FROM THE EDITOR
http://www.businesstoday.in
Rebuilding
Adani Group
I
f there is one quality about Gautam Adani that those who know
him agree on, it is that he is a fighter. The 61-year-old Adani’s
ability to take adversity head-on has been in ample evidence over
the past few months. Ever since a report in January by US-based
short-seller Hindenburg Research alleged stock manipulation and other
wrongdoings, knocking $100 billion off the group’s market capitalisation,
Adani has been busy staving off multiple problems. When Business Today
did a cover, ‘Adani Under Attack’, in its March 5, 2023 issue, it seemed the
`2.6-lakh crore Adani Group would find it near impossible to get itself
out of the rut as its stocks continued to get hammered and foreign banks
and rating agencies came up with negative views on it. Our March cover
story, however, said that while Adani faced the biggest crisis of his career,
the group’s businesses like ports and airports generated predictable cash
flows and had serious assets on the ground. What was required was a
calibrated approach to growth and a systematic deleveraging exercise.
Cut to August 2023, and Adani appears to be succeeding in getting
his beleaguered group out of the crisis. While a
Securities and Exchange Board of India probe
into the allegations is ongoing, the group is
working overtime to ensure it balances its
growth ambitions with its capex plans, even as
it deleverages key companies and cleans up their
balance sheets. It has reduced net debt in Adani
Enterprises, Adani Power and Ambuja Cement,
and redeemed promoter pledges. Though it has
pared its growth plans in some cases, the ambition
of having a massive infrastructure play riding on
the India opportunity appears to be intact. Group
CFO Jugeshinder Singh tells Anand Adhikari who
wrote the cover story in this issue: “We invest for an intergenerational
period, upwards of 30 years. We have not even completed the foundation
of our growth.” While strategic course corrections are being made, the
group’s long-term vision remains unchanged.
Elsewhere in this issue, Binu Paul gets you the story on the big shift
taking place in the ride-hailing industry, till recently dominated by Ola
and Uber. Ever since the pandemic dealt a body blow to the business, these
players have shifted to a profitability-driven strategy, which has led to the
slashing of driver incentives while fuel costs and commissions caused a hit
for the drivers, leading many to leave the platforms. Alongside, sensing an
opportunity, new players like the all-electric BluSmart, inDrive and Drife
have entered the sector, giving customers affordable alternatives. This
apart, Surabhi analyses the latest BT-C Fore Business Confidence Survey
numbers, where the Business Confidence Index has hit a five-quarter
high. However, the survey finds enough reason for caution despite the
optimism as muted global growth remains a concern.
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 PHOTOGRAPHIK

CONTENTS
12
Curried
The recent spike in
August 20, 2023 | Volume 32 | Number 17 the prices of certain
vegetables and spices
has shaken house-
holds’ kitchen budgets

14 POINT

Capital Charge
Capital goods players
have emerged as the
COVER STORY shining stars of the
equity market in the

38 18
recent past

THE BUZZ

Guarded
Optimism
The BT-C Fore
Business Confidence
Index is at a five-
quarter high

6|

20 THE BUZZ

Division Boost
By demerging its
hotels business, ITC
hopes to boost its
capital allocation and
profitability

THE MAKING OF
ADANI 2.0
PHOTO BY BANDEEP SINGH

PUTTING THE HINDENBURG FALLOUT BEHIND,

THE `2.62 LAKH CRORE ADANI GROUP IS REBUILDING
ITSELF BRICK BY BRICK 52 START-UPS

+Q&A WITH RAJIV JAIN, CHAIRMAN AND CIO, GQG PARTNERS 46 Rush Hour
The ride-hailing
industry is seeing a
churn as Uber and
COVER BY BANDEEP SINGH Ola pivot to a profit-
first approach

Business Today 20 August 2023

 102
MONEY TODAY

Travel Abroad
Tax-free
The 20 per cent tax on
foreign remittance has
caused concern. These
methods can reduce the
THE INTERVIEW 60 TECH 66 hit on your foreign trip

‘It is in India’s own interest Cloud Under Fire

to keep the data flows open’ Cloud adoption has made businesses
Nick Clegg, President of Global Affairs more efficient, but it has also allowed
at Meta, talks about the importance of bad actors to exploit vulnerabilities in
AI, regulation and more these systems for financial gain

106
THE GOOD LIFE:
TRENDS

Dial H for
Healthy Food
These meal subscription
SPACE POLICY 74 PHARMA 82 services make sure
you eat well three
times a day
Ready for Lift-off Relief Rally
Despite the recent announcement of a Sales of painkillers have seen double-
new enabling policy, the Indian space- digit growth over the past two years
tech ecosystem may require further after stagnating during Covid-19. Will
interventions to conquer new frontiers the strong run continue?

110
TECH TODAY

Pocket Pilot
When traversing
unknown roads, Google
ENTERTAINMENT 88 MARKETS 94 Maps is often your best
friend. But there are
alternatives
Switching Channels Size Does Matter
Tata Play is counting on Binge to Even as small-cap MF schemes see
bolster its falling numbers. But it’ll be huge inflows with investors betting
a while before the OTT aggregation big, some fund managers are wary of
platform can stop it from bleeding investing more in small-cap stocks

An Feature
From time to time, you will see pages titled “Focus”, “An Impact Feature”, or “Advertorial” in Business Today.
For the latest updates
These are no different from an advertisement and the magazine’s editorial staff is not involved in their and analysis, log on to
creation in any way. businesstoday.in

Business Today 20 August 2023

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12 |

CURRIED
THE RECENT SPIKE IN THE PRICES OF CERTAIN
Photo by GETTY IMAGES; Text by RAHUL OBEROI
Customers buy tomatoes at a weekly
VEGETABLES AND SPICES HAS SHAKEN
market in Hyderabad KITCHEN BUDGETS ACROSS HOUSEHOLDS.
DATA AS OF JULY 27, 2023; SOURCE CMIE ECONOMIC OUTLOOK
Business Today HERE’S
26 December A LOOK AT WHAT COSTS HOW MUCH
2021
 | 13

4.49
PER CENT
375
PER CENT
193
PER CENT
Food inflation in June 2023, The surge in the retail price Increase in garlic prices on a
compared with less than 3 of tomatoes to `122 per kg in year-to-date (YTD) basis to `8,499
per cent in May, thanks to the 2023. The increase was 250 per quintal; ginger prices also
uneven march of the monsoon per Business
cent from a year
Today ago 2021
26 December jumped 188 per cent YTD
 I N T
P O
H E
T

I
C A P T A L
C HA R G E

Capital goods players have emerged as the shining stars of the

equity market in the recent past. Thanks to the government’s
emphasis on infrastructure development, these players have seen
tremendous growth in their order books. The subsequent softening
in interest rates after the pandemic buoyed their balance sheets as
well. Analysts believe order books will remain healthy in the run-up
to the general elections, and expect this to be reflected in the firms’
bottom lines. A look at the numbers:

By RAHUL OBEROI and PRINCE TYAGI

Graphics by RAJ VERMA

Good Going
THE BSE CAPITAL GOODS INDEX CLIMBED 48 PER CENT IN THE PAST
YEAR COMPARED TO THE BSE SENSEX’S 23 PER CENT GAIN

250 BSE Capital Goods BSE Sensex 236

200

150 184
100

50

0
July 18, July 18, July 18, July 18, July 18, July 18,
2018 2019 2020 2021 2022 2023
Data has been indexed to 100; Source ACE Equity
 Doubling Down Weighty Matters
THE SHARE OF CAPITAL EXPENDITURE IN THE L&T CONTRIBUTED THE MOST TO THE TOTAL ORDER
UNION BUDGET HAS ALMOST DOUBLED IN THE BOOK OF CAPITAL GOODS PLAYERS IN FY23
PAST 10 YEARS
FY22 FY23
Budget expenditure (LHS) Capex (LHS)
4,50,000
Capex share in total Budget (RHS)

(Order book in ` crore)

4,00,000
50 25
3,50,000
45
3,00,000
40 20
(In ` lakh crore)

2,50,000

(In per cent)

35
2,00,000
30 15
1,50,000
25
1,00,000
20 10
50,000
15
0

Larsen &

Bharat

Bharat

Bharat
Toubro

Hindustan
Aeronautics

Heavy
Electricals

Electronics

Forge
10 5
5
0 0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23* FY24#
*Revised Estimate; #Budget Estimate (BE) Note: Siemens Ltd has not been considered as its data for FY23 is
Source: CMIE Economic Outlook not available Source: Annual reports and company results

Top Heavy Pillars of Profit

FOR THE SECOND YEAR IN A ROW, THE TOP LINE OF THE CONSOLIDATED PROFIT OF CAPITAL GOODS
LISTED CAPITAL GOODS PLAYERS IN FY23 REMAINED COMPANIES EXCEEDED `30,000 CRORE IN FY23, THE
ABOVE PRE-COVID-19 LEVELS FIRST TIME IN FIVE YEARS
Gross sales (LHS) YoY change (RHS) Net profit (LHS) YoY change (RHS)
4.0 25 40,000 50
3.5 20 35,000 40
3.0 30,000 30
(In ` lakh crore)

15
(In ` crore)

(In per cent)

(In per cent)

2.5 25,000 20
10
2.0 20,000 10
5
1.5 15,000 0
1.0 0 10,000 -10
0.5 -5 5,000 -20
0.0 -10 0 -30.
FY19 FY20 FY21 FY22 FY23 FY19 FY20 FY21 FY22 FY23
Consolidated figures; companies that are currently a part of the Consolidated figures; firms that are currently part of the BSE
BSE Capital Goods index have been considered for historical Capital Goods index are considered for historical calculations;
calculations; Source: ACE Equity Source: ACE Equity

Growing Strength THE ORDER BOOK OF CAPITAL GOODS

PROFITS OF CAPITAL GOODS COMPANIES HAVE
IMPROVED COMPARED TO THE INTEREST OUTGO
Interest burden (LHS) Profit-to-interest ratio (RHS)
2.5
times
FIRMS AGAINST TRAILING 12 MONTHS’
SALES, WHICH GIVES STRONG REVENUE
VISIBILITY GOING AHEAD, ACCORDING
TO IIFL RESEARCH
20,000 3.0
18,000

3
16,000 2.5 SUZLON ENERGY, HINDUSTAN
14,000 2.0 AERONAUTICS AND CG POWER—THAT
(In ` crore)

(In times)

12,000 ARE PART OF THE BSE CAPITAL GOODS

10,000 1.5 companies INDEX—HAVE SURGED MORE THAN 100
8,000 PER CENT IN THE PAST YEAR
6,000 1.0
4,000 0.5

45
2,000
EXPECTED GROWTH RATE OF STATE
0 0
FY19 FY20 FY21 FY22 FY23 CAPEX IN FY24 COMPARED TO 14.8
PER CENT IN FY23, ACCORDING TO
Note: Rising profit-to-interest ratio indicates increasing capability
of these firms to service their debt; consolidated figures; compa-
per cent NUVAMA RESEARCH
nies that are currently a part of the BSE Capital Goods index have
been considered for historical calculations; Source: ACE Equity
 THE BUZZ

ECONOMY tic economy, however, may still do better

than anticipated if the capital expenditure
of the centre and states remain on track and

GUARDED inflationary pressures ease to allow domes-

tic demand to stay robust.
Easing retail inflation—despite the re-
cent spurt in vegetable prices—at 4.81 per

OPTIMISM
The BT-C Fore Business Confidence Index
cent in June, has raised expectations of im-
proved consumption demand as real wages
rise. Besides, the Reserve Bank of India
(RBI), too, may opt for a prolonged pause
on rate hikes. Additionally, GST collections
is at a five-quarter high. The economy may remained robust at over `1.65 lakh crore in
do better than expected in FY24, but muted July, while industrial output as measured
global growth is a concern by the index of industrial production was at
a three-month high of 5.2 per cent in May.
BY SURABHI Businesses are turning a tad more opti-
mistic because of this sustained momen-
X INDIA REPORTED higher-than-expected GDP growth of 7.2 per tum in economic activity, as reflected in
cent in FY23. The International Monetary Fund too has upgraded the BT-C
T Fore Business Confidence Survey
India’s GDP growth forecast for FY24 to 6.1 per cent from 5.9 per (of 500 CEOs and CFOs) for the April-June
18 | cent earlier. But if you thought that the economy could look forward period. The Business Confidence Index
to sunny weather, curb your enthusiasm. Economic growth may re- (BCI) touched a five-quarter high of 52.7
main subdued this fiscal thanks to global storm clouds. The domes- in the June quarter. Though this was a mar-

MOOD IMPROVES, BUT JUST A NOTCH

Business confidence is at a five-quarter high... BCI improves across industry types after
60 falling for two successive quarters
ON A SCALE OF 100

53.7
53.2

52.9

55 55
52.4

52.1

51.9
51.9

54
51.6
51.8

51.4

50 53
50.3

45.5 52
52.7
49.2

45 51
50
40 49
48
JAN-MAR APR-JUN 47
2021 2023 46
JUL-SEP OCT-DEC JAN-MAR APR-JUN
2022 2022 2023 2023
….but micro industries remain in pain SERVICES LIGHT INDUSTRY HEAVY ENGINEERING
55.4
54.8
54.6
55.1
54.5

53.7
53.2

56 Businesses are confident about Q2FY24, anti-

52.9

54 cipating stronger results compared to Q1FY24

50.9
50.4
50.2

49.7
48.7
48.2

52
49.2

5.5
5.4
5.3
48.6

5.2
5.2

5.0

4.6
4.3

50 6
5
48 4
46 3
2
44 1
JUL-SEP OCT-DEC JAN-MAR APR-JUN 0
2022 2022 2023 2023 Overall Demand Hiring Profits
BIG BUSINESS MID-SIZED BUSINESS economic conditions conditions
situation
SMALL BUSINESS MICRO BUSINESS APR-JUN 2023 JUL-SEP 2023
ginal improvement from 50.9 in the March quarter, it
is still the highest since the March 2022 quarter, when
the BCI was at 55.2.
Economists believe that economic growth may re-
main muted due to the impact of weak global growth,
but easing inflation and stable commodity prices could
offer some reprieve. “The economy is showing signs of
improvement. The major boost to confidence is coming
from the decline in inflation, which is helping turn real
wages positive. In turn, this is giving a demand push to
the economy. If this trend continues, domestic demand
will be able to take care of the slump in
external demand to some extent,” says
prices are positives.
The pace of capital expansion could also give GDP
growth a push, with an estimated upside of about 50
basis points. By June-end, just about 27.8 per cent of
the `10 lakh crore of capex budgeted for this fiscal had
been used, but heavier spending is expected after the
southwest monsoon.
Businesses also remain cautiously optimistic about
the economic prospects in the September quarter and
have indicated a marginal improvement in sentiments
at 5.6 on a 10-point scale, compared with 5.3 in the pre-
vious quarter.
In fact, 52 per cent of respondents

6.1
Devendra Kumar Pant, Chief Economist are of the view that the better-than-ex-
and Head (Public Finance), India Ratings. pected GDP growth of FY23 is likely to
The agency has, however, maintained a be repeated this fiscal. However, 72 per
conservative GDP growth estimate of 5.9 per cent cent felt that the upcoming state and Lok
per cent for the fiscal. THE IMF’S REVISED Sabha elections could impact govern-
Economic growth is expected to mod- INDIA GDP FORECAST ment policymaking.
erate to 6 per cent in FY24 due to factors FOR FY24, UP FROM Companies are also more upbeat on
including a not-so-favourable base effect, 5.9 PER CENT EARLIER hiring and profits in the September quar-
impact of monetary tightening, and an ter, with the indices logging a score of
uncertain global environment that could 5 and 5.2, respectively, compared with
hurt exports, notes Aditi Nayar, Chief Economist, scores of less than 5 in the previous quarter.
Head of Research and Outreach at ICRA. “The impact Nayar agrees, and says that ICRA expects corporate
of the uneven monsoon and El Niño conditions on ag- profitability to also improve this fiscal, benefitting | 19
riculture also has to be monitored,” she cautions. But from softer commodity prices.
she says steady urban demand and softer commodity But the skies haven’t cleared yet. Corporate profit-

BUSINESSES SPEAK UP
Will the better-than- Will the upcoming state
expected GDP growth of and Lok Sabha elections
FY23 be repeated in FY24? impact government
policymaking?

YES 52% YES 72%

NO 21% NO 21%
CAN'T SAY 27% CAN'T SAY 7%

Corporate MUTED GLOBAL Do you expect

profitability ECONOMIC GROWTH 37% another rate hike
has been a SUBDUED CONSUMER by the RBI in the
challenge. DEMAND 32% next policy review
What's in August?
HIGHER THAN
worrying EXPECTED INFLATION 19%
you? YES 41%
RISING OIL PRICES 12% NO 45%
CAN’T SAY 14%

SOURCE THE BT-C FORE BUSINESS CONFIDENCE SURVEY CONDUCTED BETWEEN JULY 9 AND 21, 2023, OF 500 CEOS
OR CFOS REPRESENTING VARIOUS INDUSTRIES AND COMPANY SIZES ACROSS DELHI, MUMBAI, CHENNAI, HYDERABAD,
BENGALURU, KOLKATA, CHANDIGARH, LUCKNOW, NAGPUR, KOCHI, VISAKHAPATNAM AND BHUBANESWAR
 ability in the past has remained a
challenge, and concerns persist.
As many as 37 per cent of respon-
dents termed muted global growth
and its impact on exports as the
top challenge to corporate prof-
itability, while 32 per cent rated
subdued consumer demand as the
main concern.
Higher-than-expected infla-
tion is the chief concern for 19 per
cent of the respondents, but only
41 per cent believe that the RBI
may hike the interest rate in the
next policy review. Pant of India
Ratings also expects the status
quo on rates to be maintained but
rules out a cut in the interest rate
this fiscal.
The biggest takeaway from the
The ITC Royal Bengal, Kolkata
survey, however, remains the low
confidence of micro enterprises
that still seem to be struggling. HOTELS
Providing employment to a large

chunk of the informal sector, the
20 | business confidence of micro en-
trepreneurs has remained subdued
and below 50 for three consecutive
quarters. In the June quarter, it
only improved marginally to 49.7
from 48.2 in the previous quarter.
K.E. Raghunathan, National
Chairman of the Association of
Indian Entrepreneurs, notes that
micro industries have been strug-
gling since demonetisation, then
the hasty implementation of GST,
and after that the Covid-19 pan-
demic and lockdown. “The out-
look for micro industries has not
improved even after a year of al-
most normal economic activity.
They have not received sufficient
or any support or attention from
the government or banks, forcing
many to close down or move on to
gig work,” he points out.
Without an economic recovery
across the board, business confi-
dence may not rise significantly.
The storm clouds may be clear-
ing, but sunny skies are still some
months away.
@surabhi_prasad
Division Boost
By demerging its hotels business, ITC hopes to boost
its capital allocation and profitability
BY ARNAB DUTTA
X SALT-TO-CIGARETTES MAJOR
ITC Ltd is spinning off its ho-
tels division—after nurturing
it for over two decades—into a
separate company in an effort
to accelerate its growth and
improve resource allocation.
The company’s board has given
its in-principle approval to the
demerger, long-awaited by the
company’s shareholders and
market experts. The board will
still need to ratify the specif-
ics of the demerger on August
14. According to the proposed
structure, ITC’s management
would hold a 40 per cent stake
in the newly established entity
that will house its hotels assets
and business, while the remain-
ing 60 per cent will be owned
directly by ITC shareholders
proportionate to their share-
holding in the company.
Experts say the board’s deci-
sion is pragmatic, based on the
realities of the market. ITC had
brought the hotels business un-
der its fold in 2004 by merging
the then-listed ITC Hotels Ltd
and Ansal Hotels Ltd into it. But
over the past few years, there
has been a consistent outflow
of money to finance the hotels
division despite lower returns.
As per estimates by Nuvama
Institutional Equities, the ho-
tels business currently “guzzles
20 per cent of (ITC’s) capital”.
In comparison, it contributed
`2,689 crore, or 3.5 per cent, to
ITC’s `76,518 crore top line. But
at `852 crore, the hotels busi-
ness contributes less than 3.5

Business Today 20 August 2023

 ROOM FOR per cent to the total Ebitda (earnings
before interest, taxes, depreciation,
GROWTH and amortisation) of the group. In
fact, the performance of ITC’s ho-
tels division lags leading hotel com-
panies in the country. Take Indian
As part of the proposed
Hotels Company (IHCL) for com-
demerger, ITC will
parison, which reported revenues of
hold 40 per cent in ITC
`5,949 crore in FY23, while its Ebitda
Hotels Ltd while other stood at `1,943 crore, with an Ebit-
shareholders will own da margin of 32.7 per cent, against
the rest 60 per cent ITC’s 31.7 per cent.
However, ITC’s management is
certain that the demerger will boost
both the company’s efficiency in al-
Upon its listing on the locating capital and improve profit-
exchange(s), the de- ability. In an analyst call after the
merged ITC Hotels will demerger was announced, the lead-
become the country’s ership said that they expect a rise of
second-largest hotel 18-20 per cent in ITC Ltd’s return on
chain, with a market capital employed (ROCE) after the
cap of `25,000 crore demerger; while its return on invest-
ed capital (ROIC), a measure of how
successfully a company allocates
resources to profitable projects or
The ITC management investments, may rise by 10 per cent.
expects a sizeable According to the company’s manage-
increase in the com- ment, the separated hotels business
pany’s profitability: will have a strong debt-free balance
sheet and it’ll also be well-capital-
an 18-20 per cent rise
ised. The demerger will also allow
in ROCE and a 10 per
the spun-off firm to chart its own
cent growth in ROIC
growth path, raise its own resources
and funds based on an “asset-right”
strategy (which means the assets
they will hold or purchase will be
The spin-off will free based on in-depth research to ensure
up capital and improve that they are optimal in the overall
efficiency in capital scheme of things), and leverage ITC’s
allocation for ITC Ltd, goodwill, brand value, synergies, and
as the hotels business more, to stabilise the hotels business.
consumes 20 per cent The management says the de-
of its capex merged entity would continue de-
veloping its hotels business through
management contracts, especially
for emerging brands like Storii and
ITC Hotels will be a Mementos. Global financial services
debt-free well-capital- company Morgan Stanley has stated
ised entity; to follow an in a report that the demerger should
‘asset-right’ strategy, enhance ITC’s financial ratios and
leveraging the good- unlock value for shareholders by pro-
will, brand equity and viding them with a direct interest in
the pure-play hotels sector.
synergies of ITC
Under ITC’s direct fold, the ho-
tels business has expanded its rev-
Business Today 20 August 2023
enues at a compound annual growth
rate of 11 per cent and inventory at
160 per cent to 11,600 rooms, at the
end of FY23, from 4,472 in FY03.
With Covid-19 behind us and cor-
porate and leisure travel back on
track, analysts expect the move to
enhance ITC’s hotels business in the
coming years while increasing capex
in the company’s core fast-moving
consumer goods business.
Analysts from Nuvama say the
hotels industry has recovered well
post-Covid-19, and a favourable
demographic profile and affluent
aspirations offer further growth
potential. They expect the newly
listed company to become the sec-
ond-largest hotel company in the
country with a `25,000-crore mar-
ket capitalisation. “The tourism
business in India is in a bright spot.
There are several favourable policies
to support the sector,” they note,
adding that the hotel industry’s five-
year supply is expected to grow at a | 21
CAGR of 5 per cent, which is likely to
be outpaced by demand—pegged at
more than 7 per cent for the period.
With net assets of `5,500 crore, the
demerged entity’s own accruals
should be enough to fund its expan-
sion goals, Jefferies analysts note.
According to Sanjiv Puri, Chair-
man of ITC, the proposed demerger
is a testament to ITC’s commitment
towards creating sustained value
for stakeholders. “Creation of a
hospitality focussed entity will en-
gender the next horizon of growth
and value creation by harnessing
the exciting opportunities in the
Indian hospitality industry. In the
proposed reorganisation, both ITC
and the new entity will continue to
benefit from institutional syner-
gies,” he said in a statement.
Subject to approvals, the man-
agement has proposed the new en-
tity be named ITC Hotels Ltd. While
they are yet to declare a date of its
listing, Nuvama estimates it will
take place within 12-18 months.
@arndutt

DIGITAL PAYMENTS
22 | CHALLENGES
APLENTY
Indigenous payments solution UPI is looking to
increase its global footprint. But there are many
issues it must address
BY NAVNEET DUBEY
X NPCI INTERNATIONAL PAYMENTS
Ltd (NIPL), a wholly-owned subsid-
iary of the National Payments Cor-
poration of India (NPCI), has left no
stone unturned in its quest to make
the Unified Payments Interface
(UPI) a global solution.
These efforts appear to be bear-
ing fruit. During Prime Minister
Narendra Modi’s recent visit to
France, he announced that the Eu-
ropean country had allowed the use
of UPI for retail payments. France
joins Singapore, the UAE, Nepal,
Sri Lanka and Bahrain in allowing
UPI. Pretty soon, Indians visiting
France, Thailand, the UK and the
US could have a potentially cheaper
payment option.
soon be seen overseas. The other
area it can disrupt is cross-border
remittance, where the cost of send-
ing $500 today to India is almost
5 per cent, which can potentially
come down with UPI interoperabili-
ty,” says Ranadurjay Talukdar, Part-
ner and Payments Sector Leader at
EY LLP India.
For this to happen, though, the
NPCI must address a few challenges.
Technology integration: The
NIPL will need to improve traceabil-
ity and accountability to ensure cus-
tomer data security. “One key thing
is how the UPI will connect globally
IN COUNTRIES
with other faster payment systems,
because the technology, messaging
WHERE CARD protocols, and standards are dif-
NETWORKS ferent. So, a connector will have to
be built at NPCI to ensure technol-
ARE STRONG, ogy integration,” says Mihir Gandhi,
UPI MAY FACE Partner and Payments Transforma-
OPPOSITION tion Leader at PwC India.
Competitive conversion rates:
FROM The promise of UPI is that trans-
INCUMBENTS action fees could be lower than,
say, credit cards that have differ-
ent charges like cross-currency
“Customers pay between 1.2 mark-up, forex, etc. Talukdar says,
and 4.2 per cent markup for using a “Unless the exchange rate and the
credit-, debit- or prepaid forex card mark-up fees are competitive, it
abroad. We have already seen cash will not be easy to make affluent
being replaced by UPI in domestic and super-affluent customers shift
payments. A similar trend might to UPI from cards.” Providing re-
Business Today 20 August 2023
 Create At Dharampal Satyapal Group , we believe
the mark of our creation goes beyond our name.

what isWorth
It’s in the taste, innovation and delight that we
infuse in our well-loved brands. It’s in the

Creating
balance between sustainability and prosperity.
And in the obsessive pursuit of quality that
makes our creations worthy of you.
 wards for UPI transactions will
also be essential.
QR set-up: The other chal-
lenge is that card penetration
is very high in most countries
that Indians visit—like the US,
UK, UAE, Singapore and Thai-
land. So, setting up a QR-based
network will be a daunting task.
“Merchant acceptance of QR will
also need some legwork in these
countries, as the domestic real-
time payment networks compete
with cards in these markets,”
says Talukdar.
Gandhi adds, “It will probably
take a year or two to smoothen
the global payments process. And
implementation will take time be-
cause all the banks have to accept
the tech integration. They must
ensure that QR codes are accept-
ed at all merchant locations.”
Lobbying and geopolitics:
In developed economies, where
24 | cards are the primary mode of
payment, UPI adoption might
take a while as it may face oppo-
sition from incumbents. Satya-
jeet Kunjeer, Founder and CEO
of investment app Deciml, says,
“Companies like MasterCard,
Visa and banks alike will not wel-
come this move as it directly im-
pacts their revenue. Also, in coun-
tries like the US, where lobbying
is legal, we could see banks and
payment gateways create serious
barriers to entry.”
But Gandhi points out that
memoranda of understanding
(MoUs) have been signed with
some countries. “I think NPCI
has to [ensure] universality and,
in short, that all the banks of [the
foreign] country accept UPI pay-
ments and vice versa in India.
There has to be reciprocity (an
interchange) between UPI trans-
actions and that country’s faster
payment transactions in India.
So, there has to be reciprocity of
acceptance,” says Gandhi.
@imNavneetDubey
Business Today 20 August 2023
HEALTHCARE
Specialised Play
With investment plans of $400-500 million in
the next five years, AHH is doubling down on
its single specialty healthcare business
BY NEETU CHANDRA SHARMA
X BENGALURU-BASED health-
care investment platform Asia
Healthcare Holdings (AHH) is
planning to double its invest-
ments in the single specialty
healthcare businesses to $400-
500 million in the next five
years. Backed by private equity
fund TPG Growth and Singa-
pore’s sovereign wealth fund
GIC, the company aims to focus
on areas like oncology, women’s
$200
million
AHH HAS DEPLOYED
THIS AMOUNT IN
THREE SINGLE
SPECIALTY FIRMS
and children’s healthcare, and
advanced tech in ICUs. AHH is
also exploring opportunities in
gastroenterology, nephrology,
pathology diagnostics, etc.
“We are focussed on bring-
ing additional specialties onto
the AHH platform and aim
to onboard one or two more
companies. We have already
deployed $200 million behind
three single specialty compa-
nies and expect to double this
over the next five years,” says
Vishal Bali, Executive Chair-
man of AHH. AHH has already
invested in cancer care, mother
and child healthcare, IVF and
ophthalmology. Now, it plans to
address the prevailing demand-
supply gaps in other segments
with these investments. “These
investments will lead to the
growth and development of
specialised healthcare services
and foster innovation and clini-
cal expertise in the country,”
says Mohit Khullar, MD at
investment bank o3 Capital.
Apart from investing in
India-based single specialty
healthcare businesses, Bali
says the platform will also
look to invest in foreign firms
that offer bolt-on services that
complement its India business-
es. It has also been exploring
opportunities in the pathology
diagnostics space. Bali believes
that incorporating its own
pathology services company—
despite the sector’s disruption
revolving around pricing—into
the larger AHH ecosystem will
significantly enhance the plat-
form’s capabilities. “Pathology
is not just about price disrup-
tion; it also involves technology
advancements and the develop-
ment of a new ecosystem to
enhance disease detection and
treatment,” he says. Further, in
terms of growth prospects, the
company anticipates revenues
to be in the range of $175-185
million for FY24, with a margin
of around 20 per cent.
@neetu_csharma
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BY RAHUL OBEROI
X MUKESH AMBANI-LED RELIANCE INDUSTRIES
Ltd’s demerged entity Jio Financial Services,
formerly Reliance Strategic Investments, will be
the third-biggest non-banking financial company
after the Bajaj Twins—Bajaj Finance and Bajaj
Finserv—after its listing, the date for which is yet
to be announced. However, at the discovered price
of `261.85 per share, the market capitalisation of Jio
Financial Services will be around `1.7 lakh crore at
the time of listing.
Jio Financial’s discovered price is the difference
between RIL’s closing price of `2,841.85 on July 19
and the price of `2,580, which was derived during
the special trading session on July 20. As of July 21,
2023, Bajaj Finance and Bajaj Finserv had respective
market caps of `4.6 lakh crore and `2.6 lakh crore.
Jio Financial will be larger than LTIMindtree, Tata
Steel, Coal India and Bajaj Auto, which have market
caps between `1.3 lakh crore and `1.5 lakh crore.
The discovered price of Jio Financial is signifi-
cantly higher than the consensus brokerage projec-
tions of `160-190, according to V.K. Vijayakumar,
Chief Investment Strategist of Geojit Financial Ser-
vices. “This reflects the market’s fancy for the stock
and a vote for its potential. The stock is likely to list
Business Today 20 August 2023
near discovered price if the market
sentiment remains buoyant.”
Market analysts predict JFSL
to be listed in a month because it is
being spun out from RIL. Recently,
Piramal Pharma, which was de-
merged from Piramal Enterprises,
was listed 45 days after the record
date. However, NMDC Steel, which
was demerged from NMDC last
October, took nearly four months to
list post the record date.
According to the predetermined
share ratio, RIL shareholders will
receive one share of JFSL for each
share they held in RIL till the record
date of July 20. The energy-to-tele-
com behemoth RIL had 3.5 million
HIGH GROWTH shareholders as of June 30, accord-
OUTLOOK ing to data from the BSE.
Given the enormous The growth potential of Jio
possibility in the Financial is huge since Reliance
market and Jio
Digital can bundle its digital prod-
Financial’s strong
capitalisation, ucts like smartphones and TVs with
analysts anticipate it, says Vijayakumar. Meanwhile, Jio
the company will Financial has formed a joint venture
register smart (JV) with BlackRock to foray into
growth asset management. Both firms are
targeting an initial investment of
$150 million each in the JV, as per a
stock exchange filing.
Pankaj Pandey, Head of Research
at ICICI Direct, said, “We expect Jio
Financial to deliver higher growth
given the huge opportunity in the
sector and its strong capitalisation,
which will ensure that the company
would not need to raise external
equity capital for a reasonably long
period of time, thereby limiting any
dilution overhang.”
@iamrahuloberoi
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 X INDUSTRY AND EXPERTS are
COMPETITION LAW
eagerly awaiting the report of a
high-level panel set up to look into

Regulating
the digital competition law. The
panel is expected to submit the
report in August, and a Bill will be
drafted based on this. With this,
India will be one step closer to a law
to regulate large tech firms.
The committee was set up in
February, following a report by the
Big Tech
Parliamentary Standing Committee
Panel on digital competition law to submit
on Finance in December 2022 on an-
report by next month; demarcation of MeitY and
ti-competitive practices by big tech
companies. It had mooted a digital
MCA’s roles will help in regulation
competition bill to check such prac- BY SURABHI
tices. Industry insiders and experts
feel the report will have far-reaching
implications. There are concerns
about how well it will navigate the
complexities of the sector since it
encompasses everything from e-
commerce to cab aggregators.
Wider consultations are re-
quired, many believe. In fact, 58
28 | stakeholders had written to the

THERE ARE
CONCERNS
ABOUT HOW WELL
SUCH A BILL WILL
NAVIGATE THE
COMPLEXITIES
OF THE SECTOR
ILLUSTRATION BY RAJ VERMA

Ministry of Corporate Affairs to

“institute a transparent and open
consultative public engagement
process for the draft Digital Compe-
tition Bill”.
In the interim, the government
has demarcated the roles of the
Ministries of Electronics and In-
formation Technology (MeitY) and
Corporate Affairs to provide market
players more clarity on supervision
and regulation. In a meeting held
in July, it was decided that the MCA
would look into issues of competi-
tion in the digital market while Me-
itY would address sector-specific
and technical issues.
Union Finance and Corporate
Affairs Minister Nirmala Sith-
araman and Minister of State for
Electronics and Technology Rajeev
Chandrasekhar discussed the law
and agreed that a “whole of govern-
ment approach” should be adopted.
Experts termed this a positive
development. “With the MeitY
coming up with a Digital India
Bill and an MCA-appointed panel
working on the digital competition
law, there was fear [in] the industry
that there would be overlaps in
regulation and stakeholders would
suffer,” notes Pritha Jha, Partner at
Pioneer Legal.
Meanwhile, the industry is also
keeping an eye on the Supreme
Court, which is expected to deliver
its verdict in October in the case
between Google and the Competi-
tion Commission of India over the
alleged breach of the country’s com-
petition laws. This could provide
pointers to how the proposed digital
competition law will be framed.
@surabhi_prasad

Business Today 20 August 2023

 per cent market share.
With an investment of over
£4 billion, the group has also an-
nounced plans to build a 40-giga-
watt (GW) battery cell gigafactory
in the UK that will develop electric
mobility and renewable energy
storage solutions for customers in
the UK and Europe, with JLR and
Tata Motors as the anchor custom-
ers, and supplies commencing from
2026. “The Tata group is deeply
committed to a sustainable future
ELECTRIC VEHICLES across all of our business. Today,
I am delighted to announce the

Charging Ahead
With £4 billion in investments to set up a battery cell
gigafactory in the UK, Tata group is ramping up its EV play
BY PRERNA LIDHOO
30 | X TATA SONS-CONTROLLED TATA Motors continues
to show its commitment towards electric mobility,
especially after its luxury arm Jaguar Land Rover
(JLR) Automotive announced that its Halewood,
Liverpool plant will become an all-electric vehicle
production facility. JLR has further said its next
generation medium-size SUV architecture will now
be purely electric as it takes concrete steps towards
its financial goals of achieving a net-cash positive
position by FY25. Incidentally, Tata Motors is al-
ready India’s largest electric carmaker, with over 80
Tata group will be setting up one of
Europe’s largest battery cell manu-
facturing facility in the UK,” said N.
Chandrasekaran, Chairman of Tata
Sons. This massive investment is an
integral part of Tata group’s com-
mitment to electric mobility and
renewable energy storage solutions.
Other automakers like Mahindra
& Mahindra, too, are intensify-
GIGA PLANS ing their EV play. For instance,
N. Chandrasekaran, Mahindra has signed a new term
Chairman of Tata agreement with Germany-based
Sons (left), with UK Volkswagen Group that goes beyond
PM Rishi Sunak, at
merely sharing electric components
the announcement
of the electric from VW’s MEB (modular electric
battery cell drive matrix) toolkit in the XUV and
gigafactory on July BE (Born Electric) branded SUVs.
19, 2023 They are now considering develop-
ing charging and energy solutions
and locally manufacturing batteries.
But challenges abound, say
industry players. “Legacy players
(like Tata)... are a bit late. They

LET’S MINE LITHIUM should have done this years ago. And
when will they start manufacturing
in India?... Now there will be a lot of
Heavily dependent on imports, the discovery of lithium re-
activity from both Indian and global
serves in India has been looked upon as a big boost for India’s
players, especially when it comes to
developing EV space. Now, even the government has started
battery cells. But I think not enough
moving on the policy front, with the Cabinet giving its nod to
is being done to achieve our targets.
amend the Mines and Minerals (Development and Regulation)
Our vision is clear but the roadmap
Act, 1957, to permit private miners to extract the soft metal.
PHOTO BY GETTY IMAGES

is not,” says Sohinder Gill, Director

Since the amendment has been approved by the Parliament,
General of Society of Manufacturers
the next step will be to auction the mines, expected by to be
of Electric Vehicles.
held by the end of this year. Some companies, such as Hin-
One thing is for sure; the race
dustan Zinc—which is already into base metal mining—have
among automakers to go electric
already shown their interest.
— Nidhi Singal
just got more interesting.

@PLidhoo

Business Today 20 August 2023

Our agency advisors set high benchmarks – for
excellence, expertise, and consumer experience!
Presenting our Exemplary COURT OF THE TABLE (COT) Achievers of 2022

VANDANA RATHI NITA P GHOSH RAMMI MUNISH MATHUR

Kolkata Pune NOIDA DELHI

BALJEET SINGH HARISH ROSHNI DINESH SHAH RAHUL ASHWINBHAI

Amritsar Delhi Pune CONTRACTOR, Navsari

YASH BHADRESH JHAVERI SIVARAMAKRISHNAN R SIMRANBEN TAHILYANI MONA MAUNAL GANDHI

Vadodara Chennai Ahmedabad Ahmedabad

NEHA M MITANSHU JAIN PRASHANT KUMAR GHOSH SHAMPAT KANVR

Coimbatore Bhiwani Pune Jodhpur
 Our success is because of their
commitment and passion.
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NIHARIKA KAMLESHKUMAR SUDHABEN PANKAJBHAI SHALINI SARAF GAYATRIBEN JIGNESHBHAI

PATEL, Ahmedabad GANDHI, Balangir Kanpur THAKKAR, Bharuch

SRIDHAR SITH ZEBANAZ MOHAMMAD YOGESHKUMAR NATVARLAL PRITI JAYESH MASHRU

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SANTOSH KUMAR AMBASTA KASHISH KAMAL KELLA RAJESH RAMNIKLAL AMEENA SHAIK
Gaya Gandhidham KHANDOL, Gandhidham Nellore

SWATI JAIN SAGAR CHHGANBHAI MANISH PATWA AKSHITA AVESH JAIN

Guwahati SHELIYA, Surat Jodhpur Ahmedabad
TATA AIA is proud of our COT Advisors. We applaud
their contributions to our success!
Presenting our Exemplary COURT OF THE TABLE (COT) Achievers of 2022

RAJAN BHARATKUMAR SHAH DIYA CHANDALIYA AMIT VIJ AMIT GU PTA

Ahmedabad Pali Amritsar Delhi

ANANTHRAM LEDALLA VIPUL PATEL SANWALARAM DEWASI HARSHAL RITESH KOTHARI

Hyderabad Mehsana Ahmedabad Pune

JANIT SUJEET KUMAR RAVI MAHESHKUMAR PRIYANKA SAHOO

Hissar Ranchi AGARWAL, Surat Bhubaneswar

MUSKAN LOYA ZUBIN HOMI LILAOOWALA AAGAM HEMANTKUMAR DIVYESH DESAI

Secunderabad Mumbai SHAH, Bhavnagar Surat
 Together we continue our pursuit for excellence, in
all our endeavors.
Presenting our Exemplary COURT OF THE TABLE (COT) Achievers of 2022

POOJA RANI BHAVYA DWIVEDI VIRAL MALAYBHAI BHOW RAHUL LAXMANDAS MALANG
Hissar Kanpur Ahmedabad Chandrapur

KUMBARTHI KRISHNA PRIYA VIVEK R BARCHHA RUSTAM AHMED NISHA DOKANIA

Secunderabad Gandhidham Gorakhpur Bengaluru

ANJALI SINGLA OM GUPTA MANEETA RAJ KUMAR JAIN

Faridabad Rudrapur Hissar Udaipur

ASHISHKUMAR BACHUBHAI HARESHBHAI JAMNADAS ANSHUMEE CHIRAG PORECHA HEENA HEMANTKUMAR

MEHTA, Surat TILVANI, Junagadh Jamnagar LAKDAWALA, Surat
>LJVUNYH[\SH[LV\YLZ[LLTLK*6;X\HSPÄLYZ^OV
lead by example and always believe that their
customers are their topmost priority.
Presenting our Exemplary COURT OF THE TABLE (COT) Achievers of 2022

MAHESH GANGADHAR JOSHI RAJKUMAR SAYARNATH RAI VANDANA MISHRA MUKESH SINGH
Pune Pune Bhopal Surat

SARIKA DAMANI SWETABEN ASHOKKUMAR PARICHAY ROHITBHAI SHAH MEGHA ARORA

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DEEPA GOYAL HETA BHAGYESH SHAH KALYANI SACHIN MANIAR MANJUNATH BASANGOUDA
Balangir Ahmedabad Rajkot BIRADAR, Goa

MADHAV AHUJA MAHESH KUMAR MITTAL POOJA SRIVASTAV VISHAL MADANLAL

Agra Rudrapur Gorakhpur CHAUDHARI, Nashik
 They have carved a niche amongst their peers and
global contemporaries and set themselves apart
by creating a legacy of excellence.
Presenting our Exemplary COURT OF THE TABLE (COT) Achievers of 2022

MANISH GARG ASHISH GUPTA BHUSHAN BHARAT PATIL NILIMESH DAS

Jaipur Jaipur Nashik Howrah

VATSALKUMAR VIJAYKUMAR BEENA H SHAH DAVINDER KAUR LEETON DEKA

PATEL, Bhavnagar Bhavnagar Delhi Lakhimpur

PUBALI GHOSH RINKAL HITESH GOYANI MRUNAL ASHOK SHAH AMRITA JAIN
Durgapur Bardoli Pune Pali

AKASH JAYESH SHAH SRIDEVI PULIMATI NISHA AALAP SHAH

Mumbai Warangal Ahmedabad
EYE ON INFRA
Gautam Adani,
Chairman and
Founder, Adani Group
 COVER STORY ADANI GROUP

AFTER THE

SIX MONTHS
AFTER A HINDENBURG
REPORT LED TO A
MELTDOWN IN ADANI
GROUP STOCKS,
THE CONGLOMERATE
IS TRYING TO STRIKE
A BALANCE BETWEEN
GROWTH, CAPEX AND
DELEVERAGING
ITS DEBT
BY A N A N D A D H I K A R I

PHOTO BY BANDEEP SINGH

 THE BIG
DELEVERAGING
Equity dilution gathers steam at Adani Group

$1.87 $2.15
BILLION BILLION
PROMOTERS PREPAYMENT
SOLD SHARES IN OF MARGIN-LINKED
THE SECONDARY SHARE-BACKED
MARKET TO FINANCING BEFORE
PE FIRM GQG THE MARCH 2023
PARTNERS DEADLINE

GAUTAM ADANI, 61, loves business

jargon. Just a few months ago, the bil- $700 3.27x
lionaire, caught in the cross hairs of MILLION NET DEBT-
PREPAYMENT OF DEBT TO-EBITDA RATIO,
the US-based short-seller Hindenburg TAKEN FOR THE DOWN FROM
3.81x IN FY22
AMBUJA CEMENTS
Research, stumbled upon a new term, ACQUISITION (LESS THAN 3x
IS CONSIDERED
‘permacrisis’. The term, which refers GOOD)
40 | to a prolonged period of uncertainty,
was chosen as Collins Dictionary’s
word of the year in 2022. It describes 2.02x $130
the turbulent and uncertain nature of DEBT SERVICE MILLION
COVERAGE RATIO,
that year, and perhaps also the situa- UP FROM THE 1.47x APSEZ COMPLETES
IN FY22 (A MINIMUM THE BUYBACK OF
tion the Adani Group’s Chairman and OF 1.5-2.0 TIMES BONDS OUT OF
THE $650 MILLION
IS IDEAL)
Founder finds himself in—as he navi- MATURING IN 2024
gates the mother of all existential cri-
NOTE FIGURES FOR 2022-23;
ses of his three-decade entrepreneur- SOURCE INVESTOR PRESENTATIONS
ial journey.

Though the challenges still linger—sparked by a
Hindenburg report alleging accounting fraud, stock
manipulation, and routing of funds through foreign
shell companies, all of which the firm has refuted—
there is some breathing space. The group, which
has a top line of `2.62 lakh crore and had lost over
$100 billion in market capitalisation at one point,
is gradually charting a new course by rebalancing
its growth ambitions, slowing down on big-ticket
acquisitions, deleveraging, and strengthening its
balance sheet. The Adani family recently divested
stakes in four group companies to raise $1.87 billion
(`15,500 crore) from global private equity firm
GQG Partners. In addition, three companies have
board approval to raise funding of $4 billion over
the next 12 months. “There will be more equity
dilution if they plan to grow at the same pace as
earlier. It’s a Catch-22 situation. If growth slows
down, the valuations will correct further,” sums
up Ambareesh Baliga, a seasoned observer of the
markets. But the group has been diluting equity
since 2019 when global players like TotalEnergies,
Qatar Investment Authority and Abu Dhabi-based
IHC group invested a total of $5.79 billion.

Business Today 20 August 2023

 COVER STORY ADANI GROUP

FINANCIAL HEALTH CHECK

Rising assets and profits will help the Adani Group pay off debts
4,50,000
4,00,000
3,50,000

(IN ` CRORE)
3,00,000
2,50,000
2,00,000
1,50,000
1,00,000
50,000
0
EBITDA Gross Assets Gross Debt Cash Balance
FY19 FY20 FY21 FY22 FY23
NOTE: FIGURES ARE FOR ALL LISTED COMPANIES OF THE ADANI
GROUP; RECENTLY ACQUIRED AMBUJA CEMENTS’ NUMBERS HAVE
BEEN INCLUDED IN FY23 DATA SOURCE: INVESTOR PRESENTATIONS

REGAINING STRENGTH
While three listed Adani Group firms have reduced debt, four have raised more debt since September 2022

CASH NET DEBT (` CRORE) NET DEBT TO EBITDA (x)

COMPANY NAME EBITDA# BALANCE#
(` CRORE) SEPTEMBER SEPTEMBER
(` CRORE) MARCH 2023 MARCH 2023
2022* 2022*
ADANI ENTERPRISES 10,575 5,652 29,406 22,124 3.66 2.09 | 41
AMBUJA CEMENTS 4,368 11,912 27,519 21,004 3.06 2.33
ADANI POWER 14,427 2,861 33,865 32,702 2.12 1.81
ADANI ENERGY SOLUTIONS** 6,101 4,152 27,993 27,785 4.67 4.55
ADANI TOTAL GAS 924 372 763 1,000 0.88 1.08
ADANI GREEN ENERGY 6,390 5,571 40,892 42,097 5.54 5.61
APSEZ 14,435 9,830 35,817 40,187 2.58 2.78

*TRAILING 12 MONTHS CALCULATION; #TILL MARCH 2023; ** FORMERLY CALLED ADANI TRANSMISSION; NET DEBT IS
GROSS DEBT LESS CASH BALANCE; RUN RATE EBITDA CONSIDERS ANNUALISED EBITDA FOR ASSETS COMMISSIONED
AFTER THE START OF THE YEAR; AMBUJA NUMBERS ARE CONSOLIDATED WITH ACC SOURCE MARKET PRESENTATIONS

“Over the next 20 years, Adani portfolio compa-
nies and promoters want to raise $50 billion of eq-
uity… We want to invest close to $500 billion in core
infra as a base case. We will run this programme of
equity for the next two decades,” says Group CFO
Jugeshinder “Robbie” Singh.
But the new equity is coming with higher dilu-
tion. Besides, there are hard choices being made.
For instance, the group recently exited the finan-
cial services business; it is now focussing on its
core infra model, plus adjacencies. “We invest for
an intergenerational period, upwards of 30 years.
We have not even completed the foundation of our
growth. For instance, we are setting up a ports busi-
ness to be able to handle and move cargo equivalent
to what India moves today as a country. We have to
remain strategically patient,” explains Singh.
Market watchers are taking note. Stakeholders
Empowerment Services (SES), a proxy advisory
firm, terms the Adani Group’s debt concerns as
overstated. Rohit Chawda, acting CEO at Taurus
Mutual Fund, agrees. “The current challenging
period will only drive the company to make more
prudent investment choices, and corporate gover-

Business Today 20 August 2023

 COVER STORY ADANI GROUP
CAUTIOUS APPROACH
DB deal to acquire 1,200 MW power plants in
Chhattisgarh for `1,200 crore was not pursued
The group has also scrapped the Macquire deal
to acquire toll road projects in Andhra Pradesh
and Gujarat for `3,110 crore
Adani Power Maharashtra terminated an
agreement with Orient Cement to set up a
cement grinding unit
Exited financial services business
Has gone slow on petrochemical ambitions
No aggressive bidding for Concor, linked to
overall APSEZ’s deleveraging ratio
Green sea port ecosystem in Vietnam is now
a longer-term commitment
Healthcare on radar, but not an
immediate investment
42 |
nance standards will improve even more,” he says.
“Our balance sheet, assets, and operating cash
flows continue to get stronger and are now healthier
than ever before,” Gautam Adani had said while shar-
ing the group’s operational performance with share-
holders in July. His bet is on infrastructure assets,
which generate stable revenues and contribute over
four-fifths of the group’s Ebitda. A proxy for cash flow
generation capacity, Ebitda shows the group’s core op-
erating performance. (See box Financial Health Check.)
Florida-based GQG, the group’s top backer—which is
located just 1,000 miles away from Hindenburg’s New
York headquarters—is estimated to have invested
more than $4 billion in Adani Group companies, in-
cluding from the secondary market. Rajiv Jain, Chair-
man and Chief Investment Officer of GQG Partners,
advises the Adanis to not deleverage too much. “This
is the time to go full throttle,” he says. (For the full in-
terview, turn to page 46.) How is Gautam Adani keeping
all the balls in the air? Let us find out.
Funding in Focus
Adani Enterprises Ltd (AEL), the group’s holding
company that withdrew its `20,000-crore follow-on
Business Today 20 August 2023
WHAT HASN’T
CHANGED
No credit agency, in India or abroad,
cut any of the portfolio companies’ rat-
ings, but some did change the outlook
Bank credit lines opened for new debt;
raised close to `20,000 crore so far; $750
million credit line under discussion
No jumping the ship by management or
board of directors
New institutional investor GQG Partners
pumped in more than $4 billion
LIC remained an investor despite huge
sell-off in stocks
Acquisitions continue, but at a
moderate pace
public offering earlier this year, is back in the market
with a `12,500-crore equity raising plan. “Of the sev-
eral projects underway, two of the key ones include
the Navi Mumbai Airport and the copper smelter [in
Gujarat’s Mundra]. Both are on schedule. The Navi
Mumbai Airport is preparing for operational readi-
ness and airport transition by December 2024,” Gau-
tam Adani had announced to shareholders.
Then there’s the data centre business AdaniCon-
neX, the expansion of which is on track. In June, Adani-
ACCORDING TO GROUP CFO
JUGESHINDER SINGH, BY 2025
THE CONGLOMERATE AIMS
TO GET ITS PORTFOLIO INTO
A POSITION WHERE CURRENT
CASH IN THE BANK AND FREE
CASH FLOW ARE GREATER
THAN ANY DEBT MATURITY
REQUIREMENTS
REPAYMENT SCHEDULE
(IN ` CRORE)

43,944

25,470
32,374

10,601
16,614

17,057
11,796

5,418
9,778
7,313
“There will be more
FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 equity dilution if
they [the Adani
SOURCE: ADANI PRESENTATION Group] plan to grow
at the same pace
as earlier. It’s a
MONEY IN HAND Catch-22 situation
[for them]. If growth
FREE CASH FLOW CASH BALANCE TOTAL slows down, the
valuations will
`37,538
CRORE
`40,351
CRORE
`77,889
CRORE
correct further”
AMBAREESH
BALIGA
DATA AS OF MARCH 2023 SOURCE: ADANI PRESENTATION STOCK ADVISOR

| 43

ConneX secured $213 million in financing from over
half-a-dozen foreign banks. This money will be used
for data projects in Chennai (with 17 MW capacity) and
Noida (50 MW). It has acquired land for data centres
in Navi Mumbai and Visakhapatnam, while the Noida
and Hyderabad ones are almost 30 per cent complete.
Adani Road Transport, meanwhile, remains on
the sidelines of bidding for projects. The company
claims that the 64-km Ganga Expressway Project in
Uttar Pradesh has achieved financial closure. In June,
the company with a roads portfolio of `40,000 crore
decided to walk out of Macquarie’s `3,110-crore toll
roads project deal.
AEL’s biggest bet is green hydrogen (through AEL
subsidiary Adani New Industries Ltd, or ANIL), where
it is setting up an ecosystem—from generation of
green hydrogen, downstream products (ammonia and
urea), to manufacturing of supply chain products like
wind turbines, batteries, and electrolysers. CARE Rat-
ings says the company has decided to defer the large-
scale capex plan in green hydrogen till market and
investment appetites have revived. There has been a
downward revision in capex plans to optimise capi-
tal. “[But overall] we remain on target. ANIL is nearly
mid-way through completing our integrated manu-
facturing facility for green hydrogen,” says Singh.
Balancing the Energy Mix
Today, Adani Green Energy Ltd (AGEL) has the larg-
est operating renewable energy portfolio with 8.1
gigawatt (GW) of capacity, with a target of 45 GW
by 2030. It plans to add 3 GW of capacity this year,
matching last year’s addition. It has lined up a capex of
`14,000 crore, while in July the AGEL board cleared a
proposal to raise `12,300 crore of equity share capital.
“[The] Adanis are efficient; for example, they get paid
in 60 days versus 260 [days] for a competitor. Given
their efficiencies, it is our view that the company will
generate higher returns,” says GQG’s Jain.
In terms of revenue visibility, there is a 25-year
fixed-tariff power purchase agreement (PPA) with
an average portfolio tariff of `2.98 per unit. Analysts,
however, are wary of AGEL’s valuation, which is 32
times its book even after correction. “The company’s
equity will be continuously recycled, as the cash flow
generated each year will serve as an equity contribu-
tion for the next project. As a result, the return on
equity is expected to keep expanding,” explains Vinit

Business Today 20 August 2023

 COVER STORY ADANI GROUP

IN RECOVERY MODE
Share prices of Adani firms have risen after the Hindenburg lows
4,500
4,000
3,500

(SHARE PRICE IN ` )
3,000
“The firm’s equity will
2,500
be recycled, as cash flow
2,000
from each year serves 1,500
as equity contribution 1,000
for the next project. So, 500
ROE is expected to keep 0

Adani Green
Energy
ACC

Adani
Enterprises

APSEZ

Adani Power

Adani
Total Gas

Adani Energy
Solutions

Adani Wilmar

Ambuja
Cements

New Delhi
Television
expanding”
VINIT BOLINJKAR
HEAD OF RESEARCH,
VENTURA SECURITIES LTD 24-JAN-23 52-WEEK LOW PRICE 24-JULY-23 SOURCE: ACE EQUITY

44 |
Bolinjkar, Head of Research at Ventura Securities. collected from consumers (B2C) by discoms is com-
Then there are potential challenges, such as if pulsorily transferred to this escrow account for pay-
a distribution company (discom) defaults on pay- ing the transmission players,” says Bolinjkar. A part
ments. While renewable energy is the future, the of the capex will also go into the power distribution
thermal power business (called Adani Power Ltd business, catering to over 12 million consumers in
or APL) is raking in profits and has made its first Mumbai and Mundra SEZ. The government is also
transnational foray by supplying power to Bangla- amending the Electricity Act, which will allow for
desh. It will supply 1,496 MW of power for 25 years. multiple distribution companies in the same geog-
APL, with an operational capacity of 14,450 MW, is raphy. “The most efficient business should win. It’s
aiming for 16,850 MW by June 2027. the survival of the fittest, and the consumer ben-
efits in the end with cheaper electricity and better
From B2B to B2C service,” says Jain. ATL’s focus is on reducing power
The Adani Group is focussing on consumer-centric costs and switching from thermal to green energy.
businesses for growth, whether it is airports, energy “The implementation of smart meters is expected to
and gas distribution, real estate, or FMCG. Many contribute positively to its margins,” adds Bolinjkar.
of these are extensions of B2B businesses—for in- “Ultimately, distribution and metering will be
stance, the entire power chain. It has expanded from a bigger part of the energy solutions business by
power generation to transmission to distribution. 2028,” says Singh. Hence the renaming.
Adani Transmission Ltd (ATL)—renamed Ada- In the city gas distribution business of piped
ni Energy Solutions recently—has lined up equity natural gas (PNG) and compressed natural gas
fund raise of $1.03 billion, and has planned a capex (CNG), Adani Total Gas Ltd’s (ATGL) focus is on
of `4,500-5,000 crore in the next couple of years. building pipeline networks in newer geographies.
It sits on a transmission network of over 15,000 It currently has 460 CNG stations, 704,000 PNG
circuit km (ckm), with 4,400 ckm under construc- homes, and 7,435 industrial and commercial con-
tion. The mandatory escrow account requirement nections. “Our company is going to build over
for discoms makes it a safe business. “The money 1,800 CNG stations in the next seven to 10 years,”

Business Today 20 August 2023


“The current challenging
period will only drive the
company to make more
prudent investment
choices, and corporate
governance standards will
improve even more”
ROHIT CHAWDA
ACTING CHIEF EXECUTIVE OFFICER, TAURUS
MUTUAL FUND
said Executive Director & CEO Suresh P. Manglani
in ATGL’s annual report. The investment planned
is `18,000-20,000 crore. “The city gas distribution
business carries no cash flow risk. With a debt-to-
Ebitda ratio of just 1, there is no gearing involved,”
says Bolinjkar. However, the new administered pric-
ing mechanism has now linked gas prices to crude oil.
“If global oil prices soar, the company may be required
to purchase gas from the spot market, which could
potentially impact its ability to maintain healthy
margins,” says Bolinjkar. That’s where the diversifi-
cation strategy to build e-mobility and compressed
gas businesses for the future fits in well.
In FMCG, Adani Wilmar is gradually reducing its
reliance on edible oils (79 per cent contribution in val-
ue) in favour of food and FMCG, which includes wheat
flour, rice, pulses and sugar.
The Hard Assets
Days after the Hindenburg report, Gautam Adani had
landed in Israel to complete the $1.15-billion acquisi-
tion of Haifa Port. GQG’s Jain interprets it as a clear
vote of confidence, reflecting the Israeli govern-
ment’s trust in the group’s competence. Haifa Port’s
Indian Ocean-Mediterranean route will strategically
position the company. Adani Ports and Special Eco-
Business Today 20 August 2023
nomic Zone (APSEZ), which handles one-fourth of
the country’s cargo volumes through 14 ports, is also
expected to commission India’s largest trans-ship-
ment hub in Vizhinjam, Kerala, and a port in Colom-
bo. It has planned a capex of `4,000-4,500 crore in the
current fiscal. “APSEZ is the best proxy to take part in
the growing Indian economy, especially in the goods
trade,” says Chawda of Taurus.
Then there’s ACC-Ambuja Cements that the group
acquired last year from Switzerland’s Holcim for $10.5
billion to become India’s second-largest cement pro-
ducer. In terms of expansion, it plans to double ce-
ment capacity to 140 million tonnes (MT). But first, it
is taking advantage of group synergies to reduce costs.
For instance, it can save `300-400 per tonne from en-
ergy costs, freight costs, and forwarding costs.
Risk & Reward
Explaining the overall investment philosophy, Singh
says the group currently has a portfolio of 10 compa-
nies. “We will have close to 14-15 companies by around
2033. We have an objective to hold a certain percent-
age in our portfolio. Within that portfolio, when we
recycle capital, it is not dilution,” he says. The promot-
ers want to own the majority and the highest stake | 45
possible in the early-stage companies. “Our objective
is to get our portfolio into a position where the cur-
rent cash that we hold in the bank and free cash flow
is greater than any debt maturity requirement. At a
portfolio level, we will get there by 2025,” he says.
While the Supreme Court-constituted expert com-
mittee on the Adani stocks crash did not find any reg-
ulatory failure, the sword of ongoing investigations by
the Securities and Exchange Board of India (Sebi) is
still hanging over the group’s head. “We remain con-
fident in our governance and disclosure standards,”
Gautam Adani had said, putting up a brave front be-
fore shareholders. The group’s stocks are showing a
gradual recovery, and it is also expanding internation-
ally. For instance, Adani was in Sri Lanka in July, rub-
bing shoulders with President Ranil Wickremesinghe.
With a container terminal and a wind project already
in his bag, he pitched for a green hydrogen plant.
Amidst the crisis, Gautam Adani’s greatest asset
remains his management team and board, standing
firmly by his side. If he successfully navigates the cur-
rent challenges, he will surely write a new chapter in
his entrepreneurial journey, possibly even introducing
the term ‘permasuccess’ to the Collins Dictionary.
@anandadhikari
‘TIME TO
GO FULL
THROTTLE’
Rajiv Jain, Chairman and
CIO of GQG Partners, reveals the
thinking behind investing
in the Adani Group
BY ANAND ADHIKARI
IN THE WORLD of
finance, some may argue
that Rajiv Jain, Chairman
and Chief Investment
Officer (CIO) of GQG
Partners, is playing
with fire. But this Fort
Lauderdale, Florida-
headquartered private
equity firm has found
its special sauce with its
successful investment
strategies. Whether it’s
HDFC Bank or ITC, Jain’s
strategy has been to get in
early, thereby maximising
returns for his global cli-
ents. His investments in
the Adani Group—more
than $4 billion—have
attracted considerable
attention due to the con-
troversies surrounding
the conglomerate. But
the 55-year-old, who has a
knack for seizing oppor-
tunities amidst chal-
lenges, is betting on his
investment experience of
more than three decades
to come through for his
clients. In an exclusive
interview with Business
Today, Jain decodes his
investment thesis. Edited
excerpts:
Business Today 20 August 2023
PHOTOS BY GETTY IMAGES
fff book in India. I first start-
What were your invest- ed investing in India in
ments in India before the the early 1990s, when the
Adani Group? markets first opened for
We launched GQG FIIs [foreign institutional
Partners seven years ago investors]. So, I have seen
and I am very grateful to more than a few economic
have got such a strong cycles. And there have
response from thou- been times when I have
sands of sophisticated had significantly larger
institutions and pen- positions. About a decade
sion funds from all over ago, I had more than 5
the world. We currently per cent each in ITC and
manage around $104 bil- HDFC Bank... So, I like to
lion and offer four core make large, concentrated
equity strategies. We have bets. Our India book is
approximately $14 billion relatively concentrated in
of our overall investment just a handful of names.

We believe that’s how one
can deliver good returns
to clients.
fff
Did you study Indian in-
frastructure companies
before the Hindenburg
report?
I looked at infrastructure
operators but never invest-
ed in a big way. L&T was
as close as we got to infra.
Prior to joining GQG, I
had also looked at a bunch
of mid-cap infra stocks
that did very well for six to
seven years. But I missed
all of that! This is the first
time in 30 years that I have
been as bullish on Indian
infrastructure stocks.
If you look at our India
exposure, we believe banks
look very attractive... We
also like some public sec-
tor banks. We have been
familiar with them for a
long time, along with ITC.
[But] we have nothing in IT
services, for example.
fff
What is your assessment
of the Adani Group, the
board, the management
and the conglomerate’s
governance structure?
We started looking at the
group more closely after
the Hindenburg report
came out to see what could
potentially go wrong and
how much impact it would
have. Some of our team
members had met the man-
agement and the family
members when they (the
Adanis) were doing road
shows last year. We did
some work on their busi-
ness a few years ago. At that
time, which was almost five
years ago, we were more
bullish on China tech. And
we also thought the valua-
tions were a bit expensive.
When we started doing
the work this year, what we
found was that the more
work we did, the more bull-
ish we got. In our view, they
have world-class operat-
ing assets with utility-like
characteristics. We feel
that the Adanis’ asset
allocation decisions have
been remarkably good. If
you buy Mumbai airport
or any other airport dur-
OUR VIEW IS THAT MOST
OF THE TIME, GOOD
MANAGEMENT DOES ITS
JOB AND OUR CLIENTS
ENJOY THE RETURNS.
THE ADANI [GROUP]
DOESN’T NEED PEOPLE
LIKE ME TO TELL THEM
WHAT TO DO
ing Covid-19, when it is
likely a distressed sale,
the transaction has a high
probability of doing well.
Another example would be
solar modules. They were
not in that business even
a few years ago. Now, they
will be one of the largest
producers of solar mod-
ules outside of China. If
anybody wants to set up
data centres in India, who
would they go to [other
than the Adanis]? It’s [also]
an electricity business...
[but] the group is one of
Business Today 20 August 2023
the lowest- cost producers
of electricity in the coun-
try. What is also not appre-
ciated is that if India wants
to be net zero by 2070, it
likely cannot happen with-
out this group.
fff
Has the correction in
valuations, the govern-
ment’s focus on infra, or
the maturity of the infra
sector in India encour-
aged you to invest in the
Adani Group companies?
There are multiple reasons
here. First and foremost,
we look for bottom-up
execution capabilities. In
every country, and it’s not
unique to India, everybody
likes to talk big. The way I
like to put it is that there
are a lot of hot-dog stands
that claim they will be the
next Microsoft. But most
of them remain hot-dog
stands. I don’t think politi-
cal connections can create
competencies. What we
would like to see are core
execution capabilities over
multiple cycles—which is
COVER STORY Q&A
what we saw in this [the
group’s] case. And this is
not just in one area but
in multiple areas, such
as power, transmission,
green energy, gas distribu-
tion, edible oils, roads, etc.
It’s very unusual to see this
high level of competency
across multiple complex
projects.
We have invested in
utilities in over a dozen
countries, including
emerging markets and
developed countries. We
have seen utilities go bank-
rupt in Europe. We have
seen utilities go bankrupt
in a lot of developed mar-
kets and, obviously, in
emerging markets, includ-
ing in India. So, it is not
as straightforward. What
we found at the Adani
Group was its consistent | 47
ability to deliver in a very
cost-effective manner
and thereby generate high
returns. That’s what, first
and foremost, attracted
us. People talk about free
cash flow, but free cash
flow comes later in the
best-growing businesses.
Almost all US utilities have
negative free cash flows.
Even outside, for example,
retail giant Walmart: It had
negative cash flows during
its fastest growing years,
for almost three decades!
We also thought there
was inefficiency in the
Indian market where the
focus was too much on
short-term P&L [profit
and loss]. I consider Indian
corporations to be among
the best in the world. Of
course, I may be a little
biased. But I believe it
[Adani] truly is a well-run
 COVER STORY Q&A

corporation that managed

tough environments over a
very long period. There is a
long list of companies that
have survived and thrived.
But even within that con-
text, I rarely see somebody
execute consistently well
across diverse categories
as [does] this group.

fff
Is there a difference in
the investment cycle for
infra this time from the
last time?
There is a difference
between this cycle and the
last cycle for infra. Why
did we not invest in the
last cycle, and why are we
investing now? Last time,
there were a lot of hot-dog
stands that said they would
be Microsoft. We didn’t
48 | like the structure of those
projects or the regulatory
regime then and we avoid-
ed them. This time, there
are not many Indian pro-
moters who are coming out
to say they are investing in
infrastructure and that’s
despite a much better regu-
latory environment. Why?
Most of them [the invest-
ments] blew up. Who is to invest in operating high hit rate. Look at the in the private sector
going to bid for or build companies like airports, projects that are coming can do it?
new airports, transmission roads, green hydrogen through, such as petro-
or gas assets now? There or data centres. What’s chemicals, defence, copper fff
are not many groups. Will your view? smelting, green hydrogen, Which business of AEL,
India really give these air- They are not available etc. In all these instances, according to you, is more
ports to any foreign opera- right now. The new India needs much more mature and could be the
tor to run them? These are businesses are not listed capacities domestically. first to see unlocking?
critical national assets. separately. We like the A lot of these are power- As investors who take a
holding company. That intensive businesses, and long-term view, we don’t
fff is a larger position for us. land acquisition could be care about unlocking for
What attracted you to We own about 6 per cent a problem for any private short-term gains. Let the
Adani Enterprises Ltd of AEL on behalf of our player. Opportunities in businesses compound. If
(AEL), the group’s hold- clients now. If you look the defence sector itself you unlock them too early,
ing company? The better at the incubation track could be very large. These we believe there is a risk of
option for any investor record of the new proj- sectors are strategically becoming inefficient. In
like you could have been ects of AEL, it has a very important for India. Who our view, unlocking makes

Business Today 20 August 2023

 FOCUS
FINTECH

),17(&+$1'
3/$7)250
,1129$7,21
(;3/$,1('
2'(66$67</(
Technology is at the heart of every-
thing we do today, revolutionizing
all industries, including financial
institutions. The fintech revolution
has been a game changer, both from
the point of technology and creating
differentiated customer experiences.
It has completely transformed how
enterprises scale, operate and serve
their customers.

A
t Odessa, we serve the Asset Finance industry with
our market leading product and are harnessing
the immense potential fintech holds. I have been
a part of Odessa since 2014, and over the years have
worked with the founding team, business leaders, and
customers to scale our strategy and growth. As the Chief
Technology Officer, I have had the incredible opportunity
to work with highly talented cross-functional teams to
spearhead product and technology innovations to shape
our industry. From day one, our mission has been to cre-
ate and deliver transformative products to our global
customers. We have a long history of reimagining our
technology stack in anticipation of the future, constantly
pushing the boundaries of what is possible.
Reimagining What’s Next
Walk our hallways, and you will see a common thread
tying Odessans together – a strong company culture an-
chored on a growth mindset focused on learning, inno-
vation, and collaboration to deliver value to our custom-
ers. Our global cross-functional teams thrive on building
new features, technology capabilities and enhancing
customer experiences. We recently codified this ethos in
our employee value proposition “We Build What’s Next”
- build what is next for our employees in terms of their
career and growth, customers, and the market at large.
This robust technology and innovation engine has scaled
largely due to our intentional roadmap strategy (around
30% of our total overhead spend on R&D) and our agile
operating models that enable us to deliver quarterly
commercial product launches a year to our customers.
Our philosophy has always been “think customer/user
first”; we hyperfocus on evolving the technology stack
to solve business problems and deliver meaningful
customer experiences. The Odessa Platform offers cus-
tomers the ability to transform the complete gamut of
business operations, from digitizing key stakeholder
touchpoints, automating processes and driving data-
driven outcomes. Behind the scenes, this is powered
by modern technology architecture - Digital, API-first,
Cloud native, and extensible– and a DevOps mindset to
deliver rapid time to value.
The market validation of these efforts are the accolades
that we continue to receive from customers and leading
industry bodies – recently, Monitor recognized Odessa
third time in a row as ‘Most Innovative Companies’ for
our innovations and industry disruption in the Asset
Finance industry.
The Odessa Advantage!
In my experience at Odessa, I found a creative learning
playground to drive product and platform roadmaps,
technology innovations, and GTM for global markets. At
the same time, I have enjoyed a supportive and nurtur-
ing team culture where I can be my authentic self.
Odessans are a diverse global community of over 1,200
professionals with a strong technology and consulting
talent hub in India. Our people-first mindset includes
thoughtfully crafted programs and initiatives to create
unique talent experiences for our diverse workforce. But
what makes it truly different? The fact is while we are
built to last, we are also ever-evolving, responding to
realities, and constantly addressing the emerging needs
of our people. We are hitting our 25th mark this year, but
the great thing is we have never shied away from rewrit-
ing our playbook.
As an Odessan, beyond the day-to-day, you have the
space to experiment with ideas and bring them to life
through our flagship innovation program, Launchpad,
or leverage opportunities to learn and grow through
our robust learning and development programs through
Odessa University. We also have an Employee Assistance
Program on days you seek additional wellness support
or simply want to blow off some steam! In terms of
our community engagement, we are providing access
to quality education and healthcare to children from
low-income households through dedicated programs in
partnership with nonprofits. What’s more, our workforce
has around 40% women, which has helped foster a
diverse, inclusive, and equitable workplace for all – this
gives me immense pride as an employee and a leader. I
could not be more excited for the future; Odessans across
the globe are championing what is next – be it for us,
our customers, and our communities.
 COVER STORY Q&A
sense in some cases such
as green energy because
you can get a cheaper
cost of debt as there is a
set of debt investors who
want to invest in green
projects. But in airports,
full unlocking seems a bit
early. There’s obviously
no such benefit in petro-
chemicals, so it is better
off being part of AEL. So,
we believe there’s no real
benefit at this point in
spinning off too much.
Roads maybe... but I don’t
know. Ultimately, all of
this is their call as they
have a very good long-term
record, so let them decide.
I think, big picture-
wise, unlocking makes
sense only in the long term.
50 |
I LIKE TO MAKE LARGE, CONCENTRA-
TED BETS... OUR INDIA BOOK IS
RELATIVELY CONCENTRATED IN JUST
A HANDFUL OF NAMES. THAT’S HOW
ONE CAN DELIVER GOOD RETURNS
But you don’t have to hurry
as it reduces flexibility.
That’s where related-party
transactions, acquisitions,
and many other things that
cause friction come in. This
is the time to keep your
foot on the accelerator.
And if the market doesn’t
agree with it, so be it.
fff
Will you work closely
with the group in terms
of strategy and future
direction?
It will be too arrogant
of me to say that I can
improve what they are
doing. I think they have
done just fine without me.
I don’t think they need my
advice. Our view is that
most of the time, good
management does its
job and our clients enjoy
the returns. The Adani
[Group] doesn’t need
people like me to tell them
what to do. Just don’t
deleverage too much and
this is the time to go full
throttle. That is my view.
fff
Will you be comfortable
if they raise money by
selling equity?
The question of dilution
[of stake] is always: at
what return are we going
to reinvest the capital? If
you look at HDFC Bank, it
has raised equity multiple
times in the past. I invest-
ed in HDFC Bank from
2001 onwards. It made as
many as, I think, four or
five equity offerings over
the past two decades. And
the client accounts that
I managed participated
in every one of them. It
doesn’t need it now. There
are businesses that gener-
ate very high returns, but
they cannot deploy more
Business Today 20 August 2023
capital. Markets typical- Warren Buffett owned 55 per
ly pay higher multiples cent of Berkshire Hathaway
to companies that don’t for the longest time. Bill
need extra capital. Gates, when Microsoft
However, there are listed, owned more than
select businesses that half of the company. That’s
can deploy more capital a good thing... Whether it’s
and give high returns. 70 per cent or 73 per cent,
That is a very rare phe- who cares! In fact, for a busi-
nomenon. Most good ness that has created almost
businesses don’t need $130–140 billion worth
extra capital as they gen- of equity, it has not really
erate enough cash. The raised that much equity if
problem starts when you look at its history. And
companies start doing what is the test for that?
stuff that is not gener- There’s a simple back-of-
ating higher returns. the-envelope test. It has not
We believe the Adani diluted its stake.
Group can deploy a lot Why does Jeff Bezos
of capital without dilut- own a lot less [of Amazon]
ing incremental returns, than Bill Gates [does of
just like HDFC Bank did Microsoft]? Amazon had
in its initial journey. We more cash losses in the early
years than Microsoft. So,
it had to issue more equity
or give employees stock
options. Microsoft was
profitable from the get-go.
So, if a promoter has a high-
er insider stake after 10-20
years, it means that the
business generates a lot of
free cash on its own. We like
high insider ownership—
the higher the better.
want to own more of such fff
businesses. Despite the massive fall or
value correction, none of
fff the mutual funds in India
The Adani Group is now bought into Adani compa-
willing to go below 75 nies. Does that bother you?
per cent equity stake, Why should I care? I am
which was not the case not being arrogant here.
earlier... There are a hundred ways
There is plenty of to heaven. Everybody must
evidence [of that]. find their own way to make
Companies that have high money. And I’m not
insider ownership tend here to judge. People can
to be better than compa- make money in many
nies that have low insider different ways.
ownership. When we
study Europe and the US, @anandadhikari
 FOCUS
MADHYA PRADESH

Narendra Modi Shivraj Singh Chouhan

Prime Minister Chief Minister, Madhya Pradesh

Mukhyamantri Seekho-Kamao Yojana: Skilling the

Youth for Prosperous Madhya Pradesh
Hon’ble Chief Minister Shivraj Singh Chouhan is determined to transform Madhya Pradesh into the most competitive
and vibrant State in all spheres of development by harnessing potential of ‘Yuva Shakti’. In line with his vision and
commitment, Mukhyamantri Seekho Kamao Yojana, was announced with an objective to provide skill development
and stipend to the youth, via one of a kind “Learn and Earn” model, making them employable and equipped in joining
the mainstream economic development.

T
he 'Mukhyamantri Seekho-Kamao Yojana
(MMSKY)' is uniquely designed to bridge the
gap between skilled youth and manpower
requirement in industries .Hon’ble CM Shivraj Singh
Chouhan launched this scheme, encouraging the
youth to equip themselves with relevant industry
skills & exposure, and get stipend during their skill
development training. The scheme will empower the
students to get employment with dignity and pride.
As many as 800 courses have been offered to the
youth relating to different sectors which employs
huge manpower. Those pursuing the courses get
monthly stipend during their skill development
training. These courses enable them to serve industry
well in different sectors.
These include engineering, mechanical, civil, tourism,
hotel management, travel, hospital management,
railways, software development, banking,
accounting, media, entertainment, legal services
etc. Unemployed youth aged 18 to 29 years with a
minimum qualification of 12th grade are eligible
for drawing benefits under the scheme. They must
have their bank account and not be employed in a
government job. Those candidates wanting to avail
the scheme will have to get eKYC, and must have
requisite documents like Aadhaar for registration.
The candidates, based on their skills and
training, are being provided monthly stipend
ranging from ₹8,000 to ₹10,000
12th Pass ₹ 8000
ITI Trained ₹ 8,500
Diploma ₹ 9000
Graduate/Higher Education ₹ 10,000
The first stipend will be disbursed on 1st September.
The scheme applies to private institutions, and they
can provide training to 15% of their workforce. For
those receiving training from private institutions, the
State Government will provide 75% of the amount,
while the remaining 25% will be provided by the
respective private institution. After completion of the
course, participants to get Certification from State
Council for Vocational Training.
As of August 1, 2023 more than 7 lakh youth
have registered for training in 800 courses.
The implementing organizations will be required to
establish linkages with placement services, out of
which 50% should be in the organized sector.
Those interested in self-employment or launching
their own-start-up, the organization shall arrange
easy microfinance/ loans for them through financial
institutions, National Minority Development Finance
Corporation (NMDFC), banks etc. Further supporting
them to ensure smooth transition as post placement
assistance, a support of Rs. 2000/- per month will also
be provided for two months.
Mukhyamantri Seekho Kamao
Yojana is reflective of Hon’ble
Chief Minister Shivraj Singh
Chouhan's vision of transforming
Madhya Pradesh by unleashing
the potential of ‘Yuva Shakti’
 AS UBER AND OLA GRAPPLE WITH A DRIVER
S H O R TA G E I N T H E A F T E R M AT H O F C O V I D - 1 9 A N D S H I F T T O
A P R O F I T - F I R S T A P P R O A C H , N I M B L E N E W C O M E R S H AV E
Z O O M E D I N T O C A P I TA L I S E O N T H E I R I N E F F I C I E N C I E S ,
RESHAPING URBAN TRANSPORT IN THE PROCESS
 BY
B I N U PAU L
 START-UPS RIDE HAILING
“HELLO MADAM, WHAT is your drop
location?” “Koramangala.” Ride
cancelled. “Hello madam, cash or
online payment?” “Online.” Ride
cancelled.
“This is my struggle every day
now; spending over an hour having
these awkward conversations with
at least half-a-dozen drivers before
54 | I finally get a cab for my commute,”
shares Bengaluru-based IT profes-
TROUBLE BREWS
1 2
The Covid-19-induced
slowdown prompted an
exodus of drivers, exac-
erbating supply short-
ages for Ola and Uber
sional Reshma. If you are a regular
user of cab-hailing apps, you are
perhaps all too familiar with this.
But things weren’t always like
this, at least not before Covid-19.
In that idyllic past, the value prop-
osition that Ola and Uber offered
driver-partners and customers was
clear: seller would meet buyer in a
mediated market that promised a
fair deal for both. What ensued was
a fierce competition between the
two giants for every ride and driver,
as they outbid each other with dis-
counts and incentives, in a quest to
capture the Indian market.
By the middle of 2020, though,
months of lockdowns, enforced
isolation and deserted streets had
delivered the online mobility sec-
tor a body blow. In the depths of
the pandemic, demand for Ola and
Uber’s services plummeted to zero.
Then, just as dramatically, de-
mand came roaring back after
travel restrictions were eased. But
many things had changed for the
duo by then. They had made the
long-anticipated pivot to focus on
profitability. Many driver-partners
did not return to the platforms, and
those that did found that their real
earnings had shrunk significantly
thanks to a steep rise in fuel costs
and the 30 per cent commission
As service qual-
ity declined and ride
costs rose, more users
turned to autorick-
shaws and bike taxis
levied by the platforms. And the
chorus of disgruntled drivers and
customers that had started build-
ing before the pandemic reached
a crescendo, forcing these two key
stakeholders to search for alterna-
tives. That search has opened a gap
in a closed field and a wide array of
competitors promises to bring the
focus back to that value proposition
Business Today 20 August 2023
from the good old days.
To understand this shift, we
need only look at India’s IT capi-
tal Bengaluru. Here, according to
Tanveer Pasha, President of Ola-
Uber Cab Drivers’ Association, the
number of cabs has reduced to ap-
proximately 40,000-45,000 from
the pre-Covid-19 figure of 100,000.
Many drivers relinquished their
dreams of becoming micro-entre-
preneurs and sold their vehicles af-
ter business crashed.
The supply crunch led to a signif-
icant decline in service quality, with
complaints of badly maintained
cabs, frequent cancellations, and
long waiting times becoming a com-
mon occurrence. Plus, ride costs
increased by at least 1.5 times, per
industry estimates. Together, these
factors have pushed the industry
into uncharted territory, one that
the duopoly has not encountered
since it was established.
3
Ola and Uber, mean-
while, have shifted focus
to profitability in the cab-
hailing business
ON AUTO PILOT
But first, we must begin at the be-
ginning—that is, with the apps. Ola
and Uber saw demand plunge from
about 1.5 million rides per day just
before the pandemic to zero at its
peak. The platforms slashed driv-
er incentives and user discounts,
marking their long-awaited shift
to profitability. Industry observers
 TAXI
ON SHAKY GROUND
The financial performance of the cab-
hailing firms hasn’t been impressive
Total revenue (` crore)
FY19 FY20 FY21 FY22
2,783.61 2,844.11 1,168.16 NA
892.66 765.81 538.73 560.52
0.78 4.15 9.22 32.29
PAT (` crore)
FY19 FY20 FY21 FY22
-2,592.93 -2,208.23 -1,116.61 NA
43.24 720.74* -333.89 -216.42
-1.17 -16.72 -39.46 -65.48
NOTE OLA CABS’ FINANCIALS INCLUDE CONSOLIDATED FIG-
URES OF ITS PARENT ANI TECHNOLOGIES’ 16 SUBSIDIARIES. IT
DOESN’T INCLUDE OLA ELECTRIC. ANI TECHNOLOGIES HAS NOT
FILED FY22 FINANCIALS; NA NOT AVAILABLE
UBER INDIA’S FY20 PROFIT INCLUDES THE SALE OF UBEREATS
INDIA TO ZOMATO IN JANUARY 2020. BLUSMART’S FY19 FINAN-
CIALS ARE STANDALONE NUMBERS, REST ARE CONSOLIDATED
SOURCE PRIVATECIRCLE RESEARCH
said both firms’ core ride-hailing and mean operating structure,
business managed to find that path steering clear of the growth-fo-
as demand returned after lock- cussed, capital-burning past that
downs were eased. This marked a kept them in the red for far too long.
massive milestone for the decade- But there was a consequent fall in
old Uber and 13-year-old Ola. investments in innovation.
This also meant that the plat- “After such a long battle for mar-
forms had to retain the new lean ket share, both companies seem to
Business Today 20 August 2023
be tired. They are practically doing
nothing other than taking a cut of
every ride. They are neither invest-
ing in technology nor in fleet. That
is unfortunate for both users and
drivers,” says Kaushik Madhavan,
VP of Mobility at research firm Mar-
ketsandMarkets.
A TINY SLICE
This shift in orientation, in turn,
has been necessitated by the sober-
ing reality presented by their books.
Despite a decade of operations here,
Uber’s India business accounts for
just about 10 per cent of its global
rides, per industry estimates. And
Uber India Systems Private Ltd,
that manages the mobility business
in the country, recorded `560.52
crore (about $68.46 million at cur-
rent exchange rates) in revenue in
FY22—just 0.2 per cent of Uber’s
US revenue of $31.88 billion. | 55
“The scale of operations and
revenue in India are very negligible
when compared to their global op-
erations. They (Uber) are a clear
leader in their successful markets.
They [have been] here for about a
decade, yet don’t have significant
numbers to show. What is the best
use of an Uber dollar globally? I
don’t see India being that market
because if you are 10 years old and
still [account for] less than 0.5 per
cent of global revenue, why should
the company spend here?” says a
venture capital investor.
Elsewhere, Uber has been ruth-
less in exiting markets perceived to
have limited growth opportunities.
It exited China by selling its local
arm to Didi Global Inc., and South-
east Asia by selling its operations
to Grab Holdings Ltd. It recently
discontinued its mobility business
in Israel. In India, too, reports had
suggested that the firm explored
selling its ride-hailing business.
 START-UPS RIDE HAILING
BIG MONEY
Ola has seen the highest
fundraising among the
three big aggregators
NOTE THIS DOES NOT
INCLUDE DEBT FUNDING
* DATA AS OF
NOVEMBER 2022
# DATA AS OF OCT 2019
^ DATA AS MAY 2023
SOURCE
PRIVATECIRCLE RESEARCH
$42.8 BN
EXPECTED GMV OF
SHARED MOBILITY IN
INDIA BY 2027**
56 |
“With Bhavish (Aggarwal,
Ola’s CEO), they were never able
to [agree] on a valuation. Bhavish
would always say ‘you are smaller
and I’m bigger,’ and they would nev-
er reach consensus. If Bhavish were
to give it a chance, SoftBank would
have funded [the transaction to ac-
quire Uber’s operations] to create a
monopoly. I don’t think Uber ever
received a good valuation in India.
That is why they haven’t left the
market,” says the VC.
Others paint a different picture.
According to some industry watch-
ers, Uber has gained market share
at Ola’s expense. “In 2021-22, Ola
had higher market share, probably
just above 50 per cent. It is now in
the high 30s. Uber has a profession-
TAXI
3,000
2,500 2,900.56
2,000
FUNDS RAISED
1,500
($ MILLION)
1,000
500
0
ANI
Technologies
Private Ltd*
(Ola Cabs)
**SOURCE FROST & SULLIVAN
al leadership and stable team, and
they kept executing really well,”
says a former entrepreneur in the
mobility sector.
Uber has recently led a $20-mil-
lion investment round in fleet man-
agement firm Everest Fleet to pro-
vide its drivers with better access to
electric vehicles (EVs).
Prabhjeet Singh, President of
Uber India and South Asia, tells BT
that the company is focussing on
new categories in cities where it is
operating, while expanding new
products in other regions. “We have
widened our geographical presence,
introduced buses, and achieved
growth in all aspects, including cat-
egory expansion,” he says.
Uber is also going aggressive on
Business Today 20 August 2023
633.47
97.68
Uber BluSmart
India Systems Mobility
Private Ltd# Pvt. Ltd ^
9.7 MN
EXPECTED FLEET SIZE
OF SHARED MOBILITY
SECTOR BY 2027**
the multi-model opportunity. Ac-
cording to Singh, one out of two
trips on Uber is on two- or three-
wheelers. “We have also expanded
Reserve, our pre-booked travel of-
fering, to 13 cities. I am excited about
high-capacity vehicles in India. We
are running bus pilots in Gurugram
and a smaller one in Bengaluru and
I am very keen to explore the possi-
bilities. And more recently we have
introduced Uber Green in India, our
global flagship EV product, which
means you can now get an EV at the
tap of [the] app,” he says.
EYE ON EVs
Meanwhile, Bhavish Aggarwal and
Ola appear to be solely focussed on
the EV business, per sources, a de-

THE RATINGS
GAME
Uber has maintained its
lead in user ratings in the
past one year
UBER
OLA
BLUSMART
MOBILITY
NOTE DATA INCLUDES
$1.47 BN
APP RANKINGS AND
REVIEWS FOR THE CUS-
TOMER APP AS WELL AS
THE DRIVER APP;
PLAY STORE REVIEWS INDIA’S BIKE TAXI
MARKET BY 2030#
ARE NOT SPLIT BY GE-
OGRAPHY; HENCE IT IS
WORLDWIDE AND NOT
INDIA. ALL OTHER DATA
FOR INDIA ONLY
SOURCE SYNAPTIC
cision that is proving costly for its
mobility dreams.
Several people that BT spoke to
say the layoffs and top-level exodus
at Ola over the past few years have
significantly weakened its mobil-
ity team. “The continuous churn at
Ola went on and there is no strong
leadership to really run the mobility
business. There has not been a dedi-
cated senior-level person looking
at mobility for some time. It is run-
ning on auto pilot,” says a person
who has worked with the company.
In an effort to make the cost
structure of the electric division ap-
pear more reasonable, Aggarwal is
allocating some of the mobility re-
sources, states a former employee.
“When electric started doing
TAXI
5
4.5
4.41
AVERAGE RATINGS
4
3.5
3 4.01
2.5
2
1.5 2.78
1
.5
0
Jan 2021
VALUATION OF
#SOURCE ALLIED MARKET RESEARCH
*SOURCE INDUSTRY ESTIMATES
well, it was a clear decision from
Aggarwal to go slow on mobility.
He owns about 40 per cent in the
EV business, and just about 8-9
per cent in mobility. In his mind, it
is very clear that every second de-
voted to EV is more beneficial than
time devoted to mobility,” says a
person closely aware of Ola’s op-
erations. Ola did not respond to a
detailed questionnaire sent to it till
the time of going to press.
Ola Electric was valued at $6 bil-
lion in its last funding round in May.
Per market intelligence platform
PrivateCircle Research, Ola’s ride-
hailing business unit—ANI Tech-
nologies Private Ltd—was valued
at $6.5 billion as of May 2022. But
investment bankers say its mobility
Business Today 20 August 2023
4.00
3.77
1.72
Jun 2023
1.5 MN
APPROXIMATE
AUTORICKSHAW
RIDES PER DAY *
| 57
business might struggle to get even
half that valuation now. That’s per-
haps why the firm isn’t rushing to
complete its planned IPO.
As the market opens up, it pres-
ents Uber an opportunity to raise its
share further. The key lies in its com-
mitment to investing in innovation
and strategic collaborations. “After
being so big for a long time, if you
lose so much market share, it is ex-
tremely expensive and near impossi-
ble to gain back. Ola doesn’t have the
money; nobody is funding mobility.
So it is very unlikely that they will be
able to regain market share. It is now
up to Uber as to how much they want
to push. If they want to spend money
and gain market share, [this] is the
right time and [it] would be fairly
 START-UPS RIDE HAILING
easy,” says the former mobility en-
trepreneur quoted earlier.
SMELLING BLOOD
As the market leaders’ shadow
shortens, many challengers have
latched onto the sliver of sunlight
passing through. And these firms
are aggressively targeting the mar-
ket with differentiated offerings.
Prominent among them is
BluSmart, India’s first all-electric
ride-hailing service, which has po-
sitioned itself as a premium, reliable
alternative to the market leaders.
“In the existing ecosystem, all
three participants—the customer,
driver and the platform in the mid-
dle—have been disgruntled. We
said we won’t do anything jazzy.
We will go back to basics, [to] what
a customer needs when booking a
cab—be on time, give a clean cab
58 | and one that he can afford. For driv-
ers, we want to offer livelihood in
a city by using his core skill, which
is driving,” says Tushar Garg, Co-
founder and CBO of Gurugram-
based BluSmart.
It offers fixed prices and sched-
uled rides, addressing users’ con-
cerns about surge pricing and can-
cellations. The company has an EV
fleet of over 5,000 cars and says it is
adding 500-1,000 every month.
Industry observers believe
BluSmart’s focus on airport rides
has likely helped it capture a high
single-digit market share in that
segment and it enjoys better profit-
ability due to larger-ticket trips and
cost savings facilitated by its EVs.
Garg said the company measures
market share based on revenue.
“Our personal reading is that we
could be in double-digit percent-
ages when it comes to revenue mar-
ket share in the two cities (NCR and
Bengaluru) we operate in,” he says.
Others too are addressing the
value proposition mentioned ear-
lier as they get ready to lap up dis-
gruntled drivers and customers.
Take for instance California-based
inDrive—which had a soft launch
in Chandigarh in 2019 and oper-
ates in 12 cities today. It claims to
have completed over 15 million
rides (across cabs, autos, bikes and
intercity) in 2022. It operates on
“We have an auction-based model, allowing
widened our drivers and passengers to negoti-
ate prices for the ride, and charges
geographical much lower driver commission at
presence, intro- 10 per cent.
duced buses, and “The biggest weakness for these
platforms [Uber and Ola] is that
achieved growth they have very high commission
in all aspects, in- for drivers and they cannot really
cluding category lower that because their expenses
on user bonus and driver incentives
expansion” are very high. When they start re-
ducing these marketing tools, users
PRABHJEET SINGH will [come] to competitors like us.
PRESIDENT, UBER INDIA AND Our business model is more sus-
SOUTH ASIA
tainable because we don’t play with
incentives. We [feel we are] easily
the No. 3 in the market already, and
we are going to compete for the sec-
ond place,” says Roman Ermoshin,
Director-APAC at inDrive.
He says the company is making
headway in capturing market share
from Ola and Uber in cities like Kol-
kata, where it has already secured a
10 per cent market share. With over
100,000 drivers, the company is
looking to clock 30 million rides in
“Our business 2023. “I would say the duopoly is
model is more already being broken. Our target is
sustainable be- to get to 20 per cent of the market,
or even upwards of 25 per cent by
cause we don’t 2025-26, because we have a unique
play with incen- selling proposition,” he adds.
tives. We [feel we Then there is Drife, which start-
ed operations in November 2021
are] easily the with just 25 driver-partners. It says
No. 3 in the mar- it has a fleet of 25,000 cabs in Ben-
ket already” galuru, doing about around 1,000–
2,000 rides a day. It works on a
ROMAN ERMOSHIN
DIRECTOR-APAC, INDRIVE
subscription model where drivers
pay the company a fixed amount
for using the application. It lets cus-
tomers select their preferred driver
and fare, while drivers can view the
pick-up and drop locations along
with the expected earnings.
“I guess a new revolution hap-
pens every decade and it is time for
that in the ride-hailing space—be
it new EV fleets coming in or com-
mission-free applications like us,
[we] are coming in to bridge the gap
and fix the broken pieces. They (Ola
and Uber) know that they are los-
ing this market and [if they] invest
more money they will only increase
their losses,” says Firdosh Sheikh,
Co-founder and CEO of Drife.
RICKSHAW RETURNS
It isn’t just cabs that are jostling be-
hind Ola and Uber; there is also the
humble autorickshaw. A burgeon-
ing crowd of dissatisfied customers
is hitching autorickshaw rides for
the daily commute.
According to one market ob-
server, during 2018-19, Ola led
this segment with approximately
400,000–500,000 rides per day,
and with Uber’s entry in 2018, the
duo collectively accounted for
about 600,000–700,000 daily
rides. During the pandemic, a con-
siderable number of autos shifted
to online platforms, resulting in
substantial growth, reaching an
impressive 1.5 million rides per day
shared between Ola, Uber, Rapido,
and Namma Yatri.
Since its foray into the seg-
ment in 2020, Bengaluru-based
Rapido has made steady progress,
and currently operates in 35 cities.
According to Co-founder Pavan
Guntupalli, Rapido currently facili-
tates around half-a-million rides
and holds the top slot in the three-
wheeler segment in Hyderabad,
while it is also nearing the second
spot in several other markets. Rapi-
do began as a bike taxi service and
is currently the leader in that seg-
“Be it new EV ment. “Auto rides have grown 30-35
per cent year-on-year (YoY) in the
fleets coming in last one year. We anticipate 30 per
or commission- cent YoY growth for auto and 50
free applications per cent YoY growth for bikes,” says
Guntupalli.
like us, [we] are Bengaluru-based auto booking
coming in to app Namma Yatri, which works on
bridge the gap the ONDC network, has garnered
about 20-25 per cent of the market
and fix the bro- share in the city in less than seven
ken pieces” months. The app was built by Jus-
pay Technologies on behalf of the
FIRDOSH SHEIKH autorickshaw drivers’ union amid
CO-FOUNDER AND CEO, DRIFE an escalating dispute between the
Karnataka transport department
and Ola and Uber over higher fares.
It now has a fleet network of over
81,000 autos and has completed
over 5.7 million rides so far. | 59
Like with Namma Yatri, ONDC’s
core principles of unbundling and
interoperability are expected to
help it create a new ecosystem that
can address the online mobility
industry’s inadequacies. “ONDC
unbundles demand and supply as
two separate businesses where any
large consumer app can become
“We said...we the buyer and any dedicated mobil-
ity player can become the seller by
will go back to on-boarding drivers or vehicles,”
basics, [to] what explains Nitin Nair, Senior VP
a customer needs of ONDC.
ONDC is currently looking to
when booking a include cabs and other modes of
cab—be on time, transport, and plans to launch in
give a clean cab multiple cities. Large consum-
er applications such as Paytm
and one he can and PhonePe are also expected
afford ” to launch mobility verticals on
their apps.
TUSHAR GARG Clearly, the ride-hailing market
CO-FOUNDER AND CBO, is entering an intriguing phase.
BLUSMART
@binu_t_paul
Business Today 20 August 2023
 INTERVIEW RAHUL KANWAL

‘It is in India’s own

interest to keep the
data flows open’
Nick Clegg, President of Global Affairs at Meta, talks about the importance
of artificial intelligence, regulation and more
PHOTOS BY HARDIK CHHABRA

60 |

issues of the day is Nick Clegg, President

of Global Affairs at Meta. Clegg, who
is also a former Deputy Prime Minister
of the UK, in an interaction in Delhi
with Rahul Kanwal, News Director of
India Today and Aaj Tak, and Executive
Director of Business Today, talks about
AI, regulation, Meta’s latest product
Threads and innovation, among other
things. Edited excerpts:

This is the age of artificial intelligence
(AI). And one of the biggest questions
the world is grappling with is how AI
should be regulated. Then there’s social
media, which humankind can’t seem
to have enough of. And the behemoth
that is straddling these worlds is Meta,
with its bouquet of three popular social
media services—WhatsApp, Instagram
and Facebook. Shepherding the
company through the complex process
of global regulations and the pressing
Q: I want to start by talking to you about AI
and the manner in which it is capturing global
imagination. But who should regulate artifi-
cial intelligence?
A: AI is not new. It’s been around for decades. There’s
a lot of hype at the moment around something called
generative AI… But I think it somewhat obscures the
reality that AI has been around for years. At Meta, for
instance, we’ve been using AI for ages; anything you
see on Facebook or Instagram has, in one way or an-
other, been touched by AI already. I think how to regu-
late it is a question of first working out what harms
and problems you’re trying to deal with. Is it intellec-

Business Today 20 August 2023

 INTERVIEW RAHUL KANWAL
62 | tual property and copyright, is it misinformation, and
then ask yourself whether the current laws we have on
the statute books are sufficient or not. And I suspect
it will be a mixture of the two; some of the existing
laws we have will be able to be applied to AI, and some
new laws will be required. I hope that as those new
laws develop, they are developed as internationally as
possible because this technology is bigger than any
country, bigger than any company.
Q: When it comes to international regulation,
different countries seem to be proceeding
at different speeds. So what you’re saying, in
principle, sounds correct, but in reality, how
do you see that being implemented?
A: I think there is as much a danger in rushing to
regulate something that hasn’t been properly anal-
ysed yet than there is about being too slow. Being too
fast could also create problems because it means that
you suffocate a lot of the innovation that will come
from AI, or that at least will be the risk, which would
be a great shame, particularly for countries like India.
[For] India, it’s not a question of if; it is a question of
when India becomes one of the great digital super-
powers of the world. It already has the world’s second-
largest community of developers. And there are
fantastic innovators, entrepreneurs and developers in
India who are using AI today. And I think that culture
of innovation [that] is strong in India… is something
you don’t want to stymie by rushing to pass laws when
Business Today 20 August 2023
“AI is our best defence against
anything we don’t want on the
platform... I’m quite optimistic
that the latest advances in
AI will almost help strengthen
our defences as much if not
more so than help people
produce bad content”
it’s not always obvious that new laws are necessarily
the answer. I do think new laws will be necessary, but
I think it’s not a bad thing to take a little bit of time to
get it right.
Q: A few years ago, Mark Zuckerberg and Face-
book had pivoted to Meta. You were drawing
out the grand vision of a metaverse, whereas
the real revolution seems to have been in arti-
ficial intelligence. Were you caught off guard
and are you now trying to catch up?
A: Not really, on several counts. First, you can’t build
the so-called metaverse… without AI, that umbilical
link. And that’s the reason why far from catching up,
we’ve actually been leaders in AI research for years,

and over the last decade, Meta has open-sourced,
shared over a thousand AI databases and models,
including very powerful AI models, which help with
the automatic translation of many languages, includ-
ing the numerous languages in India. And recently, we
did something that none of the big US tech companies
have done so far: We have open-sourced our latest
large language model (LLM) called Llama. What
does that mean? That means that any academic, any
researcher, any developer, any entrepreneur, any bud-
ding businessperson here in India—instead of having
to build their own LLM at the expense of billions of US
dollars—can just download it. It runs directly on Win-
dows… and you can create a new large language, new
tools in finance, financial services, and education,
health, [among other things]. I think that approach to
open innovation is something we’ve always believed
in, and it will really help going forward as well.
Q: Let’s shift our attention to Threads. It
launched with a lot of hype, but user engage-
ment and daily active users seem to have come
down quite a bit from the initial numbers.
How do you see Threads playing out?
A: When you get new apps, you always get this erup-
tion of interest; lots of people use it two or three times
and then it falls off... And then you get a core base of
users and build from that. And we’ve done that be-
fore, multiple times on Instagram, on Facebook with
new features. And remember, Threads is a sort of a
Business Today 20 August 2023
work in progress for lots of new features will be added
over time.
But why Threads? Because I think there are a lot of
people who are looking for a microblogging site where
they can share news and views… particularly when it’s
led by people you admire—creators, influencers and
so on; they don’t necessarily find Twitter particu-
larly attractive right now and want something that is
a slightly kinder alternative. There’s space for more
than one kind of microblogging site. The interesting
thing about Threads is we’re building it very, very
different to things like Twitter... so that it will become
part of something called the fediverse—where you
will be able to interoperably share your content on
Mastodon, for instance. It’ll be a much more open
platform where people will be able to share content
across different sites.
Q: On the issue of innovation, one of the
concerns is that a lot of work Meta has done
of late, whether it’s Reels, Stories, or Threads
seems to have been taken from somewhere
where you adopted the ideas and scaled it up,
gave it volume, made it successful. But it isn’t
genuine innovation in the way that OpenAI | 63
did, or Apple and Google do. How do you re-
spond to this?
A: I don’t think anyone can say that Facebook itself is
not one of the most innovative technologies over the
last decade… [and our] huge investments in building
a new computing platform is something that we’re
pioneering in a way that nobody else is. And by the
way, car manufacturers will look at each other’s prod-
ucts; of course, people compare notes and see what is
moving and shaking in the market. But look at our big
bets—whether they’re on social media platforms, the
metaverse, or indeed, our long-standing investments
in AI well before it became a major talking point.
And just to give you an example of that, one of the
foundational AI libraries that everybody now uses in
the AI industry is called PyTorch—something that
Facebook engineers and researchers came up with.
I think you can both innovate and, at the same time,
look at how people use technology as it evolves. And
then evolve yourself, and that’s exactly what we do as
a company.
Q: You mentioned the need for global regula-
tion. In India, through the data privacy bill,
which is going to be introduced, the focus is
on data localisation. How do you see the data
privacy debate in India shape up?
A: I haven’t seen the latest version of the legislation
you refer to, but I very much hope that it will not
 INTERVIEW RAHUL KANWAL

include provisions to sort of divide up ON REGULATING last several months, we’ve rolled out 30
ARTIFICIAL
the data cake. Because, one of the great INTELLIGENCE
new features… you can limit the amount
things about the internet—particularly of time on Instagram, with far greater
the internet outside China—is that it is so AI has been around parental controls… I think both with the
fluid, it doesn’t recognise geography. The for years. At Meta, research and with the new features that
internet is something that everyone can we’ve been using AI we’re rolling out, everyone, whether its
relish and partake in and build businesses for ages; anything governments, parents, families, kids,
you see on Facebook
and communicate with each other. And or Instagram has, in ourselves, [we will] make sure that any
that’s also true for social media. And I one way or another, experience online for young people is as
think the great risk would be if India were been touched by AI. wholesome and as positive as it can be.
to say, ‘Oh, well, we’re going to hoard all How to regulate AI
this data for ourselves’; and then Vietnam is a question of first Q: One of the big concerns about
working out what
will say, we’ll do that next; and then the harms and problems the use of social media has been
European Union; and the US. And before you’re trying to deal fake news. And while Meta part-
you know it, the global internet, as we with. Is it intellectual ners with various organisations
know it, will have disintegrated, will have property and globally to tackle fake news, one of
copyright or is it
fragmented. That is why we believe that it
misinformation, and
the big concerns is AI models were
is in India’s own interest to keep the data then ask yourself being skewed in a way that they
flows open. And particularly, at a time whether the current started thinking that fake news
when the Europeans and the US have just laws are sufficient was real. How do you prevent that?
recently entered into a new agreement or not A: The thing to remember about AI
to ensure the continued open data flows and misinformation, or indeed any
across the Atlantic. And I think India and ON THREADS undesirable, deep fake disinformation,
Europe and the US are the tripod for the anything that we don’t want on the
64 | future governance of the online world. It is a work in platform, is, yes, it is true that AI might
progress, where
And the more that India, Europe, and the new features will make it a bit easier for someone to pro-
US can align and work together, the better be added over duce a fake image… that’s not new, but
for us all. time. Threads is you might be able to do it more quickly
a slightly kinder now. But conversely, AI is [also] our best
Q: Let us talk about the impact apps alternative to Twitter. defence. I’ll give you one very concrete
It will become part
like Instagram have on the psyche of of something called example. The prevalence or proportion
young kids, adolescents, teenagers, the fediverse, where as a percentage of the total content on
and with so much research coming you will be able to Facebook of hate speech today is now
out on that. What are you doing to interoperably share as low as 0.02 per cent. That means
your content across
make these apps safer for young different sites,
if you’re scrolling through your news
children? like Mastodon, for feed endlessly, and you saw 10,000 bits
A: You mentioned research. As it happens, instance. It’ll be a of content, [only] two bits of content
the research is not conclusive. [Because much more open might be hate speech… it has reduced
there is] quite a lot of research that sug- platform by over 50 per cent over the last couple
gests that for the vast majority of young- of years, precisely because of AI. And
sters, being able to find a community... ON INDIA’S the thing to remember about content
find people they can associate with and DIGITAL PROWESS moderation systems on platforms like
share their experiences with is a very good Facebook is from our point of view, it
India already has
thing for their own sense of well-being. the world’s second- doesn’t matter whether it’s a human
But of course, for people who are not feel- largest community being or a robot that produced the bad
ing great about themselves or dealing with of developers. For content, our systems will still try to
challenging issues in their lives anyway, the country, it is not pick that up, regardless of how it’s been
a question of if; it is
and particularly if they are passively a question of when
generated… I’m quite optimistic that
scrolling and not interacting with other India becomes one the latest advances in AI will almost
people, then it’s not always a great experi- of the great digital help strengthen our defences as much
ence. What we try and do is understand superpowers of if not more so than help people produce
that and then find and build features in the world bad content.
Instagram, which will help both parents
and kids get the best experience. Over the @rahulkanwal

Business Today 20 August 2023

CLOUD
UNDER
FIRE
WHILE INCREASING
ADOPTION OF THE CLOUD
HAS HELPED BUSINESSES
FUNCTION EFFICIENTLY,
IT HAS ALSO PROVIDED A
WINDOW TO BAD ACTORS TO
EXPLOIT VULNERABILITIES
IN THESE SYSTEMS FOR
FINANCIAL GAIN

BY NIDHI SINGAL
ILLUSTRATION BY ANIRBAN GHOSH
 TECH CLOUD SECURITY

UNDER ATTACK
Instances of cyberattacks in India have gone
up in the past few years
1,600,000

NUMBER OF ATTACKS
1,400,000
NE OF INDIA’S largest hospitals, 1,200,000
the All India Institute of Medi- 1,000,000
cal Sciences (AIIMS) in New 208,000 1,391,000
800,000
Delhi, was hit by a ransomware 600,000
attack in November 2022. The 400,000
attack cut off access to approxi- 200,000
mately 1.3 terabytes of data and 0
2018 2019 2020 2021 2022
impacted the hospital’s elec-
tronic medical records system. Its patient scheduling SOURCE CERT-IN
and billing systems were also affected, forcing the hos-
pital to curtail its outpatient services for several days. A BARRAGE OF BREACHES
Not only did it inconvenience patients, it also resulted in Some of the most impacted industries
substantial financial losses for the hospital. After this in- 5,000

PER ORGANISATION
WEEKLY ATTACKS
cident, AIIMS strengthened its network by switching to 4,000
a dedicated and secure local area network, among other 3,000
2,000
security measures. Six months later, when another mal-
1,000
ware attack was mounted, it was thwarted. 0

HEALTHCARE

MILITARY

LEGAL

BANKING
UTILITIES

ISP/MSP
EDUCATION/
RESEARCH
GOVERNMENT/

MANUFACTURING

WHOLESALE
COMMUNICATIONS
INSURANCE/

FINANCE/

RETAIL/
This isn’t an isolated incident. Such instances are
rising across both government and private enterpris-
es. Data from Indian Computer Emergency Response
Team (CERT-In) reveals that India Inc. encountered
nearly 1.4 million cyberattacks in 2022, and among
these, attacks on cloud systems were the highest.
68 | “With the adoption of digital technologies, critical in- ISP INTERNET SERVICE PROVIDER;
frastructure systems are no longer air-gapped, expos- MSP MANAGED SERVICE PROVIDER
ing them to significant cyber vulnerabilities. This shift SOURCE THREAT INTELLIGENCE REPORT INDIA–CHECK POINT
has become particularly evident due to the increased
reliance on digital solutions, virtualisation of govern-
ment and citizen services, and the rise of remote work-
forces,” says Samir Kumar Mishra, Director of Security
5.1
PER CENT
39.93
PER CENT
Business at Cisco India & SAARC. ESTIMATED CAGR OF THE ESTIMATED CAGR OF CLOUD
Incidentally, attacks on cloud-based networks per GLOBAL CLOUD SECURITY SECURITY SOFTWARE
SOFTWARE MARKET MARKET IN INDIA BETWEEN
organisation has increased by 48 per cent between 2021 BETWEEN 2022 AND 2028 2023 AND 2028
and 2022, per data from cybersecurity solutions pro-
SOURCE IMARC GROUP
vider Check Point Software Technologies. As organisa-
tions grapple with the rising complexity of managing
security across multiple environments, and struggle to
detect and respond to emerging threats that span on-
premise and other cloud set-ups, security is emerging Chief Digital Officer & Head of Applications & Cyber-
as a top priority. Consequently, the global cloud secu- security at data centre service provider Yotta Data Ser-
rity software market—that was worth $29.3 billion in vices. Around 98 per cent of organisations globally now
2022—is expected to reach $39.3 billion by 2028, per utilise some form of cloud-based tech, while many have
market research firm IMARC Group. Revenues of In- adopted multi-cloud deployments from multiple cloud
dia’s cloud market are also expected to clock $25.39 service providers. The massive adoption of the cloud
million in 2023, and reach $136.20 million by 2028. environment has also given rise to Shadow IT, where
employees or departments use hardware or software
BUT WHY THE CLOUD? from external sources without the knowledge of the
As businesses increasingly adopt cloud-based solu- IT or security group of the organisation. This creates a
tions, cyber criminals—who are constantly looking vacuum, where the responsibility of managing security
for new vulnerabilities to exploit—are finding it easier within organisations is not clearly defined.
to engineer data breaches, explains Rajesh Garg, EVP, “Cloud infrastructure is inherently complex; that

Business Today 20 August 2023

 A CLOUD SAFETY AUDIT
Phishing attacks THE MOST Denial-of-
PREVALENT service
attacks
TECHNIQUES
Data breaches
USED IN CLOUD Account
ATTACKS... hijacking
Ransomware/
malware attacks

Implement strong Use cloud

authentication security solutions
and access and encryption | 69
control measures

Keep software up to Monitor cloud

date and implement ...AND activity for suspicious
security patches MEASURES THAT behaviour
CAN PREVENT
Deploy a robust CLOUD SECURITY Spread awareness of
and tested incident standard cybersecurity
response plan
BREACHES measures
SOURCE INDUSTRY, BT RESEARCH

increases manifold with the addition of hybrid and
multiple-cloud models,” says Atul Gupta, Partner and
Head of Digital Trust and Cyber Security Services at
KPMG in India. “This makes it difficult for organisa-
tions to identify and address vulnerabilities in their
environments, leaving them more vulnerable.”
This has created the notion that cloud systems are
less secure. Not only that, once bad actors identify a
vulnerability, they deploy various strategies to exploit
it and gain unauthorised access to one or many ac-
counts/systems, from where they can move laterally
within the complete cloud environment. This allows
them to access critical accounts, services and data. But
this doesn’t mean the cloud isn’t secure. It is usually as
vulnerable or as secure as on-premise infrastructure.
What really makes a difference is the cybersecurity
frameworks deployed to protect and prevent these sys-
tems against attacks.
UNRAVELLING THE ATTACKS
Primarily motivated by financial gain, recognition
and visibility, espionage, geopolitical reasons, etc.,
cyber intruders usually target industries that have
large-scale manufacturing or sales operations, or
those that deal with sensitive personal information,
such as hospitals and financial services firms, or those

Business Today 20 August 2023

 TECH CLOUD SECURITY
that run critical infrastructure, such as power plants,
and transmission and distribution companies, among
others. “For now, private sector banks, healthcare and
consumer product industries are the most commonly
targeted since they are the early adopters of cloud,”
says Chintan Matalia, Partner at Deloitte India.
“Earlier, these sectors were unwilling to utilise
clouds for their essential data assets due to control is-
sues. But now, even these industries are moving to the
cloud,” says Anshuman Sharma, Associate Director
CSIRT & Investigative Response, APJ at Verizon Busi-
ness. By targeting financial services firms, cyber crim-
inals aim to steal sensitive customer information, fi-
nancial records and transaction data to commit fraud,
initiate unauthorised transactions, or demand ransom
to restore the data and services they have impacted.
On the other hand, healthcare data can be used to
gain access to personal health information, which can
then be used for identity theft, insurance fraud, or
THE PROTECTION GAME
Global cloud security Indian cloud security
software market software market
2022
29.3 25.39
Market size ($ billion) Market size ($ million)
2028
39.3 136.2
ALL FIGURES ARE ESTIMATES; SOURCE IMARC GROUP
even be sold on the dark web. E-commerce platforms
and retailers are also often targeted to access customer
payment information, including credit and debit card
details, etc. Often, this data is sold on the dark web,
from where people can buy it to perpetrate more finan-
cial crimes. Such breaches can lead to financial losses
for the business as well as its customers, reputational
damage, and loss of trust among customers.
Cyber criminals use various methods to gain unau-
thorised access to cloud accounts. “Most attackers per-
form extensive reconnaissance, searching for leaked
credentials, default or weak passwords, misconfigura-
tions, and human errors,” says Anand Trivedi, Head of
APAC at cyber security services provider CyberProof,
a UST company. Cyber attackers usually attempt to go
Business Today 20 August 2023
after the weakest link in the chain, normally a human,
by launching multiple social engineering attacks—
which manipulate an individual into divulging sensi-
tive information, such as passwords, access codes, etc.
Phishing is another tactic where bad actors hoodwink
users into clicking on malicious links or attachments,
which can then be further exploited to infect a system.
“The attacker will employ tactics such as phishing, or
try to get credentials through brute force attacks to
unlawfully access user accounts, so they can access
[an employee’s] mobile or hack it, and then imperson-
ate [that individual] to create issues,” says Huzefa
Motiwala, Director for Systems Engineering, India and
SAARC at Palo Alto Networks. Brute force attack uses
trial and error to crack passwords, login credentials
and encryption keys.
Another common method used by cyber criminals
is through misconfiguration. This refers to improper or
inadequate set-up of cloud services, resources and se-
2023
2028
curity settings, which occurs when cloud environments
are not configured according to security guidelines.
Even poorly secured interfaces and APIs provided by
cloud service providers can be exploited by cyber crimi-
nals to gain unauthorised access and manipulate cloud
resources. Denial of service attacks (DoS) is another
method where malicious attempts are made to disrupt
the normal functioning of a computer system, network,
or online service by overwhelming it with a large volume
of traffic or requests, rendering it inaccessible to users.
Both government and private entities need to be
wary of these techniques used by attackers. “Addition-
ally, insider threats and third-party vendors are a criti-
cal part of the network today, and must be considered
when planning defences,” adds Trivedi of CyberProof.
SECURING THE CLOUD
Enterprises should focus on fundamental security
policies and procedures necessary to protect their sys-
tems. “To begin with, a configuration management da-
tabase is imperative, with visibility into who has access
to what and whether access is being monitored and au-
dited,” says Anant Adya, EVP of Infosys Cobalt, a group
within Infosys that helps businesses with their cloud-
led transformation. Running vulnerability scans and
developing a plan to address those vulnerabilities is
also critical, along with identifying end-of-life/end-of-
support technologies.
“Another crucial approach is the adoption of a ze-
ro-trust model. The model... requires explicit verifi-
cation of all relevant factors before granting access,”
says Ranganath Sadasiva, CTO at enterprise IT solu-
tions provider HPE India. The model involves imple-
menting the principle of least privilege, risk-based
authentication built on network segmentation, con-
MONEY
MATTERS
Average spending on cloud
security in India per annum
Large-cap $1 million-
companies 5 million
$100,000-
SMEs
1 million
$50,000-
Start-ups
100,000
SOURCE ANKURA TECHNOLOGIES
tinuous monitoring for signs of attacks, and active
defence mechanisms.
Businesses should also conduct regular security
assessments and penetration tests to identify vulner-
abilities. “These tests simulate real-world attack sce-
narios and help organisations identify and remediate
weaknesses proactively,” says Monisha Oberoi, Asia
Pacific Security Services Leader at IBM Consulting. In
addition, maintaining continuous monitoring of cloud
environments and leveraging threat intelligence feeds
to stay informed about emerging threats and attack
techniques also enables proactive threat detection and
response, she adds.
Having a robust security framework is advisable.
Take for instance Tata Communications that has over
Business Today 20 August 2023
700+ clients spanning large- and mid-market enter-
prises across sectors. The company has deployed a
full-fledged security information and event manage-
ment solution that automates the complete remedia-
tion process. “Our network analytics and intelligence
platform analyses 25 million traffic-flow records
from around the world every minute. This enables us
to proactively detect and prevent approximately 2.6
million threats per day, globally,” says Rajesh Awasthi,
VP and Global Head of Managed Hosting and Cloud
at Tata Communications. Experts also emphasise the
need to keep cloud infrastructure, applications, and
systems up to date with the latest security patches to
avoid any breach.
IS INDIA PREPARED?
A lack of awareness among enterprises plays an in-
tegral role in companies not deploying sufficient
security measures for their IT systems. Sundar Bala-
subramanian, MD of Check Point Software Tech-
nologies, India & SAARC says, “Limited awareness,
budget constraints, misaligned priorities, trust
concerns, and compliance requirements are some
potential reasons for companies hesitating to invest
in cloud security.” He adds that raising awareness
among companies around cloud security risks, offer- | 71
ing cost-effective solutions, building trust in service
providers, and ensuring compliance with regulations
are crucial.
The lack of a data protection law also hampers cloud
security. Amit Jaju, Senior MD of Ankura Consulting
Group (India) that helps firms mitigate the risks asso-
ciated with cloud computing, estimates that the “aver-
age spending on cloud security in India among large-
cap companies, SMEs and start-ups ranges from $1-5
million, $100,000-$1 million, and $50,000-$100,000,
respectively.” Jaju adds that it can be difficult for com-
panies to know what they need to do to protect their
data when there are no clear regulations and guide-
lines. “This can lead to complacency and a lack of in-
vestment in security measures.”
However, recent advisories by regulators and gov-
ernment agencies have reiterated the need to deploy
robust cybersecurity measures and incident response
systems for everyone from mainstream organisations
to emerging fintech companies, start-ups and SMEs.
Whatever the reasons, it is only by adopting a com-
prehensive cybersecurity approach that organisations
in India can mitigate risks, safeguard sensitive data,
and ensure the resilience of their digital infrastructure
in the face of an expanding threat landscape.
@nidhisingal
 DESPITE THE RECENT ANNOUNCEMENT OF A
NEW ENABLING POLICY, THE INDIAN SPACE TECHNOLOGY
ECOSYSTEM MAY REQUIRE FURTHER INTERVENTIONS TO
CONQUER NEW FRONTIERS
BY MANISH PANT

ILLUSTRATION BY NILANJAN DAS

 POLICY SPACE EXPLORATION

wo days after the the Indian Space Research Organisation or Isro). It’s
country launched its heartening to note that it has been extended to pri-
vate players as well,” says Pawan Kumar Chandana,
Chandrayaan-3 mis- Co-founder & CEO of the Kondapur, Telangana-
sion to explore the based spacetech firm Skyroot Aerospace. Bengaluru-
lunar surface, the GST headquartered space situational awareness (SSA)
Council, in a surprise firm Digantara Research & Technologies, which
recently raised an additional $10 million in funding,
announcement, ex- called the move “transformative”. “By eliminating
empted private launch this tax barrier, the government has demonstrated
service companies its commitment to fostering innovation and growth
from paying GST if within the space tech sector,” says Co-founder &
they launched satel- CEO Anirudh Sharma.
In April this year, the Cabinet Committee on
lites into space using Security (CCS) approved the Indian Space Policy,
their launch vehicles 2023. While promoting the role to be played by
or rockets. Welcoming the an- the private sector, the policy aims to augment the
nouncement, Lt Gen. (Retd) Anil country’s space capabilities; enable, encourage and
develop a flourishing commercial presence in space;
Kumar Bhatt, Director General of
use space as a driver of technology development and
Indian Space Association (ISpA), derive benefits in allied areas; pursue international
the country’s apex industry body, relations; and create an ecosystem for effective
tells Business Today that this will implementation of space applications among all
76 | stakeholders. Moin S.P.M., Co-founder & COO of
definitely incentivise the nation’s
Chennai-based launch vehicle maker AgniKul Cos-
space industry and help mos, believes the policy will give a fillip to research
in its growth. “We hope this is and development (R&D) in emerging areas such as
made available across all satellite launch vehicles, space tourism, satellite servicing and
service domains, including space-based applications for climate change, disaster
applications.” management, and other societal needs. “This will
encourage India’s private players on the whole to be a
part of future global leaders in the space sector.”
The opening of the Indian space sector to private
Space technology start-ups in the country, cur- entities in 2020 is beginning to bear fruit. The sector
rently around 150, are over the moon hearing the news. has secured $62 million in funding in the first half of
Skyroot Aerospace, which launched India’s first pri- 2023, a 60 per cent increase over the corresponding
vately built rocket into space in November 2022, hails period last year. In 2022, it attracted $112 million in
the move as a historic one towards a more level playing funding, a growth of 22 per cent over 2021. Over the
field. “Previously this [exemption] was only available past few years, despite the current funding winter,
to New Space India Ltd (NSIL, the commercial arm of India’s space technology industry has expanded

$8 BILLION
The current size of the Indian space market, which
has grown at a CAGR of 4 per cent in the past few
years compared to 2 per cent globally, as per a
report by global consultancy Arthur D. Little

Business Today 20 August 2023

 INDIA’S
SPACE
at a remarkable pace. “As a result of
government initiatives to support local
ODYSSEY industry perspective, it is not even
tapped. Imagine if somebody can pro-
entrepreneurs and the opening up of The CCS cleared vide better visibility and transparency
the space market to private operators, the Indian Space not only for objects in space but also for
the industry has seen a lot of growth,” Policy 2023 in objects on the earth, that will be a huge
says Neha Singh, Co-founder of market April to facilitate, thing,” he says.
intelligence platform Tracxn. A report stimulate Therefore, the industry has long ad-
and develop
by global consultancy Arthur D. Little a flourishing vocated for relaxing FDI norms, as the
endorses Singh’s view. “India’s current commercial current framework is often ambiguous
space market is around $8 billion in size, presence in the and confusing. Ranjana Kaul, Partner
and has grown at a CAGR of 4 per cent global space at New Delhi-based law firm Dua As-
in the past few years compared to 2 per market sociates, describes this as a “generic
cent globally,” says the report. demand”. “FDI has been allowed for
Although this is encouraging, it may India also joined setting up satellite systems for 23 years.
be necessary to take more enabling the Artemis It used to be 74 per cent and then during
measures before the companies com- Accords, an the launch of the Make in India pro-
international
peting for India’s spacetech pie can be commitment led
gramme in 2018 it was overnight made
successfully launched into the next by the US, to return 100 per cent, subject to sectoral guide-
growth orbit. But space is a cruel place humans to the lines. Those guidelines say that within
where failure is not an option unless moon by 2025 five years, you have to bring it down to
entities involved have government 74 per cent. So, whenever anyone says
backing (as is the case with most global For India’s FDI should be allowed, the question
space agencies), or well-capitalised, like spacetech industry that needs to be asked is which precise
Elon Musk’s SpaceX. This justifies the to be competitive point are they looking for? That’s the | 77
relaxing of FDI regulations for the sec- on the global story on FDI.”
tor, in addition to the incentives already stage, the Space
The good news is that policymak-
Activity Bill must
provided by India, say experts. be approved ers are aware of the difficulties private
spacetech companies have in attracting
funding and are actively working on
To encourage
FDI IN THE private investment, a solution. “We realised that many of
FINAL FRONTIER the government the start-ups are facing difficulties in
Before 2030, India’s spacetech ecosys- has also exempted raising funding, while there’s an interest
tem will produce multiple unicorns in private launch among foreign investors to invest in
multiple segments, predicts an early service companies them. In less than a year, we have cov-
investor in the domain. “I am convinced from paying GST ered major ground in terms of a revised
when they launch
that we will have at least three to four satellites
[FDI] policy draft that strikes a very
unicorns emerging in India’s spacetech fine balance between the needs of our
industry in another five years,” says start-ups getting funding and the needs
The country has
Ravinder Pal Singh, Partner at venture over 400 private of foreign companies that are [setting up
capital fund Kalaari Capital. Singh led space companies, shop] in India, while also protecting the
the fund’s investments in spacetech in- the fifth-highest interests of India’s nascent private sec-
frastructure firm Digantara, which was globally; in tor,” says Pawan Goenka, Chairperson
among the first start-ups to successfully 2022-23, these of the Indian National Space Promotion
demonstrate its proof of concept in 2022. companies had and Authorisation Centre (IN-SPACe),
raised $210.6
The growth potential of the sector the single window nodal agency for
million in funding,
is immense. In the past 10 years, nearly up 29.12 per cent authorising, promoting and regulating
$27 billion in investments were made from a year ago private players in the space sector. He
globally in certain segments of the adds that the revised FDI policy draft
space sector, which is now worth close is being approved and will be released
to $4 trillion, according to Singh. “If soon. Partially echoing Kaul on foreign
you look at space from the insurance investment, Goenka says this is much

Business Today 20 August 2023

 POLICY SPACE EXPLORATION

needed because there are no clear guidelines on FDI

despite the sector’s enormous growth potential. “A
liberal FDI policy in the space sector will definitely
help in increasing the access to capital for the Indian
spacetech start-ups, which will open more opportu-
nities for collaboration and growth in the sector in
the coming years.”
In addition, India’s spacefaring potential is wide-
ly acknowledged globally because of the country’s
demographic dividend and highly trained work-
force. Elizebeth Varghese, People in Space-Leader at
“We must find Deloitte and author of the best-seller Stellar
ways to deliver Singularity: Navigating the Spacefaring Economy,
on-ground says, “The new [space] policy will allow FDI in three
different kinds of activities: satellite establishment
infrastructure and operations, launch vehicle and manufacturing,
and connectivity and subsystem manufacturing.” And this needs to
to millions at low be sped up through a supportive FDI mechanism, or
cost” else the country risks losing some of the benefits it
has gained on the international stage.
“At one [point in] time, we had about a 2 per cent
SREEDHARA share of the international commercial space launch
PANICKER SOMANATH market. But then [Elon] Musk introduced his reus-
78 | CHAIRPERSON, ISRO; AND SECRETARY IN THE
DEPARTMENT OF SPACE, AT AN EVENT able Falcon 9 rocket, bringing down the cost of a
commercial space launch significantly. India is no
longer the cheapest in the market,” says Kaul.
In a first-of-its-kind move, Isro will transfer the
technology of the Small Satellite Launch Vehicle
(SSLV) it developed to the private sector to power
low-cost launches, mitigating the high cost of its
time-tested workhorse, the Polar Satellite Launch
Vehicle (PSLV). The private sector will be the
recipient of this major technology transfer through
a competitive bidding process. Since Isro has spent
years and hundreds of crores of rupees to develop
various technologies, making them available to the
private sector is a “big deal”. Goenka says this will
be a “big enabler”. Reiterating that the progress
“A liberal FDI policy in the wouldn’t have been achieved without the national
space agency’s co-operation, he calls Isro “essential
space sector will definitely to the private space industry’s advancement.”
help in increasing the
access to capital for Indian
spacetech start-ups, which PROPELLING INDIAN
will open more opportunities ACTIVITY IN SPACE
for growth in the sector in Finally, a Space Activity Act may need to be enacted
the coming years” to bring Indian laws in line with global frameworks
for space travel and exploration. In this regard, the
government had put up a Space Activity Bill draft for
PAWAN GOENKA public comments in 2017. However, it was soon for-
CHAIRPERSON, IN-SPACe gotten until three years ago, when the government

Business Today 20 August 2023


MOONSHOT
The millions of TV, laptop
and smartphone screens
across India that are usu-
ally airing news, entertain-
ment or cricket matches,
were unexpectedly tuned
in to watch the launch
of the Chandrayaan-3
lunar mission on July 14.
Meanwhile, in restaurants
across Delhi NCR, patrons
and servers alike broke
into loud applause to cel-
ebrate the moment space
agency Indian Space
Research Organisation’s
heaviest rocket LVM3
successfully lifted off from
the iconic spaceport at
Sriharikota.
Described as a follow-
on mission to Chan-
drayaan-2, it seeks to
demonstrate the country’s
end-to-end capability in
safe landing and roving
on the lunar surface. The
propulsion module will
bear the lander and the
rover up to 100 km of the
lunar orbit. The probe
will perform experiments
to measure the thermal
conductivity and temper-
ature, seismicity, plasma
density and elemental
composition around the
landing site on the moon’s
South Pole, which has
barely been covered by
earlier missions. A passive
laser retroreflector array
from Nasa is also included
in the payload and will be
used in lunar laser ranging
studies.
Taking lessons from
the failure of the Chan-
drayaan-2, Isro has this
time performed rigorous
soft-landing tests on an
artificial lunar surface
located in Ullarthi Kaval
village in Karnataka’s
Chitradurga district.
The superfine moon soil
was created by crushing
anorthosite rocks sourced
from Tamil Nadu. The mis-
sion is expected to touch
down at the South Pole on
August 23.
A successful mission
will make India the fourth
nation after the US, China
and Russia to have safely
landed and roved on the
lunar surface. At `615
crore—a little over $75
million—Isro has again
developed a mission on
a shoe-string budget. As
Isro Chief Sridhar Panick-
er Somanath said, “Con-
gratulations India! Chan-
drayaan-3 has started its
journey towards Moon.”
— Manish Pant
Business Today 20 August 2023
decided to open up the space sector to
the private sector. Kaul, who is critical
of the way the old Bill was framed, be-
lieves that any draft legislation should
be thoroughly thought through, as
space exploration is already a highly
regulated industry. “When companies
that have been suppliers to Isro since
1972 are governed under the normative
laws of the country, subject to special
terms of the contract, sectoral guide-
lines and so forth, how could it pos-
sibly have been contemplated by the
drafters that the new space companies
would be governed under a different,
rather burdensome, legal regime and
law? Are the existing players going to
be happy to be under this?”
As Indian businesses globalise,
local laws may need to match interna-
tional norms. For instance, interna-
tional aircraft lessors cannot immedi-
ately recover their assets if an airline
in India goes bankrupt since India has | 79
not joined the Cape Town Convention
and Protocol (CTCP). Start-up found-
ers see the implementation of the Bill
as complementing the space policy.
“An early clearance of the Space Activ-
ity Bill will complement the Space
Law but also open up the scope for
unlimited innovation-led home-grown
start-ups to be launched,” says Suyash
Singh, CEO & Co-founder of Benga-
luru-based satellite maker GalaxEye
Space. Arindrajit Chowdhury, CEO of
space factory start-up Inspecity, also
believes that an early passage of the
Bill will benefit the fledgeling industry
in many ways. “The Bill will pave the
way forward for any actor in the space
community to develop technologies
with the proper authorisation and
frameworks, without being concerned
about the legalities of the action!”
Besides, Deloitte’s Varghese be-
lieves a space activity law will provide
a solid foundation for more companies
entering the sector. “Innovation
thrives when companies and entities
feel protected, and understand risks
 THE SPACE ECOSYSTEM
It’s a little big thing, and it’s growing

Nations Commercial Global space No. of payloads

operating in space revenue investment deployed in

SOURCE SPACE FOUNDATION ANNUAL REPORT, 2022; SPACE CAPITAL

space in 2023 in 2021 since 2013 2022

91
5% rise year-
$362
BILLION
$272.3
BILLION
2,354
36% increase
on-year (YoY) 6% increase YoY AS OF 2022 YoY

Size of the global Global govt space Global launch Average number
space economy programme attempts of payloads per
in 2020 spending in 2021 in 2022 launch in 2022

80 | $469
BILLION
$107
BILLION
186
28%
12.7
6%
9% increase YoY 19% increase YoY increase YoY growth YoY

$1
TRILLION
LIKELY SIZE OF THE GLOBAL SPACE ECONOMY BY
2040 COMPARED TO $469 BILLION IN 2020, AS PER
MORGAN STANLEY’S PROJECTION

COUNTING STARS KEEP THE DOUGH COMING

India has seen a sharp rise in the number Some of the well-funded spacetech start-ups
of spacetech start-ups in recent years in the country
80 YEAR OF FOUNDING IN
(FUNDING IN $ MILLION)

120 BRACKETS; FIGURES ARE TOTAL

100 70
FUNDING SINCE INCEPTION;
(NO. OF SPACETECH

100 60 DATA TILL H1FY24

START-UPS)

80 50 SOURCE BT
T RESEARCH

60 40
47
30
40
20
20 11 10
7
0 0
Pixxel (2019)

Aerospace (2018)

Space (2020)
Skyroot

AgniKul

Technologies (2018)

Aerospace (2015)

GalaxEye

Inspecity (2022)
Digantara Research &

Bellatrix
Cosmos (2017)

Dhruva Space (2012)

2019 2020 2021 2022*

*OVER 100; SOURCE: EY, BT RESEARCH

GRAPHICS BY RAHUL SHARMA

Business Today 20 August 2023


ARTEMIS ACCORDS
TO THE MOON
& BACK
In June, India became the 27th signatory
to the Artemis Accords; expect further
dialogue and agreements to establish a
comprehensive and inclusive framework
for space exploration
Increased technological collaboration
between India and the US to help the
global space economy’s growth through
innovation, talent and low-cost Indian
technology
Space industry collaboration with the US
may improve satellite manufacturing,
launches and services
With 381 satellite launches for 34
countries already under its belt, India’s
track record as a low-cost yet high-
technology launch hub will get further
reinforced
Given India’s young, technologically
trained workforce, spacetech applicat-
ions are projected to increase, leading to
more consumer-based innovation
SOURCE DELOITTE, BT
T RESEARCH
Business Today 20 August 2023
and how things work. The intention of any space
Bill is not necessarily to regulate and make things
onerous, but to provide security and guardrails
around how things can be done effectively,” says
Varghese. That’s really important to keep in mind
when we are looking at more foreign companies
wishing to join India’s space economy, leverage
Indian innovation and talent, and use more Indian
talent and resources in things like [space] research
and launches,” she adds.
Goenka says that the Space Activity Bill will
follow once the FDI norms are finalised since the
operating document is part of the space policy.
“The draft [Space Activity] Bill is already there. The
2017 draft Bill is not relevant anymore because a lot
has changed since then. Therefore, a new draft Bill
has been made, which is consistent with where we
are today. Bills take time, and the new draft will go
through a process,” he adds.
Meanwhile, Sreedhara Panicker Somanath,
Chairperson of Isro and Secretary in the Depart-
ment of Space, has one piece of advice for private
companies entering the space. In a country where
freebies are suddenly a hot topic, spacetech compa- | 81
nies must develop business models that make their
solutions affordable to millions. “We must find
ways to deliver on-ground infrastructure and con-
nectivity to millions at low cost,” he recently said
at an industry gathering. In agreement, Varghese
explains, “At the start of the internet economy,
companies had a separate internet division. Eventu-
ally, they had to consolidate. The space sector is at a
similar inflection point, where every company will
become a space company by harnessing some of the
technologies. Whether it’s healthcare, finance, or
insurance, we are going to see an impact on how this
space economy is unfolding.”
Arthur D. Little says that as against the estimate
of India’s space economy touching $40 billion by
2040, it can potentially be worth $100 billion.
In India’s case, this is likely to hold true. In June,
during Prime Minister Narendra Modi’s state visit to
the US, India became the 27th signatory to the non-
binding Artemis Accords, a multilateral agreement
between the US and other countries to return hu-
mans to the moon by 2025. And as the country preps
to send its first human mission into space through
its low-cost Gaganyaan mission, the final frontier
may well be within reach.
@manishpant22
 SALES OF PAINKILLERS
HAVE SEEN DOUBLE-
DIGIT GROWTH OVER THE
PAST TWO YEARS AFTER
STAGNATING DURING
COVID-19. WILL THE
STRONG RUN CONTINUE?
BY NEETU CHANDRA SHARMA
ILLUSTRATION BY ANIRBAN GHOSH
 PHARMA PAINKILLERS

OR BHARAT BHUSHAN Mehta, an avid tennis says Chaudhary.

and badminton player even at 79, disaster As a class, analgesics, or pain reliev-
struck during a tennis match about two ers, have consistently grown at 4-18
years ago when the Covid-19 pandemic per cent. Analgesics can be OTC or
was on the wane. Attempting a smash, he require a prescription. Analgesics as a
sprained his shoulder badly. Mehta, who class rank at No. 7 by sales in the Indian
lived for the thrill of the game, tried to pharmaceuticals market after cardiac
ignore the injury, popping pills and consult- medications, anti-infectives, gastroin-
ing some neighbourhood doctors. Nothing testinal drugs, diabetes pills, respira-
eased the pain, but he was not queuing up at tory treatments and even vitamins (not
hospitals. necessarily in that order).
Finally, in February 2022, when hospitals had reduced the num- Pharmarack, a technology platform
ber of Covid-19 beds and opened their doors to general patients, and software solution designed to
Mehta consulted a specialist. The diagnosis: Rotator cuff tear. Mehta streamline and digitalise the pharma-
was soon in hospital for arthroscopic repair surgery and recovered. ceutical supply chain, says the moving
Mehta and others like him, who began getting back into physically annual total (MAT) or the sales data
active life with a vengeance after months of Covid-19 lockdowns and over a rolling 12-month period, was
physical distancing, are unwittingly contributing to double-digit `13,071 crore in April 2023 for painkill-
growth in sales of pain medications, analgesics, muscle relaxants, ers and analgesics. The MAT for April
over-the-counter (OTC) drugs, and even implants. 2019, or just a year before Covid-19 was
Dr Deepak Chaudhary, Senior Director and Head of the Depart- declared a pandemic, was `8,894 crore.
ment, Arthroscopy and Sports Medicine at New Delhi’s BLK-Max The MAT for the muscle relaxants
Super Speciality Hospital, who operated on Mehta, says even minor segment has grown by 20.75 per cent
84 | trauma can cause such muscle tears. The rotator cuff is a group of since 2019, to `355 crore in April 2023
four muscles on each shoulder joint. (from `294 crore).
“As individuals age, these muscles can weaken due to wear and Sheetal Sapale, Vice President-Com-
tear, and even minor or no trauma can cause tears. Many patients mercial at Pharmarack AWACS, says
with shoulder pain fail to recognise the seriousness of their condi- the pain market has shown a robust
tion and resort to self-medication,” says Chaudhary. five-year CAGR of 10 per cent.
It’s not just people getting back to an active life. Many have start- “Muscle relaxants, local anaesthet-
ed lifting weights at home or taking up sports to get fit. Then many ics, and anti-inflammatory drugs,
had to postpone elective surgeries because hospitals were focussed which are relevant for sports-related
on the pandemic and were careful about admitting general cases. injuries, have also demonstrated prom-
ising growth in the same period. This
growth comes after a slowdown during
THE MARKET GAINS FROM THE PAIN the Covid-19 pandemic,” says Sapale.
Manufacturers of pain management drugs are pumped up and Going by the CAGR or compounded
swaggering around, and why not? They are reporting robust double- annual growth rate of companies
digit growth in sales over the past two years, even as the size of the dominant in the pain market over
market grows. the past five years, Ipca Laboratories
Their offerings range from pills and sprays to lotions, ointments, tops, followed by Sun Pharmaceutical
and implants. An example is Smith+Nephew’s Regeneten Bioinduc- Industries Ltd, GlaxoSmithKline Phar-
tive implant, launched in India on July 11 this year. Smith+Nephew maceuticals (GSK), Zydus Lifesciences
reckons rotator cuff injuries in India added up to at least 150,000 cas- and Micro Labs.
es in 2022, and just 28,000 of these opted for repairs. The company Ipca Labs reported a CAGR of 9.4
estimates that rotator cuff repair cases will rise to 33,000 in 2023 per cent, and Sun Pharma 8.8 per cent.
and 39,000 in 2024, a year-on-year growth of 15 per cent. Ipca’s sales grew by 23 per cent last
“The number of patients requiring such surgeries is increasing year, and Sun Pharma’s by 14 per cent.
as patient awareness and knowledge about shoulder pain improve GSK reported a CAGR of 4.3 per cent,
after the pandemic. For people now more active in sports and gyms, followed closely by Zydus with 4.2 per
many surgeries could be avoided if patients seek treatment earlier,” cent and Micro Labs with 3.9 per cent.

Business Today 20 August 2023


PHOTO BY HARDIK CHHABRA
BOOM TIME FOR BALM The moving annual total of painkillers
and analgesics has increased to `13,071 crore in April 2023 from
`8,894 crore in April 2019, just a year before Covid-19
IN GOOD HEALTH
Demand for pain management and
muscle relaxants surged due to
post-Covid-19 stress and anxiety
after lack of physical activity dur-
ing the lockdowns
Lingering symptoms of Covid-19,
such as body aches and fatigue,
have also led people to seek relief
through pain management and
muscle relaxants
People are getting back to exercis-
ing, leading to injuries, which in
turn has led to an increase in the
use of these medications
The rise of telemedicine during
the pandemic has made it easier
for people to get prescriptions for
these medications
Sales are also being boosted by
the fact that hospitals are once
again doing surgeries like knee and
shoulder replacement following
the pandemic
Business Today 20 August 2023
The CAGR numbers relate to the
painkillers businesses of these compa-
nies in the period 2019-2023.
Similarly, for companies like Cipla
with a significant pain management
portfolio through Cipla Health—a
wholly-owned subsidiary of Cipla
Ltd—sales in the pain market have
shown moderate growth, with a CAGR
of 2.1 per cent over the past five years.
Shivam Puri, CEO of Cipla Health,
says, “We have witnessed signifi-
cant growth in demand for pain care
products owing to rising cases of body
pain due to the pandemic-induced sed-
entary lifestyle. Our pain management
gel, Omnigel, led the growth in this
segment by outgrowing the category
by 1.2x.”
Puri says that the household pen-
etration of the category has increased,
and the company expects the market
to grow further as consumers move
towards newer ways of treating their | 85
pain. “Understanding consumer
needs and introducing innovations
based on deep-rooted insights will be
the key to growing further in this seg-
ment,” he adds.
Meanwhile, Dr. Reddy’s Labora-
tories—another manufacturer of
pain management drugs—has shown
consistent growth in sales, with a surge
of 19 per cent last year, which indicates
a positive trend. In February 2022,
Dr. Reddy’s entered into an exclusive
sales and distribution agreement with
Novartis India Ltd for the Voveran
painkiller range, Calcium range and
Methergine in India.
“Our business in India has con-
sistently driven strong growth and
continues to be a significant focus
market for us. Through this agreement,
we aim to reinforce our portfolio in
pain management and women’s health
domains,” says M.V. Ramana, CEO–
Branded Markets (India & Emerging
Markets), Dr. Reddy’s.
According to a company spokes-
person, pain management is a core
 PROFIT PILLS
The market for pain relief medicines has shown
a CAGR of 10 per cent in the past five years
therapeutic area for Dr. Reddy’s. “We
14,000
have a significant product portfolio
(MAT IN ` CRORE)

12,000
10,000 in the space. In FY22, we licensed
8,000 the Voveran range, among other
6,000 products…. India is a very strong focus
4,000 area for us. We aspire to break into the
2,000 Top 5 in India. Pain management will
0 continue to play an important role,” the
Jun ’19 Jun ’20 Jun ’21 Jun ’22 Jun ’23
spokesperson says.
NOTE: MAT (MOVING ANNUAL TOTAL) IS TOTAL SALES
FIGURES OF THE PREVIOUS 12 MONTHS
SOURCE PHARMARACK
WHAT SET OFF THE
WAVE OF PAIN?
After the Covid-19 pandemic’s disrup-
FIGHTING FIT tion, people focus more on staying in
Ipca is the leader in India’s pain relief medicines shape, according to a survey of 700
space with a 9.4 per cent market share consumers across 12 cities by Pronto
1,400 Consult, a consulting firm that works
(MAT IN ` CRORE)

1,200 with companies across sectors, includ-

1,000
800
ing healthcare.
600 According to the survey, more than
400 51 per cent of the respondents said
200 health is a priority for them, compared
0 with only 11 per cent in the pre-lock-
Ipca

Torrent

Laboratories
Laboratories
Sun Pharmaceutical
Industries Ltd

GSK

Zydus

Micro Labs

Abbott
Laboratories
Alkem
Laboratories

Pharmaceuticals

Janssen
Lifesciences

Dr. Reddy's

Pharmaceuticals

down era. The study found that chronic

pain, muscle injury, post-surgery
recovery, and sports-related injuries
were the primary reasons for using
muscle relaxants.
“The muscle relaxant market in
JUN ’19 JUN ’20 JUN ’21 JUN ’22 JUN ’23
India is experiencing steady growth
MOVING ANNUAL TOTAL (MAT) IN ` CRORE SOURCE PHARMARACK
due to various factors, such as an
increase in musculoskeletal disorders,
a rising geriatric population, chang-
MEDICINE MARVEL ing lifestyles, and growing awareness
A majority of painkiller sales has come from of healthcare,” says Karishma Shah,
drugs designed to treat mild to moderate pain Founder and Managing Partner of
Pronto Consult.
(MAT IN ` CRORE)

12,000
The survey found that 83 per cent
10,000
8,000
of consumers felt the motivation to
6,000
take a pain- or muscle-related drug
4,000 was to improve their quality of life. The
2,000 researchers studied the bills and found
0 that topical applications were the most
Analgesics

musculoskeletal
products

Drugs for
osteoarthritis

Muscle
relaxants

Local

regulators
Other

anaesthetics

Bone calcium

purchased, with Volini being the most

APR ’19
MOVING ANNUAL TOTAL (MAT) IN ` CRORE
bought brand across retail stores.
Hari Natarajan, Founder and Man-
aging Partner at Pronto Consult, says
the sports medicine market, driven by
APR ’20 APR ’21 APR ’22 APR ’23 medicines that offer quick relief, has
SOURCE PHARMARACK been growing at a fast clip.

Business Today 20 August 2023


“We have witnessed
significant growth in
demand for pain care
products owing to rising
cases of body pain due to
the pandemic-induced
sedentary lifestyle”
SHIVAM PURI
CHIEF EXECUTIVE OFFICER,
CIPLA HEALTH LTD
“The number of
patients requiring such
(arthroscopic repair)
surgeries is increasing as
patient awareness about
shoulder pain improves
after the pandemic”
DR DEEPAK CHAUDHARY
HEAD, DEPARTMENT OF ARTHROSCOPY
AND SPORTS MEDICINE, BLK-MAX
SUPER SPECIALITY HOSPITAL
“The growth of the sports medicine market is driven by several
factors, including the increasing prevalence of sports-related inju-
ries, a growing emphasis on physical fitness and sports participation,
advancements in sports medicine technology, and a rising awareness
of the importance of injury prevention and management in sports,”
says Natarajan. He adds that the sports medicine market goes
beyond medicines and includes orthopaedic devices, surgical equip-
ment, and performance monitoring devices.
Dr Debashish Chanda, Lead Consultant-Orthopaedics at CK Birla
Hospital in Gurugram, says innovative pain management and mus-
cle relaxation combinations are also spurring the market growth.
“Certain companies have even introduced similar products under
multiple brand names, recognising the immense potential of this
market. This upward trend in demand for such medications can be
Business Today 20 August 2023
PHARMA PAINKILLERS
attributed to various factors, with
one notable influence being the post-
Covid-19 era,” says Chanda.
The orthopaedic surgeon says that
many people, locked indoors by the
Covid-19 shutdown, took advice from
physical fitness experts and self-
proclaimed experts on YouTube and
Facebook. Injuries became common
because people tried out exercises
without the physical presence of
coaches. “Consequently, both topical
application creams and oral medica-
tions experienced a significant rise in
sales,” says Chanda.
The pharmaceuticals industry
has responded quickly, introduc-
ing many new molecules and drug
combinations for topical and oral
medications and expanding patient
treatment choices.
Chanda believes that the market
growth is much greater than what
is visible. “Many patients purchase | 87
over-the-counter medicines without
consulting doctors, as the market
demand has become so vast that it
overwhelms the healthcare system.
As a result, the actual number of pa-
tients seeking medical attention may
be underestimated,” he says.
And it is not just the exercise craze
leading to more pain.
Those not caught by the exercise
bug are probably glued for hours to
their smartphones or laptops, playing
computer games or just hooked to
social media. Sitting or lying for long
periods is bad for your back or hips.
“The growth in the pain manage-
ment and muscle relaxant market is
undeniable and continues to show
immense potential. We may only be
seeing the tip of the iceberg, as this
upward trajectory is projected to
continue in the foreseeable future,
redefining the landscape of health-
care and patient well-being,” says
Chanda.
@neetu_csharma
 ENTERTAINMENT TATA PLAY

TATA PLAY IS COUNTING ON ITS OTT AGGREGATION PLATFORM

BINGE TO BOLSTER ITS FALLING NUMBERS. BUT IT’LL BE A WHILE BEFORE
THE NEW KID IN TOWN CAN STOP THE COMPANY FROM BLEEDING

BY P R E R N A L I D H O O

P H OTO BY M A N DA R D EO D H A R

Business Today 20 August 2023

 | 89

READY FOR THE BINGE

Will Tata Play MD and
CEO Harit Nagpal’s
gamble pay off?

Business Today 20 August 2023

 ENTERTAINMENT TATA PLAY
T three to four years ago. We knew
‘TATA SKY Y-ISKO laga dala, toh life
jinga la la.’ (Once you get Tata Sky,
your life is on the right track). This
popular jingle from an old Tata
Sky ad was crucial in powering
the direct-to-home (DTH) broad-
caster to pole position in the DTH
space. While it has retained the
position with a market share of 33
per cent, the new rendition of that
jingle is slightly different; it starts
with Tata Play after the company
rebranded itself in January 2022.
In the fast-paced business of
90 | entertainment where the battle
for dominance is relentless, Tata
Play has taken a leap of faith with
its over-the-top (OTT) content
aggregation platform Tata Play
Binge, launched for all customers
in October 2022. “It’s both chart-
ed and uncharted [territory] for
us,” Harit Nagpal, MD and CEO
of the company, tells BT. T (More on
that later.)
But first, a little background.
Analysts estimate that while the
TV industry’s DTH segment will
grow by just around 3-4 per cent in
the near term, its average revenue
per user (ARPU) will grow by 6-7
per cent. According to financial
services firm Elara Capital, the
DTH market will grow only slight-
ly, while a major proportion of
growth will come from households
with connected TVs and free-to-air
channels in the next few years.
Further, Tata Play’s income from
the DTH segment dropped 7 per
cent, from `4,567 crore in FY22 to
`4,240 crore in FY23, per data from
Tofler. This is why diversifying into
the OTT aggregation model makes
eminent sense for it. “We started
working on this platform about
we had to deliver a different cus-
tomer experience,” says Nagpal.
He adds that Binge’s USP lies in
making content both discoverable
and affordable, while also comple-
menting the company’s DTH
business—that contributes close
to 96 percent to its top line. “It is
charted territory for us because
we have been in the business of
distributing content. Now, if our
subscribers have started watch-
ing on-demand content, then it’s
our job to create a platform that
gives them the same facility,”
says Nagpal, adding that the firm
is confident of bringing more
eyeballs to Binge from outside its
primary customer base. “We’ve
spent the past two years test-
ing this platform with our DTH
customers because they would
definitely be more forgiving,” he
says. The company had rolled out
the OTT aggregation service for its
DTH subscribers in 2020.
Now, as the company embarks
on its inevitable transformation,
sceptics wonder if it’s a stroke of
genius or a perilous folly, especially
WEAK SIGNALS
Active paid subscriptions of DTH
industry continue to decline YoY
(SUBSCRIBERS IN MILLION)
57
56
56
55
54
53
52
2020
NET OF INACTIVE/TEMPORARILY
SUSPENDED SUBSCRIBERS;
SOURCE FICCI-EY
Business Today 20 August 2023
when competition from telcos like
Reliance Jio and Airtel, pure play
OTT aggregators like OTTplay,
scope video by YuppTV, and OTT-
cum-aggregator platforms like
Amazon Prime Video and Apple
TV+ is intensifying. Even custom-
ers’ growing preference for OTTs
poses a huge risk. “The growing
popularity of OTT could be a threat
to DTH operators in the medium
to long term. With limited product
differentiation, the DTH industry
is exposed to intense internal
competition, and from cable TV
as well as DD Free Dish,” states a
CRISIL Ratings report. It adds that
the drop in Tata Play’s active DTH
subscriber base is due to industry-
wide headwinds and growing
digital entertainment options.
Interestingly, the firm—that has
been mulling an IPO for the past
few years—posted a net loss of `105
crore in FY23, compared to a net
profit of `69 crore in FY22.
However, Nagpal says, “It is
going to be difficult for a subscriber
who wants to watch content to have
subscription relationships with
multiple apps”. But even as custom-
ers make do with multiple OTT
apps for now, it has not been any
easier for the company as well. “It
wasn’t easy to forge relationships
with each platform because every-
one wanted to go direct-to-custom-
er and not through an aggregator.
But we knew that in the end, the
need of the customer would be-
come supreme,” says Nagpal.
In an era when subscribers
can choose from around 60 OTT
55 apps, the aggregation space is
fast becoming the new theatre of
54
battle for content broadcasters.
Moreover, the pricing has to be
such that consumers get 20-30
2021 2022 apps at the price of three or four
apps, which is what players like
Tata Play and OTTplay are trying
to achieve. “Today, everyone from
leading telecom players to pay
TV operators and OTT services
aspire to become future content
gatekeepers,” says Mihir Shah,
VP at media and telecom consul-
tancy Media Partners Asia. OTT
aggregation serves various pur-
poses for different players. While
telcos aggregate OTT services to
retain subscribers and drive data
consumption, OTT platforms
have introduced aggregation to THE PLOT THICKENS
widen their user base. Separately
pay TV operators, which have 1 DTH leader Tata Play 2 As the company
traditionally served as wholesal- posted a net loss of looks to enter the
ers of linear TV, already have an `105 crore for the financial OTT aggregation segment
established prepaid subscription year ended March 2023 as with Tata Play Binge,
relationship with customers. opposed to a net profit of sceptics wonder if it’s a
Despite all that, Shah says that `69 crore in the previous stroke of genius or a
current monetisation through fiscal perilous folly
ads remains limited. “With the
shift in consumer viewing prefer-
ences, OTT aggregation is a natu- 3 While the timing is 4 Competition from
ral transition for these operators right for Tata Play to telcos like Jio and
to retain and expand subscriber diversify into the OTT Airtel, pure-play OTT | 91
ARPU,” he adds. aggregator business, aggregators like OTTplay,
Consequently, the OTT plat- there’s still a long way to go and OTT-cum-aggregator
forms get subscribers without before Tata Play Binge platforms like Amazon
having to spend any money on becomes a strong cash- Prime Video and Apple
acquiring and retaining subscrib- flow generator for it TV+ is already intensifying
ers, which is normally their big-
gest cost. “Now that effort will be
5 Changing customer behaviour in favour of OTT is
made by us, not them,” explains
Nagpal. For him, Binge’s revenue another huge risk. Experts say that the growing
model is simple. “We are com- popularity of OTT platforms could be a threat for DTH
mission agents. We make com- operators in the medium to long run
mission on whatever we sell. We
buy at a certain price and sell it
at a slightly higher price.” Hence,
the margins are also thin. STRONG CONNECTION
According to a Ficci-EY report Connected TVs have seen the highest year-on-year growth
on India’s media and entertain- in all television segments
ment landscape prepared by
140
(HOME SUBSCRIPTIONS

Ashish Pherwani, Media & En-

120
tertainment Leader at EY India,
100
IN MILLION)

long-term success in streaming

80
requires establishing a durable
60
relationship with subscribers.
40
“Nearly all media companies
20
that are active in the direct-to-
0
consumer (DTC) arena today 2020 2021 2022 2025E
are aiming to offer consumers
PAY TV (CABLE + DTH + HITS) FREE TV CONNECTED TV
E ESTIMATE; HITS HEADEND IN THE SKY, AN AGGREGATOR SERVICE FOR TV
CHANNELS; SOURCE EY ESTIMATES

“Nearly all media
companies that
are active in
the direct-to-
consumer arena
today are now
aiming to give
consumers a
bundled offering
of streaming
content and
other services”
ASHISH PHERWANI
MEDIA & ENTERTAINMENT
LEADER, EY INDIA
a bundled offering of streaming
content and other services,” the
report states, adding that along
with boosting sign-ups and reduc-
ing churn, bundles allow media
companies to improve efficiency
in marketing spends and technol-
ogy investment. Pherwani says,
“Going forward, media companies
will fully integrate distinct
streaming services into one ap-
plication, creating a true ‘hard’
bundle of content.”
Another challenge that OTT
aggregators could address is the
subscription fatigue customers
face, by allowing users to group
multiple subscriptions under
PROFIT PAIN
Tata Play’s net profit dropped significantly in FY23
7,000 364
6,000
(IN ` CRORE)
5,000
4,000
3,000
2,000
1,000
-234
0
FY19
TOTAL INCOME (LHS) PROFIT/LOSS AFTER TAX (RHS)
SOURCE ACE EQUITY. TOFLER
one account sign-on, says Shah.
“Consumers can also avail better
discounts by purchasing OTT app
bundles through an aggregator.
Moreover, some recently intro-
duced services such as Tata Play
Binge and Airtel XStream have
blurred the lines between online
video and pay TV, bringing con-
sumers the best of both services,”
he adds. In that backdrop, the OTT
viewing experience is gradually
evolving to resemble the pay TV
distribution model, familiar in
terms of packaging (bundling of
linear TV channels combined with
OTT packs), a fusion of content
search and discovery, and even
Business Today 20 August 2023
400
300
(IN ` CRORE)
69 69
200
100
0
-100
-105.25
-200
FY20 FY21 FY22 FY23
-300
payment experience.
An example is OTTplay—that
pivoted last year from being a rec-
ommendation and content discov-
ery platform to aggregation. The
platform says that it is solving the
problem of what to watch through
its recommendation engine, along
with providing a solution to miti-
gate subscription fatigue. “People
spend over 15 minutes figuring out
what to watch, and if they know
what they want to watch, they
need to figure out which OTT is
running it,” says Avinash Muda-
liar, Founder of OTTplay. “That’s
something we are solving. So the
product-market-fit is definitely

“With the shift
in consumer
viewing
preferences,
aggregation of
OTT services
is a natural
transition for
these operators
to retain and
expand subs-
criber ARPU”
MIHIR SHAH
VICE PRESIDENT, MEDIA
PARTNERS ASIA
there vis-à-vis our competition.”
Industry estimates suggest that
the platform is closing about half a
million subscribers this year.
Pherwani says the next stage of
evolution will be the bundling of
OTT platforms. “Like multi-system
operators (MSO) bundle different
broadcasters into packages for
consumers, these players (OTT
aggregators) are doing the same
thing from an OTT perspective and
offering them at a much affordable
price,” he says. “Telcos have an
advantage here because they have
a far bigger reach. Even platforms
may start bundling with other
platforms. What matters is that
the final value proposition must be
very attractive for the customer.”
XPERTS BELIEVE THAT
E Jio will have an
advantage as the
country’s largest
telecom player. Even Tata Play as
the largest DTH player is well
placed to make a mark in the
aggregation space, they add. “DTH
and OTT are two different
products and target segments.
OTT goes far deeper. It’s about
giving me what I want, where I
want,” says Pherwani. “It’s a
long-term game for the players in
terms of RoI, but there would be
break-evens of two to five years
depending on the revenue model.”
Nagpal says it took them and
the content platforms some doing
to get the revenue model right.
“It’s kind of half settled now. And
we’ll get even more perfect as the
numbers grow. But it’s not very
different from the kind of model
we have with the broadcasters for
TV content,” he says. “Every new
technology is taking shorter to get
adopted as it progresses. But that
doesn’t mean that the old is gone
or written off. And new technolo-
gies will keep coming.”
The challenge of cord-cutting is
also helping the aggregation space.
“We’ve seen that it has worked for
us. Every person who is cutting
cords can very quickly marry
OTTplay with their systems,” says
Mudaliar. “I also see companies
making an effort to retain their
customers, but people want to
move away from their existing
DTH connections and consume
OTT content, and that’s where
platforms like us make sense.”
Per the Ficci-EY report,
revenues from the digital seg-
ment would be `1.5 lakh crore
by 2025, or around twice the TV
Business Today 20 August 2023
ENTERTAINMENT TATA PLAY
segment. The linear TV universe
will remain comparatively stable
at 166 to 169 million households.
And the pay TV universe will
continue to shrink, albeit at a
slower pace, to 116 to 119 million
active households by 2025, as the
impact of new, paying subscribers
is expected to be lesser than the
conversion of households from
linear TV to connected TV. The
report adds that connected TVs
will exceed 40 million daily active
users by 2025, thereby ending
the monopoly of broadcasters on
the large screen. This will lead to
around 30 per cent of the content
consumed on large screens to be
from social, gaming, and digital
channels, among others. Further,
this creates a major growth op-
portunity for players like Tata Play
and OTTplay. “Right now, there’s
a blank canvas as far as OTT [ag-
| 93
gregation] is concerned. There are
about 120 million people who are
not on our base,” says Nagpal.
While Binge is expected to bol-
ster Tata Play’s slowing revenues,
there’s still a long way to go before
it becomes a strong cash-flow
generator for the company, which
is hoping that the gamble pays off.
What gives Nagpal hope is the suc-
cessful run in the DTH business.
“We didn’t have any exclusivity [in
terms of content] in TV, yet we’ve
been the largest for a long time.
The only differentiation was the
customer experience. We failed
less. We recovered fast. And we
made content discovery easier.
These are the principles we’re tak-
ing to the OTT industry as well,”
he says. “We don’t know how to
make content but we know how to
aggregate it.”
Now, whether life turns out to
be “jinga la la” for Tata Play, only
time will tell.
@PLidhoo
 EVEN AS
SMALL-CAP
MUTUAL FUND
SCHEMES SEE
RECORD
INFLOWS WITH
INVESTORS BETTING
BIG ON THE
SEGMENT, SOME
FUND MANAGERS
APPEAR WARY OF
DEPLOYING MORE
MONEY INTO
SMALL-CAP
STOCKS. IS THE
PARTY OVER
FOR THEM?
BY ASHISH RUKHAIYAR
ILLUSTRATION BY ANIRBAN GHOSH

Business Today 20 August 2023

SIZE DOES MATTER

DRIVE IS ALMOST FULL

OK
 MARKETS SMALL-CAP FUNDS
‘SMALL IS BEAUTIFUL’ or ‘the big-
ger the better’—which one do you
think has the best value?
Now, imagine the possibility
of purchasing a product that has
grown to a very large size but still
centres around things that are
96 | deemed small.
That’s the realm of small-cap
funds, which invest primarily in
small-cap stocks. Though these
stocks are considered small in
terms of market capitalisation,
such has been the investor appe-
tite for them that a few funds in
the segment have become so large
that deploying investor money has
become a problem, forcing some
fund managers to temporarily halt
new subscriptions.
To understand why that is
the case we need to first tackle a
frequently asked question that
always surfaces when the bench-
mark indices scale record highs:
What is the outlook on the small-
cap universe of stocks, especially
when the small-cap barometer
has outpaced the benchmarks, the
S&P BSE Sensex and the broader
Nifty 50? A bunch of fund manag-
ers reckon the recent rally and the
resulting surge in valuations de-
mand that they take a breather in
terms of putting more money into
such stocks that often encounter li-
quidity problems during hefty buy
or sell orders.
Consider this: While the Sensex
has gained 9.45 per cent so far in
2023, the S&P BSE SmallCap index
has rallied 17.50 per cent through
July 17. Interestingly, this comes on
the back of a 1.80 per cent fall in the
small-cap index in 2022, when the
Sensex rose nearly 4.5 per cent.
This is noteworthy because many
market watchers believe that a sharp
increase in the value of small-cap
stocks indicates that the rally is
nearing its end, even though the
Indian stock market is currently re-
ceiving strong support in the form
of inflows from both foreign and do-
mestic institutional investors.
Now, let’s talk about small-cap
mutual fund schemes.
The amount of fresh money pour-
ing into these schemes has reached
record highs in the recent past. Ac-
cording to data from the Association
of Mutual Funds in India (AMFI),
net inflows in small-cap funds hit
an all-time high of `5,472 crore in
June, up from `3,282 crore in May,
while popular equity categories like
large-cap funds, flexi-cap funds, eq-
uity-linked savings schemes (ELSS)
Business Today 20 August 2023
and focussed funds witnessed net
outflows during the same period.
Additionally, small-cap funds
received cumulative fresh flows
of slightly more than `29,500
crore in the 12 months till June
2023, which was again much
higher than all other categories of
equity schemes. However, that is
just one side of the story.
At least two major fund hous-
es, Nippon India Mutual Fund
and Tata Mutual Fund, have
stopped accepting fresh lump
sum investments in their respec-
tive small-cap schemes. The rea-
son cited is the huge run-up in the
prices of most small-cap stocks
that has made their valuations
soar, causing fund managers to
worry that they are becoming
locked in a vicious spiral.
A VICIOUS CYCLE
Low liquidity is a common prob-
lem for small-cap stocks, making
it challenging for institutional in-
vestors like mutual funds (MFs)
to buy large quantities of shares.
Even if the required quantity
is available, a huge order could
drive up the price, making the ac-
quisition prohibitively expensive.
And, large schemes usually have
substantial purchase require-
ments. Compared to Tata Small
Cap Fund’s assets under man-
agement (AUM) of nearly `5,250
crore, Nippon India Small Cap
Fund’s AUM is around `32,000
crore. Both plans are no longer
accepting fresh money through
the lump sum route, but they con-
tinue to honour current system-
atic investment plans (SIPs).
“The step was warranted giv-
en the recent sharp rally in the
small-cap space and increasing
investor participation through
high-ticket investments. We
thought it is in the best long-term
interest of investors in the fund
 RETURNS ROSTER
The small-cap index has given better returns than the bench-
mark BSE Sensex in 2023
for money to arrive in a more cali-
80
brated manner,” says Samir Rachh,
Fund Manager-Equity, Nippon In- 65
dia Mutual Fund. “Small-cap is a

(RETURNS IN PER CENT)

50
comparatively less liquid space and
has high impact cost. In that con- 35
text, the size of the fund does create 20 17.50
its own challenges,” he adds.
5 8.98 9.45
Similarly, Anand Vardarajan,
Business Head-Institutional Cli- -10
-11.23
ents, Banking, Alternate Invest- -25
ments & Product Strategy of Tata 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023*
Asset Management, notes that the -40
fund house’s performance has re- BSE SENSEX BSE SMALLCAP
sulted in robust flows, which have *DATA TILL JULY 17, 2023; SOURCE BSE
increased cash in hand. Unlike
large-cap companies, which typi-
cally have plenty of liquidity, small-
caps can make it tricky to get the Small-cap funds emerged as the highest return-generating
amount needed. “If we still buy, the category of MFs after falling into negative territory in 2022
impact cost goes up and we unwit-
tingly drive up the price,” explains 70
(RETURNS IN PER CENT)

Vardarajan. 60
According to AMFI, the top 100 50
stocks by market cap are consid- 40
98 | ered large-caps, while the following
30
150 are classified as mid-caps. The 20
small-cap market comes next. To 10
put it differently, the largest stock
0
that a small-cap fund could invest in 2019 2020 2021 2022 2023*
-10
would be the 251st largest company
in terms of market capitalisation, in EQUITY: FLEXI-CAP EQUITY: LARGE-CAP EQUITY: MID-CAP
the overall list of listed firms. EQUITY: SMALL-CAP EQUITY: LARGE- & MID-CAP
“The issue that a lot of large EQUITY: VALUE-ORIENTED EQUITY: MULTI-CAP
small-cap funds face is daily liquid- *YTD AS ON JULY 13, 2023; SOURCE VALUE RESEARCH
ity with a lot of small-cap stocks
having really low average daily vol-
umes. When inflows into small-cap
funds increase faster than daily li- Small-cap funds had net assets under management
quidity, as has happened recently, of `1.7 lakh crore as of June 30, 2023
it can become a limiting factor for
funds and it will always impact Category No. of schemes No. of folios* Net AUM**
funds with the largest SIP books Equity: Flexi-cap 36 12.80 2,72,743.17
first,” says Gaurav Rastogi, Found-
er & CEO of Kuvera, an online Equity: Large-cap 31 12.90 2,59,583.23
wealth management firm. Equity: Mid-cap 29 11.00 2,18,145.99

NO LONGER SMALL Equity: Small-cap 24 12.30 1,68,434.33

At least six small-cap funds have Equity: Large- & mid-cap 26 8.00 1,48,217.80
AUM of over ``5,000 crore. Nippon
India Small Cap Fund is the largest Equity: Value-oriented 23 4.90 1,04,685.73
in the country with almost `32,000
` Equity: Multi-cap 19 4.30 78,415.29

*IN MILLION; **IN ` CRORE; DATA AS OF JUNE 30, 2023; SOURCE AMFI

Business Today 20 August 2023

 MARKETS SMALL-CAP FUNDS
crore of AUM as of June 30, ac-
cording to Value Research. HDFC
Small Cap Fund and SBI Small Cap
Fund follow with AUMs of over
`19,000 crore and `18,700 crore,
respectively. Leading fund houses
including Axis Mutual Fund, Kotak
Mutual Fund, HSBC Mutual Fund,
Canara Robeco Mutual Fund, and
ICICI Prudential Mutual Fund of-
fer large small-cap fund schemes
with an AUM of more than `6,000
crore each, as per data from Value
Research. In light of the assets they
manage, it is clear that small-cap
funds are, in fact, not small.
Even though small-cap funds
have the lowest number of schemes
(total 24) among the most popular
MF schemes in the equities cat-
egory, they have a cumulative AUM
of approximately `1.68 lakh crore
as of July 30. This makes them the
sixth-largest fund category in the
100 |
“Small-cap
investing
is not a
sprint,
it is a
marathon… Small-caps,
as is widely known, is a
comparatively less
liquid space and has
high impact cost. In that
context, the size of the
fund does create its own
challenges”
SAMIR RACHH
FUND MANAGER-EQUITY,
NIPPON INDIA MUTUAL FUND
equities segment. Small-cap funds
also boast of a huge number of fo-
lios, at 12.3 million, almost on par
with that of flexi-cap funds (12.8
million), which have the highest
AUM of `2.73 lakh crore amongst
all categories of equity-oriented
MF schemes.
Fund houses typically take pride
in their large AUM schemes, but the
sheer scale of small-cap funds ap-
pears to have presented a manage-
ment difficulty.
“At times there can be a need
to shut a fund. It can depend on a
few factors like the size of the fund
within its category relative to the
available liquidity in a segment
like small-cap to build relevant
positions,” says Ajit Menon, CEO,
PGIM India Mutual Fund.
“It can also depend on the li-
quidity of the existing portfolio
relative to the expected flows, es-
THE BIG LEAGUE
Top 5 small-cap MF schemes in terms of AUM
Launch date Scheme name
Nippon India Small
16/09/2010
Cap Fund
HDFC Small Cap
03/04/2008
Fund - Regular Plan
09/09/2009 SBI Small Cap Fund
Axis Small Cap
29/11/2013
Fund - Regular Plan
Kotak Small Cap
24/02/2005
Fund - Regular Plan
*RETURNS IN PER CENT AS OF JULY 13, 2023;
**AUM IN ` CRORE AS OF JUNE 30, 2023
SOURCE VALUE RESEARCH
Business Today 20 August 2023
pecially outflows. It could also be
dependent on valuation. A fund
house may feel that the valuations
are overstretched to the point
where incremental flows, while be-
ing accommodated, may not have
a good investment experience,” he
adds.
It’s a bull market, and small-cap
funds are outperforming the rest in
terms of returns. In the current cal-
endar year through July 13, small-
cap funds have given a category
average return of a little more than
15 per cent, higher than that of all
other equity-oriented categories,
including flexi-cap (9.25 per cent),
large-cap (7.82 per cent), mid-cap
(12.74 per cent), and multi-cap (11.05
per cent). However, it is frequently
argued that past performance does
not guarantee future outcomes and
that investors in MFs should not
base their decisions on the histori-
1-year* 3-year* 5-year* AUM**
37.51 46.44 22.01 31,945.15
40.79 42.71 17.10 18,999.05
25.43 35.60 19.35 18,624.54
27.54 36.41 22.22 14,251.72
21.79 41.03 20.08 10,829.68
 cal returns of a scheme or a catego-
ry. What does that mean for people
who want to use the MF route to in-
vest in the small-cap universe?
THE WAY FORWARD
The best piece of advice long-term
investors can take right now is to
stick with their investments, no
matter what the fund houses do.
“We are still positive on small-cap
as a category. The segment is good
from a long-term perspective and
offers enough investment opportu-
nities. All we want is more time to
deploy funds,” says Vardarajan.
While there is some enthusi-
asm in the small-cap space, Nippon
India’s Rachh, who oversees the
country’s largest small-cap fund,
believes there will always be at-
tractive investment opportunities.
“Currently we are in a sort of eu-
phoria in small-caps. Markets have
Net inflows into small-cap funds have steadily grown over the past
eight quarters
20,000 18,258.12
(QUARTERLY NET FLOWS IN ` CRORE)
15,000
10,000
5,000
3,716.47
3,000.78
1,943.07
1,367.20
0 528.28
-5,000
Q2FY22 Q3FY22 Q4FY22 Q1FY23
FLEXI-CAP SMALL-CAP MULTI-CAP
LARGE- & MID-CAP LARGE-CAP SOURCE VALUE RESEARCH
their balancing mechanisms and
that would ensure that there would
be better opportunities to deploy
funds. Also, the supply of paper is
huge, so it will also bring some good
opportunities to deploy the flows,”
he adds.
Fund managers may seem opti-
mistic from a longer-term perspec-
tive, but when equity benchmarks
are near historic highs, investors
should always proceed with cau-
tion. “The 250 small-cap compa-
nies in the Nifty SmallCap Index
have a total market cap of around
`27 lakh crore. If promoter owner-
ship is assumed to be 80 per cent,
there would be approximately `5.5
lakh crore in free float. Of that,
small-cap funds probably hold
around `1.25 lakh crore or about 23
per cent, which is not an alarmingly
high ownership in aggregate,” says
Rastogi.
10,936.70
4,735.13
3,018.66
1,045.50
165.87
-3,359.26
Q2FY23 Q3FY23 Q4FY23 Q1FY24
MID-CAP
Business Today 20 August 2023
“For the larger market and retail
[segment], it also becomes an indi-
cator of caution that the small-cap
space is so hot that some of the lead-
ing funds are having a hard time
deploying funds without moving
prices significantly. The last time
this happened was in mid-2017, be-
fore the small-cap index peaked in
January 2018,” he explains.
In a recent note, domestic
broking major ICICI Direct stated
that while small-cap funds have
seen significant underperformance
in the past few years, if overall mar-
kets remain stable, these funds may
continue to thrive going forward.
There’s probably still enough
steam left to drive markets, espe-
cially small-caps, to new heights,
but a little bit of prudence never
hurt anyone.
@ashishrukhaiyar
| 101
“At times
there
can be
a need
to shut a
fund. It can depend on a
few factors such as the
size of the fund within
its category relative to
the available liquidity
in a segment like small-
cap to build relevant
positions”
AJIT MENON
CHIEF EXECUTIVE OFFICER,
PGIM INDIA MUTUAL FUND
GRAPHICS BY RAHUL SHARMA

THE GOVERNMENT’S
DECISION TO INCREASE
THE TAX COLLECTED AT
SOURCE ON SOME FOREIGN
PAYMENTS, INCLUDING
TOUR PACKAGES, TO 20
PER CENT HAS CAUSED
CONCERN. BUT HERE ARE
SOME HACKS THAT
CAN ENSURE THAT THE HIT
ISN’T TOO STEEP
BY NAVNEET DUBEY
ILLUSTRATIONS BY RAJ VERMA
Business Today 20 August 2023
ANT TO TRAVEL ABROAD? What if you have to
W
shell out a few lakhs more upfront? Well, guess
what, that’s just what you may have to do if you
wish to travel abroad in a few months.
This is a result of the increase in tax col-
lected at source (TCS) on some foreign transactions, like
foreign tour packages, to 20 per cent (from the current 5 per
cent) that Union Finance Minister Nirmala Sitharaman an-
nounced in the Budget for 2023-24.
According to Amit Singhania, Partner at Shardul Ama-
rchand Mangaldas & Co, the government appears to have
calculated that a person travelling abroad must fall in the 20
per cent income-tax bracket, which means they must earn
`12–15 lakh a year.
This comes amid a boom in foreign travel after two years
of enforced isolation because of the pandemic. Consider this:
Data from the Reserve Bank of India (RBI) shows that Indians
have spent more than $1 billion on foreign travel every month
since June 2022. And a recent report by private insurer ACKO
 WHAT IS TCS?
It is a tax collected at source
(TCS) by the agent from the buyer on booking
tour packages, or any other remittance abroad

HOW DOES IT AFFECT

YOUR TRAVEL?
If you spend `10 lakh on a foreign
tour package after October 1, your
TCS will almost double to around `1 lakh

WHICH TRANSACTIONS
ARE AFFECTED?
TCS applies to several foreign transactions,
including on education loans, medical
treatment and foreign tour packages

| 103

Business Today 20 August 2023

 MONEY TODAY TAX ON FOREIGN TRAVEL

SURGE IN FOREIGN TRAVEL and research firm YouGov suggests that this trend is
set to continue. Nearly 31 per cent of respondents said
Except for October, foreign
g remittance for
travel has been over $1 billion since June 2022 they would take more international trips this year.
The report, which surveyed people aged between 24
1,493 and 45 across seven major Indian cities, also found
1,470
1,500 1,403 that around 48 per cent of them said they would
increase their travel budget in the coming year.
1,200 1,138 1,150
1,043 Though the government has postponed the rule’s
995 1,100 implementation, the relief is temporary, because it
1,015 1,031 1,071
($ MILLION)

900 974 will come into force on October 1.

881 So, it’s imperative that you understand this tax.
Put simply, it is a tax collected by the agent from
600
you when you book a tour package, and can be col-
lected upfront. The agent then deposits it with the
300 tax authorities. The rate of taxation is 5 per cent if
the expenditure is below `7 lakh and 20 per cent for
0 sums beyond that. It applies to foreign remittances
APRIL ’22 APRIL ’23 made through the Liberalised Remittance Scheme
(LRS), which allows resident Indians to remit money
LRS REMITTANCE FOR TRAVEL
abroad every fiscal for travel, education, medical
NOTE: THESE FIGURES ARE FOR OUTWARD REMITTANCE MADE treatment, investment in foreign stocks, real estate,
UNDER THE LRS BY RESIDENT INDIVIDUALS FOR THE PURPOSE OF etc. The sum allowed is up to $250,000 in a fiscal.
TRAVEL; SOURCE RBI
But TCS is not an additional tax; you can either
adjust it against your total income tax liability or
WHERE INDIANS claim it back while filing income tax returns (ITR).
ARE HEADED “There is no ‘cost’ per se for the traveller since
he will get credit for the TCS. However, it may be a
The most-preferred foreign destinations temporary cash flow issue, which may be adjusted
against the quarterly advance tax liability. If the TCS
DUBAI MALDIVES exceeds the traveller’s total tax liability in a financial
year, he may claim a refund when filing income re-
turn,” says Shruti K.P., Partner at IndusLaw.
So, say, you book your overseas tour package from
domestic online travel agents or aggregators such as
MakeMyTrip, OYO, EaseMyTrip, and Yatra, then the
SINGAPORE SWITZERLAND 20 per cent TCS will be levied after October 1.
Suppose you book a foreign tour package for a
family trip after October 1, then 20 per cent TCS will
be deducted if the package costs more than `7 lakh,
BALI (INDONESIA) unless you have booked it using an international
credit card, which does not attract TCS. Let’s take the
example of a tour package for Switzerland that costs
around `10 lakh. Here, the agent will collect TCS of 5
per cent on `7 lakh and 20 per cent on the remaining
``3 lakh. If you add tax, then, the package will work
SOURCE ACKO REPORT out to `10.95 lakh, which means the TCS is `95,000.
`

48%
Respondents said BEAT THE LEVY
they would raise their If you’re not too pleased by the prospect of having to
travel budget shell out more because of the tax, fear not, there are
a few hacks that help you save on the levy.

GRAPHICS BY RAHUL SHARMA

Business Today 20 August 2023

 Buy forex in advance: The Union
finance ministry has also increased
the TCS on foreign exchange (forex)
transactions by amending Section
206C of the Income Tax (I-T) Act.
Sudarshan Motwani, Founder
and CEO of BookMyForex.com, says,
“TCS will not apply to forex transac-
tions below `7 lakh in a financial year.
If you intend to travel or transfer
money abroad and need to purchase
forex worth more than `7 lakh, you
can book your orders in advance.
Following RBI’s guidelines, you may
purchase currency 60 days before
your trip. If you travel abroad before
November 30, you can buy forex worth
more than `7 lakh by September 30,
and avoid paying 20 per cent TCS.”
The current rate is 5 per cent for forex
worth more than `7 lakh.
Avoid packages: You can opt for
standalone bookings of stay, travel
ticket, etc. The I-T Act defines a tour
package as one that offers a visit to a
foreign country and includes expenses
like travel and stay. But it is vague be-
yond this definition, says Maneet Pal
Singh, Partner at accountancy firm I.P. Pasricha & Co.
“The terminology used in the law is overseas tour pack-
age, and the term tour package is [not] clearly defined in
the I-T Act or rules.” Singh suggests booking components
like hotel, flight tickets and cab separately.
Pick a foreign tour operator: International credit
card transactions with a foreign tour operator do not
attract TCS. Reports suggest that such transactions
could be brought under LRS in six to eight months. In the
interim, Singh says, “If you use an international credit
card to purchase tickets and hotel bookings from a for-
eign tour operator, the strategy could result in significant
savings. Therefore, if you book online through a foreign
website, you may avoid paying TCS.” Besides, Singhania
of Shardul Amarchand Mangaldas points out that foreign
aggregators have not been collecting the current 5 per
cent TCS, though they were required to. “However, if re-
mittances made to foreign travel aggregators amount to
LRS, the 20 per cent TCS may still apply [if] the amount
paid to such agents is more than `7 lakh in a year.”
Echoing their views, IndusLaw’s Shruti says, “The
[government] has said that international credit card
payments will not fall within the ambit of LRS until fur-
Business Today 20 August 2023
“Opt for standalone
bookings for stay, travel,
etc., rather than a bundled
tour package, which falls
within the definition of a
tour programme package”
SHRUTI K.P.
PARTNER, INDUSLAW
“[The government] believes
a person [travelling abroad]
must at least fall in the
income tax bracket of 20
per cent; that is why [it] has
levied a TCS of 20 per cent”
AMIT SINGHANIA
PARTNER, SHARDUL AMARCHAND
MANGALDAS & CO
| 105
ther notice. While under Indian law, the international
tour operator may also be required to collect TCS, they
are unlikely to undertake the exercise.”
Use your credit cards smartly: Credit cards will not
currently attract TCS. “Suppose you plan to go abroad,
you can use your international credit card to book and
save TCS. However, remember that once the TCS applies
to cards, if you plan to go with your family or friends, you
can still smartly use your card to book flight tickets and
your spouse’s credit card for hotel bookings. Then, for
each of you, the total payment made through all cards
will have to be within `7 lakh. However, you must con-
sult a tax expert before you do this to clarify the impact
beforehand. For instance, if you and your spouse file
returns jointly under HUF, the implications may differ,”
says Adhil Shetty, CEO of BankBazaar.com.
But credit cards may include charges on foreign
transactions. “It is best to avoid dynamic currency con-
version and pay in the local currency,” says Shetty. And
finally, heed Shetty’s advice and consult a tax planner
to ensure you are fully compliant with the rules.
@imNavneetDubey
106 |

Dial H for
Healthy Food
Whether you would like
to take a break from
cooking or are bored of
the limited variety being
prepared at home, these
meal subscription services
ensure that you have
something nutritious and
delicious on your plate,
three times a day
BY SMITA TRIPATHI

Business Today 20 August 2023

 THE GOOD LIFE
F THERE is one
question that ir-
ritates 34-year-old
Seema Bhatia, a
Gurugram-based
management con-
sultant, more than
anything else in the
world, it is her house
help asking her every morning,
“Aaj khane mein kya banega? (What
should I cook for you today?).”
Bhatia, who lives alone in the
city and is health conscious, says
ruefully, “I like to eat healthy, but I
also want variety. My cook’s skills
are limited and I don’t have much
time to try my hand at fancy cook-
ing. So the answer to her question
is generally aloo gobi (potato and
cauliflower) or paneer, hardly excit-
ing.” It was to add more variety to
her daily diet that Bhatia decided to
try out Food Darzee, a healthy meal
subscription plan. She initially
opted for a one-day trial plan for
three meals for `608. “The next
day, a nutritionist spoke to me and
after understanding my require-
TRENDS TECH TODAY
AT A COMPOUND ANNUAL GROWTH
RATE OF 14 PER CENT, THE GLOBAL
HEALTHY-MEAL SUBSCRIPTION
MARKET IS PROJECTED TO INCREASE
TO $13.76 BILLION IN 2032 FROM
$3.73 BILLION IN 2022
ments, a meal plan was designed.”
The day after, Bhatia received all
three meals in the morning, packed
in microwave-friendly containers.
“I had a cheese omelette, grilled
chicken and a teriyaki bowl. Defi-
nitely more exciting than what I
had been eating,” she laughs. Happy
with the experiment, Bhatia signed
up for the monthly meal plan.
“It’s been two months and since
my aim was to maintain my weight,
things are on track. Plus, I really
like the variety and the fact that
I don’t have to think about what
needs to be cooked. Also, the added
headache of grocery shopping, etc.,
Business Today 20 August 2023
| 107
has been taken care of,” she says. A
monthly meal plan at Food Darzee
for non-vegetarians costs `13,800
for breakfast, lunch and dinner.
Depending upon your require-
ments, you can choose anywhere
between one to four meals. The
menu is divided into vegetarian,
non-vegetarian and eggetarian.
Meal plans cater to different di-
ets— keto, high-protein-low-carb,
vegan and balanced.
Food Darzee delivers in Mum-
bai, Delhi, Bengaluru, Chennai,
Hyderabad and Pune. The menu
is updated weekly and in case you
don’t want to eat a particular dish,
 THE GOOD LIFE TRENDS
108 |
you can change your preference on
the app. Your personal nutritionist
acts like your mentor, follows up on
a regular basis, maps your progress
and tweaks and tailors your diet to
help achieve your health goals.
Meal delivery services are
rather popular in western countries
and are fast catching up here, too.
According to a report by Apollo
Research titled, ‘The Exponential
Growth in Meal Kit Subscription
MEAL SUBSCRIPTIONS ARE
POPULAR DUE TO THEIR CALORIE
SPECIFICATIONS, BUT WHAT SETS THEM
APART FROM THE COMPETITION IS
THAT THE MEALS ARE CURATED AND
TAILORED TO EACH INDIVIDUAL
Market’, the global healthy-meal
subscription market was valued at
$3.73 billion in 2022 and is expected
to touch $13.76 billion by 2032,
growing at a CAGR of 14 per cent.
While meal subscriptions are
mostly sought after for their calorie
specifications, what differentiates
them from other traditional op-
tions is that the meals are curated
and personalised based on your
requirements. “They are whole-
Business Today 20 August 2023
some, diet-oriented and freshly
cooked,” says Bengaluru-based IT
professional Nimit Acharya who has
been getting food from Eat.Fit for
the past few months. Eat.Fit is the
meal subscription venture of health
and fitness company Cult.Fit. “I
have been working out at Cult.Fit,
but in order to lose weight I need
to also eat healthy,” says Acharya.
He has subscribed to Eat.Fit’s
Signature Salad package for lunch
on weekdays (vegetarian monthly
package for `4,342 for 22 days) and
gets a fresh salad delivered to his
office every afternoon. Each salad
comes with nutritional information
such as calorie count, protein, carbs,
etc., printed on it. For dinner, he has
subscribed to the Weight Loss thali
package and pays `4,104 for 30 days.
Eat.Fit delivers in 12 cities
including Bengaluru, Chennai,

Meal delivery services are all the rage in the West and are quickly
gaining traction in India too
Gurugram, Mumbai, Surat and
Hyderabad. You can sign up for
anything from a Power Breakfast
Plan to a Homestyle Dinner or
Fruit Snack Plan. You can order
an individual meal or subscribe to
a monthly package. “It’s like your
office dabbawala, just healthier and
with more variety,” says Acharya.
There are several healthy meal
delivery subscription services, es-
pecially in the metros. These cater
to individuals as well as families. At
Delhi-based Parafit, you select your
goal—weight loss, muscle gain,
weight maintenance or detox diet
and then subscribe to your pack-
age. For instance, a three-day trial
package for detox, including three
meals a day, costs `2,490. These
will include dishes such as grilled
cottage cheese and quinoa salad,
grilled vegetable sandwiches and
vegetable stroganoff with rice on
day one, followed by yoghurt bowl,
hummus with grilled pita, achari
soya chaap, etc., on day two. In case
you are confused about your health
goals, you can speak to a nutrition-
ist and have a customised plan for
you. The USP lies in the over 250
dishes on their menu, so that you
get to eat enough variety.
Then there are lesser-known
brands such as Blufit and Nutri
91 that specifically cater to those
keen on a keto diet. You can start
with a three-day trial and if you
Business Today 20 August 2023
| 109
are satisfied, you can subscribe to
it monthly. The menu is a mix of
Indian, Continental, Mexican and
Chinese, with over 500 recipes in
their database. It’s perfect if you
would like to stick to a Keto diet but
crave variety. One of the pioneers
in this field is HealthifyMe, which
likes to consider itself a connected
fitness ecosystem that helps you
achieve your health goals faster
and more consistently. So, besides a
healthy meal subscription, you get
personalised coaching for weight
loss, and a metabolic dashboard
with 80-plus key parameters that
help you stay healthy and identify
any underlying medical conditions.
Eating healthy is not difficult. All
you have to do is pick up the phone.
So what’s your excuse now?
@smitabw
 POCKET
WHEN TRAVERSING UNKNOWN
ROADS, GOOGLE MAPS IS
OFTEN YOUR BEST FRIEND. BUT
THERE ARE ALTERNATIVES
BY NIDHI SINGAL
ILLUSTRATION BY PRABAL BISWAS

WHAT HAS BEEN the best thing

110 | since sliced bread? For most of us
who move around a lot, it is Google
Maps. But there are times when
the app directs you to nowhere as
up-to-date data isn’t available. If
you’re looking for alternatives, fret
not. Here are some free navigation
apps that you might want to try.

Community Power Waze

A popular community-based app for navigation,
Waze was launched in 2008. And its popularity led
to it’s acquisition by Google for around $1 billion in
2013. Designed for car and motorbike users, Waze
has a clean interface and suggests the best routes
based on user-collected data. It also changes
routes instantly to avoid traffic. Users can also
update information such as traffic, crash, hazard,
and more on the map with just a tap. And if you love
listening to music, you are going to love Waze as the
music controls from apps such as Amazon Prime
Music and Spotify appear on the top. This makes it
really simple to manage music while driving.

Available on: Play Store; App Store

Business Today 20 August 2023

 Made for India Mappls
Very similar to Google Maps, this made-
in-India solution from MapMyIndia is
very good with street-level addresses
and points of interests. Just like Google
Maps, it shows all the routes to the
destination with an estimated time of
arrival. But I found Mappls’s suggestions
to be more accurate than Google’s, not
just in cities but also in rural areas. Also,
given the surfeit of flyovers in metro
cities, the app’s interface changes the
view to clearly indicate when to take
one and when not. That is definitely
a life-saver. The app also has speed
monitoring. The only thing missing is an
option to share the progress of your live
trip. The app also has a panoramic street
view, which MapMyIndia calls RealView.

Available on: Play Store; App Store

THE SIMPLE LIFE HERE WeGo | 111

Remember the good old days of Nokia?
The default maps for navigation were
good with directions. They were called
Nokia Maps then; now called HERE
WeGo, this app is currently owned by
HERE Technologies. Also accessible on a
web browser, you can also download the
maps for offline functionality in areas
that have a patchy network. But unlike
Google Maps, where you can download
only a particular region, HERE WeGo
lets you download territories or even
countries. The route search displays
options such as estimated time of
arrival, traffic delay time, distance and
the route it would take. It also accurately
displays the best public transport
navigation route (in my case, the Delhi
Metro). Other options include routes for
walking and biking. But you can’t book
an app-based cab from the app, like you
can on Google Maps in some countries.
Available on: Play Store; App Store

iCHOICE Apple Maps

Apple Maps, the default iPhone navigation
app, has improved a lot since it was first
introduced in India. The first thing I noticed
about it was its relatively clean interface
with small text and icons, and also readings
for temperature and AQI of the current
location displayed at the bottom right. The
search bar appears at the bottom, and the
option to choose the map from explore,
driving, transit and satellite appears on the
top right. When searching for a destination,
it not only shows the location, but also
the detailed address and phone number
wherever available. While using the app, it
offers the option to share your ETA with your
friend. If you’re exploring a new route, it can
be added to favourites. If you are an iPhone
user, Apple Maps is worth a try.
Available on: App Store

Business Today 20 August 2023


UNDERSTATED
BRILLIANCE
The HP Dragonfly G4 is a very capable
business laptop that you love more
and more with time as you discover
its thoughtful touches and the nifty
features it packs in
BY NIDHI SINGAL
REVIEW
When looking to buy an ultra-
112 | premium yet lightweight business
laptop, many are torn between
Apple’s MacBook Pro and the HP
Spectre x360. Now, add one more
from HP to the mix—the Dragonfly G4.
The magnesium and aluminium
finish, and the rounded corners of the
Dragonfly gives it an ultra-premium
look, something that could even give
the MacBook a run for its money.
While the matte metal finish may
appear to be heavy, the notebook
weighs only 999 gm.
Lif ting the lid reveals the
D ragonfly ’s brilliant 13. 5 -inch
touchscreen, with 180° hinge; if
you’re concerned about privacy,
say on a plane, the touch of a button
ensures the screen is obscured for
your neighbours. The other thing
you notice is the laptop’s super-
responsive backlit keyboard, which
ensures that typing is a breeze. The
large trackpad and the fingerprint
scanner above it also aid ease of
use. Even with the sleek design,
HP has managed to squeeze in all
connectivity ports. The built-in 5MP
camera with 88° field-of-view is great
for video calls and recording; plus
THE GOOD LIFE TECH TODAY
f SPECS: 13.5-INCH,
1,920x1,200P TOUCH-
SCREEN, 999GM, 13TH
GEN INTEL i7, 32GB RAM,
1TB STORAGE, TWO
TYPE-C THUNDERBOLT
4 PORTS, HDMI PORT,
USB A, MIC/HEADPHONE
JACK, 5MP WEBCAM,
WINDOWS 11 PRO
you can connect a second camera
an d u s e b oth simult an e o u s ly.
Sound by Bang & Olufsen is not only
good for meetings or watching the
occasional video; you can even listen
to music on the speakers.
Powering the notebook is the
latest 13th-generation Intel Core i7
processor, which not only handles
eve r yd ay t a s ks s u c h a s wo rd
Business Today 20 August 2023
HP DRAGONFLY
G4
` 2,20,000
If you’re looking for a
lightweight Windows 11
business laptop that
makes your life easier,
look no further
processing, web browsing and
video streaming with ease, but also
manages demanding ones like gaming
and audio and video editing without
breaking a sweat. With the solidity of
Windows 11 Pro, it also has privacy and
security features such as a webcam
disable key and HP’s Wolf Security.
With normal usage, the battery lasts
for around 10 hours. Even the compact
charger, with its beautifully braided
cable, feels premium.
The HP Dragonfly G4 may not
have a single disruptive feature; but
the sum total of all its nifty touches
and premium features results in a
stellar experience that you grow to
appreciate with time.
Available on: hp.com/in-en
@nidhisingal
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IRS 2019 Q4 (TR)
 GAURI SHANKAR NAGABHUSHANAM
CEO, INDIA BUSINESS PARKS CAPITALAND INVESTMENT LTD

CapitaLand Investment Ltd is a Singapore-based global real estate investment manager

‘Spend time,
What was the problem you were
grappling with?
In 2013, while I was working with Ascendas-
Singbridge in Singapore, I was offered the

effort to build
position of Chief Financial Officer (CFO)
at Ascendas-Firstspace (AFS), a joint ven-
ture between CapitaLand and Firstspace, in
Mumbai. I hesitated because it required me to

the right team’ leave my comfort zone, despite the promotion. I

was the only Ascendas representative at a start-
up with a few employees, and we had to build
a business.

Whom did you approach for advice

and why?
I sought guidance from my reporting supervisor,
who has been my mentor since the beginning of
my career.

114 | What was the advice you received?

My supervisor was honest about the risks of the
new role. He was certain that a CFO could struc-
ture the firm and urged that I spend time and
effort in building the right team. He trusted me
and said I could do more and better. As a leader,
he also provided a safety net that the company
would find me a better opportunity if things
went wrong, as this was a new business segment.

How effective was it in resolving

the problem?
Exceptional results need measured risks. My
supervisor trusted me to explore new busi-
ness opportunities. I built a team, stabilised the
organisation, multiplied our revenue, and laid
out process enhancements for future develop-
ment in my four years at AFS. Today, AFS is a
renowned logistics and industrial park devel-
oper. My supervisor and organisation noticed my
efforts, which led to my current position.
—TEAM BT

Vol. 32, No. 17 for the fortnight

August 7, 2023 to August 20, 2023.
Released on August 7, 2023.
Total number of pages 116 (including cover)

PHOTO BY HARDIK CHHABRA

Business Today 20 August 2023

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