‘rast this with the fallin SBI's aecount and the point is driven home. Interestingly, many of the pub- lic sector banks have published thelr 2022-23 annual reports too. Among. them are Canara Bank, Indian Bank, Punjab National Bank, SBI and UCO Bank. A look at the annual report reveals the following. Cash and bal- ances with RBJ have three heads ~ cash, fn hand (including foreign currency and gold), balance with RBI under ‘current account and balance in other accounts. Put. simply, money with [RBLIs kept under the three aforemen- tioned heads. ‘SBI has withdrawn all its deposits (held under the head ‘other accounts), amounting to 260,406 crore. Balance in current account is dovrn by 210,138 crore and Cash in hand by €333 crore The fall in balance (as mentioned at the start) amounts to £71,178 crore. Decline in deposits The case of Indian [Bank is a bit diferent, The bank has seen a steep decline in deposits (held lunder the head ‘other accounts) by 129,720 crore. However, balance in current accounts with RBI has gone ‘up to 4,578 crore, this partly arrested the slide, Cash in hand has slid by 1720 crore. The fall in balance held by Indian Bank is 25,862 crore. ‘A similar pattern can be seen in UCO's balance sheet. Deposits (other accounts) have fallen by 26891 crore, ‘current account balance with ROL is up {EAS crore. Cash in hand fs down by 22.48 crore. However, in case of UCO Bank there is a marginal increase of 112 crore (rounded off number) in cash and balances with RBI, mainly because of the Increase in current account balance, Sern Period 2022.23 2021-22 ‘Standalone igure TciCl Bank 68.525 1.03523 Als Bank 66.118 94.035 nan Bank 32.693 38.555 Canara Bank 54988 73,208 Tsing Bank 22.961 coi Bank of Baroda 54803 71184 Kotak Matinee Bank 13.965 36,026 HDC Bank i716 123,996! DBI Bonk 16.559 27795 ‘Central Bank of odi 27433 38.034 unis Nationa Bank 78:7 85,736 Federal Bank 12581 16.089 South Inca Banke 4539 7297 Bank of Mohorasia 18.508 e722 TOFC Fst Bank 10,740 71.390) Tota 373.109 11.56,932 Erne Period 2022.23 2021-22 unge: Standalone igure score Union Bank of Indi 30254 4613 41 Bankof nia 44035 40281 3784 Karur Vysya Bank 4279 3.594) 685, indian Overseas Bank 2, ‘Gay Union Bank 37 Punjs & Sind Bark 36 Jammu & Kashi Sank 4 ‘UCD Bank 2 Total 3.503 Reserve Bank of ti BT] _ ATI] ene] danse (coe percent Deposts Tasez7 | WssTeB| 3.79570] 22 (a) Covert S06] 500 a] (nis 95077 676726] s3751| 6 (financial stuns out da 192207] 75728] 26,78] 35 (Ooms 3.16490] 776291 eseani| 99 (0) Admevatars of Employee PF Ale 46a] 4503, 139 {) DepostorEdvston and AnarenessFand | 62225] #8265] Tapez| 23 (Balances of Foreign Cera Bans ‘0s9| 491] 36s] tig (Balances of indian Fnac isons 6757] 1008] 5709] 575 (lances ot eterational Fnacal ntnaions | S07] a6 7 (Wawa Fans 1 o of (iy others zaiase| 7aiase| 490204] 67 Out ofthe eight banks which have (hown under the head ‘in other Increased thelr balance, six are pub- accounts’) Is part) total reverse repo lic sector banks. None of the annual deposit kept with the central bank, Be reposts say. whether this money that asit may. suns 12°25, 2000Business Notes ‘The RBI released its annual report towards the end of May this year, A striking feature in the accounts for the year ended March 2023, is the fall in deposits held by the’ central bank. Deposits fell by 2479,570 crore 10 8,354,217 crore For the year ended March 2023, deposts accounted for 21.34 per cent of the balance sheet as Against 28.01 percent Tn the notes to the accounts, the central bank says: The amount under "Deposits Others’ decreased by $9.23, er cent from ¥7,76,29093 crore as on SSI March 2022 to 35,16 489.64 crore son 31 March 2023, primarily due t0 ‘decrease in reverse repo deposits with, the Reserve Bank, Te might be recalled that the central bank had introduced the SDF (Stand ing Deposit Facility) scheme in April last year. Under this scheme, banks could place money with RBI on over: ight basis at the rate of 8.75 per cent. At the same time RBI would not give collateral (read G-Secs), to banks park ing money, which Is the norm in all repo transactions. The fixed reverse repo rate at that time was 3.35 percent. Today, SDF’ rate is 6.25 per cent and fixed reverse repo rate remains still For the year 2022-23, RBI incursed a Joss of *7 448 ctore on this scheme as per its annual report. * MONEY MARKETS Falling volumes overnight money market has Tioar segments "att money, mar ket repo, triparty repo (also referred as TRE?) and repo in corporate bond. Triparty repo, which holds a tion's share of late, is witnessing adecline in its market share, And the gainer so far Js the market repo section, For the context, as per CCILS fact book 2021-22, for the financial year 2019-2020, the daily average turnover in TREPs was £150,345 crore (market share of 6790 per cent). In 2021-2022, the daily average turnover in TREPS stood at £309,263 crore (market share (f 74.74 percent). Fr the year 2021-22, ‘Market Repo standsat a distant second Se 2023 May ‘Apni| March] February] nary ca mas] av] 13997|__4ss2|___ 13.366 Repo 4,a2,702 | 9sa4|168.0s0[ 160.683) 132.451, Te. 292,710] 309949| 33114| _3,77427| _3.8,806 Toul 486.546] 5,17800/ _5,13170] 5.524662) 5.27.23 2023 May ‘apn| March] Febraary| nary Repo, oss 38 3275 2907 251 hep eons sac] 64s2| 820 7236 Tota 9995| 10000] 10000] 9999 9999) inser caves the otal igh up 10 109, sarap incorpo ond notice 2025 May ‘Avrl| March] Febrasry| fanny Repo 636 650 655) at 618 Te. 651 651 646 636 615 Scarce wal and CA. moriy putin. with a share of 23.19 per cent (daily average turnover of 25,957 crore) Tor the financial year just gone by (2022-23), the average daily turn- in TREPs was 1384,533 crore At its peak triparty repo's (17 Octo: ber 2022), turnover in the call money. market was 1463845 crore and it accounted for 76.27 per cent. Market repo was a distant second (turnover of 4135,528 crore) with a share of 22,28 per cent Since January 2023, the market share of triparty repo has been fall. ing and the gainer is market repo. ‘The share of triparty repo in January this year was 72.36 per cent and that fof market repo was 25.10 per cent. In May 2023, ttiparty’s share has slid to 60.18 percent and that of market repo hhas gone up to 37.53 per cent. Even more disturbing is the falling daily average volumes inthe TREPs.seg- ‘ment, The only consolation for TREDS Js that, in May 2023, both TREPS and ‘market repo saw a dip in thelr daily average turnover “Triparty repo is a variant of mar- et repo, but witha difference. In tri party repo there isa general collateral, ‘wherein the lender receives any secu: nity (ead, Secs) within the specified security class This i not the case with market repo, the specified security has tobe delivered on the same day. In the market repo segment, banks ‘and primary dealers are the main bor- rowers. And, in the TREP section, banks are the main borrowers. In both the categories mutual funds are the Diggest lenders, The question is: can TREP ward off the imminent threat i is facing from market repo? DIGITAL BANKING UNITS New guidelines nthe fist week of Apri last year, the Reserve Bank of India issued guie- lines for setting up Digital Banking Units (DBL). 4 majority of the banks has released the results for the fourth ‘quarter of 2022-23, with regard to DBUs, because they were waiting for the guidance tobe issued by the Indian Banks! Association (IBA) for report Ing ‘digital banking’ asa separate ub- segment of “etail banking”. In simple terms, under the segment reporting, section retall banking has been bro: keen down into two segments ~ digital Danking and other retail banking, suwe 12-95, 2002TRCN coco reemeermonenena AN Vem ofeyg Sey Se ‘ang anteg bein Ue you ior gael Nos tk a 36 Bonk of aod 04 2 Way JOSVAO)RSMa [srk rine ° “ais z tank of Mahara 01 029 2 Can Bank an “136 6 iy nin Bank 007 001 1 Feder ak a4 s HORE Bank asi ay z Tee nk as 138 TOF Fa nk 3007 26 Tn Bonk ° 306 3 Tan Ovens Bank ° “034 2 Tas nk ae 7 Iemma Karin on oa z otk MahindsBank 306 4 2 Pon Nata Boi ar “a6 a Peni & Sin Bank ° om Ste kt oar 188 South nk 106 2 UGo Bank oar a H Uncen Sankefindo 18 02 2987 crore and profit of 8,888 crore Im the results, it clearly says that the profits ate before exceptional items For the full year, on revenues of 83,697 ‘ror, it has shown a profit of %4,732 ‘rote. Here too, the profits are before ‘exceptional Items. As to how the bank has posted profits way above its revenue can be best answered only by the bank. ‘Canara Bank and Punjab National Bank, in their notes to accounts, have said that they have commenced six and eight DBUs respectively. The fonly bank to mention in its notes accounts where exactly it hes started cad Among the big banks, ICICI Bank BUS is Indian Overseas Bank. It says SO has posted revenue of £6475 core and it has started two DBUs ~ one in Solan profits of 21,535 crore for the quarter (Himachat Pradesh) and the other in fended March 2023. It implies a mar- Thanjavur (Tamil Nadu). To banks xin of nearly 24 percent. South indian Central hank of India and IDB Bank — Bank, a relatively small bank, has have stated in their notes to accounts reported a margin of 31 percent. that they have yet to commence dig ‘B's DBU for the quarter ended tl banking units, March 2023 has shown a revenue of snot suns 12°95, 2002Government & Politics The upgrade pitch India woos rating agencies _Nageswuran leading the charge ith V. Anantha Nageswaran, chief economic advisor to the Mogi government, lace ‘ng the charge, India is making a trong, pitch for a sovereign ratings upgrade ‘The government is hopeful of an upgrade after discussing various rating parameters, such as the budge, fiscal {targets and borrowings ‘Nageshwaran has. gone on record that a ratings upgrade will reduce the ‘cost of borrowing, “A change In credit rating from even “BBB. to "BBB. by ‘Moody's could reduce the cost of bor rowing by 100 bps” he said in Luc. know recently. Poltically, an upgrade will also help the government bute tress its credentials of economic man- agement during an election year. To start with, senior officials of the finance ministry have begun talks with, executives of Moody’ Investor Services, Moody's has rated the Indian econ- omy at ‘baa, the lowest investment arade. S&P and Fitch have rated India "BB In their interaction, the officials hhave highlighted the fact the outlook for India i stable though other emerg- {ng economies were rated higher than, India. Moody’, according to officals hhas acknowledged the positives of the Indian economy, but sai a rating action ‘won't be a knee-erk reaction. Officials point out thatthe Interactions are not intended to com- pare countries ratings and question the ‘methodology. Instead, it @ forum to explain the government’ assessment of the economy to help the rating agencies make thei assessments. The Modi governments stand is ‘that the Indian economy 1s estimated to grow 72 per cent in 2022-28. The ‘momentum has sustained, with the risks being more evenly balanced now than a few months before. Interestingly, this was the assessment of the CEA in May after the O4 GDP rose 61 per cent India is performing well, when com. pared to other emerging economies, and a few advanced economies as well, ‘who are battling inflation, he sai, Signs of growth Besides, CPI Inflation moderated to 4.25 per cent in May a25-month low, falling ‘well within the RBI tolerance band of 2-6 per cent. There are signs of growth in pri vate investment and capital formation and the development of Inc's digital public infrastructure he said. For 2023- 24, both the RBI andl the Finance Minis try have pegged growth at 65 per cent Apart from Moody's, India wil bat fora positive revision by S&P and Fitch too. Ff late, Nageswaran as been on panndia tous, meeting industry associations in Lucknow, Kolkata and ‘Chennai, regarding the growth pros: pects an! the sustained growth outlook for India. He expects that India’s 2022- 123 growth projection will be over 7.2 Per cent, when the final estimates firm lupin 2025.26, India will aim to stck to its fiscal deficit glide path, he said while speaking in Lucknow. The government hopes toachieve a fiscal deficit of 4.5 per ‘cent of the GDP by 2025-26, which isa key consieration as India pitehes for a higher rating ‘According to Nageswaran, there is no second opinion on achieving the fi ‘al deficit number and getting a better ‘ret rating” "This isnot a question of prestige but about putting more money In the hands of the people, as a better ‘reat rating would bring down interest rates," he added. ‘Observers point out that India’s pitch foran upgrade comesat atime when iis rated at the lowest by all the three credit rating agencies, Moody's ating for India 55 Baa’ with a table outlook, thsi the lowest rating of investment grade and states that India is at moderate credit risk itch rating for India is ‘BBB’ with ‘stable outlook, this puts India into a [good credit rating with love default risk ‘S&P Global Ratings rated India as BBB ‘with a stable outlook, same as Fich report, wilh Is considered as specula- tive investment grade, The development also marks a ‘change n approach from the days when. India called the credit rating a8 unfaie. ‘A ecent Economic Survey had charged the global credit rating agencies with prejudice against emerging economies Such as of India, added that, “There isa large academic literature that high- lights bias and subjectivity in sovereign ‘rect ratings, especially against coun- tiles with Tower ratings.” Indias come plain was that the rating agencies are Critical of developing countries such as India while giving a pass to countries like the US, which has not been respon: sible with ts money. esides, countries like Indonesia have ‘been rated higher than India, making the Modi government sceptical of the ‘methods used by the global rating agen- ‘les while assessment. However, it IS ‘now trying to convince the rating agen- ces to change their opinion through “discussion and persuasion, . suwe 12-25, 2002Government & Politics Pay disparity Big gap in top private, public sector salaries 1e debate over difference in | the chief executive's pay pack- ages. between public sector banks (PSB) and private sector banks thas flared up again, after it came t0 bbe known that Dinesh Khara, chait- ‘man, State Bank of India, which is India's largest bank, took home an annual salary of €37 lakh in 2022-23, fs against Sashidhar Jagdishan, CEO, HDEC Bank, who drew &6.51 crore in 2021-22, though he manages a bal- ance sheet less than half of SBI, where KKhara manages 255.17 lakh crore of assets as of March 2023) Successive governments have toyed with the idea of appointing protes- sionals from the private sector at top postions in PSUs, While the decision. fon appointing from the private sec. tor had been made in principle, the government has however dillydal- lied on pushing changes to the law required to constitute a pay package in line vith the private sector. So, lateral entries from the private sector into the government or PSUs are far and few between. ‘The report of Khara’s salary teige gered a debate on social media, While some argued that his compensation Js too low, considering the size of the Dank he heads, almost 18 times less than that of Jagdishan, others felt that the SBI chaleman’s job comes with other perks like a plush bunga- low in Mumbai, dedicated help, two cars with drivers, unlimited petzol, and so on. But industry sources across the board agree that the salary fig- ures of other private bank executives are indeed quite high, when compared to that ofthe SBI chief and othet PSB hheads. Also, the pay disparity between SB chiefs and private bank chiefs isn’t an issue that is limited to the banking Sector alone. This is true for compa les actos all other sectors too, Huge gap ‘The problem I that this lack of level- playing field could create a lack of incentive for professionals to have lon- ger stints with state-run banks and ‘ther companies. While the pay dis- parity is huge, PSUs and state-run banks are supposed to compete with private sector rivals with the same aggression. In 2020, a joke by the then SBI boss, Rajnish Kumar, had triggered 8a debate in India's banking circles. In ‘conference call with analysts, he was fsked if is bank would undertake a pay cut for employees. “If that hap- pens, Tl have to live on the road, 1 already get so les,” he said in jest ‘The quip tokd a thousand tales, As JEN, Gupta, founder, SES, a proxy adv sory firm, and former executive direc ton, Securities & Exchange Hoard of India (EBD, puts i, PSBs need to be ‘granted a level-playing field to com- pete with private banks. “Right nov, {hey are asked to ran a race with thelr arms and legs tied,” Gupta said. Some of the former bankers who have held top positions in PSBs point ‘ut that the low pay isa factor that acts, ‘asa tur off forthe top executives. In August 2016, Raghuram Rajan, for mer RBI governor, drew attention to the issue when he said salaries of top- level employees of the public sector, Including RBI, ace way short of global standards. “One of the problems, of ‘course, is that the public sector over- pays at the bottom but underpays at the top. Lalo feel underpaid,” Rajan had si Indeed, Its no secret that top exec: utives in PSUs of PSBs are paid af ton of what their private sector peers ‘earn. The last authoritative study on the pay disparity was the 2018 Execu- tive & Board Remuneration Report by IMA India, which found that private sector heads earned 22 times more ‘on an average than their public sector ‘counterparts. Executive chalrmen/ CMDs in the private sector drew a median salary ‘of &79 crove in 2017-18, as compared to 235.3 lakh median pay earned by their equivalents in the public see tor. While @ quarter of private sector ‘executive chairmen/ CMDs earned ‘over 215 crore, CEOS took home &5.5 ‘rore at the median, with 27 per cent ‘of them earning more than 310 erore. ‘A median is the mid-point of any distribution. “The survey said that big companies typically pay more than the smaller ‘ones do, Companies with revenues ‘of over £50,000 crore pay their CEOs 2124 crore at the median, as com: pared to %4.1-5.6 crore in the lower Fevenue bands. Similarly, executive pay jumps when net profit crosses the 22,500 crore mark indicating that is strongly correlated with a company’s revenue and net profit Since then, ‘the gap has just widened. + une 12:25, 2028,Government & Politics Calibrating on UCC Govt preparing the ground 1¢ three contentious electoral | promises which the BIP had made fn 2014 and 2019 were the crap- pingof Article 37Din Jammu & Kashmir, ‘onstruction of Ram temple in Ayodhya and a Uniform Civil Code, With Article '370having been annulled, a temple well ‘nits couse, the UCC remains among the last unfulfilled items central to the Sangh Parivar agenda, ‘With the Law Commission recently seeking opinion of the public and rell- gious bodies on a UCC, there is row- ng speculation thatthe BJP may well be preparing the ground for implementing ‘his electoral promise. Suddenly, theres a fury of activity on this score. So, will, ‘the BJP finally bite the bullet? No one i. sure Dutt dos help the BJP in nurturing the impression that the Modi govern ‘ment is serious about bringing it before the 2024 polls. However, the party is, ‘well aware ofthe obstacles and, ill ot rush anything through. “The BJP has got signals from the ‘Biju Janata Dal (BD) that it will back the UCC, with the party asking the gov- ‘ernment in Parliament to begin the pro- ‘ess over it The BJD's support may just bbe enough for the BJP to getts numbers In order fora Bil So, while the BJP is confident that whenever a bill on UCC Is introduced, Jn Parliament, its passage will not be an issue, iis waiting forthe Law Com= mmission” to submit its report before formally taking a call. There isalso con- fidence in government's ranks about the report going in thelr favour, partic: tlaly after the Law Commission took a stand aligned to the bP’ views on sed tion recently. Simultaneously, a number of state B)P governments ~ Goa, Guje rat, Uttarakland, Madhya Pradesh and Assam ~ have already begun efforts to bring ina UCC in theit respective states. Ranjana Desai panel report ‘The government could walk the mide de path by bringing in a bill that ‘makes concessions for inxigenous com> ‘munities and thelr practices and cus toms, removed in shape and form from ‘what has been talked about in the pub- Tic domain, A clue of this les in the Ranjana Desatsled expert committee appointed by the Uttarakhand govern ‘ment for a UCC, which recently Was in New Delhi to hold a meeting with top offices in the Central government. According to sources, the report of the Desai panel may be a model fora UCC. Bill atthe national level. And the com- mittee’ procties, in ts words ate gens der equality, rasing the marriageable age of women to 21, equal rights for daughters in ancestral properties, legal rights for LGBTQ. couples and popula. tion control, However, there are unlikely to be any precipitate moves from the government ‘on a UCC till the various G20 meetings ‘arcoverand the G20 surat takes place in September, as the Mod government ‘will not want any controversy over its moment on the global stage. After that, the last chance for the government 16 initiate the legislative process on a UOC before the 2024 Lok Sabha polls will bbe the Winter Session of Patiament. ‘But, by then, elections to the key heart land states of Madhya Pradesh, Rajast- han and Chhattisgarh will be near, and the significant tribal populations there ‘are unlikely to weleome any UCC that infringes on ther traditions. In Mizoram, another state that will 450 to polls in a few months, the state asserbly earlier this year passed una mous resolution opposing any move to implement a UCC. The resolution said ‘any steps taken oF proposed tobe taken for the enactment of @ UCC in India’ ‘wil terminate religious and social prac- tices, cultures and traditions of minor- ities, In view of the ethnic untest in Manipur, the government will not risk any move that could further ste tbal fears in the Northeast. Tn 2016, the Rashiriya Adivasi Ekta Parishad, group that claims to work for adivas! Interests and to represent 110 million teibals, had-moved the Supreme Court seeking protection fof their customs and religious prac. tices, Including thelr right to practise polygamy and polyandry, all of which ‘would be on a UCCs agenda, The aali- wwsis have their on personal laws ‘and do not fall in the estegory of Hin- ‘dus, as they worship nature instead of Idols and perform burial of the dead, the Parishad had said. It had submit ‘ted that the marriage and death cere: monies of tubals were different from Hindu customs as well, and feared ‘these might also see a ban, esides the fear of alienating the tribals and of backlash, the BJP. ‘will also have in mind the wishes of friendly. parties and potential. allies = whieh itis ewooing after the Kar- nataka results, to shore up numbers ahead of the 2024 polls. : une 12:25, 2028,Column Time to intervene India should help find a way out of the Ukrainian quagmire ff more than 6.3 per cent in 2023, compared swith about § per cent for China, 1 per cent for the US and 0 per cent for most of the European Union, But Prime Minister Narendra Modi still thas a rocky pill climb to secure gains for Indian business ‘The chief problems stem from hurdles in attracting foreign capital to drive his Make in India campaign because the availability of money is tightening almost everywhere. That’s because central banks in the US and EU continue to raise Interest rates in a desperate fight against infla- tion, Some Wall Steet experts who navigated the 2008-09 global financial crisis, described the cur tent environment as ‘one of the most complex in ‘economic history’. For example, America’s Fed has raised its bench ‘mark rate 10 times in the past 15 months, caus ing an explosion in the dollar debt service burden for every country, including India, Three major US regional bank failures and the government's own borrowing needs of atleast $1 tillion thisyear have caused America’s global banks to become more prudent in thelr lending decisions. That cold fur ther squeeze capital lending around the world for large industeal andl infrastructure projects, The persistence of inflation and excessive debt in the rich Western nations are fuelled largely by the massive financing needs and deep disruptions of the Ukraine war. They are worsening by the day, despite hopeful statements from Kyiv and Wash: ington that Russia's military is on the back foot and face: failure. Long-awaited Ukrainian coun- {eroffensive operations have begun, but have yet not given cause for optimism, ‘The Ukraine war looks remote from Delhi. But iis central to the realisation of Mod's ambitions for a ‘self-reliant India’ that delivers economic uplift 10 people and wins partnership with G-7, the club of the world’s seven richest democracies, For India, the time has come to actively help to find a way out ofthe Ukrainian quagmire, increas ingly described as “an unveinnable war’ It would bbe in India’s economic seltinterest now for Modi to take a leadership role in finding a pathway to peace between the West and Russa, I= economy is Likely to grow at a steady clip 8 formula for peace to avold more human sutfer ing and the further destruction of entre citiesand regions in Ukraine. ‘The process must start now, before the war becomes entrenched as a protracted unsolvable war of attrition and the warring sides become s0 steeped in hate that only massive destruction will push them to negotiations. Horror was on full display a few days ago, fol lowing destruction of the Kakhovka dam's water reservoir in Ukraine, which UN chief Antonio puterres described a6 ‘2 monumental humanitar- Jan, economic and ecological catastrophe’ It the war does become a long-lasting slow burn, “Modi could not hope to succeed in making the giant economic strides needed to secure a moderately prosperous future forall Indians and turn India into an influential economic giant within a decade. This is presaged by the World Bank report con- taining the above-mentioned growth forecasts, Which Its chief economist described as ‘anothet gloomy report’, because the world economy may Rs eee Se eae 7 reren ce ened eect aa Pern eee tne ng be headed towards a shatp slowdown, “By the end fof next year, a third of the developing world will not meet the per-capita income level that they had atthe end of 2019," he sai. The only etfective way for Modi to reap huge dividends for Indians may be to plunge into the complex struggle for peace. The Lowy Institute's Asia Power Index 2023 forecasts India’s gross domestic product (GDP) at $179 trillion in 2030 at purchasing power parity (PPP), making it the World's third largest up from fith. This is worth achieving. It would also open excellent opportuni- ties for Indian companies to take part in Ukraine's lucrative reconstruction as preferred partners of the EU and US, ‘Modis state visit to Biden on 22 June may be Teawerba ‘At the heart of global business risk is the wors- the best opportunity to overtly offer his help. areainwsfn enting enmity between the US-led West and Rus- Washington and all its Western allies have staked sammissrdunce sia, The war is also causing a deepening rift their prestige on ensuring that Moscow does not" intaeanwr” between. Washington and Beijing. Both. trends defeat Kyiv. But none sees a way to unconditional wave will adversely affect Indian business unless Delhi victory over Russia so, the only choice is finding stsymatom overcomes reluctance to intervene. e suns 12-25, 2002Panju’s Page By Panju Gangult RUPEE IS NOT WEAK BUT THE DOLLAR IS STRONG. THERE IS NO UNEMPLOYMENT BUT THE NUMBER OF GRADUATES HAS INCREASED. / THE WORLD NEEDS TO MAKE SURE THAT EVERYONE- \WE WANT TO GROW FASTER, IF INDIA HAS TO GROW AND NOT JUST PEOPLE WHO ARE WELL-OFF-BENEFITS 8% GDP, WHICH IS WHAT OUR ASPIRATION IS IF YOU FROM ARTIFICIAL INTELLIGENCE, GOVERNMENT AND WANT TO GROW TO A $5 TRILLION. AND THEN TO. PHILANTHROPHY WILL NEED TO PLAY AMAJOR ROLEIN _IOTRILLION, REALLY IN REAL TERMS. THEN CREDIT ENSURING THAT IT REDUCES INEQUALITY AND DOESN'T MUST GROW AT APPROXIMATELY 18 TO 20 8. - CONTRIBUTE TO TT, aL cares AJAY PIRAMAL Microsoft Founder Charman Piramal Group ‘PhilanthropistCover Feature usINEss tN ¢ THE MAGAZINE OF THE ConFORATE WoRLD IBC in severe distress, with poor results Ly eo FF ALOK ease ESLSTEEL LIMITED INOUSTAIES LimreD. JET AIRWAYS Ni | AIRCEL > Wenig SS Gti xt LAVASA on ncaaein X| JP INFRA vipDEocon Is IBC earning a dubious distinction? The much- m* quarts, wile cs for which touted umbrella legislation for insolvency iene can is heading towards becoming a law that is a Bae ae ence e a : : Jy ade compte exon Incapable of producing results pes ih ete 9. x Bi wa aDegeety ancl Si Rkpy "Ca Athen ed ofp 0 sont Zils Sapam fay clan sme sou ieee tie a dpe ese op ante nl scnmy vat ngs Newtson Ge crs ar ed janis Howdy Anew Gh doing for lerthu coe tee ht ed ot inne pn prune anergy pete an 100 ce) weed theca a usual fre Guns ir Sys Hwee nF, temas tc aces “Dr pas. IB tf eh 3.00 tka ee ce ci til is Sey ener 9 cated uth BE compte 08 the Raton Congr Law tara Cesena andony et Si count Pet Ll Pt Rot ing mt aoe areca hes eg thecal haan ea treaty the Capa acm whch te nay sie time of 5 Mh ee es Terre st sot am ele and 27ame 3 moe meng onto te age suns 12-95, 2008Cover Feature ‘options to salvage We all know, profit and loss are part and parcel of running any busines fnterprise. If businesses reap profit oF even a break-even, things are fine, but if losses mount beyond thei ability to pay supplies, employees, taxes and pay back Joans then such enterprises turn into distressed assets and their borrowings turn into NPAS For decades following independence, ‘the route to resolution for distressed businesses facing operational or finan- cial stress resting in cashflow Issues anda lack of liguidity to repay debts and suppliers, was extremely dificult, reslt- ‘ng in. challenges for both busineses and creditors seeking an amiable ext. "The term ‘ick companies’ referred to those companies that were unable to meet thelr financial obligations and were on the verge of closure Potentially sick companies were classified as ‘indus ‘wally sick companies’ and ‘financially sick companies” There existed a way foran amicable exit, but there was ase ‘ous gap in conceptuaising ‘recovery t0 revival, which made collections diff cult” says Akshat Khetan, Founder, AU Corporate Advisory and Lega Services There was a highly fragmented legal framework and multiple ineffective executive and judicial branches of the government for resolution, and cases remained pending for years in debt recovery tbunals (DRT, the company law board, and the Boaed for Industrial and Financial Reconstruction (BFR) famously called the graveyard of compa- nies and the civil cours The laws governing insolvency and reorganisation of companies had Several lacunas and were difficult t0 enforce under the provisions of wind- Ing-up unde the companies act. Some fof those which are now redundant weee the Securitisation and Reconstruction fof Financial Asets and Enforcement of Security Imeest Act, 2002, GARFAESM, the Recovery of Debts Due to Banks and. Financial Insitutions Act, 1993, (RDD- BED, ec in the preIBC era, recoveries were enforced. through the RDDBFI Act land SARFAESI Act. Under both acts the recovery: mechanism sas handled ‘rough DRT tribunals. Under SARAFESL the recovery was proposed to be done through the mortgaged assets whereas under the RDDBE Act recovery. was ‘The most important drawback of IBC is that the core purpose Denner en rete ren ee ee eect een etry Penge een rr Visewas Paanse Chief mentor at NPA Consultant lexpscte from mortgaged assets as well a5 assets belonging to borrowers and guarantors, Tedious process “its true toa large extent, Though the RBI tried to formulate schemes to revive defaulting companies, most of them There asa lack properinsolvency la, and the process of winding up compa: nies was tedious, Most of the defaulting companies would go for a winding-up petition, Secured creditors would elther fenforce thele securities unde the SAR: FAESI Act or relinguish their securities and await payment after the liguida tion ofthe company’s ase, along with alist of other creditors,” explains Anita Gandhi, Whole Time Director, Head fof Institutional Business, Aeihant Cap- ital Markets Ltd. Gandhi says that “the major drawback of the SARFAESI Act, 2002, was that there were no rights available to unsecured crestor, The major thrust was. persuasion as was defined In the Code of Conduct ff each bank, Of Tate, banks started employing recovery agents who were pall a commission on the bas of the recovery amount, The agent adopted heal fal non-cthia aans of mc toy and watny unten ices place” points out Paanse. “Today, this Practice stil prevalent to some extent Bit ti to contro by suing var inns guidelines form tne tte on The deployment of recovery agents nti the Ste Co-pertive Act, the recovery process Was defined orc: ‘operative bunks nares states go coed by thet repudiate Ls. ‘The fact remains thatthe banks ae sti focused on recovery by salvaging the fees and ae aot thing setbuly about recovery through real ad Feanse Predominant concepts lie ie vale of money ad maximise tim fast valu’ ere tally ignored” sas Khetan ‘Als, there was oe wars mech anism ‘avaliable for the discharge of fexmidabl abit except forthe rea bitaton scenes that nee propounded and propesd by companies unr th Aegis of SICA through the BIFR route These fora were also governed under archived laws which had not crobved ‘ver the decay ever instil ae economic activity grew at fat pace pot the 192 Ibeaisron. ‘With an objective to change all his, in 2016 the Mod government intro duced the Insolvency and Bankupty Cove, 2016 Cala which erated Consliated framework that governed iraclvency and bunkrupty process fe compuiespartrcip de a well 2 for individuals. Most ofthe old le Slaton and the leslatve odtes were scrapped The TBC Code was introduced to covahanl the eoxponte dates nao Iiion regime In India and consol date previously avalable laws (0 create {dims bound foechanian wath ce itocin-contol model as opposed tothe ‘munity, creditors, and other stakehol fers as a result of enterprise fare are distributed fairy In the US, although individual states hhave laws that govern the relationship between debtors and their creditors, bankruptcy islargely governed by federal law and the United States Constitution {Aiticle 1, Section 8, Clause 4) autho: rlzes Congress to enact “uniform Laws ‘on the subject of Bankruptcies through ‘out the United States” and the Con ‘ess has exercised this authority several {Umes since 1801, enacting new laws and ‘amending them from time to time. The main focus of US insolvency Law has Deen to provide maximum return to ‘rectors (anc, if possible, equity hokd- 13) of the debtor and, in that context, to reorganise rather than likuidate bust ness debtors to preserve employment and to realise the ‘going concern sur his’ of reorganisation value over liqut dation value suns 12-25, 2002Cover Feature Even China has in recent times made resolving insolvency easier by providing rules for post commence iment credit priority and increasing the participation of creditors in insol- vveney proceedings, This reform applies to both Beijing and Shanghai While countries around the world are making resolving insolvency easier by promoting reorganization proceed ings India also made resolving insol- veney more difficult by not allowing dissenting creditors to receive as much under reorganization as they would receive in liquidation. Also, the promoters and owners are not allowed to bid, Jet Airways Isa clas sic example of what is wrong. Compare this with the US, where airines wings are not clipped; bankruptcy cases are resolved ina fil ‘New cases galore So naturally the big question in ever one's mia i the implementation of TBC Rieti distros eto pendency, 1st going the way of the normal civil courts where eases ae pending for a? Most experts are optimistic they say if the gaps are plugged then it will make a significant impact in the prope impe- mentation ofthis leit, According to Varghese Thomas “These challenges will have an impact on recovery ation Snd the curent statistics speak for themselves. At the same time, hat the recovery numbers do not show Is the Improvement in debor behaviour as 3 result ofthe threat of IBC proceedings” Ta a reply to a question in the Lok sobha on 1 March 2023, Minister of State for Corporate Afalrs Rao Inderit Singh said that Januaryend this yer ‘more than 21,200 cases were pending before NCIT- Thisisablg number by any standards and atthe rate at which new Cases are being referred under IBC, he pendency is only bound oinress. “The pile-up of large cases Is the real challenge that will have tobe tackled ‘we have to save it from going the way fof ur eit courts. As its India’s coe porate debt repayment cate abysmally lew, and even after prolonged rox ry proceedings preceence has shown that Tenders have not recovered mace thana quarter of their loans recovers fall sharply a8 delays mount. There are also cases where prometer debiors who ‘owe ta lot of creo try to game the whole IBC process, thereby causing fur ther and inordinate delays, thereby fus- trating any attempts ata fair resolution. (On the other hand, while financial cre tors like banks and NBFCS would ty t© settle for what they would consider re sonable recovery, operational creditors — ‘many of them service providers ~are let ‘with no choice and are thereby unhappy ‘with the approved rsotion, ‘According to Santosh Pooja, partner at Bhatia and Poojari Associates, in thelr experience, smaller operational cred {ors often have very litte representation {nthe CoC. Smaller players lik provider for services have to accept whatever the majority accepts, and do not have the financial capacity to then go into Iii gatlon. “The government fas to think bout these issues including the infra Structure issues and come up with some solutions," headded, “Take for Instance the case in. NCLT filed by a group of home buyers of Navi ‘Mumbai-based Monarch Developers a8 an intervention application against the builder in 2019, Close to 1,500 under construction flats were sold by the devel. fopers spread across Navi Mumbai and the buyers who saw tle hope of getting possession oftheir flats, ied an applica ton at the cour seeking participation in the case filed by Capri Global under the IC. Talking about the ease neo the Nat foviners sai "It has been so many years and our case does not come on board at all this despite the fact that a resolution plan has been submitted nearly 2 years go, ifs so frustrating because we were hopeful that as envisaged under the IBC, ve thought the interests of homebuyers will be protected Indeed, as we check the cave status, we see that it has been adjourned mostly die to ‘paucity of time ‘matter Is not reached This Is not what the code had envisaged forall types of creditors, but the fact is thousands of such cases linger on for such reasons, {and this should be a cause fr worry. So, where isthe ISC heading? “Since t Js designed more on a global framework, Keeping creditors and shareholders Interests in mind, sticking to timelines, and inducting more professionals into this process will make it more fruitful,” says Gandhi “Presently IBCisbeing halfway imple mente as it covers only the corporate entities and not partnership firms. Pro Pritary concerns and partnership Bars are not covered under thelr umbrella, ‘which mainly belong to the MSME sec tor. The Indian economy is dominated by the MSME sector and iti the back: ‘bone of the Indian economy’ About 63 iaion such nits have been estimated in the economy. If such a huge mass is deprived of benefits of TBC, how ean we ‘expect IBC to improve the economy?” ‘questions Paanse Right now, only under corporate ei- ‘sibility, the “number of applications fled are more than the number of cases ‘dosed. The present condition Is that after filing application under IBC it takes, bout 8-12 months to reach the admis: Sion stage. If this foodgate of partner ships and proprietary concerns open, the implementation of IBC will col lapse. Rather, it is already very difficult for the NCLT courts in the country to ‘cope up with existing cases, “Therefore, lunless there Isa paradigm shift on the assumptions of the recovery mechanism IOC has a bleak future" say Paanse who feels that killing the business and entre- preneurship is not the real solution to reduce NPA, Every deserving NPA unit should be treated like a living being and Should be nurtured and given all the necessary treatment to protect, to nour ‘Sh, to revive and to survive itsel “Entrepreneurial skills should also bbe protected and nourished, There are lot of schemes for creating new business Dut there is barely any effort to protect, sick and struggling units. There slack of ‘counselling and mentoring of units by the lenders. In the incipient stage of the ines, the banker should be able to gauge the problem and offerte solution at that instance and thereafter from time to time tw avoid probable NPAS” sums up Paanse. Finally, it appears that the gov femment Is also Indeed work, and this can be extrapolated from a ‘state ment from none other than the Union Finance Minister, Nirmala Sitharaman ‘who amid concerns in cetain quarters ‘over the pace of the insolvency resol ‘tion process said afew months ago, that ‘one can neither afford to have the legis: Tation “lose its sheen” nor let eaey stress warnings go unnoticed. This is ertical statement, but ifthe government docs not wake up to the current reality, the situation can quickly spiral out of con- trol and become ireparable, 5 suns 12-25, 2002Column Trust is a must What sustains a brand is one’s faith in it. And that belief can work wonders en you buy fom an unorgaied ma Weert nme ut sent te quate ene tty andthe genulnene tout the pod of sev that yo have Sought espe In Your ‘Sind However whan jou tor bated poder (iver eek Reoee eer the ming; cau the brand sae an the com iearae Seana tinea MERIC county and epoany and tus Bing outa chen fo tags ava rom Gnoraised ond unbanded fou and ree to bande) an rp Sods aleve Bocas fe tim oboe Etter bctanerencttlalecantes bathe thaand hopes tofnd tin the adden ‘Whore nonmal ancl od tensor SPS ay, tel hepa lines bua ofthe mar rec that contin gaa to buy hom thr sha ey ave Banded 3, tec str ‘is meron consumes av ens ath tnranded products nd series an ny epone thar stin how banded pokes and evs tags extent Tas noe ta te pon Silty and sccoumtbity of the rand owe Ianlatre service prod’ getup bt {ity bose census bay ed pros td serie om ther company, hoping tat ity can tt th fern of ay ua tirand the promis thar hae oon ma. ans that companies wih a pling tht Brands ow inthe mana fr etomes who tre consuing tov nde fay sed Krcieamelbt te peal soe diescion Dra wth va aati rh Hey er end, ela Conse stostwothy and wil at be deal srth i eft, a understanding es pce Between the consumes and and hich sul Sern er Wy eco ma Wa Iceeand stan wh ramet ‘Thee av unpinen insane wherein brands have been ropes, red appreited and bean tpl to ov dechder ad arated! yay BeShsthay ano bak the consumer sk ecg eeeen epoca, rao ep buying and oeaning ta et, Scns ey a use hatte a an Soe ‘that twill not let them down, And the companies made sure that the consumers were given what twas promised to them, ‘These are pure true trusted brands. (On the other hand, brands which break con- sumers trust, do not last long. Consumers are able t0 make out and slowly move away from ‘those brands. Further, the consumers use a strong weapon, that every consumer has, which is ‘word of mouth. If Its @ trusted brand which has not let them down, they will spread a good word. But, sf there {oss of trust, then they will spread a bad word, which will spoil the Image and the credibility of the ‘til then’ trustworthy brand, bringing down the number of consumers of It and thereby bring: ‘ng down its sales. It may even make it shut shop. Therefore, it i important that brand trust, which is a must, should be built sincerely and in ene Once eee mislead them or over promis Coe eer eee cone) enon rates tart distrusting that particular brand Co a dedicated true manner. You need to define the expectations of the consumers in terms of what is being promised to them, That means expecta- tions must be set. Then you need to deliver on those promises. That means expectations must be ‘met. When that happens, you become a trustwor thy brand and consumers respect you and become loyal to you across generations, ‘Consumers do not like brands which mis- lead them or over promise, Consumers are sim- ple people. They do not want to be taken for a Fide, because they will then start distrusting that particular brand offering. Hence itis critical and Almost mandatory for any brand to make sure that It does everything possible to ensure that brand trusts. mast suwe 12-25, 2002