Fear and Despair: in Covid Country

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WEEKLY ANALYSIS OF THE INDIAN ECONOMY AND MARKETS

www.mintasia.com SINGAPORE/KUALA LUMPUR MCI (P) 084/01/2021 April 30 - May 6, 2021, (Weekly) Vol. 9 No.17 PPS 1868/09/2015(025601) PRICE: SGD 6/RM 6

FEAR AND DESPAIR


IN COVID COUNTRY
The explosion of covid-19 cases in India has sparked a mental health pandemic as deaths, misery
and helplessness lead to widespread grief and despair. Helplines and psychiatrists in urban areas
are flooded with calls, while people turn to community networks in rural parts. MintAsia
examines the psychological cost of India’s unfolding healthcare tragedy >Pages 16-17

SRUTHIJITH KURUPICHANKANDY (EDITOR)


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INSIDE mintasia

FEAR AND DESPAIR


INCOVID COUNTRY
The explosion of covid-19 cases in India has sparked a mental health pandemic as deaths, misery
and helplessness lead to widespread grief and despair. Helplines and psychiatrists in urban areas
are flooded with calls, while people turn to community networks in rural parts. MintAsia examines
the psychological cost of India’s unfolding healthcare tragedy >Pages 16-17

+ VIEWS MARK TO MARKET


Future of work-from-home boards ICICI Bank’s Q4 metrics justify
lies in hybrid interaction its recent valuation re-rating
An exchange of views for collective decision- What investors may fret about is that the bank’s fastest
making will remain sub-optimal without the growing loan segment was that of SMEs. > Page 22
dynamics of an in-person gathering, writes
Narayan Ramachandran > Page 14 For stocks, 2nd wave is not deadly yet > Page 23

The covid crisis is a wake-up call Refining margins improve, but virus-led demand
concerns weigh on OMCs > Page 24
for even India Inc.
The current healthcare crisis is a sign that
Corporate India should change, and a portent that
it needs to indulge in corporate activism of a NOTE TO READERS
different kind, writes Rajrishi Singhal > Page 14
It was in April 2013 that HT Media launched
The second covid wave could mark MintAsia to cater to the global business reader
rooted in Asia. For the last eight years, it has been
a new beginning for India a privilege to keep our readers abreast of the
India has an opportunity to attract global capital trends shaping the Indian economy and markets.
with its political stability, reasonable tax rates and Now, in deference to the changing habits and
structural reforms, write V. Anantha preferences of readers amid a global pandemic,
India Inc offers balm amid viral disaster Nageswaran & Rahul Bajoria > Page 15 MintAsia is discontinuing its print edition. From
Indian companies are stepping in to fill the gaps in India’s healthcare infrastructure, crumbling under an explosion of next week, MintAsia will continue to be available
covid-19 cases, supplying medical oxygen, cryogenic vessels and oxygen concentrators > Page 4
We can’t afford to let vaccine as a digital publication. All future editions will be
scepticism get in the way available at https://epaper.livemint.com/asia.
Even if vaccines are found to be doing less than We look forward to your continued patronage and
we expected, they remain our best hope against engagement with us in the digital format.
Banking regulator caps terms of MD Prices of essential goods climb covid, writes Rahul Matthan > Page 15
and CEOs at private lenders Mini lockdowns across India have disrupted supplies and
The Reserve Bank of India has capped the tenure of pushed up prices of some essential goods > Page 8
managing director and chief executive officers (MD and
Demat account openings at a record high Corrections & Clarifications
CEOs), and whole-time directors of private banks at
15 years from the date of appointment > Page 5 Indian investors opened a record 14.2 million new demat
accounts in FY21, nearly three times the figure in the
MONEY feedback@livemint.com
Airlines brace for more turbulence previous fiscal year amid a robust market rally > Page 9
Things to consider before going for MintAsia welcomes comments,
Countries such as US, UAE, UK have placed restrictions
on travel and banned flights from and to India as covid DII holdings fall to a seven-quarter low a guaranteed insurance plan suggestions or complaints about errors.
It’s a good option for investors with a low-risk Readers can alert the newsroom to
infections continue to climb > Page 6 DIIs’ stake in 318 of the BSE 500 firms showed that
appetite and long-term horizon, but there are any errors in the paper by emailing us,
aggregate holdings stood at 13.64%, the lowest since Jun
better alternatives > Pages 18-19 with your full name and address, to
Maruti Suzuki India steps on the gas 2019 quarter > Page 10
feedback@livemint.com
despite second covid wave Franklin Templeton’s debt investors It is our policy to promptly respond to
Maruti Suzuki India Ltd is planning to increase production Blackstone commits $2.8 billion all complaints.
by 200 cars per day from May, as the country’s largest for majority stake in Mphasis see year of pain, with silver linings Readers dissatisfied with the response
carmaker bets that demand for personal mobility will Move will help global private equity major Blackstone, They have been able to recover some money, but or concerned about Mint’s journalistic
continue amid the resurgence of the pandemic > Page 6 which owns 56% of the firm, hold on to the stake for the asset management company’s very existence integrity may write directly to the editor
longer period. > Page 13 is under scrutiny > Page 20 by sending an email to
Rising caseload poses biggest threat Power Point | China’s recovery offers a good bet asktheeditor@livemint.com
to India rebound: monetary policy panel Jagdish Khattar: In memoriam for investors > Page 21 Mint’s journalistic Code of Conduct
RBI governor Shaktikanata Das said the surge in cases Jagdish Khattar, the former managing director of Maruti that governs our newsroom is available
and its impact on economic activity needs to be Udyog (Maruti Suzuki India Ltd), breathed his last on Money Matters | Sebi should lay down rules to at www.livemint.com
monitored, minutes of the meeting show > Page 7 Monday, 26 April. He was 78. > Page 13 offer adequate protection to investors > Page 21
COVER PHOTOGRAPH FROM REUTERS

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04 April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR www.mintasia.com

News mintasia
HEALTH CRISIS

India Inc offers balm amid viral disaster


Firms step up to fill gaps in health pandemic and will continue to explore other
infra by supplying medical oxygen, avenues to help address the challenges
emerging during these trying times,” the com-
cryogenic vessels and oxygen pany said.
concentrators to hospitals The Adani Group is importing four cryo-
genic tanks with 80 tonnes of liquid oxygen
from Saudi Arabia, while ArcelorMittal Nip-
B Y K A L PA N A P AT H A K & S U N E E R A TA N D O N pon Steel India is supplying 220 tonnes of liq-
······································· uid oxygen per day to Gujarat.
MUMBAI/NEW DELHI In Haryana, the OP Jindal Modern School

I ndian companies are stepping in to fill the


gaps in India’s healthcare infrastructure,
crumbling under an explosion of covid-19
cases, supplying medical oxygen, cryogenic
vessels, and oxygen concentrators. The Tata
operated by Jindal Stainless in Hisar is being
converted into an emergency covid hospital
with ICU beds. Jindal Stainless managing
director Abhyuday Jindal said the company’s
oxygen facility in Hisar was continuously
group, Reliance Industries Ltd, JSW Group, feeding oxygen in and around Hisar hospitals
Adani group, ITC Ltd, and Jindal Steel and and will also feed the oxygen to this new facil-
Power Ltd are among many top Indian com- ity. “With a country-first motto in mind, we
panies helping hospitals with emergency sup- are ready to supply more oxygen to hospitals
plies. even if this is at the expense of the produc-
On 27 April, the Confederation of Indian tion,” he said.
Industry (CII) formed a task force to work Supplying aid: Tata group-owned airline Vistara has offered help to government organizations and hos- In view of the pandemic, the oxygen plant
with central and state governments to raise pitals in immediate need of air logistics. at Hisar facility of Jindal Stainless is running
oxygen supply through capacity enhancement logistics hurdles to reduce transit time, ensure across multiple cities. up to a capacity of 150%. The plant has
and imports. It will also look into logistics speedy clearances and transport to the desti- Amazon said it will bear the cost of airlifting increased its oxygen production capacity to
issues related to transport, cylinder availabil- nations through green corridors and augment these oxygen concentrators and BiPAP 7.5-8 tonnes per day from 6 tonnes per day.
ity and policy-level interventions. capacity to produce additional oxygen using machines, procured through multiple funders. On Monday, 26 April, packaged consumer
T.V. Narendran, president-designate, CII, supercritical processes. Tata group-owned airline Vistara has goods maker Procter and Gamble said it will
and chief executive officer and managing Reliance Industries is supplying liquid offered help to government organizations and contribute `50 crore to vaccinate over 500,000
director of Tata Steel Ltd, said, “There is a dire medical oxygen of over 700 tonnes per day to hospitals in immediate need of air logistics. citizens through partnerships with govern-
need to increase the availability of oxygen and Gujarat, Maharashtra, Delhi, Madhya Pra- The airline has also offered to fly doctors and ment and local authorities in India. This con-
address logistical issues in transporting oxy- desh, Rajasthan, Uttar Pradesh, and Daman, nurses, representing government organiza- tribution towards vaccines will be on top of
gen across the country. The biggest bottleneck Diu and Nagar Haveli. The company plans to tions, free of cost, across its domestic network. P&G’s earmarked corporate social responsi-
is the shortage of cryogenic containers. Tatas scale this up to 1,000 tonnes. Last week, fast-moving consumer goods bility funds for the current year, it said.
+ are importing 36 cryogenic vessels by this E-commerce giant Amazon India has tied company ITC Ltd said it has tied up with “In the current situation and going forward,
month-end. Tata Steel is also supplying over up with ACT Grants, Temasek Foundation and medical oxygen supplier Linde India to airlift vaccines play a critical role in containing the
600 metric tonnes medical oxygen from its the Pune Platform for covid-19 Response 24 cryogenic ISO containers of 20 tonnes each spread of the virus,” Madhusudan Gopalan,
plants to hospitals”. (PPCR) and others to urgently airlift over from Asian countries. CEO, P&G Indian Subcontinent, said, without
JSW Steel said it is supplying 1,000 tonnes 8,000 oxygen concentrators and 500 bi-level ITC is also airlifting large numbers of oxy- disclosing the states where it plans to offer
of oxygen per day and plans to ramp it up fur- positive airway pressure (BiPAP) machines gen concentrators for distribution, it added. free vaccines.
ther. Seshagiri Rao M.V.S., who chairs the CII from Singapore, the company said on Mon- Its paperboards unit in Bhadrachalam has kalpana.p@livemint.com
task force and is joint managing director and day, 26 April. also commenced supply of oxygen to identi- Ayushman Baruah and Utpal Bhaskar con-
group chief financial officer of JSW Steel Ltd, The equipment will be donated to hospitals fied government hospitals in the state. tributed to this story.
said the task force has proposed to use direct and public institutions to augment their “ITC is committed to supporting the gov-
vessels to import liquid oxygen and remove capacity to help covid-19 infected patients ernment in its fight against the debilitating

RISING CASELOAD

India’s testing capacity fails to keep up with rise in cases


B Y N I K H I L R A M PA L
nikhil.r@livemint.com
TESTING TROUBLES
········································ The slow growth in testing, along with an increased infection
rate, has bumped up India’s overall positivity rate to 20%.
I ndia’s covid-19 testing capacity has less than
doubled in the past month, even as daily
cases have jumped sixfold, a Mint analysis of
Daily infections Tests conducted
6.5X rise
government data shows. In Delhi, the worst-hit 1.6X rise
city, tests have come down in the past week,
while Kerala is scaling up the fastest in
response to rising infections.
The slow growth in testing, along with an 50,497 330,142 1.05 mn 1.65 mn
26 Mar 26 Apr 26 Mar 26 Apr
increased infection rate, has bumped up
India’s overall positivity rate to an all-time high
of 20% as of Monday, 26 April, from 4% a
month ago.
This number, based on a seven-day rolling Positivity rate
average, has crossed 30% in Delhi, Goa and 26 Mar 5%
Chhattisgarh, data on covid19india.org shows. 26 Apr 20%
Madhya Pradesh, Maharashtra, West Bengal Note: Seven-day rolling averages used. Source: covid19india.org
and Kerala also fare worse than the national
PHOTOGRAPH FROM BLOOMBERG; GRAPHIC BY PARAS JAIN/MINT
average.
An increase in testing capacity typically lion daily samples, which has now grown to latter’s tests. results of coronavirus tests in the city. Dr
needs to match up to the rise in caseload to 1.65 million. This growth was led by some of In some states, such as Uttar Pradesh, pri- Harsh Mahajan, who runs a diagnostic chain
ensure all infections are detected. the worst-hit states; but recent data show these vate labs are reportedly claiming that the state in Delhi, said despite labs running extra shifts
“Early detection helps in quarantining con- states are either peaking in their testing capac- government has asked them to limit testing, and adding machines, results were taking
firmed cases, and so, not increasing testing ity or growing very slowly. The Economic Times reported on 17 April. longer as demand exceeded supply.
capacity when the pandemic is in full swing Maharashtra increased daily tests from By 11 April, Delhi had boosted testing to John estimated that at the current positivity
could make infectious persons mobile, leading 120,000 a day to 250,000 in the first two weeks more than 100,000 a day, but this fell below rate, each additional 10,000 tests could help
to further spread,” said Rijo M. John, an adjunct of April but has remained in the same range 60,000 on Monday. This is a matter of concern detect 3,000 more cases every day. Indeed,
professor at Rajagiri College of Social Sciences, since then, despite there being no let-up in because the national capital has been record- Delhi’s daily caseload has come down from
Kochi, pointing at high positivity rates. “Govern- infections. West Bengal, which is holding ing 350 deaths a day, with most hospitals filled 28,395 on 20 April to 20,201 on 26 April with
ments should at least double the testing num- assembly elections, has a population that’s just to capacity and critical patients being turned the decline in tests.
bers if they can’t triple.” 20% smaller than Maharashtra’s. But even after away if they can’t produce a positive test result. Neetu Chandra Sharma contributed to this
As of March end, India was testing 1.05 mil- a ramp-up, it is conducting just one-fifth of the The stretched capacity is leading to delayed piece.

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mintasia NEWS 05
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

STRENGTHENING GOVERNANCE the hardest hit as he completes 15 years in


2024. He was reappointed as MD and CEO on

Banking regulator caps terms of 1 January this year for a period of three years,
which means his tenure will now end on 1
January 2024. Dipak Gupta, joint MD, may
also not be eligible to succeed Kotak as he

MD and CEOs at private lenders


completes 15 years in 2024 as a WTD at the
bank.
N. Kamakodi, chief executive officer of City
Union Bank, will complete his 15-year tenure
in May 2026.
MINT “We are unsure how RBI will treat Bandhan.
The tenure managing director Note that Bandhan was converted to a bank
and chief executive officers, as five years ago. So, if RBI considers that time-
line as threshold, then Mr. (Chandra Sekhar)
well as whole-time directors Ghosh, the promoter CEO, has a longer ten-
has been capped at 15 years ure. However, RBI has said it will look at the
progress made by promoters in terms of dilu-
tion. considering Bandhan’s track record in
B Y G O P I K A G O PA KU M A R meeting these shareholding norms, there per-
gopika.g@livemint.com haps could be a reluctance from RBI in our
······································· view,” said Suresh Ganapathy, an analyst at
MUMBAI Macquarie Research.

T he Reserve Bank of India (RBI) has


capped the tenure of managing director
and chief executive officers (MD and
CEOs) and whole-time directors (WTDs) of
private banks at 15 years from the date of
In the circular released on 22 April, RBI said
the upper age limit for MD and CEOs and
WTDs will continue to be 70. Within that
limit, as part of their internal policy, individ-
ual bank boards are free to prescribe a lower
appointment. For CEOs who are part of the retirement age for WTDs, including the MD
promoter group or large shareholder, the ten- and CEO.
ure is capped at 12 years. The age cap for RBI said the new rules come into effect by 1
chairman and independent directors has Stringent norms: The norms have been made tougher as part of RBI’s attempts to strengthen the October. Individuals who have already com-
been set at 75 years. governance structure in private sector banks. pleted 12/15 years as MD and CEO or WTD
The norms have been made tougher as part on the date these instructions come into effect
of RBI’s attempts to strengthen the govern- individual shall not be appointed or associ- such MD and CEO or WTDs may be allowed shall be allowed to complete their current
ance structure in private sector banks against ated with the bank or its group entities in any to continue up to 15 years. While examining term as already approved by RBI, the circular
the backdrop of a series of failures in financial capacity, either directly or indirectly,” the RBI the matter of re-appointment of such MD and said.
institutions. said in a circular on Monday, 26 April. CEOs or WTDs within the 12/15 years period, The revised instructions will be applicable
According to the new rules, an individual While RBI has capped the tenures of pro- the level of progress and adherence to mile- to all private sector banks including small
will be eligible for re-appointment as an MD moter CEOs and WTDs at 12 years, it also said stones for dilution of promoters’ shareholding finance banks and wholly owned subsidiaries
and CEO or a whole-time director in the same theirs tenure may be extended to 15 years at shall also be factored in by RBI,” it said. of foreign banks. It will not be applicable in
bank after a minimum gap of three years. the sole discretion of RBI. “In extraordinary Among bank promoter CEOs, Uday Kotak, the case of foreign banks operating as bran-
“During this three-year cooling period, the circumstances, at the sole discretion of RBI, MD and CEO of Kotak Mahindra Bank, will be ches in India.

+ ADVERTISEMENT

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Deepayan Mohanty, MD, SUPPLY CHAINS: BECOMING
Hemera group offered specific

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n April 22, The events affect the commercial market.
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webinar focused on the current policies to help their domestic
security threats to supply chains, industries to grow. Thus, the
changes in them, examples and complexity of global trade in times
reference points for good practice, like Covid has become more
lessons learned from Covid-19. complex and the risk perception
Mr. Mohanty focused on how continues to go up.
disruptions in supply chains are manufacturing, defaults due to huge Mr. Mohanty mentions that, while Responding to one of today’s
increasing in frequency and swing in supply and demand, trade it will take time for robotics to most important concerns, the
magnitude. Earlier the risks limited documentary fraud, port replace humans, intelligence has vaccine supply chain and the
themselves to shipping, credit, congestions and data security been present in some form or certification that goes with it,
quality, etc. However, now concerns. another for a while. In today’s world, Mr. Mohanty thinks that when it
disruptions are a significant When asked about the ‘new intelligence has been digitalised. comes to human life, one should not
category. He also mentioned that the normal’ in the supply chain, he Specifically talking supply chain he take any chances. Vaccines are an
Covid-19 outbreak isn’t an isolated responded that minimising cost, mentions that digitalised intelligence important element of health care
event. The effects of it are also multi- reducing inventories and driving up has taken the form of blockchain and thus have an impact on human
dimensional which add to the asset utilisation do not provide the technology. Blockchain technology life. Even if certification is sometimes
disruption such as political mistrust, buffers and flexibility to absorb allows one to track down suppliers just a piece of paper, he believes
realignment, geopolitics, etc. delays. Supply chain needs agility and go back stage, which can that they are important and they will
With new commodities and today. In addition, he points out that further help to evaluate the supply come out to be much more intense,
Deepayan Mohanty, products like PPE kits, sanitisers, in such difficult times like Covid-19 chain involved, the types of complex and detailed in the coming
MD, Hemera Group and other safety equipment taking a pandemic, there have been cases disruptions that can occur, and time.
centre stage, the supply chain has where suppliers have used force so on.
become more complex and majeure to their benefit. It has also Giving his opinion on the
congested. Other than this, the been observed that there are less difference between the international
global supply chain has witnessed effective dispute settlements in the and domestic supply chain, he
many new challenges which include international courts, arbitration points out that how in the
the shortage of raw materials, centres, etc. even if the efficiency international market there is
absence of workforce for remains the same. vindictiveness and how political

https://theospas.com/2021/04/23/security-and-the-supply-chain-is-full-resilience-restored/
Author: Drishti Rangi, Intern, Corporate Communications, Hemera Group | email: srijla@hemeraglobal.com www.hemeraglobal.com

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06 NEWS
April 30 - May.6, 2021 , SINGAPORE/KUALA LUMPUR° WWW.MINTASIA.COM
mintasia
STRINGENT CURBS
Amex, Diners
Club barred Airlines brace for more turbulence
from adding new
customers amid a fresh wave of travel bans AP

Countries such as the US, United


B Y S H AYA N G H O S H
shayan.g@livemint.com
Arab Emirates and the UK have
··································· placed restrictions on travel and
MUMBAI
banned flights from and to India
T he Reserve Bank of India (RBI) on Fri-
day, 23 April, asked global card pay-
ment networks American Express Banking
BY R HIK KUNDU
rhik.k@livemint.com
Corp. and Diners Club International Ltd ·······································
not to on-board new customers due to NEW DELHI

non-compliance of localized payment data


storage norms. “This order will not impact
existing customers,” the regulator said.
American Express and Diners Club are
payment system operators authorized to
T he revival of international flight opera-
tions from India is expected to be fur-
ther delayed, with several countries
imposing restrictions on travel to and from
the country in a bid to contain the spread of
operate card networks in India under the the virus.
Payment and Settlement Systems Act, 2007 The US, France, Australia, Singapore, Hong
(PSS Act). The ban on adding new custom- Kong and Oman have put in place restrictions, Delayed recovery: Rating agency ICRA expects domestic air traffic to reach pre-covid levels by FY23,
ers will be effective 1 May, RBI said on Fri- while others like the United Arab Emirates, while international air traffic is likely to hit pre-covid normalcy only by FY24.
day, 23 April. Canada, the UK, New Zealand have banned
“While we are disappointed that the RBI flights from and to India. the person added. the government to see through the crisis.
has taken this course of action, we are Major Indian airlines like Air India and Mint had in March reported that Vistara is Rating agency ICRA Ltd expects domestic air
working with them to resolve their con- IndiGo, which have a considerable interna- in talks with Boeing Co. to modify the 787-9 traffic to reach pre-covid levels by fiscal year
cerns as quickly as possible,” American tional network, now expect a delay in recovery Dreamliner jets it is set to induct over the next 2023, while international air traffic will hit pre-
Express said in an emailed statement. of international flights, which typically bring two years by adding a resting room for crew, covid normalcy only by FY24 because of slug-
In its circular on “Storage of Payment in higher yields than domestic flights. allowing the airline to mount direct long-haul gish demand from leisure and business travel-
System Data” in April 2018, the central Vistara, a joint venture between Singapore flights to the US and other countries, said two lers and a surge in new variants of the corona-
bank had directed all payment system pro- Airlines and Tata Sons, that had planned to people with direct knowledge of the matter. virus.
viders to ensure that their entire data is start direct long-haul flights to the US, is now Meanwhile, Air India, which operates sev- “ICRA has always maintained that the
stored in a server only in India. They were bracing for a delay in the launch. eral long-haul flights across the globe, is bra- impact of the pandemic will last longer on
also required to report compliance to RBI “The recent spike in covid cases in India, cing for an impact from restrictions imposed international travel than on domestic travel.
and submit a board-approved system audit and resulting restrictions imposed by several by countries. Scheduled international operations are yet to
report within the timelines specified. major economies on travel to and from India, “The second wave has delayed the recovery start. However, the civil aviation ministry has
+ RBI had asked payment service providers has delayed Vistara’s long-haul plans by at in international travel by at least three to four permitted international operations under the
to comply with the regulations within six least a couple of quarters,” said a person with months. If things worsen, more countries Vande Bharat Mission and air transport bub-
months and report by 15 October 2018. direct knowledge of the matter, who didn’t could impose restrictions on flights to and bles arrangement,” said Kinjal Shah, vice-
Data to be stored exclusively in India want to be named. from India,” said a senior Air India official, president at ICRA.
include complete end-to-end transaction “When things get normalized, people who too spoke on the condition of anonymity. “The same is also expected to be impacted
details, information collected, carried and would want to fly directly to long-haul desti- “With domestic traffic also being impacted as consumers avoid non-essential travel and
processed as part of the message or payment nations in North America, Europe and else- by the surging number of cases, a strong also as countries again start restrictions for
instructions. According to the April 2018 cir- where and not through a hub in the Middle recovery seen in domestic passenger traffic travel to and from India due to the second
cular, the audit report approved by the board East as they would want to minimize their since May last year is also fizzling out,” the wave of the pandemic. This will pose a chal-
was supposed to be submitted by 31 Decem- exposure to the virus. This would be a great official said, adding that the sector would lenge for the recovery in international travel,”
ber 2018. opportunity to start direct long-haul flights,” need policy intervention and support from Shah added.

DEMAND SURGE “The semiconductor issue is yet to be


resolved for most automakers, and then we

Maruti steps on the gas despite covid wave RAMESH PATHANIA/MINT


have the covid situation, which impacted cus-
tomer sentiment. Given the production sched-
ule of the company, one can expect that Maruti
is expecting a comeback like last year. The low
B Y M A LYA B A N G H O S H inventory level at dealerships is also not letting
malyaban.g@livemint.com them reduce production,” the person said.
······································· “The Maruti stock has underperformed
NEW DELHI (27% versus the Nifty and 23% versus the NSE

M aruti Suzuki India Ltd is planning to


increase production by 200 cars per day
from May, two people aware of the company’s
Auto Index) in the past six months, impacted
by market share loss and pressure on margin,
despite a strong volume recovery. We see
plans said, as the country’s largest carmaker both these concerns abating as the product
bets that demand for personal mobility will life cycle improves and price increase/dis-
continue amid the resurgence of the pan- count moderation drives recovery in profita-
demic. bility. We expect 30% volume growth in
The increase in output will take the daily FY22E (estimates) and positive evolution of
production rate to more than 7,000 cars, the margin,” analysts at Motilal Oswal Institu-
people cited above said on condition of ano- tional Equities said in a 31 March 2021 note
nymity. Parent Suzuki Motor Corp. has to clients.
recently added a new assembly line in its Guj- Meanwhile, Maruti Suzuki India reported a
arat factory, and production will be increased 9.4% year-on-year decrease in a net profit to
as a consequence. `1,166.1 crore for quarter ending 31 March, as
Maruti saw a sharp recovery in production a result of jump in overall expenses due to
and sales in the second half of the last fiscal as increase in prices of important commodities
sales of its compact cars picked up due to the like steel, copper and others. The other
preference for personal mobility to limit infec- Increasing production: Maruti plans to raise output by 200 cars per day from May. income dropped substantially by 89.8% due
tions, and quicker recovery economic activity. to mark to market losses on certain invest-
Some of Maruti’s popular products, like Baleno ond wave was quite strong, and the company Achieving the ambitious production target ments further impacted the bottom-line.
and Swift, have long waiting periods, and most expects the momentum to continue once cases will mark a sharp rebound for India’s largest The company posted a net profit of `1,291.7
of the company’s dealers have less than 20 days come down. Also, the shift towards personal carmaker, which is set to report lower sales crore in the corresponding period as sales
of stock with them. mobility will get accelerated in the coming for the second straight year in FY21 because took a hit due to economic slowdown and
According to one of the two people, Maruti days as people will remain apprehensive of of disruptions caused by the implementation transition to new safety and emission norms.
has guided for an increase in production as a public transport,” the person said, seeking ano- of new emission and safety norms, followed The company’s net sales during the March
result of the new assembly line, which has nymity. by the pandemic. quarter increased by 32% year-on-year to
started operating. It has not indicated any Mint on 4 March reported that Maruti Although Maruti is trying to boost produc- `24,024 crore on the back of 27.8% jump in
reduction in production during the first half plans to make 220,000-240,000 vehicles and tion, it remains to be seen if it will be able to total vehicle sales to 492,235 units. Sequen-
of the fiscal, the person said. launch 5-6 new vehicles during the current meet the target, given the current challenges, tially, sale of vehicles decreased marginally by
“The demand in the market before the sec- fiscal year. said the second person. 0.7% from the December quarter.

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mintasia NEWS 07
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

GLOOMY MINUTES
Banks asked to
Rising caseload poses biggest report taxpayers’
interest income
threat to India rebound: MPC PTI
B Y R E N U Y A DAV
renu.yadav@livemint.com
·········································
RBI governor Shaktikanta Das NEW DELHI

said the surge in cases and the


resulting impact on economic
T he Central Board of Direct Taxes (CBDT)
has issued detailed guidelines on how
banks and companies will report information
activity needs to be monitored related to interest and dividend income of tax-
payers.
Section 285BA of the Income Tax Act, 1961,
B Y G O P I K A G O PA KU M A R and Rule 114E require “specified reporting per-
gopika.g@livemint.com son” to furnish a statement of financial transac-
······································· tion. According to the notification issued on 20
MUMBAI
April, banks will have to report the details of all

R ising covid-19 cases constitute the sin-


gle biggest challenge to economic
recovery, the Reserve Bank of India
governor Shaktikanta Das told the monetary
policy committee earlier this month, accord-
those taxpayers whose interest income across
deposits exceeds `5,000 in a fiscal year.
For companies there is no minimum limit.
They will have to report details of the dividend
paid to every shareholder. In March, the tax
ing to the minutes released on 22 April. department issued a circular directing a few
Compared with the policy statement, the entities including banks, companies and bro-
minutes read gloomy: Das said the recent kers to report the interest, dividend, and capital
jump in cases and its impact on economic gains earned by investors to the tax department
activity needs to be carefully monitored. every year.
“The need of the hour is to effectively The purpose of this is to enable the tax
secure the economic recovery underway so Policy support: The need of the hour is to secure the recovery underway so it becomes broad-based, department to provide pre-filled information in
that it becomes broad-based and durable. The said RBI governor Shaktikanta Das. the tax forms to the taxpayers. In the Union
renewed jump in coronavirus infections in Budget 2021-22, the finance minister
several parts of the country and the associated second wave much lower than the first, but MPC member Jayant Verma said the chal- announced that taxpayers will get information
localized and regional lockdowns add uncer- still retard full normalization by a quarter or lenges need time-based forward guidance related to capital gains and dividend pre-filled
tainty to the overall growth outlook,” Das said. two. Ramping up vaccination, testing and amid the uncertainties and evolving eco- in their tax forms.
Contrast this with the policy statement ear- treatment hold the key to protecting eco- nomic state. The guidelines will help in uniform reporting
lier this month, when the central bank said: nomic recovery and health policies have Since October the MPC has maintained an by the entities. “Reporting entities are required
“The renewed jump in covid-19 infections in become the first line of defence. Monetary accommodative stance “during the current to prepare the data file in prescribed format
certain parts of the country and the associated and fiscal policies can only play a second fid- financial year and into the next financial year”, from their internal system.The statement of
localized lockdowns could dampen the dle,” Saggar added in the MPC minutes. which is reflective of a time-based forward financial transactions shall be furnished on or
+ demand for contact-intensive services, RBI deputy governor and MPC member guidance. before 31 May, immediately following the
restrain growth impulses and prolong the Michael Patra, who is usually the most hawk- “I think it is not prudent to repose excessive financial year in which the transaction is regis-
return to normalcy. In such an environment, ish among all members, however, softened his faith in forecasts. Instead, the MPC must have tered or recorded,” said the notification.
continued policy support remains necessary.” stance. He said the focus remains on reviving the agility and flexibility to respond rapidly “The statement shall be signed, verified, and
RBI executive director and MPC member the economy. and adequately to whatever surprises new furnished by the specified designation director
Mridul Saggar, too, raised his pitch on the “I would continue to look through the data may brings in the future. Time-based of the bank,” it added.
risks to economic recovery if the new wave of recent elevation in inflation and remain guidance is inconsistent with this imperative,” The banks will report the interest income
infections is not flattened soon. focused on reviving the economy on a path of Verma said. earned by the account holder across the bank
He added that health policies hold the key strong and sustainable growth. An integral “Inflation rates have been consistently well accounts, including, savings account, recurring
to India’s recovery as monetary and fiscal pol- part of this approach would be to insulate above the mid point of the target zone and is account, and fixed deposits. However, interest
icies have already used most of the space domestic financial markets from global spill- forecast to remain elevated for some time. earned on Public Provident Fund (PPF), foreign
through stimulus measures. overs and volatility so that congenial financial This is a difficult situation, but I believe that currency non-resident account, resident for-
“Learning effects on calibrating stringency conditions continue to support growth,” he the balance of risk and reward is in favour of eign currency account, and Sukanya Sumrid-
of restrictions may keep economic costs of the added. monetary accommodation,” he added. dhi account is not required to be reported.

UNINTERRUPTED SUPPLY

Central govt working to keep lights on as virus hits workers


MINT

B Y U T PA L B H A S K A R years become eligible for the vaccine from 1 May.


utpal.b@livemint.com “We are working to ensure that the number
········································· of infections among power sector professionals
NEW DELHI
doesn’t surge. Thankfully, with hydropower

W ith a growing number of power sector


personnel testing positive for covid-19,
the government is pulling out all stops to
projects being located in far-off places, there is
a limited number of infected personnel there,”
said the official cited above.
ensure uninterrupted electricity supply across Queries emailed to spokespeople for power
the country, two government officials aware of ministry, NTPC, NHPC and Power Grid Corp.
the preparations said. were not immediately answered.
A standard operating procedure has been put “The plan is to limit the number of infec-
in place for all central power projects to prepare tions among the power sector professionals.
for peak summer demand. Also, an aggressive The situation is presently under control, and
vaccination campaign is on for inoculating cen- we don’t want the number of cases to spiral,”
tral power sector personnel, with 60% of people said the second official cited above, who also
above 45 years already vaccinated. did not want to be named.
Power and new and renewable energy min- India has a complex interconnected power
ister Raj Kumar Singh on 22 April conducted a grid requiring close coordination between grid
review meeting, attended by officials from the operators and power project generators across
two ministries and heads of central public sec- coal, gas, hydro, nuclear and green energy
tor units (PSUs) such as NTPC Ltd, NHPC Ltd sources run by the Centre, states and the pri-
and Power Grid Corp. of India Ltd. vate sector. It is state-owned Power System
This comes amid oxygen supply running low at Meeting demand: A standard operating procedure has been put in place for all central power projects Operation Corp. Ltd (Posoco), which manages
many hospitals and the severe second wave to prepare for peak summer demand. these complex functions through the National
exposing India’s creaking health care system, with Load Despatch Centre (NLDC), Regional Load
acute shortages of oxygen, vaccines, testing kits, generation capacity of 379.13 gigawatts (GW), the any foreseeable impact on power supply,” one of Dispatch Centres (RLDCs) and State Load Des-
hospital beds, and intensive care units (ICUs). central and state sector projects account for the two officials cited above said on condition of patch Centres (SLDCs)—often drawing com-
The Union power ministry is working in close 96.18GW and 103.62GW, respectively. “Central anonymity. parisons with an air traffic controller. The
coordination with the states for facilitating sector power PSUs have a large workforce, and The plan includes vaccinating everyone above country has 33 SLDCs, five RLDCs (for the five
round-the-clock electricity supply from state sec- they are getting infected by the virus. Constant 45 years by April end and the remaining on a regional grids that form the national grid) and
tor projects as well. Of India’s installed power reviews are taking place with a focus on avoiding mission mode, once everyone above the age of 18 one NLDC.

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08 NEWS
April 30 - May.6, 2021 , SINGAPORE/KUALA LUMPUR° WWW.MINTASIA.COM
mintasia
TRANSPORTING JABS
Serum eyes early
nod for Covovax Vaccine cargo lifts prospects for
airlines as passenger traffic sinks
B Y L EROY L EO
leroy.d@livemint.com
········································
NEW DELHI

S erum Institute of India (SII) is considering


applying for an expedited emergency licence
for Covovax under the government’s revised Airlines are reconfiguring aircraft
RAMESH PATHANIA/MINT

norms if the vaccine’s developer Novavax secures


authorization from the US regulator.
and getting more planes to meet
“Once Novavax receives all the necessary the cargo transport demand, which
global regulatory approvals, we can look at may swell as vaccinations open up
launching it (Covovax). That said, we would still
want to continue with trials in India to ensure
its immunogenicity and efficacy,” Serum Insti- BY R HIK KUNDU
tute chief executive officer Adar Poonawalla rhik.k@livemint.com
said in a statement to Mint. ········································
NEW DELHI
In March, Novavax CEO Stanley Erck told
business channel CNBC that if the US Food and
Drug Administration (USFDA) agrees to review
the data from the firm’s UK trial of 15,000 partic-
ipants, the vaccine could receive an emergency
use authorization (EUA) as early as May.
A t a time fewer Indians are flying to limit
the risk of coronavirus infections, air-
lines are focusing on cargo transport for
the world’s largest immunization drive under-
way, transporting millions of vaccines doses
In case USFDA gives its authorization by next across the length and breadth of the country.
month, Serum Institute could potentially get a Airlines are reconfiguring aircraft and getting
similar authorization in India as early as the first more planes to meet the cargo transport
half of June. According to the revised government demand, which is expected to swell as vaccina-
norms, a foreign vaccine with authorization from tions open up for all adults from 1 May. Enhancing capacities: Airlines have also increased their dedicated cargo capacities to move goods, medici-
USFDA or four other top regulators could be eli- “IndiGo is currently the leader in terms of nes, groceries, and other supplies.
gible for expedited authorization in India. the amount of vaccine being transported by
The entire process from submission of air within India—we anticipate this will con- date, carrying about 17 million doses or about back with an increasing vaccination drive for
application to the Drugs Controller General of tinue, given our wide network and number of 18-20% of total vaccines transported across all age groups starting 1 May. However, it may
India to securing an authorization is to be flights, even after some reductions due to the country, a company spokesperson said. take a few months for passenger traffic to
completed in about a week, according to the lower passenger demand,” said Willie Boulter, “We have offered committed cargo space in bounce back to January-February 2021 levels,”
norms. chief commercial officer at IndiGo. our commercial flights to freight agents the official added.
Poonawalla said Serum Institute plans to “While there is no more important mission appointed by Serum India and Bharat Biotech IndiGo, which has over 280 aircraft, has
stockpile Covovax starting this month but to complete properly, and all our attention to that they have utilized. We can also operate converted 10 of its passenger aircraft into
declined to comment on the capacity, saying detail is given to delivering vaccine shipments cargo-only flights for ferrying covid vaccine in freight carriers with a capacity to ferry up to 20
that it is too early to comment. swiftly and safely, the actual tonnage is rela- case any pharma firm has to air transport large tonnes of cargo. Rival SpiceJet has a dedicated
For now, with no USFDA authorization for tively small and well within capabilities. We volumes,” the spokesperson added. freighter fleet of 19 cargo aircraft, which
+ Novavax’s vaccine in place, Serum Institute is look forward to expanding this vital national IndiGo and SpiceJet have dedicated cargo includes Boeing 737 freighters and Q400s.
planning to launch Covovax by September, effort further as production increases,” Boulter planes for vaccine transport, while other air- A Vistara spokesperson said the airline has
Poonawalla said, adding “with new policies in added. lines utilize the belly cargo space of their pas- been working with the relevant logistics com-
place, we may launch earlier only if quality is IndiGo said it transported 81,437kg of covid senger planes. panies for facilitating vaccine transport.
proven.” vaccine shipments between 12 January and 12 Airlines have also increased their dedicated National carrier Air India, too, saw its cargo
Novavax in February announced the rolling April from key vaccine manufacturing points cargo capacities to move goods, medicines, operations grow after introducing all-cargo
review process—review of efficacy trial data as in Pune, Hyderabad and Mumbai, securing a groceries, and other supplies. flights on certain sectors, mostly international,
it is generated—of its application for EUA from leading market share of 36.6% in the vaccine “At a time when the recovery of passenger an airline official said. “Air India is doing its bit
USFDA, European Medicines Agency (EMA), transport segment. traffic has been hampered by the rising num- in transporting cargo, including vaccines, on the
UK Medicines and Healthcare products Regu- The airline is also sourcing four Airbus ber of infections, airlines are increasingly belly of passenger aircraft,” the official said,
latory Agency (MHRA) and Health Canada. A321ceo aircraft, each of which will be con- focusing on their cargo operations to make up adding cargo remains a key source of revenue
The announcement came after the company verted from a passenger jet to a full freighter for the loss in passenger revenue,” a top official for the airline in the absence of growth in pas-
published its interim efficacy data from its configuration. at a Gurugram-based airline said on condition senger traffic.
trial in the UK and South Africa in late Janu- Meanwhile, no-frill carrier AirAsia India has of anonymity. Spokespersons of SpiceJet Ltd and GoAir
ary. transported over 50 tonnes of vaccine cargo to “We hope for passenger traffic to bounce were not immediately available for comments.

SUPPLY DISRUPTION

Prices of essential goods climb as localized curbs clog supply


AP
B Y S U N E E R A TA N D O N & structure throughout last year and also in of sanitizers are intact, but the owner fears
S AU M YA T E WA R I early 2021. As a result, BigBasket is making supplies could be delayed for everything
······································· deliveries in all our operating cities, albeit over the coming days. On e-commerce plat-
NEW DELHI with extended timelines in some cities due to forms, the price of some oximeter models

M ini-lockdowns and movement restric-


tions across the country have disrupted
supplies and pushed up prices of some essen-
unexpectedly high demand and movement
restrictions,” a BigBasket spokesperson said.
Indians aren’t hoarding like last year when
went up in the last five days from `1,999 to
`2,499.
“There are supply disruptions, but not like
tial goods, even though availability remains supply chains snapped entirely. what we saw the first time,” said Prem Kumar,
better than a year ago when customer hoard- Though large companies are ensuring sup- founder and CEO of Snapbizz that works with
ing and broken supply chains led to severe plies, consumers are facing intermittent chal- kiranas, offering them a range of services.
shortages. lenges in areas under lockdowns as mobility “The problem of last-mile delivery is from
Several consumers reported delayed deliver- is restricted and demand for essentials is up. the distributor to the retailer. If the driver
ies, even as fear and anxiety boosted demand In parts of Delhi and Chandigarh, distribu- doesn’t turn up for work, or the shop is not
for products such as cooking oils, pulses, sani- tors and wholesalers said prices of mustard oil open, or the window of opening the shop is
tizers, masks and oximeters. Taking a break: A vegetable vendor rests during are up by 10-15%, while that of pulses and rice just three hours or four hours. So, the prob-
Ashmit Dalal in Mumbai’s Andheri said lockdown in Mumbai. were up 8-10% over the last few days. Certain lem is not across the supply chain,” he said.
staff shortage at kirana stores is leading to brands of cooking oils are in short supply, said Demand is up for sanitizers, soaps and dis-
delays and cancellations. In Maharashtra, water was tough. Across markets, the price of a wholesaler. infectants, apart from biscuits and basic
store timings are limited to 7am-11am, with tender coconut has risen from `35-40 to `80 “Edible oils have been seeing price hikes essentials, he added.
home delivery allowed up to 8pm. Priyanka per piece in the last few days, vendors said. in the past two quarters; some increase in In Kolkata, which is currently not under any
Singh in Mulund, too, said BigBasket was Customers also reported delays in online milk and wheat (prices) happened earlier, restrictions, the availability of supplies and
delivering only every two days in her area, delivery orders across platforms such as Gro- too. On the fresh produce side, price hikes movement of goods is relatively smooth.
though hyperlocal e-commerce platforms like fers, BigBasket and Amazon, especially in Del- are very local and not pan-India. Localized “Things in Kolkata are okay so far. We went
BBdaily, Frazzo and Supr Daily were quicker. hi-NCR and Mumbai. Vaishali Choudhury in enhanced demand has come up and is cre- to a supermarket (Spencer’s) on Sunday to
Neha Grover in New Delhi said prices of Noida complained about not finding stocks in ating some opportunistic approach from buy stuff, and it was fully stocked. We ordered
fruits and vegetables were up in the last few her neighbourhood supermarket. some suppliers,” said Akshay D’Souza, chief some things from their online store, and
days. Grover has been relying on HalloBasket, “The second covid wave has led to a surge marketing officer at Bizom, a retail intelli- everything was available and got delivered
an online marketplace for fruits and vegeta- in orders across cities on our platform. In view gence platform that tracks grocery sales quickly. Nothing is marked up either,” said
bles, for her large family. Grover, who lives in of the pandemic situation, we had worked on across thousands of retail stores. Swati Bhasin, a 29-year old writer.
Greater Noida, said finding tender coconut increasing our capacity and building infra- At Narang Chemist in New Delhi, supplies Lata Jha contributed to the story.

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mintasia NEWS 09
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

GAINING CURRENCY We strongly feel that new-age investors have a


good understanding of the opportunities in

Demat account openings climb to


the capital markets, especially over the long
term, and will continue to leverage this finan-
cial instrument to grow and reach their finan-
cial goals,” said Jaideep Arora, chief executive

a record of 14.2 million in FY21


officer, Sharekhan by BNP Paribas.
“As for markets, the factors from last year
were unique; however, we expect the growth
this year to be moderate, but a critical time for
investors to make the most of the volatilities
we are seeing,” Arora added.
Appetite for trading among POSITIVE SENTIMENT March last year, appetite for stock trading Arora expects demat accounts to continue
Indian investors saw a threefold Digitization, growing awareness about grew. In FY21, the benchmark Sensex gained
68% while BSE500 climbed 77%.
growing this year. Factors such as digitization,
growing awareness about equities, diversifica-
equities, are likely to push more people
jump from the previous fiscal towards capital markets. “The covid-19 outbreak has been a major tion of saving and low-interest rate environ-
year amid a robust market rally 15 14.2 influx point for the discount brokerage indus- ment will push more people towards the capi-
try on the whole and we witnessed record tal markets, he said.
openings of demat accounts as an increasing Younger investors as well as investors from
12
B Y N A S R I N S U LTA NA & number of millennials started moving towards tier-2 and tier-3 cities such as Nashik, Jaipur,
No. of new demat
A S H W I N R A M A R AT H I NA M accounts in millions dual or multiple income sources, and stock Guntur, Patna, Kannur, Tiruvallur and Nainital
········································ 9 market seemed to be a great investment began trading in FY21, said Arora. “Ever since
MUMBAI option,” said Prakarsh Gagdani, chief executive we have launched our online account pro-

I ndian investors opened a record 14.2 mil-


lion new demat accounts in FY21, nearly
three times the figure in the previous fiscal
year, as the global pandemic and business dis-
ruptions opened up new investment opportu-
6

0.3
of 5paisa.com, an online discount brokerage
firm.
Policy changes like easier know-your-cus-
tomer (KYC) norms, greater internet penetra-
tion and affordable devices and technology
gramme, tier-2 and tier-3 cities have surprised
us with the rate at which they are adapting to
the digital journey,” said Arora.
Even as the raging coronavirus pandemic
has spread to smaller towns in the second
nities. 0 enabled easy access to services and increased wave, analysts believe trading will continue to
FY10-11 FY20-21
In contrast, 4.9 million demat accounts were the financialization of savings, analysts said. attract more investors.
Source: Sebi, NSDL and CDSL
opened in FY20, with a three-year average of A gradual decline in stock markets in recent “Coronavirus has rather been a factor that
PARAS JAIN/MINT
4.3 million in the three fiscal years starting weeks, with the Sensex down nearly 7% from has changed the approach of people towards
FY18, data from National Securities Depository tives like stocks. its record high, is not expected to shake retail investment. They are now looking at high
Ltd (NSDL) and Central Depository Services A dematerialized or demat account is investors’ confidence, market experts told returns investment options to have a cushion-
Ltd (CDSL) showed. opened by an investor with a depository par- Mint. ing amount that would support them at the
In March 2021 alone, 1.9 million demat ticipant to invest in securities such as stocks “The markets are always cyclical in nature. time of crises or help them recover the money
accounts were created, the highest monthly and bonds. The securities are held in digital Thanks to the huge amount of information lost. At present, over 80% of the total consumer
increase ever, indicating investors shifted their format. available on the internet, new-age investors base of 5paisa comprises consumers from the
savings from traditional instruments such as As markets made a robust rally in FY21 after and traders who are entering the markets are tier-2 and tier-3 cities and we only see this
gold, real estate and bank deposits to alterna- the crash following the national lockdown in well aware of market ups and downs, volatility. increasing in the near future,” Gagdani added.

RESOLUTION WOES Q4 RESULTS

+
Insolvency cases face delays Axis Bank warns of slowing
amid spike in virus infections collections in coming weeks
MINT

B Y S H AYA N G H O S H another six months or so, may not make a B Y S H AYA N G H O S H


shayan.g@livemint.com difference. shayan.g@livemint.com
······································ The NCLT had resumed hearings on 25 ··········································
MUMBAI March, but lawyers expect the IBC to be sus- MUMBAI

I ndia’s insolvency tribunals are hearing


only a handful of cases amid the spike in
covid cases, and this is going to delay the res-
pended again. However, there is no official
word on it yet. Aniruddha Sen, a partner at
Trilegal, said speculations were rife that the
P rivate sector lender Axis Bank Ltd expects
collections to slow in the coming weeks as
covid infections continue to rise across India,
olution of stressed assets. IBC suspension is likely to be extended by affecting the movement of executives on the
The death of a National Company Law Tri- the government. ground, its chief executive officer Amitabh
bunal (NCLT) judge in Delhi and the rising The IBC led to the resolution of several Chaudhry said on Tuesday, 27 April.
infections among members have shocked the large stressed companies and is a preferred “These are early days, but we do see an
fraternity. Besides, fewer banks are route for lenders. Out of the 2,422 IBC cases immediate business impact across segments,”
approaching the NCLT as they do not expect which were concluded at the tribunals, a said Chaudhry.
buyers to quote a reasonable price in the staggering 1,126 were through liquidation, He said that corporates are adopting a wait- Robust growth: Axis Bank has a strong balance
middle of this calamity. while only 317 had a successful resolution and-watch strategy and given the sudden surge, sheet, said CEO Amitabh Chaudhry.
“There will be a delay in filing of fresh IBC plan as on 31 December. In other words, the focus is on employee health and safety.
cases. Ultimately the purpose of pursuing around 46.5% of the cases went for liquida- Axis Bank’s advances including targeted business loans, setting aside more than regula-
IBC is to ensure corporate tion, compared to just long-term repo operations (TLTRO) invest- tory requirements. This contributed an addi-
debtors find a taker at a rea- 13.1% having a resolution ments grew 12% year-on-year (y-o-y) to `6.41 tional `803 crore to provisions in the quarter.
sonable price and, consider- plan. trillion. Its deposits rose 10.5% y-o-y to `7.07 “Our balance sheet is strong, and we have
ing the current situation and Fewer banks are “Further, due to the sec-
ond wave, financial institu-
trillion.
India is in the midst of a raging pandemic
taken provisions upfront and have more than
decent buffers built in,” said Chaudhry, speak-
the market sentiment, the
lenders are wary of very dis- approaching the tions are also carefully eval- that has returned with renewed vigour and is ing about the lender’s resilience to the second
counte d pr ices b eing uating the situation and infecting people at an alarming rate. States such covid wave.
offered,” said Ajay Shaw, a NCLT as buyers may they will not take all bor- as Maharashtra and Delhi have announced He added that the bank has a formalized and
partner at DSK Legal. rowers to the IBC unless restrictions on movement to curb the spread, calibrated provisioning policy and depending
As India battles a second
not quote a they see that the process but could end up hurting economic recovery, upon how the portfolio across the franchise
will result in maximization experts said. behaves, provisioning will automatically
wave of infections, shortage
of medical oxygen, beds and
reasonable price of the value of assets,” said The Reserve Bank of India (RBI) had recently change.
ICUs has led to patients Ashish Pyasi, associate warned in an article of inflationary pressures “We don’t know how covid will play out.
gasping for air, and many succumbing to the partner, Dhir and Dhir emanating from any delay in containing the Depending on that, our provisioning policy will
infection. NCLT benches across India are, Associates. spread of the coronavirus. take care of it,” he said.
therefore, hearing only urgent cases from 20 Pyasi said the number of IBC cases shall “We have not seen any slowdown in early Meanwhile, the bank invoked debt recast of
April, said insolvency lawyers . gradually increase over the next few months. bucket collections, but it is likely to get `1,848 crore under the RBI’s covid-19 relief cir-
“While the suspension has been lifted, the The rise, he said, will not be sudden because impacted in the coming weeks because people cular. Of this, debt recast in loans of `623 crore
judicial forum where one could have gone to for defaults that occurred before the IBC sus- are not able to meet customers,” Chaudhry has been implemented.
have those issues addressed is overcome by pension came into force, creditors were free said, adding that despite challenges, such situa- While Axis Bank has time till 30 June to com-
the pandemic,” said Faisal Sherwani, partner to approach the NCLT in past one year, since tions do provide opportunities and the bank plete the rest of it, the lender may or may not do
at law firm L&L Partners. “Therefore, for all the default was not related to covid-19. would like to grow in its focus segments. it by then.
practical purposes, there is no longer a pro- “For the post-suspension period, fresh The bank reported a net profit of 2,677 crore “The way we have disclosed our numbers is
hibition on new insolvency petitions, but few defaults resulting in filing of cases will take in the three months to March 2021, compared to provide you the maximum extent of restrict-
cases are being heard.” time. Due to the Reserve Bank of India’s with a loss of `1,388 crore in the same period ing possible on our book,” said Puneet Sharma,
Sherwani said while in constitutional (RBI) moratorium and various relaxations last year. What changed this time round was the chief financial officer, Axis Bank.
courts cases will require urgent hearing, for given by banks, fresh defaults will only start significantly lower provisions of `3,295 crore in The bank reported gross slippages of `5,285
insolvency tribunals, most cases would not now and then petitions will be filed,” said the quarter. This, despite the fact that Axis Bank crore during the March quarter, versus `3,920
qualify for urgent hearing and waiting Pyasi. has changed its provisioning norms for small crore in the same period last year.

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mintasia
NRI MATTERS

NAVIGATING THE MAZE OF CROSS-BORDER


REMITTANCES IN COVID-19 ERA IS TOCKPHOTO

B Y V I K A S VA S A L outside India, the provisions do not provide


····································· guidance as to how the reporting is to be

C ovid-19 has transformed the way we


work and live. Lockdowns, restric-
tions and international travel sus-
pensions have transformed businesses and
professions carried out across the globe.
carried out. However, based on practical
experience, it is advisable that one should
remit funds in multiple tranches selecting
the specified reason for which funds are
being transferred.
‘Geography’ is now ‘history’. Working However, in case it is not feasible to
remotely on projects has become common. transfer in multiple tranches for any reason,
A person who generally resides outside the broader/overarching reason should be
India, but has returned to India due to the mentioned while remitting the funds along
pandemic, may not have been able to leave with a letter that can be submitted to the
India due to flight restrictions and other bank intimating the usage of funds for mul-
constraints. A prolonged presence of such tiple reasons. It is advisable to check with
person could alter his residential status and the bankers prior to the remittance as to the
could trigger tax, regulatory and exchange specific requirements. Further, in case there
control issues. are transactions which mandate a prior
Residency under the Indian tax and approval from the Reserve Bank of India,
exchange control law the requisite compliances should be done
Residency under the India tax and before effecting the remittances.
exchange control regulations is predomi- While effecting remittances, a Form A2, a
nantly determined basis the number of in India even if they have been in India for considered as a resident and consequently Chartered Accountant’s certificate in Form
days an individual is present in a country. more than 182 days in the preceding finan- the facility of remitting $1 million may not 15CB (as applicable) and a self-declaration
During financial year 2020-21, the Central cial year: be available based on the strict interpreta- in Form 15CA are required to be furnished
Board of Direct Taxes (CBDT) has issued * Persons who have come to, or stays in tion of the law. Contra-distinguishably, to the bank, confirming that applicable
some clarifications from a tax perspective India otherwise than for taking up employ- Indian residents who are now staying over- taxes have been deducted and deposited
to determine the residential status of indi- ment in India or to carry on any business in seas for the purpose of business/employ- into the government treasury. Further,
viduals who have overstayed due to cov- India or with an intention to stay in India ment etc. may be eligible to remit overseas bankers may also require a certificate
id-19 in India. The clarifications provided for an uncertain period. up to an enhanced limit of $1 million per attested by a Chartered Accountant that the
to address genuine hardships from tax per- * Persons who have gone outside India financial year from India, subject to fulfilm- money proposed to be remitted overseas is
+ spective, however, do not have utility in for taking up employment or to carry out ent of specified conditions. earned from genuine sources in certain
determining the residential status of an any business outside India or has an inten- Further, the permissible outward trans- cases.
individual under the exchange control reg- tion to stay outside India for an uncertain actions under both the above-mentioned Tax collection on overseas remittances
ulations, as the criteria prescribed for period. schemes are different: To widen the tax net, the government has
ascertaining residency under these regula- Though the definitions under the tax and * For non-residents, current income also placed onus on the authorized dealers
tions are different. exchange control law use 182 days as a earned such as rent, pension, interest, etc. to collect taxes while effecting remittances
Under India’s tax laws, a person is a resi- common threshold, there is a significant is freely repatriable outside India from the under the LRS. Taxes shall be collected at
dent in a particular tax year, if he fulfils difference between the criteria. The defini- NRO account. Apart from current income, the rate of 5% on remittances under LRS in
either of the following conditions: tion of residence under the tax law is based balances in the NRO account may be repa- excess of `7 lakh in a financial year through
* If he stays in India for a period of 182 on number of days of stay in India. Purpose triated abroad only up to $1 million in a authorized dealer.
days or more in a financial year (1 April to and intent have limited relevance. In con- financial year. Repatriation of an amount Further, in cases where amount remitted
31 March of the following year); or trast, under the foreign exchange law, the more than $1 million may be permitted by is towards pursuing education abroad out
* If he stays in India for a period of 60 purpose and intent of stay in India are also Reserve Bank of India under the approval of loan obtained from financial institution,
days or more in a financial year and if he to be considered. route in exceptional circumstances. reduced rate of 0.5% shall be applicable on
has stayed in India for a period of 365 days Impact on account of change of resi- * Permissible outward transactions for amount in excess of `7 lakh. The tax so
or more during the 4 years immediately dential status residents include travel outside India, deducted by the authorized dealers can be
preceding the relevant financial year. Due to the different definitions under the donations, gifts, maintenance of close rela- adjusted by the individual against his final
However, a relaxation is provided to two laws, a person who is a resident under tives abroad, business trips, studies outside tax liability while filing his income tax
Indian citizens and Persons of Indian Ori- the tax law may not necessarily qualify as a India, medical treatment abroad, purchas- return.
gin, who are outside India and come on a resident under the exchange control law. ing immovable property abroad, foreign Further, with effect from 1 July 2021, tax-
visit to India. For them, the 60 days thresh- Determination of residential status is inte- investments, rupee loan to Non-Resident payers who have not filed their tax returns
old has been replaced with 182 days except gral to understand the scope and applica- Indian/Person of India Origin who is a for two preceding financial years and where
where their total income in India exceeds bility/non-applicability of the exchange close relative etc. Individuals can also open, the aggregate of tax deducted and collected
`15 lakh, in which case, this relaxation is control provisions to a person. In case the maintain and hold foreign currency at source is in excess of `50,000 in each of
reduced to 120 days. residential status of the individual gets accounts with banks outside India for car- the two financial years, shall be subject to
Further, new deemed tax residence rules altered on account of the above-mentioned rying out transactions permitted under the tax collection at the higher of the following
have been implemented from financial year conditions, there would be far-reaching scheme. rates:
2020-21 in India beginning from 1 April implications on the cross-border remit- Basis the above, like determination of a) Twice the rate specified in the relevant
2020, whereby Indian citizens not liable to tance facilities available to individuals residential status is important under tax provisions of the Act; or
tax in any other country by virtue of their which would merit consideration. laws, it is equally imperative to determine b) Rate of 5%
domicile or residence, or similar criteria, For example, currently, a non-resident residential status as per the exchange laws. The above rates shall also be applicable
will be deemed to be resident in India, pro- can remit up to $1 million overseas per Individuals impacted adversely due to a in a case where the person does not have a
vided their total income in India exceeds financial year (April to March) from his mere overstay in India or overseas may permanent account number or Aadhaar, a
`15 lakh. However, such citizens would be Non-resident Ordinary Rupee (NRO) approach the Reserve Bank of India for unique 12-digit identity number that can be
considered as “Resident but Not Ordinarily account, which is generally opened by non- relief. obtained by eligible individuals in India.
Resident”. Accordingly, their India sourced residents to receive income earned in India. Reporting requirements In view of the extensive tax and exchange
income and income earned from any busi- In contrast, resident individuals can remit The outward remittances discussed control compliance and reporting require-
ness controlled/profession set up in India an aggregate sum of $250,000 per financial above require multiple levels of reporting. ments, it is imperative that due care be
shall be taxable in India. year for any permissible transaction as per The purpose for which a remittance is taken while effecting cross-border remit-
Under the exchange law, an individual is the Liberalized Remittance Scheme (LRS) affected is to be reported in the relevant fil- tances especially during covid-19.
said to be resident in India, if he has been under the automatic route. Erstwhile non- ings. As per the extant exchange control CA Nilpa Keval Gosrani and CA Viraj
in India for more than 182 days in the pre- resident individual, qualifying the threshold regulations, there are no category-wise lim- Doshi contributed to the article.
ceding financial year. However, the follow- of residency in financial year 2020-21 due its for remitting funds abroad. In case there Vikas Vasal is national leader-tax at
ing persons are not deemed to be resident to an extended stay in India, may now be are multiple reasons for transferring funds Grant Thornton Bharat LLP.

Business. Class.
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mintasia NEWS 11
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

REDEMPTION PRESSURES

DII holdings in BSE 500 firms at a seven-quarter low


DIIs’ stake in 318 of the BSE 500 DOWNWARD TREND crore in Indian shares during the quarter. In
firms showed that aggregate The fall has been due to profit-taking by insurance
the December quarter, they sold `1.03 trillion
worth of Indian equities. After eight months
holdings stood at 13.64%, the firms and portfolio reshuffling by MFs, said experts.
of consecutive outflows, equity mutual funds
lowest since the Jun 2019 quarter 14.0
DII holdings (in %) witnessed a net inflow of `9,115 crore in
March amid a correction in the stock market.
Net inflow in equity and equity-linked
B Y A S H W I N R A M A R AT H I N A M open-ended schemes was at `9,115 crore in
ashwin.r@livemint.com March, compared with an outflow of `4,534
······································ 13.9
crore in February, Association of Mutual
MUMBAI 13.89 Funds in India data showed.

D omestic institutional investors’ (DIIs)


ownership in BSE 500 companies fell
to its lowest level in the seven quar-
ters to 31 March, an analysis of the share-
holding pattern of 318 firms showed. This
13.8
Foreign institutional investors’ (FIIs) stake
in the firms stood at 20.91% in the March
quarter, compared to 21.11% in the previous
one, but higher than the 19.40% in the year
ago. In the March quarter, FIIs invested $7.33
comes after many months of redemption billion in Indian shares.
13.7
pressures faced by mutual funds, and DIIs “The q-o-q changes in DII holdings in BSE
turning net sellers of equities. 500 companies has been small. The fall has
DIIs’ stake in 318 of the BSE 500 firms, 13.64 been due to aggressive profit-taking by insur-
which have announced their shareholding 13.6
ance companies and portfolio reshuffling by
pattern, showed that the aggregate holdings Sep 2019 Mar 2021
MFs at a time when a lot of small- and mid-
in the firms stood at 13.64%, the lowest since cap counters have risen and showed a good
the quarter ended June 2019. Cutting stake: Of the 318 BSE 500 firms, DIIs Only 318 of the BSE 500 firms have reported Q4FY21 results as on date. For amount of depth,” said Deepak Jasani, head,
these firms, shareholding pattern is available for 25 quarters.
DIIs are feeling the heat of redemptions raised stakes in 150, while trimming their stakes retail research, HDFC Securities. “At such
Source: Capitaline
over the past year with the latest sharehold- in 164. times, large institutions try to get out of
ing data showing that their stakes have stocks (probably even at a lower loss) where
reduced in frontline companies. Companies eral Bank Ltd and Bajaj Auto. monthly run rate of `8,300 crore in FY20. DIIs the business fundamentals have deteriorated
that have seen a fall in DII ownership in the Only those firms for which comparable have trimmed several known companies like but the market conditions are buoyant and,
March quarter include Tata Motors - DVR, data was available for 25 quarters have been Tata Motors, Raymond, Tata Chemicals, hence, the stock price remains high. Retail
Nava Bharat Ventures Ltd, Jubilant Food- considered. Of the 318 BSE 500 firms, DIIs Vedanta, etc., during the quarter. DIIs have and trader interest in such stocks has been
works Ltd, CARE Ratings Ltd, Gujarat Min- raised stakes in 150, while trimming their also trimmed stakes in banks while allocating high and, hence, even the retail holding in
eral Development Corp Ltd and eClerx Servi- stakes in 164. The aggregate holdings were at resources to a few pharma companies,” said BSE 500 firms may have risen in the quarter.”
ces Ltd. the same levels as the preceding quarter for S. Ranganathan, head, research, LKP Securi- In the March quarter, the BSE 500 index
To be sure, DII ownership has increased in the remaining four companies. ties. rose 7.11%, outpacing the benchmark Sensex
some other companies such as MOIL Ltd, “SIP flows moderated to a monthly average DIIs, primarily mutual funds and insur- and Nifty.
South Indian Bank, EPL Ltd, NTPC Ltd, Fed- of `7,900 crore last year as compared to the ance companies, sold a net of `23,124.22

CoinSwitch EV ECOSYSTEM
Warburg Pincus
Kuber’s valuation Ola Electric to invest $2 bn buys HDFC’s
hits $500 mn in battery charging network stake in student
B Y TA RU S H B H A L L A
tarush.b@livemint.com
·······································
BENGALURU
B Y M ADHURIMA N ANDY
BLOOMBERG
housing startup
madhurima.n@livemint.com

C ryptocurrency investment platform Coin-


Switch Kuber on 22 April said it has
·······································
BENGALURU
B Y M A D H U R I M A N A N DY
madhurima.n@livemint.com
raised $25 million (`181 crore) from Tiger
Global Management at a valuation of more O la Electric Mobility Pvt. Ltd, which is set-
ting up a mega factory to produce
··········································
BENGALURU

than $500 million, in the American hedge


fund’s first investment in an Indian crypto
company.
e-scooters, will invest $2 billion in the next
five years to build an electric two-wheeler
charging network along with its partners, said
B askin Lake Investment Ltd, an affiliate of
Warburg Pincus, has acquired HDFC Ltd’s
24.48% stake in Goldman Sachs-backed student
A person aware of the matter said that the a top executive. housing startup Good Host Spaces for `216.18
company was valued at $100 million in Janu- Called ‘Hypercharger Network’, Ola said it crore.
ary when it had raised $15 million in a Series will provide super-fast charging solutions to Following the transaction, Baskin Lake,
A round from global fintech investor Ribbit all its electric two-wheeler customers, includ- which now holds a significant stake in the com-
Capital, San Francisco-based crypto-focused ing the scooter that it plans to launch in July. pany, along with Goldman Sachs will support
investment firm Paradigm and Sequoia Capi- Ola plans to set up a network of 100,000 EV Good Host’s growth by investing additional
tal India. chargers across 400 cities, of which 5,000 capital. Goldman Sachs continues to be a
Four-year-old CoinSwitch is a global aggre- charging points will be installed in 100 cities majority shareholder in the startup.
gator of cryptocurrency exchanges, and in 2021-22. Mobility solutions: Ola chairman Bhavish HDFC on 22 April said it has exited Good
launched its Indian platform CoinSwitch The charging network will have both verti- Aggarwal expects adoption of EVs to accelerate Host. Goldman Sachs’ investment banking divi-
Kuber in June 2020 to simplify crypto invest- cal tower chargers as well as standalone char- as the firm sets out to create the world’s largest sion advised Good Host on the transaction.
ments for Indian retail investors. gers in popular locations such as malls, office and densest 2-wheeler charging network. Mint had first reported in January that a War-
With the new Series B fund infusion, it complexes and cafes. Ola’s customers can burg Pincus affiliate was set to buy HDFC’s
plans to sign up 10 million users by the end of charge their electric two-wheelers at home as launched in sync with the scooters and will stake in Good Host Spaces.
this year, hire top talent and build awareness the home charger will come bundled with the be installed before the sales process in a par- The startup was founded by Nimesh Grover
among retail investors for cryptocurrencies in vehicle. The home charger will require no ticular city commences. and Stanley D’britto in September 2017. It
India. installation and will provide Ola customers “Electric is the future of mobility, and we operates around 18,000 beds across campuses
“This is a monumental time for the crypto with the convenience of charging at home by are reimagining the entire user experience of of educational institutes, such as Manipal Uni-
industry in India and globally, as institutional simply plugging into a regular wall socket for owning an electric vehicle. Our plan to build versity, O.P. Jindal Global University and Shoo-
adoption as well as retail adoption for this overnight charging. a comprehensive charging network is a key lini University. The company said it is in talks
asset class is increasing exponentially. We are The new Ola scooter can be charged up to piece of this. By creating the world’s largest with other prestigious institutes to expand its
thrilled to have Tiger Global, the most prolific 50% in 18 minutes for a 75km range, and to and densest 2-wheeler charging network, we portfolio to 50,000 beds in the near-term.
backers of the Indian startup story, as inves- charge the vehicle’s battery to its full capacity will dramatically accelerate the customer “…Good Host is confident that with Goldman
tors and mentors in our journey,”said Ashish will still take less than an hour, the company adoption of electric vehicles and rapidly Sachs and Warburg Pincus as shareholders, our
Singhal, chief executive and co-founder, said. move the industry to electric,” Aggarwal said. company will further strengthen its leadership
CoinSwitch Kuber. “This investment round Ola’s factory on 500 acres of land in Tamil Customers can monitor the charging position in this space and bring many more
brings us at par with some of the most Nadu’s Krishnagiri district is expected to be progress in real-time on the Ola Electric app partner universities and students onto our plat-
sought-after cryptocurrency companies in the ready by June and will produce 10 million and can use the same app to pay for the form by providing contemporary student hous-
world and sets us up for the long run.” e-scooters every year, making it the largest charging as well. ing to live, learn and grow in a safe environ-
CoinSwitch Kuber says its Indian user base two-wheeler maker globally. “Just like Tesla has its proprietary charging ment,” said Nimesh Grover, chief executive,
has grown 350% since January, crossing 4.5 Bhavish Aggarwal, chairman and group network, we are building our own. In the Good Host.
million users and $5 billion in transaction CEO of Ola, said at a virtual press meet on early adoption phase, consumer experience is The company is also hiring across verticals as
volume in March. Thursday that the charging network will be paramount,” Aggarwal added. it enters the next phase of growth, Grover said.

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12 NEWS
April 30 - May.6, 2021 , SINGAPORE/KUALA LUMPUR° WWW.MINTASIA.COM
mintasia

A MAYDAY PLAN
TO VACCINATE INDIA
Instead of trying to inoculate 600 million people in the midst of shortages, here’s a better way to beat covid-19.
AFP

B Y P A R T H A M U K H O PA D H YAY &
S HAMINDRA R OY
·······································
NEW DELHI

O n 1 May, India will move into


uncharted territory. An additional 600
million people in the 18-45 age group
will become eligible for vaccination. This will
happen without any corresponding immedi-
ate increase in India’s vaccine production
capacity, which currently stands at about 75
million doses per month. So far, one dose has
been administered to about a 100 million
Indians who are above the age of 45, or
roughly 40% of the estimated eligible popula-
tion.
Thus, by this weekend, we will be tripling
the vaccine requirement, even as 60% of the
currently eligible population remains to be
vaccinated. There are already multiple
reports of serious vaccine shortage, with
many unable to get their second dose.
Consequently, India now needs to quickly
determine not just who to vaccinate, but
where to vaccinate in order to secure the
maximum public health benefit in an atmos-
phere of shortage. Obviously, everybody can-
not be vaccinated simultaneously. Beyond
the market-determined allocation—those
+ who can pay more will get vaccinated first—
the country needs a broader plan to priori-
tise.
The vaccination drive is not merely about
attaining herd immunity. While that is indeed
the medium-term goal, vaccines can also be
used in a targeted fashion to mitigate the epi-
demic over the next few months. Full protec-
tion from vaccination is attained only about 3
weeks after the second dose, but partial indi-
vidual protection from severe illness may be
obtained just a few weeks after the first dose.
So, it is possible to affect the severity of the Under stress: A vaccination camp in Bengaluru. The initial concentration of cases in fewer districts resulted in the visible overwhelming of the health-
second surge and limit the spread of the ill- care system in the surge zones.
ness by having a viable, well-thought-out districts that were the hotspots at that point
plan. also figured in the list of 145 districts from
Here, the pandemic’s concentration in a PULSE OF THE PANDEMIC September 2020, and accounted for 91% of
few districts could and should be exploited. the population of the hotspot districts.
Chart 1: The pandemic is revisiting its old haunts, with the geography of affected districts in both the
For example, in mid-April, 25 districts (less waves looking eerily similar.
But is the pandemic becoming more rural?
than 5% of India’s districts) were responsible Aug-Sept 2020 wave Mar-Apr 2021 wave
And is it affecting the semi-urban and rural
for 50% of the total infections. The disease is Districts reporting 50% of all cases pockets of the districts which were hotspots
Hotspots with the next 25% of cases
spreading beyond these districts, but experi- Exit from hotspot during surge
in the first wave? Chart 2 looks at the settle-
ence from the first wave in August and Sep- Entry into hotspot during surge ment structure of the hotspot districts at dif-
tember of 2020 offers valuable clues. Data NA Delhi ferent periods during the pandemic. It shows
Has the geography of covid-19 infections Ahmedabad Lucknow that the current surge started out in areas that
changed between September 2020 and April are much more urban than in August-Sep-
2021? Can the settlement structure of the tember 2020. By April, the pandemic is mov-
infection-intensive districts—whether city, ing beyond the megacities into districts with
semi-urban periphery or village—offer fur- Nashik million-plus cities and large towns. As such,
ther insight? Our analysis suggests that India Thane the peripheries of these cities—though they
Mumbai Nagpur
needs to worry about a much smaller, more may be administratively classified as villa-
Pune
manageable subset of the population than ges—are also likely to have a significant num-
600-700 million people, at least in May and Bengaluru ber of infections.
June. The key question for the upcoming vac- Ernakulam
Since the location of the cases is not known
cination drive in the midst of an acute second publicly (but known to the administration),
wave is ‘where’ rather than ‘who’. the analysis is circumstantial, but there have
Chart 2: The current surge is even more concentrated and urban-centric than the first wave.
been relatively few reports of cases in rural
Villages Other than class-I Non-million class-I Other million-plus cities Top eight metros
Geography of covid areas. It was feared that this might occur last
To analyse the geographic spread of cov- Districts with 50% cases Districts with 75% cases year, especially after migrant workers started
9-15 Aug 2020 9-15 Aug 2020
id-19, we grouped districts into four catego- 9-15 Sep 2020 9-15 Sep 2020 returning to their villages. This is a possibility
ries according to the caseload intensity: dis- 9-22 Mar 2021 9-22 Mar 2021 this year too due to similar migrant move-
14-16 Apr 2021 14-16 Apr 2021
tricts that comprise 50% of the cases, those 0% 100% 0% 100%
ments and also due to recent large gatherings
comprising the next 25%, the next 15% and, Source: Covid19india.org, Census, author calculations
like the Kumbh Mela and election campaigns.
finally, the other districts. But it hasn’t happened yet. If things play out
Chart 1a maps districts that were pan- AHMED RAZA KHAN/MINT similar to last year, the worst of covid may
demic hotspots in the August to September to 145 districts. Comparing the first and sec- April, covid-19 had spread substantially in at remain concentrated in urban areas and their
2020 period. The pandemic was relatively ond wave is instructive. least 105 districts, which were responsible for peripheries.
concentrated in Maharashtra and in the Chart 1b attempts to do just that, showing 75% of all detected cases.
southern states, with major urban centres in the spread of the disease in the March to The initial concentration of cases in fewer The vaccine plan
the north, east and west also affected. In Sep- April 2021 period. Interestingly, the current districts resulted in the visible overwhelming India started vaccinating those above 60
tember 2020, about 45 districts accounted for surge started out even more concentrated, of the healthcare system in the surge zones. (and those above 45 with co-morbidities)
50% of the cases (marked in dark brown) and with only 10 districts accounting for 50% of Further, and of great importance for the pre- from 1 March, and then, all those above 45
another 100 districts added 25% more cases. the cases and a further 37 districts taking that dictability of this surge, the pandemic is revis-
Essentially, the disease was largely confined figure up to 75% of cases in March. By 17 iting its old haunts. As of 17 April, 89 of 105 TURN TO PAGE 13

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mintasia NEWS 13
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

STAKE SALE fer from one Blackstone fund to another, since


there are new investors who are acquiring the

Blackstone commits $2.8 billion


firm along with Blackstone and have done
their independent assessment of value and
the growth potential of the company,” said a
person aware of the PE firm’s plans, speaking

for majority stake in Mphasis


on condition of anonymity. This is the largest
PE deal in India, he added.
Since the sale involves a transfer of over
25% stake, it triggers an open offer under reg-
ulatory norms, which will see two acquiring
BLOOMBERG Blackstone funds make an offer to public
Move will help global private ends. If an older fund holding an investment shareholders to purchase up to 26% share-
equity major Blackstone, which is unable to find a buyer for its investment due holding of the company.
to current macro conditions or if it is not get- The open offer price has been set at
owns 56% of the firm, hold on to ting the right value for it, the PE firm may look `1,677.16 per share. If Blackstone acquires the
the stake for a longer period to sell the investment to another of its funds. entire 26% through the open offer, it will have
This gives liquidity to the existing investors of to shell out `8,262 crore. This will take the
B Y S WA R A J S I N G H D H A N J A L the old fund, and the PE fund can then con- maximum purchase price for Blackstone to
swaraj.d@livemint.com tinue to hold on to the investment till it is able over `23,000 crore for both transactions.
······································· to find buyers at a price that is profitable for it. To be sure, the final purchase price will be
MUMBAI Such a transaction can also be executed lower than `23,000 crore since Blackstone will

G lobal private equity major Blackstone


on Monday, 26 April, said it will trans-
fer its entire majority shareholding in
Mphasis Ltd from its existing fund to two new
funds after dropping plans to sell its stake to a
Growth potential: Blackstone is said to believe
that Mphasis market cap can grow to $10 bn.
when a PE firm sees a long growth runway for
its investment and does not want to lose out
on the growth prospects due to its fund reach-
ing its lifetime. In such a situation, transfer-
ring to a new fund gives the PE firm the head-
acquire shares only up to 75%, depending on
the number of shares it acquires in the open
offer. If the open offer is subscribed fully, then
Blackstone will reduce the purchase of shares
from BCP VI (55.31%) so that its total share-
third party. The move will help Blackstone, room needed to exploit the full growth poten- holding does not cross 75%.
which owns 56% of the IT services company, Asia). This transaction will be done at a maxi- tial of its investment. “Based on the open offer subscription, the
hold on to the stake for a longer period, and mum value of `15,216 crore, Blackstone said “Blackstone believes that Mphasis can grow blended purchase price will vary between
seek exit opportunities at a later time. in a notice to stock exchanges. from over $4 billion in market cap today to `1,452 to `1,497 per share (12-16% premium to
The PE firm said its 104.79 million shares in It is not uncommon in the private equity almost $10 billion. And while there was 12-month average price and 3-6% discount to
Mphasis, held by Blackstone Capital Partners world for firms to transfer their shareholding increased interest from buyers post covid-19 6-month average price), and the purchase
VI fund (BCP VI), will be bought by Black- from one fund of theirs to another. to acquire the company, the firm has decided consideration will vary between `15,200 crore
stone Capital Partners VIII and Blackstone PE funds have a limited lifespan, and the to continue to hold on to the investment given to `21,000 crore (or approximately $2-$2.8 bil-
Capital Partners Asia funds (BCP VIII and BCP capital must be returned to investors before it the growth that it expects. It is not just a trans- lion),” Blackstone said in a statement.

JAGDISH KHATTAR: IN MEMORIAM


A Mayday plan to vaccinate India
The man who transformed Maruti FROM PAGE 12 healthcare capacity in these perilous times.

+ and India’s automotive industry from 1 April. The first dose has been adminis-
tered to about a 100 million people from this
Beyond vaccination centres
To do this, we must go beyond the current
RAMESH PATHANIA/MINT eligible category as on date. approach of expecting people to come to the
B Y M A LYA B A N G H O S H The spread of vaccination has been largely vaccination centre. The low share of vaccina-
malyaban.g@livemint.com proportional to the eligible population across tions till now shows that there are many vul-
······································· states, with some states like Rajasthan doing nerable and eligible people who are finding it
NEW DELHI exceedingly well. But while states have bat- hard to access vaccination centres or are hesi-

J agdish Khattar, the former managing


director of Maruti Udyog (Maruti Suzuki
India Ltd), breathed his last on Monday, 26
tled each other for vaccine doses, the district-
level story has gotten very little attention.
If we dig deeper and look at the district-
tant. It would be important to address these
issues. We must focus on taking vaccine
doses to the people in high-risk areas, rather
April. He was 78. level vaccination coverage, the most affected than merely expanding the eligible popula-
Khattar, an Indian Administrative Service districts do have a higher share of the eligible tion.
(IAS) officer of the Uttar Pradesh cadre, had population who have received at least one Second, in a raging pandemic situation, a
joined Maruti as an officer on special duty dose, but this ratio is still less than half. In number of vaccinated people will be infected,
(OSD) in 1992 and became its director of other districts, it is only around a third. What’s especially those that have received only one
sales and marketing operations. worse is that the pace of vaccinations has dose. To ensure this does not increase vaccine
In 1999, he was promoted as the joint man- slowed down considerably since mid-April— hesitancy, it is important to convey that this
aging director of the company at a time when either because people are scared of vising vac- does not indicate that the vaccine is ineffec-
Maruti was dealing with several problems. cination centres or because of supply issues. tive and that even if infected, the illness is
Khattar’s career also mirrored that of Mar- The missed opportunity is more likely to be mild if the
uti’s chairman R.C. Bhargava, who was also this: If we had focused on person has been vaccinated.
an IAS officer, but resigned to join Maruti per- the districts previously There is a risk that satura-
manently in the mid-1980s. Valued stint: Jagdish Khattar oversaw Maruti’s affected by the surge in Sep- Give vaccine doses tion vaccination in certain
Khattar oversaw Maruti’s operations during
one of the most challenging periods in its his-
operations during one of the most challenging
periods in its history.
tember, we could have vac-
cinated the entire vulnera-
to people in high- areas can make the virus
move to new areas which are
tory and successfully represented the auto
industry’s demands for changes in regula- total costs borne by him or her during the lif-
ble population above 45 in
these areas by now.
risk areas, rather currently not very highly
infected. Also, the virus can
tions and taxation structure before the gov- ecycle of the product. This was clearly a mis- than expanding the mutate as the share of infec-
ernment via the Society of Indian Automobile “One day, he walked into the sales and take. In the next month or table people goes down after
Manufacturers (Siam). marketing area of the old Maruti office and two, when vaccine supplies eligible population vaccination. One must be
According to Bhargava, Khattar undertook summoned all the top executives in the are likely to remain very careful to watch out for both
a number of initiatives during his years at department. He showed us the paper from constrained, how can we these possibilities, by closely
Maruti and it was quite a productive time for Ford and said that Maruti should also try to use the vaccination drive to save lives? The monitoring the spread of the disease in new
the company. strive towards engaging with the customer best option appears to be to focus the drive areas and by extensively increasing sequen-
“He was the managing director of the com- while they own the vehicle. That was the ger- on increasing vaccination among the existing cing and observing the nature of mutations
pany for almost eight years and before that he mination of the project,” recalled Avik Chatto- 45+ category beginning with urban areas by that are taking place.
was the head of marketing. Being an IAS offi- padhyay, a former employee at Maruti and using pop up vaccination camps closer to the The fact remains that by expanding vacci-
cer, he had a smooth transition after joining founder of Expereal, a brand consultancy people. This needs to be done while simulta- nation drive to all adults, the government has
Maruti. Under his watch, the company went firm. neously phasing in younger people with done away with the question of whom to vac-
public quite successfully and he also dealt Khattar had his share of disagreements co-morbidities in the districts which currently cinate. The states are now tasked with the
with the labour strike during his time. In fact, with the top management of the parent, Suz- comprise the top 50% of reported cases. This onerous responsibility of sequencing vaccina-
the Manesar plant was set up under him,” he uki Motor Corp., on a number of issues, will protect the most vulnerable in precisely tion in a situation of high scarcity.
said. including recruitment, product development the areas where they are most at risk. In this situation, a good way to prioritise
The most significant decision taken by and the broader strategy of the company for As more doses become available, one can may be a geographic criterion that targets par-
Khattar during his stint in Maruti was to its India operations. then extend the vaccination to other areas in a ticular districts. In the districts that accounted
establish its insurance, used car, accessories Khattar retired from Maruti in 2007 and phased manner, with 18-20-year-olds in dis- for 75% of all cases on 17 April, 34 million had
and businesses, which are successful ven- started his own venture, Carnation Auto, a tricts that have rarely seen covid cases being received their first dose out of an eligible 45+
tures, providing a separate source of revenue multi-brand automobile services platform. the last to be vaccinated. People need to be population of about 100 million. We can give
for Maruti’s dealers. His stint as an entrepreneur though ended convinced that the prioritisation process is at least one dose to most of this remaining
According to people who had worked with on a sour note as the project failed and inves- based on an assessment of risk exposure, and high-priority, vulnerable group in May if we
him, Khattar established the businesses after tigation agencies, including the CBI, booked that the people who are most in danger are try. We must.
reading a paper published by Ford Motor Co., him for alleged financial losses. But Khattar being prioritised first. This will also save lives Partha Mukhopadhyay and Shamindra Roy
which indicated that the value paid by a cus- maintained that Carnation Auto was a genu- by decreasing the need for hospitalization are researchers at the Centre for Policy
tomer while buying a car is just 33% of the ine business failure. among those infected, preserving scarce Research

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mintasia

myview A VISIBLE HAND ings do not really work is that the


structure of these meetings misses
one. The complex social clues from
just this one set of behaviours are
NARAYAN RAMACHANDRAN very important clues related to body
language, pauses, fidgeting, eye-con-
generally not available online and are
weakly substituted by virtual hand
tact, interruption, influence, power signalling when a board member
FUTURE OF WORK-FROM-HOME projection, courage and timidity.
Importantly, the very basis of trust in
wants to interrupt.
The Path Forward: The future for
BOARDS LIES IN HYBRID INTERACTION collective decision- making is difficult
to accomplish in a virtual context. In
WFH board meetings is clearer than it
is for WFH employees. Board meet-
other words, WFH board meetings ings will evolve into a mix of online

I n the past year, much has been


said about the future of work-from-
home (WFH) for corporate
employees. Many companies like
Amazon and Google have delayed
anxiety caused by wandering family
members, and frustration with under-
performing internet connections and
poor eye contact, WFH board mem-
bers have had to deal with how to read
offer an efficient alternative, but miss
significant human aspects of social
interaction. These elements are nec-
essary for visceral relationships to be
drawn between risks the business
and offline variants. Interaction is the
very basis of
collective decision-making, and the
nature and dynamics of virtual inter-
action are very different from those of
worker return to offices to at least signals, collaborate, and make impor- may be facing and bold forward-look- the physical kind. While virtual inter-
October this year, while others like tant decisions in the absence of physi- ing decisions—arguably the principal action may match or improve the
Shopify and Twitter are contemplating cal meetings. roles of a board. In physical meetings effectiveness of decision-making, if
a more permanent cadre of WFH What has worked: The most impor- where high-stake decisions need to be you consider normative models like
employees. As the pandemic has tant positive about WFH board meet- made, ad-hoc conversations along the that proposed by decision scientist
dragged on, virtual meeting fatigue ings is that they can be convened side or in corridors, or over lunch, are Herbert Simon, recent research com-
has set in, with Citibank declaring quickly and often. Physical meetings necessary to move thoughts along. paring virtual and face-to-face
‘Zoom free Fridays’. LinkedIn has typically need to be set in advance Many boards also get together for off- approaches have clearly concluded
announced one-week paid leave for its (with many firms adopting annual site huddles outside the context of that face-to-face teams are more
employees to cope with WFH burnout. calendars) to allow planning for inter- meetings. While some may argue that effective on all decision behaviours.
One topic that has not been dis- city and international travel. this decreases objectivity, if managed An emerging area of research is
cussed much is the functioning of Once set, WFH board meetings typ- properly, it can dramatically improve called ‘media choice’, which refers to
WFH boards. I use this term to refer to ically start and end on time, since the the effectiveness of boards. Their using the appropriate media depend-
board meetings that are held virtually mechanics of teams and vendors join- decisions are inherently collective. ing on the objectives and decisions to
no matter where its members may be ing parts of the meeting are dictated Efficiency, logic and data have a be made. As the virtual meeting for-
based. by when it starts. This has meant that major role to play, but are often mat goes from being on a two-dimen-
As uncertainty and risk rose last most board meetings get conducted trumped by the behavioural context of sional plane to a three-dimensional
year, the boards of companies have productively with minimal wastage of the decision-making. one, thanks to digital technologies like
been meeting at much greater fre- time. Virtual meetings have also Take interruption, for instance. virtual reality, some of the deficiencies
quency than they would in any normal meant that presentations are generally Interruption at its lowest level can be may become less obvious.
+ year. It is imperative, particularly for curated for timeliness and projected annoying and distracting, but is a In the meantime, boards will likely
boards of those companies that oper- at the same time as the conversation. weapon of great nuance and influence evolve to a state where video meetings
ate with a leveraged balance sheet, to Unlike in physical meetings, you are if wielded properly in a tense board are interspersed with physical meet-
meet once every few weeks in order to unlikely to see PowerPoint presenta- meeting. It can break the momentum, ings. This would allow for a good
combat uncertainty and deal with tions with hundreds of slides on a deflect, reset or outright arrest the combination of efficiency and effec-
liquidity requirements and regulatory video call. path of a good (or bad) idea. Interrup- tiveness.
changes. In addition to undefined What has not worked: The impor- tion can be a hugely positive collabo- Narayan Ramachandran is
work hours, tant ways in which WFH board meet- rative force or a disruptive negative chairman, InKlude Labs.

GENERAL DISEQUILIBRIUM ism as posturing, or as a publicity


stunt, and believes that CEOs should
strengthen distribution networks or
increase public healthcare capacity
RAJRISHI SINGHAL focus exclusively on shareholder
enrichment and not endanger the
by whatever extent possible. Instead,
there was premature rejoicing amid
company over personal political dubious claims of attaining herd
THE COVID CRISIS IS A WAKE-UP whims.
The increased level of corporate
immunity.
India Inc suffers from similar pre-
CALL FOR EVEN INDIA INC activism seems to be setting a tem-
plate for the Joe Biden presidency
mature elation and an inexplicable
ability to disregard risk, even when it
and, perhaps, impelling the adminis- is staring businesses in the face. In an

T hree years ago, California-based


outdoor retail company Patago-
nia sued former US president Donald
occurrences. Corporate America is
increasingly stepping out of comfort-
able boardrooms to highlight and
tration to move in certain directions.
This throws up a larger question: Is
India Inc setting a template for the
economy just getting used to busi-
ness cycles, Indian firms have often
mistimed their investment decisions
Trump for depriving public lands in protest political actions or public pol- Indian government or taking its cues and debt-loading activity. The roots
Utah of federal protection which icies that are deemed unfair, or from New Delhi? of this perhaps lie in an attitude bred
would potentially open up two mil- biased against some section of the Traditionally, it would seem, Cor- by decades of protection and an
lion acres for logging, drilling and population, or outright mendacious. porate India has always followed the entrenched risk-reward matrix that
mining. Patagonia is known for its This strengthening trend of corporate government’s lead. It is time, perhaps, privileges crony capitalism over open
environmental activism, as much for activism has received widespread to change that. This has become all competition and fair play. India Inc’s
its outdoor clothing and gear. The support; it has also attracted sharp the more necessary after the govern- neglect of its workforce in March-
company was joined in its suit by criticism, predictably from right-wing ment’s inept handling of the covid April 2020, and once again in 2021,
many Native American representative politicians and some tone-deaf busi- health crisis in all the critical depart- also reflects its risk-denial behaviour,
groups because the land, as Patago- ness school professors. ments—planning, logistics, delivery especially the multiple long-term
nia describes it, is a “cultural land- Corporate activism can be viewed and even communication—where the implications for future productivity.
scape sacred to tribes”. through four lenses. First, it reveals a private sector usually scores high. But India Inc’s failure to look after work-
More recently, on 14 April, the firm’s desire to be counted as a key both India Inc and the government ers (consider how even non-essential
chief executive officers (CEOs) of stakeholder in the broader govern- have been revealed to be woefully staff was asked to commute to work
leading US firms released an adver- ance matrix, and not be seen as a inadequate in one particular area. in the midst of rising infection rates)
tisement protesting against new vot- passive legal entity. The second The glaring deficit in India’s health perhaps also springs from a broader
ing laws being enacted by various involves hard-core business sense: infrastructure was conspicuous after governance deficit.
Republican legislatures (Georgia, Firms are aligning with environmen- the pandemic broke in March 2020. The current healthcare crisis is a
Texas or Arizona, to name a few) that tal or political issues (such as ‘Black Once the government started lifting sign that Corporate India should
threaten to disenfranchise voters, Lives Matter’) because their employ- its lockdown—first partially and then change, and a portent that it needs to
especially from African-American and ees and customers (especially millen- fully—the logical approach would indulge in corporate activism of a dif-
Hispanic communities. The signato- nials) are either directly affected or have been to repair our crumbling ferent kind. India Inc must seize the
ries included the CEOs of Google, deeply care about it. Silence over health infrastructure on a war foot- initiative and step into the gaps left
Amazon, Starbucks, General Motors, important issues can reverberate ing. by the state. It should now become
Merck, Netflix. Some CEOs who loudly on social media. The third lens Admittedly, the government got part of progressive civil society. It
didn’t sign the petition, such as Jamie is strategic: Many companies want to only a six-month window between could start by becoming more
Dimon of JP Morgan Chase, had ear- associate with social or political the infection rate abating in October labour-friendly.
lier released statements criticizing issues because it syncs with their and then picking up in April. But few Rajrishi Singhal is a policy consult-
these new laws. business strategy. The fourth lens, attempts were made in this period to ant, journalist and author. His Twitter
These incidents are not one-off somewhat cynical, views such activ- rebuild broken supply chains, handle is @rajrishisinghal.

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theirview
The second covid wave could deadweight loss from containment,
testing and treatment of covid-19 is
several times the cost of vaccines.
The government’s assumptions on

mark a new beginning for India economic growth, tax and non-tax
revenues, and expenditures for
2021-22 are likely to withstand the
second wave of infections, in our
BARE
TALK
V. Anantha Nageswaran &
E arlier this month, less than 100
days into India’s vaccination
drive, the government made
important changes to the process. In
a single stroke, it removed restrictions
frontline and healthcare workers have
been vaccinated fully, and only about
half of those aged 60 and above have
received at least one dose.
Even with such a large segment of
of local lockdowns in the current
wave is at least `80,000 crore and ris-
ing, which makes recurring lock-
downs and mobility restrictions far
costlier than the vaccination drive
view. The current three-tier pricing of
vaccines—one for the Centre, another
for states and yet another for the pri-
vate sector—has the potential to
cause confusion, arbitrage, diversion
Rahul Bajoria on eligibility, pricing and distribution, the vulnerable population not yet vac- itself. and leakage. The country could have
are, respectively, a member opening it up more broadly to states cinated, the decision to liberalize eli- A major constraint in this regard is just two prices: one for the govern-
of the Economic Advisory and the private sector as well, freeing gibility was the right one. The govern- the supply of vaccines. Raw material ment and another for the private sec-
Council to the Prime up the inoculation effort. While some ment did well throughout 2020, man- shortages, low pricing, and export tor. This would allow the Centre to
Minister and chief India have reservations over the timing of aging the economy by responding commitments are limiting India’s procure and distribute vaccines to
economist at Barclays. the move, especially since near-term flexibly to evolving circumstances. To ability to increase domestic coverage. states, actively supporting their
supply constraints appear somewhat manage the economic fallout, given Infrastructure has been prepared to efforts. It will be a good gesture of
binding, it is still a very welcome step. the unknowns surrounding the virus do over 7 million jabs a day, but in federalism in these times. Nationwide
India’s earlier success in containing (its spread and effects), it made sense recent days, several states have had vaccination, facilitated and financed
covid infections in 2020 was not to wait and respond appropriately to halt vaccine distribution or have by the Union government, would be
based on rationing. One of the pri- with fiscal measures. Recently, the rationed supplies, especially for the the equivalent of its stimulatory fiscal
mary reasons why India was able to government reintroduced free food first dose. Bibek Debroy, chairman of response to the first wave. States
contain the earlier covid wave and rations that will be made available to the Prime Minister’s Economic Advi- would continue to be responsible for
reopen its economy was its liberal over 800 million people, for two sory Council, recently noted that making sure vaccines are not diverted
testing policy. This helped to reduce months, to mitigate their pain. India will only be able to scale up to the black market.
the fear of contracting covid, However, with vaccinations, the vaccinations to around 5 million per More importantly, with the US
improved treatment protocols, and opposite response is needed. High day by September. apparently leaning towards higher
encouraged wider testing, thereby levels of vaccination are the way to The new vaccine procurement taxes and with a realignment of sup-
promoting early detection. open up the economy sustainably. rules also introduce an element on ply chains away from Asia, India has
Similarly, the government needs to The government has provided resour- one-upmanship between states and an opportunity to attract global capi-
do all it can to address vaccine hesi- ces in its annual budget for vaccina- the Centre on providing free doses. tal with its political stability, reasona-
tancy, which has been obscured amid tions, setting aside about `35,000 Ultimately, the Union and state gov- ble tax rates and structural reforms.
+ the noise around evolving vaccine crore for the drive. According to some ernments lose revenues when high- For that to materialize, India must get
protocols. While the absolute number estimates, the total burden on states contact services are restricted. This is its second covid wave under control,
of doses given in India is high, the to vaccinate those aged between 18 especially true with cities being the and this will require the combined
percentage of the population vacci- and 44 will be `46,300 crore, or 0.2% worst affected by covid. As such, the and cooperative efforts of the Union
nated is low. Only slightly over 8% of of gross domestic product (GDP). most logical strategy here would be and state governments.
the population has received one dose Together this amounts to `81,300 to channel all resources towards These are the authors’ personal
of the vaccine, and just 1.3% has been crore, just 0.36% of India’s projected securing as many doses as fast as views
fully vaccinated. Even within priority nominal GDP. In contrast, the esti- possible, without worrying too much Comments are welcome at
groups, so far only about 50% of all mate of one of the authors of the cost about burden sharing, since the theirview@livemint.com

We can’t afford to let vaccine here) around the world, very few have
suffered from clots, which has made
the connection between the vaccine
complications is worth it if their bodies
have an innate ability to overcome the
disease.
scepticism get in the way and the clotting side-effect “plausible
but not confirmed”. According to UK
data, there is only a one-in-a-million
Unfortunately, anecdotal evidence
seems to suggest that India’s second
wave is an equal opportunity offender,
EX
MACHINA
T he last time I saw my dad was
through a plexiglass porthole on
the door of the ambulance that was
Much has also been written about
how we got here—tales of compla-
cence, ineptitude and misplaced politi-
chance of death among the vacci-
nated. This means that even if every
last person in India were to get the
putting the young and old alike into
hospital. Doctors I spoke to told me
that, if anything, this time around more
taking him to hospital. For over a dec- cal priorities. But now is not the time shot, just over 1,300 people will have young people are dying than old.
Rahul Matthan ade-and-a-half, my father had stoically for post-mortems. Our medical infra- fatal side-effects. Which means that when the govern-
is a partner at Trilegal and suffered various ailments, silently put- structure is crumbling and we need to That said, of all my friends who got ment opens up vaccines for everyone
also has a podcast by the ting up with pain that our best medical find a way to stem the rot. If our only themselves vaccinated, one suffered a over the age of 18 on 1 May, I hope the
name Ex Machina. His science could only dull but not elimi- effective strategy to survive covid in micro-stroke and another experienced youth show up in large numbers.
Twitter handle is @matthan nate. When the pandemic descended India is not to get it in the first place, an inexplicable burning sensation in None of this is meant to divert atten-
on us, given his other medical condi- we need to focus our energies on his chest that he has been forced to tion from all that must be done imme-
tions, he was extra-vigilant about ensuring that those who are not yet treat with blood thinners. Though they diately, such as procuring supplies of
masking and staying indoors. So it was infected remain safe, so that they don’t can’t confirm a causal link, doctors are oxygen and life-saving drugs and ramp-
a shock to us when he tested positive. put any more strain on our already- reasonably certain that both episodes ing up the establishment of covid care
Still, since he was just one dose short of battered infrastructure than is abso- are vaccine-related. If I myself know facilities, both intensive care for serious
complete vaccine immunity, we were lutely necessary. two people who have reported serious cases as well as isolation facilities, apart
hopeful that he’d come back home Unlike last year, when the virus first vaccine side-effects, then the risk must from telemedicine and home health-
after no more than a short stint at the hit us, we have vaccines that will pro- surely be greater than advertised. care for mild to moderate cases. But as
hospital. vide us immunity at best, and, at worst, At the end of the day, every time we work to buttress our battered infra-
The second wave was just beginning blunt the full force of the disease. And your body is presented with a portion structure to help the sick and the dying,
when my father was admitted to hospi- yet, the country’s vaccine uptake in the of a virus to build immunity—as hap- we must not forget that it is just as
tal. Even then, hospitals were dealing initial months was disappointingly pens with the AstraZeneca vaccine— important to keep the healthy out of
with rising numbers of patients that weak. Even though the second wave there is always a risk of immune dys- hospital. We can’t allow vaccine scepti-
would turn into a tidal wave and over- has spurred more people to join vacci- function. But we have to keep remind- cism to come in the way of this.
whelm them, depleting our national nation queues, many remain sceptical, ing ourselves that this is nothing My father never made it back home.
stocks of medical oxygen and straining trotting out excuses that range from compared to the risk of exposing our His weakened body couldn’t weather
supplies of critical drugs. Much has conspiracy theories about the avarice bodies to the full-blown pathogen. the ravages of the disease. In his case,
been said about this catastrophe, so I of Big Pharma to fears of rare blood But there are also other factors to not only did he get all the medical help
will not spill any more ink on the sub- clots. Since this column has never consider. We’ve always known that he needed, I have only gratitude for all
ject—except to say that unless you’ve stooped to debunking conspiracy theo- covid disproportionately affects the that his doctors at Ramaiah Hospital
had a loved one go through the dis- ries, I am going to skip right past that elderly. The youth, on the other hand, did for him.
ease, it’s impossible to understand how and focus on the blood clot risk. have, for the most part, been able to Still, I cannot help wonder how dif-
brutal it can be. And to remind you that According to the World Health Orga- fight off the disease with minimal ferent things might have been had he
as bad as things might seem, having nization’s Global Advisory Committee medical assistance. That being the caught the infection after he had taken
stood at ground zero, it’s clear to me on Vaccine Safety, of the over 200 mil- case, we have to ask ourselves whether his second dose.
that things will get worse before they lion people who have received the the risk of exposing young people to Comments are welcome at
get better. AstraZeneca vaccine (called Covishield vaccine-related blood clots and other theirview@livemint.com

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FEAR AND DESPAIR IN COVID COUNTRY


The explosion of covid-19 B Y S MRUTI KOPPIKAR
feedback@livemint.com
REUTERS
who suddenly find themselves without jobs.
Two-thirds of the migrant workers who left
cases in India has ········································
MUMBAI
cities last year had returned or planned to
return to their work but were in no better emo-

sparked a mental health


A
hmed had voluntarily moved to tional or mental health than last year, showed a
Bengaluru to work as a partner for pan-India survey conducted in January this
a popular food delivery app two year by the Rapid Community Response to
pandemic as deaths, years ago. He returned to his fam-
ily’s one-room tenement in Mum-
Covid (RCRC), a coalition of 43 organisations
in rural India.
misery and helplessness bai earlier this month after his sister and broth-
er-in-law were detected with covid-19. “I used
This survey, of 11,766 respondents across 12
states, showed a staggering 78% stressed or
lead to widespread grief to be out working all day, maybe I too will get
sick. If I cough, I’m scared. I can’t sleep or eat,”
highly stressed, nearly a third of them with
sleep disturbances: another third irritable, and
and despair. Helplines he told Mint.
He hears his colleagues taking ill every day,
nearly 45% tense all the time.
Moreover, the asymmetry in medical facili-

and psychiatrists in some of them seriously so. Much-in-demand


e-commerce companies saw a number of their
ties between large cities and rest of India is
mirrored in mental health care too. “There’s
delivery personnel call in sick last week or two, hardly any mental health care in small towns
urban areas are flooded forcing a round of fresh recruitments.
Earlier this month, the rush of patients in
or rural areas. People still fall back on commu-
nity networks,” said Dr Chatterji.
with calls, while people need of a hospital bed or oxygen apparatus at
Mumbai’s Lilavati Hospital prompted the man- The next steps
turn to community agement to put up beds in the elevator lobby of
the premier hospital. The makeshift beds soon
Psychiatrists and therapists offer a range of
“psychological first-aid” tools to get through
networks in rural parts. filled up but patient registrations would not
stop. Doctors on covid-duty, some of whom
this time. The most important aspect is for
people to square off their fear and anxiety of

MintAsia examines the had beaten back the virus, felt “overwhelmed,
extremely helpless and angry”, said a senior
covid, especially because recovery rates are
good with nearly nine out of every ten recover-
doctor of his younger colleagues. ing. “It’s important to find this balance amidst
psychological cost of These are words not expected from doctors.
As covid-19 rampages across India in the
the doomscrolling. It does help to keep a posi-
tive mindset,” said Dr Parikh.
+ India’s unfolding second wave clocking the world’s highest daily
caseloads of over 300,000 and 2,300 deaths,
Other important alleviation measures
include accepting that some degree of anxiety
healthcare tragedy turning the health emergency into a massive
humanitarian crisis, mental health issues are
and depression is par for the course now, cut-
ting family members and friends slack for their
wreaking havoc with lives in a way that psychi- emotional ups and downs; accessing profes-
atrists and therapists had not seen last year. sional help given that mental health care is
Feelings of stress, fear, anxiety and depres- now available online; practising meditation
sion related to the pandemic emerged last year, and other calming techniques, forming online
subsided a wee bit early this year, only to support groups; and not discussing covid-19
return with a vengeance this March. From statistics all the time.
erratic behaviour and anger on social media to These measures work well if organisations
frantic calls for help and support, the signs of have professional mental care facilities to fall
this malaise are all around us. While there is a back on. The better endowed schools and col-
glimmer of reversal in Mumbai, the recent, leges brought trained psychologists on board
tragic images from Delhi in particular have cast and offered counselling sessions for students.
a pall of gloom on the nation’s collective psy- When a cohort of post-graduate media stu-
che. Mental health practitioners are calling it a dents of a premier institute wrote to their
parallel and silent pandemic that deserves department head asking for an unprecedented
urgent attention once the crisis for oxygen and two-week leave and suspension of all deadlines
ICU beds tapers off. Those who have the band- because “the pandemic (was) taking a toll on
width to address it—formal workplaces, corpo- us”, their request was not only honoured but
rate offices, better-off schools and colleges— the college also organised one-to-one therapy
have begun to take note, but just about. Work- sessions for those interested at no cost to stu-
places are introducing new measures to deal dents.
with the deepening mental health fallout Corporates worked with mental health pro-
among employees in the second wave of the Hard times: From erratic behaviour and anger on social media to frantic calls for help and support, the signs of this malaise are all around us. fessionals to offer similar sessions to employ-
pandemic. But for informal sectors, mental ees. The helpline run by MPower, Aditya Birla
health issues are not even on the table yet. and 74% showed moderate stress; these must their conditions, and there are large new sets of OCD behaviours have spiked, especially pared for that,” remarked Dr Chavda. challenge. The constantly changing protocols Education Trust, saw a staggering 75,000 calls
“What we are going through now, after what have spiked in the second wave, practitioners people without previous mental health issues. because covid-19 protocols demand repeated of restrictions and quasi-lockdowns that each last year (they do not yet have numbers for the
we went through last year, is leaving deep emo- reckon. That a pandemic has mental health ramifica- hand-washing and sanitisation. “People are The workplace state is enforcing in the second wave have second wave).
tional and mental scars on people, even on All psychiatrists, psychologists and counsel- tions is known. “Whether it was the Influenza working with new protocols of distancing, India Inc’s human resources departments added to the weariness. “This wave is bigger. We are getting more
those directly unaffected by the virus. We will lors Mint spoke to said their appointment cal- epidemic of 1918-19 or the Calcutta plague, Work from Home types feel isolated, older peo- are witnessing a marked change from the “Employee wellness which was a low-level calls now even from people whose test report is
collectively carry them for a long time. No endars are full despite working longer hours. there are references to depression in ple feel cut-off within their homes. The behaviour of last year: employees are breaking activity has become a central piece of the positive and need hand-holding,” said Dr
doubt at all that it’s a parallel pandemic,” Dr “I’m seeing at least 50 patients a day which is the records,” Chinmay Tumbe, isolation-cum-depression has down and asking for more me-time; the free- workplace,” remarked organisational develop- Ambrish Dharmadhikari, head of psychiatry at
Rajesh Parikh, noted psychiatrist and medical huge for a hospital in Bhopal, and I’m feeling economist and author of Age of escalated,” said a renowned Del- dom and flexibility that came with WFH last ment expert Dr Shalini Lal. “Wellness doesn’t MPower, to Mint.
director of Mumbai’s Jaslok Hospital told Mint. the strain now,” said Dr Rajni Chatterji, psychi- Pandemics told Mint. “There hi-based psychiatrist on con- year has been replaced with loneliness and dis- only mean programmes on mindfulness any- The organisation proactively worked with
India’s frontline healthcare workers are at atrist at Bhopal Memorial Hospital. used to be collective or com- The constantly dition of anonymity. connectedness; the ‘doomscrolling’ of dismal more but transactional things like leadership Mumbai’s frontline workers in civic services
high risk. Dr Kersi Chavda, noted psychiatrist The range of mental illnesses has expanded munity solidarity practices changing protocols of Additionally, women are news is dominating official meetings; and taking the time out to do non-work meetings, and police since the pandemic began. “Hun-
and consultant at Hinduja Hospital said, in the second wave of covid, so has the type of such as bhajans at crema- restrictions and qua- exhibiting a burnout and downscaling of organisations has meant either offering covid-support to employees, and so dreds of them have died, their colleagues are
“Those who are out there have been soaking people calling in. Anxiety, fear and depression toriums to address the fatigue after a year of jug- job losses or pay cuts which exacerbate uncer- on. Company leaders are learning from best stressed out and their trauma unbelievable. I
up unbelievable stress for a year. A doctor were the three most commonly seen disorders emotional fallout.” si-lockdowns that gling professional work and tainty. practices of one another,” she added. believe we made some difference,” he added.
friend called me the other day to have me last year, say psychiatrists. The brutal second Grief is complicated by each state is enforcing housework, younger chil- “We thought last year was challenging Corporates do not want to come across as For all the gains, the discipline of mental
counsel his son, around 24 years old, who’s wave has added a layer of direct or complicated covid death protocols. “The dren are confused and una- enough but we find that the second wave has insensitive. Among the concepts and practices health does not have all the tools to compre-
been a resident doctor at a covid-19 centre grief, anger born out of helplessness, despair most difficult part was to have added to the ble to process the world cracked our employees who coasted last year,” that organisations have embraced in the sec- hensively address this unprecedented parallel
since last year. He’s burnt out.” and intense hopelessness. “Women have conduct final rites of my weariness around them—a four-year-old said a senior HR manager of a FMCG multina- ond wave are covid leave, vaccination leave, pandemic. But we live in hope.
another layer of abuse or violence, so do chil- mother all alone and not even believed that school meant tiny tional on the condition of anonymity. More care-giving leave, softening of KRAs, moving The last word goes to a journalist, Parth MN,
The stage dren. We aren’t even talking about that,” touch her one last time,” said windows on his mother’s laptop than in the first wave, executives across hier- beyond productivity benchmarks, and asyn- who has reported on the pandemic for national
There was a three- to five-fold rise in the remarked Dr Chatterji. Chennai-based Meera Gurunath who while young adults are exhibiting a archies have seen covid-19 complications or chronous work. “Empathy is now acceptable in and international publications from across
number of mental health cases last year from Clinics and online consultations are record- lost her mother last week and is nursing her range of anxiety disorders emanating from the death up close this year in their families or our corridors. There has been a fundamental India since March last year. “It’s excruciating,
the pre-pandemic norm. Mental health practi- ing three distinct categories of patients in the husband through covid complications. Her uncertainties that lie ahead of them. Of course, among friends and colleagues. shift in work culture,” said Dr Lal. one breaks down seeing all the misery and
tioners say they are seeing many times more second wave: many with history of mental ill- children fear she will “crumble” any day now. senior citizens are experiencing acute vulnera- Counselling and, particularly grief counsel- While some organisations have stepped up mismanagement. I’ve lost sleep but I cope
patients now. In a survey that the Indian Jour- nesses are seeing recurrences or relapses of ail- Depression, which psychologists say was bility and thought spirals of their mortality. ling, is the latest practice that a few organisa- their HR practices, a few have gone through somehow.”
nal of Psychiatry conducted last year, nearly ments, those with mild forms of mental ill- more typically seen in 20-year-olds and “The scale and enormity of what we are tions have taken to since working through down-sizing staff without warning, increasing Smruti Koppikar is a senior journalist and
48% respondents showed anxiety or depression nesses have experienced an exacerbation of 50-year-olds, is now across all demographics. grappling will unfold as a crisis. We aren’t pre- shock and grief, even indirectly, became a the stress and depression levels among those urban chronicler.

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IS TOCKPHOTO

BETTER RETURNS

Things to consider before going


for a guaranteed insurance plan
Onus of bearing tax
deducted at source
is on the NRI seller
I’m a resident of India and I want to send some money to
my son, who is an NRI. How much money can I send in a
year and what will be the tax implications?
Residents of India are allowed to remit up to $250,000
under the Liberalised Remittance Scheme (LRS) in a financial
year. This remittance may be used for medical treatment,
travel, education, maintenance of close relatives or gifts, etc.
INVESTMENT OPTIONS Effective 1 October 2020, tax is collected at source (TCS) @
Returns are for a 30-year-old male, 10 years policy payment term, policy term of 11 years and 60,000 premium (without GST). 5% on all remittances under the scheme that are above `7
lakh. In case you don’t provide PAN to the authorized dealer,
Income payout
Insurer Plan name period* (years) IRR (in %) TCS shall be deducted @ 10%. TCS shall apply on the amount
that is in excess of `7 lakh. TCS can be adjusted against your
HDFC Life Sanchay Plus-Long Term Income 25 6.04 final tax due at the time of filing your income tax return in
ICICI Prudential Guaranteed Income For Tomorrow-Income 10 5.78 India.
TATA AIA Life Fortune Guarantee Plus-Regular Income 35 5.91 —Name withheld on request

Bharti Axa Life Guaranteed Income Pro-Long Term Income 25 5.77 My friend has a share in some fam-
*Income starts after policy term for 10, 25 or 35 years. Source: www.policybazaar.com ily property in Delhi purchased by
+ his father. My friend has three broth-
PHOTOGRAPH FROM ISTOCKPHOTO; GRAPHIC BY PARAS JAIN/MINT
ers. Two of them are Canadian citi-
It’s a good option for investors with a Co. Ltd. zens and the other is an Indian citi-
low-risk appetite and long-term horizon, For example, SBI’s five-year FD is giving 5.40% interest, zen. Now, they are selling the prop-

but there are better alternatives


while HDFC Life’s Sanchay Plus-Long Term Income is offer- ASK MINT erty through a general power of
ing a 6.04% payout. Moreover, the absolute returns from a attorney given to the Indian brother.
bank FD may fall after tax deduction as per your slab rate. MONEY The buyer’s chartered accountant is
B Y A B H I N AV K AU L However, there are a number of pitfalls in such insurance saying that he will cut 10% TDS from
abhinav.kaul@livemint.com policies. Let’s look at these plans in detail and whether you ARCHIT GUPTA the shares of all the owners. The total
··················································· should invest in them. founder & CEO, ClearTax cost of the property is approximately

C onsider this: In 2014, fixed deposits (FDs) by banks


were offering 8-8.5% returns, but now they are giving
5-5.5% returns. This has made finding an investment
instrument offering both safe and decent returns an uphill
task.
What investors get
During the sales pitch, it is mentioned that these are guar-
anteed plans and are not linked to market returns. This
makes such plans much more compelling from the selling
`1 crore. What is the remedy?
—Name withheld on request

Usually, a general power of attorney is issued by an NRI for


the sale of a property since he/she cannot be personally
Amid the uncertainties and the low-interest rate regime, perspective. present in India. It helps them assign their responsibility to a
many investors have been moving towards life insurance Short-term interest rates have fallen over the past five trustworthy person. However, in case of property sale trans-
policies offering pure protection and guaranteed returns, years. However, long-term rates on instruments such as gov- actions, even though a power of attorney has been issued, the
claim insurance industry executives. ernment bond yields haven’t gone down in a big manner. onus of bearing TDS on the transaction remains on the NRI
“There is a definite shift in consumer preference towards “That’s why guaranteed return plans offered by insurance seller. Also, note that the rate for TDS deduction shall be 20%
guaranteed insurance plans since they offer capital protec- companies, where the underlying instruments are govern- (additional cess and surcharge as applicable) in this case. If
tion and stable returns. Besides, it enables customers to ment bonds, have been able to give better returns than FDs,” the NRI sellers plan to reinvest the capital gains and therefore
eliminate the uncertainty of future income streams to a large said Vivek Jain, head of investments, Policybazaar, an online do not have any tax dues, they may seek a certificate from the
extent, and the life cover provides financial security to the marketplace for insurance. relevant income tax officer for TDS deduction at nil rate or a
family, which is essential in the current times,” said Amit lower rate.
Palta, chief of distribution, ICICI Prudential Life Insurance TURN TO PAGE 19 Queries and views at mintmoney@livemint.com

WEEKLY SENSEX CHART NON-RESIDENT EXTERNAL TERM DEPOSITS ( Deposits up to R1 crore; all figures in %)
50,500 Bank 1 year 1 to <2 years 2 to <3 years 3 to <4 years 4 to <5 years 5 years >5-10 years
49,733.84 SBI 5.00 5.00 5.10 5.30 5.30 5.40 5.40
49,500 HDFC Bank 4.90 4.90 4.90-5.15 5.15-5.30 5.30 5.30 5.50
ICICI Bank 4.90 4.90-5.00 5.00-5.15 5.15-5.35 5.35 5.35 5.50
48,500 Bank of Baroda 4.90 5.00 5.00-5.10 5.10-5.25 5.25 5.25 5.10-5.25
48,080.67
PNB 5.20 5.20 5.20 5.20-5.30 5.30 5.30 5.30
47,500
22 Apr 2021 28 Apr 2021
Source: BSE
FOREIGN CURRENCY NON-RESIDENT DEPOSITS (all figures in %)
NON-RESIDENT ORDINARY DEPOSITS (all figures in %) Bank 1 to <2 years 2 to < 3 years 3 to < 4 years 4 to < 5 years 5 years
Bank 1 to <2 years 2 to <3 years 3 to <4 years 4 to <5 years 5 year >5 to 10 years US $ Euro US $ Euro US $ Euro US $ Euro US $ Euro
SBI 5.00 5.10 5.30 5.30 5.40 5.40 SBI* 0.73 0.01 0.80 0.01 1.02 0.01 1.28 0.10 1.53 0.15
HDFC Bank 4.90 4.90-5.15 5.15-5.30 5.30 5.30 5.50 HDFC Bank 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.2 0.01
ICICI Bank 4.90-5.00 5.00-5.15 5.15-5.35 5.35 5.35 5.50 ICICI Bank 0.23 NA 0.3 NA 0.52 NA 0.78 NA 1.03 NA
Bank of Baroda 4.90-5.00 5.00-5.10 5.10-5.25 5.25 5.25 5.10-5.25 Bank of Baroda 0.58 0.00 0.65 0.00 0.87 0.00 1.13 0.02 1.38 0.10
PNB 5.20 5.20 5.20-5.30 5.30 5.30 5.30 PNB 0.98 0.04 1.05 0.06 1.27 0.11 1.53 0.17 1.78 0.25
Top three public banks and top two private banks by number of branches Note: Data taken from respective bank’s website Rates as on 26 April 2021; *wef 10 April 2021 Source: BankBazaar.com
GRAPHIC BY SARVESH KUMAR SHARMA/MINT

Disclaimer: The articles and data in Mint Money aim to help readers with their money-related decisions. Each person will have a unique solution that would fit his personal situation and we advise you to consult a certified financial planner before buying a product.

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MICHAEL HOLLAND/EMBASSY REIT 1:1 trading lot size. We would strongly support
such a measure. The principle behind bring-

Reit should be a core component ing down the trading lot size is to enhance
liquidity and make the instrument more
accessible for all investors to be able to trans-
act at efficient market-clearing prices.

of every asset allocation strategy


Lot size reduction enables broader retail
investor participation, thereby enabling a seg-
ment of the population that can and should
be able to invest in Reits safely and for all the
benefits that the structure provides to unit-
holders.
B Y R E N U Y A D AV It also enables potential entry into bench-
renu.yadav@livemint.com mark indices that allows passive tracking by
······································· index funds and diversifies the investor base.

T he second covid wave is going to


impact the recovery of many sectors,
including real estate. The commercial
real estate sector, especially grade A offices,
has shown resilience over the past year with
It also mitigates major movements that typi-
cally define trading patterns of thinly traded
securities. Lack of liquidity affects the longer-
term ability of Reits to efficiently utilize the
capital markets to fund growth.
good occupancy and rent recovery levels. But There have been two more successful listings
the second wave may hit growth prospects as after Embassy. How will the sector benefit with
companies may go slow on expansion plans more players entering the space?
as work from home continues. This may We welcome the addition of more Reits on
impact the performance of real estate invest- the Indian exchanges. Reits are a $2 trillion
ment trusts (Reits), which invest the majority asset class globally, and they were created
of their assets in rent-generating commercial specifically so that investors could invest in
real estate, at least in the short term. Michael commercial real estate in fractional lot sizes
Holland, CEO, Embassy Reit, spoke to Mint and in a regulated and tax-efficient structure.
about the medium-term outlook of the sector We believe that the Reit structure has per-
and why investors should make Reits part of manently altered the face of the Indian office
their portfolio. Embassy was the first Reit to be market. For India to have listed three Reits in
listed in India in April 2019. According to two years speaks to how eager investors have
Value Research, it has delivered a price return been to embrace the evolution of the office
of -2.8% CAGR since listing, as of 19 April. market in India away from the fragmented,
However, Holland said the return, including low-scale, variable quality market to a more
dividend and capital appreciation, is 24% institutionalized, concentrated, higher qual-
since listing (absolute, not CAGR). Edited ity, compliant market that provides better
excerpts... trust owns the subsidiary special purpose product to occupiers and investors alike.
India has been hit by the second covid wave and it INTERVIEW vehicle in a single-tier structure. Historically, Why is it a good time to invest in Reits and who
seems that work from home is going to stay some of our holdings were held in a dual-tier would you recommend should invest in Reits?
longer. This is likely to impact the expansion seen record hiring of new staff over the past structure, which we have now received per- Reit is a mature and diverse asset class
plans of companies. How is this going to impact quarter. We have witnessed some strong mission to collapse and will have a single-tier across the world. In the US alone, 87 million
the commercial real estate sector and the growth results from major banks in the US that rely 100% ownership structure. The simplification individuals invest in Reit stocks. Over the last
prospects of Reits? on Indian technology to support their global of the holding structure enables us to enhance 25 years, Reits have delivered a total return
+ Prior to the onset of the second wave, we business lines. the dividend portion of the overall distribu- higher than S&P 500. Embassy Reit has deliv-
were witnessing an increase in occupier inter- With the west’s growth outlook improving, tions, increasing the overall post-tax distribu- ered a projected total return of 24% since list-
est for new leasing. The increase in cases will we feel positive about the medium-term out- tion yields to our unitholders, given Reit divi- ing (in absolute terms and not CAGR) and has
slow down the return to office plans for many look for office demand once we get past this dends are fully tax-exempt for unitholders. paid out quarter after quarter dividend totall-
occupiers, but it doesn’t alter the fundamental second wave, given the reliance of global The minimum lot size for trading in Reits is 200 ing around `3,700 crore.
fact that India is the go-to market for hiring businesses on workforces in India. units. A higher lot size requires a higher invest- This demonstrates that Reit is a resilient
digital talent and executing technology-sup- Is the restructuring exercise of Embassy Reit to ment amount. Do you think it needs to be brought business through the pandemic and has
ported services. The young Indian profes- simplify ownership complete? How is it going to down to increase retail participation? growth from multiple levers—contractual
sional will continue to serve global businesses benefit investors? After enabling three Reits to list in India escalation, mark to market, on-campus devel-
which, across the world, are more dependent We have received approvals from the over the last two years and creating a regime opment and acquisitions.
on technology and less constrained by geog- National Company Law Tribunal and the that has gained international and domestic With this track record, an office Reit
raphy. scheme came into effect in March. Dividends acceptance, Indian regulators are considering focused on catering to the Indian market
We have recently seen great results from under the Indian Reit regulatory framework synchronizing Reit trading lots with those of should form a core component of any asset
technology companies in India, which have are tax-free in the hands of investors subject listed companies to make Reits more liquid allocation strategy alongside equity and
their strongest order books ever and have to a few conditions, one of which is that the and accessible to a wider audience through a bonds for all retail investors.

Things to consider before going for a guaranteed insurance plan


FROM PAGE 18 Moreover, as some part of the money in From a tax perspective, ultra-high-net- While the NSC is currently offering 6.8%
these plans gets allocated to term insurance, worth individuals (HNIs) may find these returns, post office schemes have a payout in
Moreover, since these plans are tax-free, the returns get capped. plans lucrative. the range of 4% to 6.7%, while RBI bonds
investors get a tax benefit under Section 80C As things stand, 5-6% returns might look “If an HNI investor is looking for a 6% tax- offer 7.15% interest.
and even the returns are tax-free under Sec- attractive today, but that might not be the free interest from guaranteed insurance For a 35-year-old retail investor, the objec-
tion 10(10)D provided the insurance cover is case in the future. Experts feel that sooner plans, he or she has to look for instruments tive of debt investment should be strategic
at least 10 times the annual premium. than later, interest rates are bound to with a 8-8.5% payout for the kind of tax pay- and not income generation. A moderately
“So, for investors in the 20% and 30% tax increase. ment to reach 6% post-tax. So, there can be a risky investor should allocate 60% in equity
brackets, FDs are giving post-tax 4-4.5% “As these are guaranteed plans, a big por- merit for these plans for ultra HNI clients, and the rest in fixed income investment.
returns, while these plans are giving 5-6% tion of the money needs to be invested in given the interest rate scenario,” said Kirtan However, investors should not go for locking
post-tax returns,” added Jain. debt instruments, and the rates are going to Shah, chief financial planner at Sykes and in their investment in the debt portion for
A major catch in the value proposition is be locked in at current rates, Ray Equities (I) Ltd. the long term.
the policy term, which acts as a lock-in which have been low over Shah added that insur- An investment strategy for people in this
period. The minimum policy term is five the past few years,” said ance as an investment is age group could be bonds or highly rated
years, but such policies also tend to have Suresh Sadagopan, founder, A major catch in the not something that people non-convertible debentures or debt mutual
longer terms. Missing a premium payment Ladder7 Financial Adviso- should look at, as investors funds.
can cause the policy to lapse, costing you all ries, a Sebi-registered value proposition is won’t get anything higher “Potentially, you can get better returns
or some of the money you have already paid investment adviser. than 5-6%. Moreover, if an from these instruments, and you don’t have
as premium, although a revival period of up One big drawback of a the policy term, investor locks in his/her to lock in investments for a long period. As
to two years is generally offered. guaranteed return product money for a longer tenure, and when interest rates rise, there may be
is liquidity because the
which acts as a they might miss out on the more opportunities,” said Sadagopan.
What experts say
Financial advisers say that mixing life
money an investor will get
back will eat into the gains
lock-in period increased rates that might
happen in the future.
For senior citizens who are looking for a
stable income, have low-risk appetite and
insurance and investment is not a smart way made if he or she wants to need to protect their capital, the Senior Citi-
to manage risk and money. surrender the product. Better options zens Savings Scheme and Pradhan Mantri
“Insurance is a distinct subject compared If you are only opting for these products Vaya Vandana Yojana are better bets as they
to investment and when you look at life For whom does it work? due to better returns or tax benefit, there are both offer 7.4% returns.
insurance, the first thing you should look at However, according to Sadagopan, inves- better alternatives. The mantra for getting maximum returns
is term insurance rather than unit-linked tors who have a very low-risk appetite, a For retail investors with a low-risk profile, in a guaranteed product is to invest at an
insurance or endowment plans,” said long-term horizon, don’t want any volatility there are options such as National Savings early age and stay invested for the long term,
Abhishek Bondia, MD and principal officer, and want to know upfront the potential Certificate (NSC), Post Office Monthly but look at the liquidity factor, risk profile
SecureNow.in, an insurance broker. returns can invest in these plans. Income Scheme and RBI floating rate bonds. and interest rate returns while investing.

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mintasia
CRISIS MODE about the exit of managerial talent from the
embattled fund house.

FT’s debt investors see year A Franklin Templeton spokesperson, how-


ever, dismissed these concerns. “We have a
stable and experienced portfolio manage-
ment team. The emerging markets India

of pain, with silver linings


equity team possesses over 20 years of experi-
ence in successfully investing in the Indian
equity market. The team members have aver-
age industry experience of approximately 16
years and seven years of service with the
firm,” he said.
They have been able to recover PARTIAL RELIEF However, the picture on the ground is
some money, but the asset The NAVs of the schemes have not dipped a lot. However, investors have been paid only
mixed. While senior fund managers have
stayed put so far, the fund house has seen
management company’s very part of their money so far. senior-level exits in its marketing team.
existence is under scrutiny 1 year return 3 year return Cash returned as a % of NAV Media reports also suggest a possible exit of
(in %) the fund house from the country with the
Franklin India Low 12.99 business being sold to a competitor or wound
B Y N E I L B O R AT E Duration Fund 5.31 71 up.
neil.b@livemint.com “Franklin Templeton’s commitment to
······································· Franklin India Ultra 8.35 India remains steadfast. We were early
Short Bond Fund 64

I
7.38
t has been a year since the shock freezing entrants in the Indian mutual fund industry
of six debt mutual fund schemes of Frank- Franklin India Dynamic 6.49 and have remained a part of the industry
Accrual Fund 46
lin Templeton Asset Management (India) 5.19 even while many other global asset managers
Pvt. Ltd on 23 April 2020. Post the freeze, Franklin India Credit 11.7
decided to leave. We have no plans to exit our
investors in the schemes had to deal with Risk Fund 33 India business and any speculation suggest-
5.01
almost a year of uncertainty about when they ing otherwise, or any rumours around the
will recover their money. Franklin India Short Term 4.40 sale of our business in India are incorrect and
Income Fund 21
Various cases related to the freezing, partic- 3.11 simply that—rumours,” said a Franklin Tem-
ularly on the matter of whether investor con- Franklin India Income 4.15 pleton spokesperson in response to a Mint
sent is a precondition for winding up, made Opportunities Fund 7 query on the subject.
3.89
their way through the courts. A winding-up Other experts have taken a more measured
Data as of 20 April; cash returned data as of 16 April NAV: Net asset value Source: Value Research, Franklin Templeton Asset Management
vote was finally held in December 2020 and view. “Take a scheme-specific call. For exam-
PARAS JAIN/MINT
investors gave their consent. ple, if you are comfortable with the growth
This was followed by a Supreme Court recent interview. Franklin India Prima. style of the Franklin US Opportunities Fund,
order to start distributing the accumulated If only a small fraction of illiquid papers Prime Investor, a mutual fund research there is no reason to exit because of events in
cash in February. So far, out of the roughly remain, a move by Franklin to take them on portal, asked investors to exit these schemes India. Similar is the case with their other
`26,000 crore that was wound up, investors its own books may provide closure on the on 7 April. On the equity side, it pointed to equity funds—exit if there is sustained under-
have received `12,084 crore in cash (`9,122 matter to investors as the asset management underperformance in the past few years, performance and not otherwise,” said Vishal
crore in February and `2,962 crore in April). company had done with debt papers of JSPL which saw a concentrated rally in the stock Dhawan, founder, Plan Ahead Wealth Advis-
The apex court also appointed SBI Funds in 2016. market. ors.
Management Pvt. Ltd to dispose of the assets “We are confident that the According to Prime Inves- “As for fund house risk, the asset size is so
in the schemes and oversee the distribution
of the money received, thereby bridging the
portfolio investments
remain sound and can be
SBI Funds remains tor, the past year saw a
catch-up by Franklin Tem-
large that a sale to another AMC is more likely
than a wholesale exit and return of money to
+ trust deficit for investors who were sceptical monetized at a fair value confident of pleton, which broadly fol- investors. If this actually happens, you can
of winding up by Franklin Templeton itself. given appropriate time lows a value style of invest- make a decision at that point rather than now
Amid a difficult year for Franklin investors under normal market condi- disposing of most of ing, but the catch-up was based on who they are selling to,” he said.
who have been deprived of access to their tions. We are, however, not not strong enough. Kaustubh Belapurkar, director - fund
own money, there are a few silver linings. The in a position to make any the Franklin On the debt side, a loss of research at Morningstar Advisor India, drew a
net asset values (NAVs) of the schemes have forward-looking statements investor confidence can trig- distinction between existing and new inves-
not dipped significantly due to defaults or with regard to the monetiza- Templeton assets ger panic and spark tors.
downgrades, with defaults by Future Group tion,” said a spokesperson redemptions in schemes “On the equity side, if you are an existing
firms in September 2020 being a notable for the fund house in other than the six being investor, redeeming at this point would be
exception. Investors on aggregate have been response to a Mint query. wound up. This can force the affected premature. The judicial process is still on and
paid around 46% of their money so far, A heated debate has broken out among schemes to sell highly rated holdings to meet the equity team continues to be stable, with
although the recoveries vary from scheme to industry experts over whether investors redemptions, Prime Investor pointed out. the funds being run with a consistent style. If
scheme (see table). should exit the remaining Franklin schemes Alternatively, it can force the fund house to there are any team changes in the future, you
SBI Funds remains confident of disposing (other than the six debt funds being wound hold a large amount of cash to meet such an can look at this question then. New investors
of most of the Franklin assets over the next up). The AMC retains around `60,000 crore of eventuality and this eats into returns, the may want to look at other options till there is
couple of months despite the second covid such assets and funds with large brand recog- research portal noted. greater clarity on the ongoing issues,” he
wave, its CEO Vinay Tonse told Mint in a nition such as Franklin India Bluechip and Prime Investor also expressed concerns added.

Online mutual fund platforms Insurers get nod to invest in debt


may find it hard to give advice instruments of InvITs and Reits
B Y N E I L B O R AT E lator if it would ask asset management compa- B Y A B H I N AV K AU L Instruments rated or downgraded below AA
neil.b@livemint.com nies (AMCs) for reimbursements for providing abhinav.kaul@livemint.com should form part of ‘other investments’.
········································· these services. However, the request was ······································· Insurance companies can invest in bonds of

A Securities and Exchange Board of India


(Sebi) guidance note issued to Paytm
Money has clarified the regulator’s position on
turned down.
In a second clarification, the regulator also
said that a platform can only provide advisory
T he Insurance Regulatory and Develop-
ment Authority of India (Irdai) allowing
insurers on Thursday, 22 April, to invest in
InvITs or Reits of any ratings, but if it is below
AA, it becomes part of other than approved
investments, and above AA rated, it becomes
the ability of online mutual fund platforms services after an investment advisory agree- debt securities issued by infrastructure invest- approved.
offering direct MFs to provide advice. Such ment is signed with the client, incorporating ment trusts (InvITs) and real estate invest- As per Irdai, 75% of the insurers’ invest-
platforms, including Paytm Money, are typi- certain terms and conditions mandated by ment trusts (Reits) is expected to improve the ments have to be in AAA-rated assets, while
cally registered with Sebi as investment advis- Sebi. Mere online consent with a copy of the overall yield of the portfolios held by the 25% can go to instruments rated AA or even
ers. agreement emailed to the client’s inbox will firms, while providing more long-term fund- A-. Moreover, an insurer can take exposure to
The guidance note was issued on 9 April fol- not be sufficient. ing to the realty sector. below AA-rated instruments only after getting
lowing an application from Paytm Money to A senior industry professional, however, The nod came after Irdai had allowed insur- approval from the board.
the regulator. added that this does not mean physical or ‘wet ers in March to invest in the units of such However, insurance companies generally
According to Sebi, such platforms will be signatures’ will be needed. pooled investment vehicles. stick with AAA-rated instruments such as gov-
prohibited from taking any type of remunera- Instead, mutual fund platforms will ask cli- “The move gives insurance companies an ernment securities. Most of the Reits and
tion from fund houses even for execution func- ents to execute their physical signatures on additional opportunity to invest in top-rated InvITs that have been launched are AAA-
tions such as KYC, payment gateway, technol- computer screens and this is considered as a infrastructure assets. By their very nature of rated.
ogy hosting and platform maintenance. valid signature, he said. business, insurance companies are long-term Irdai also said that insurers cannot invest
According to a person with knowledge of the However, the new Sebi guidance can place players and hence ideal candidates for invest- more than 10% of the outstanding debt instru-
matter who declined to be named, other direct on hold any type of advisory solutions for users ments in long-term infra projects,” said Arun ments in a single InvIT or Reit. “The current
MF platforms such as Kuvera and Groww avail of the platforms till an agreement is signed. Srinivasan, head of fixed income, ICICI Pru- attractive spread of these structures makes it a
the services of intermediaries like BSE Star MF, Paytm Money, for example, used to offer dential Life Insurance Co. Ltd. compelling proposition. Investment in these
whereas Paytm Money had developed internal ‘investment packs’ of pre-selected funds to Irdai said in a note released on 22 April that bonds will improve the overall yield of the
infrastructure for the services mentioned investors based on their requirements. The insurers cannot invest in debt instruments of portfolio on a risk-adjusted basis. In our view,
above. platform discontinued offering them from 1 InvITs and Reits rated below AA as a part of this move will go a long way in supporting the
The platform had hence requested the regu- April. the approved investments. infra growth of the economy,” said Srinivasan.

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Production of export goods has been on track owing to


healthy capacity utilization rates across sectors. At a time
when the global economy is getting stronger, China stands
a good chance to shift gears in favour of exports linked to
RACHANA MAKHIJA cyclical sectors.
Beijing’s thrust towards a dual circulation policy will

POWER POINT propel the domestic market. China is transitioning from a


manufacturing-cum-export model to a consumer model.
We welcome your comments at mintmoney@livemint.com This augurs well for sectors such as discretionary con-
sumption and technology.
In financials, earnings comeback in 2021 will be on the

China’s recovery offers a good


back of easing provisions and double-digit loan growth.
Fast and online retailing, consumer durables, media,
entertainment, telecom, communication services, digital
payments infrastructure, medical/healthcare innovation
and emerging technologies are becoming increasingly rel-

bet for investors evant in China’s headline indices.


Simultaneously, the role of traditional sectors such as
industrials, utilities, infrastructure and commodities in
driving index performance may start reducing gradually.
Since valuations of secular growth sectors tend to be

F rom the lows of March 2020, global equity markets


have recovered sharply. In line with its early eco-
nomic bounceback relative to other countries, China
has, unsurprisingly, managed to outperform the rest quite
convincingly. The Chinese economy has shown strong
other major emerging and developed markets, which pro-
vides a fillip to economic growth prospects.

BOUNCING BACK
higher and investors are willing to pay a premium as well,
steep market multiples can be fairly sustainable in the
long run.
In recent times, news pertaining to the government’s
squabbles with tech giants has been surfacing. This may
Consumption, tech and financial sectors exhibit strong signs of
signs of recovery among other emerging markets (EMs) as earnings recovery. continue to impact their valuations in the short term.
attributed by its gross domestic product (GDP) growth of EPS % y-o-y China Leading Indicators Index (right-hand scale)
However, the importance of technology in strengthening
18.3% for the first quarter of the year. 108
the Chinese economy and markets cannot be overlooked
60
Despite a correction in the previous month due to by the regulators in the long run.
reports of regulatory scrutiny in tech companies and Given the vagaries of international markets in general,
probable tightening of financial conditions, we believe 40 104 we suggest investing in them through mutual funds. This
China is poised for a steady recovery, with strong funda- gives investors the benefit of professional fund manage-
mentals for long-term investors. ment and risk diversification. Investors can invest in
China’s key economic indicators such as purchasing 20
100 China through the Greater China-focused (China, Hong
managers’ index, index of industrial production, retail Kong, Taiwan) Axis Greater China Equity Fund-of-Fund.
spending and fixed asset investments have shown remark- The mother fund of this feeder funds has been outper-
able improvement year-on-year. Unlike most other 0 96 forming its benchmark over the long term.
nations, China’s covid crisis is under control. While the Investors who don’t wish to take concentrated exposure
rest of the world contracted due to the covid outbreak, to China can consider a fund like Edelweiss Emerging
China registered a positive GDP of 6.5% in Q4FY21. We -20 92 Markets Opportunities Equity Offshore Fund. It currently
expect China’s real GDP growth for 2021 to be close to invests 50-60% of its assets under management in Greater
8.5%. China equities, along with other EMs such as South Korea,
Chinese companies, represented by the MSCI China -40 88 Russia, Brazil and Mexico.
Mar 2006 Mar 2021
Index, derive approximately 87% of their revenue domesti- EPS: Earnings per share Source: Bloomberg Finance, iFAst compilation
Rachana Makhija is senior research analyst, iFast Finan-
+ cally. This number is significantly higher than that of cial India Pvt. Ltd.
PARAS JAIN/MINT

accredited investors.
To comment on the accredited investor framework, we
first need to know what can be exempted. The US Securi-
ties Exchange Commission (SEC) has a framework for
VIDHU SHEKHAR exempted securities that can be offered to accredited
investors. According to the SEC, its exempt offering

MONEY MATTERS
We welcome your comments at mintmoney@livemint.com
framework “will promote capital formation and expand
investment opportunities while preserving or enhancing
important investor protections”.
Instead of an exempt offering framework of the type
that exists in the US, Sebi’s framework provides two pos-

Sebi should lay down rules to offer sibilities: a) of lower ticket size or b) of flexibility in regu-
latory requirements.
The proposal seems to be a tacit admission that Sebi’s

adequate protection to all investors


minimum ticket size requirements are preventing the
industry from finding enough customers. However, it is
hard to understand the logic of offering a lower ticket size
to sophisticated investors and a higher ticket size for
unsophisticated investors. Perhaps, it would be more log-

I n his book Liar’s Poker, Michael Lewis describes his


early career as a trader at Salomon Brothers. A proprie-
tary trader at the bank fooled Lewis into selling loss-mak-
services are offered a regulation-light regime…” Sebi goes
on to list several benefits to the Indian securities market
that can be gained from the flexibility offered by an
ical to remove the ticket size restrictions and limit the
distribution of alternative investment funds (AIFs) and
portfolio management services to accredited investors.
ing bonds to his client, leading to a loss for the client and accredited investor regime. The second approach, to relax regulatory requirements
a loss of face for the novice trader. Lewis quickly caught Market participants have generally welcomed the for accredited investors, is more in keeping with what we
on, and over the next few months learnt important les- move. However, Sebi’s paper is not clear on how it will find in other jurisdictions. Here, Sebi has proposed that
sons, often at the expense of his clients. decide whether certain products can be offered only to new regulations can be created for products that can be
Despite the passage of time, Liar’s Poker remains an IS TOCKPHOTO offered only to accredited investors. This places the
essential book for anyone trying to understand misa- responsibility of determining what can be offered to
ligned incentives and a cut-throat work culture where accredited investors on the department within Sebi which
profits and commissions are prized over client interest. I regulates that particular product.
was reminded of Lewis’ funny yet insightful observations To be successful, Sebi’s framework has to recognize the
because of two recent developments. fiduciary responsibility that investment advisers and asset
On 12 April, Sebi gave an adjudication order against managers have towards their clients, irrespective of their
Yes Bank and its officers. As part of this order, Yes Bank net worth and sophistication. The framework should also
was fined `25 crore, and three officers working for the lay down some basic principles that Sebi would use to
private wealth management division of the bank were determine regulatory relaxations that can and cannot be
individually fined smaller amounts of `50 lakh and `1 offered. It would also be useful to articulate fiduciary
crore. The order was passed for violating Prohibition of requirements to which asset managers and wealth man-
Fraudulent and Unfair Trade Practices regulations. agers would be subjected, including disclosures and a
In a separate development, Sebi invited comments on governance framework that reduces the risk of mis-sell-
new proposals to define so-called ‘accredited investors’. If ing.
accepted, the proposals would allow firms to sell finan- Companies offering financial products have a fiduciary
cial products to certain investors without the usual responsibility towards their customers. Industry profes-
checks and balances that are applicable when offering sionals are required to exercise reasonable care and inde-
financial products to small investors. This is a common pendent professional judgment while performing invest-
practice in most developed markets. ment analysis, giving investment recommendations and
According to Sebi’s discussion paper, accredited inves- taking investment actions. It is in Sebi’s own interest to
tors “are sophisticated enough to not require extensive clearly lay down the rules of the game to provide the
regulatory protection, and therefore issuers of securities appropriate level of protection to all investors.
and providers of financial/securities market products/ Vidhu Shekhar is country head, India, CFA Institute.

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Mark to Market mintasia


SATISH KUMAR/MINT

SLOWING AGAIN
SBI Cards and Payment Services saw its card
spends decline sequentially, hinting at a
slowdown amid second wave jitters.
APARNA IYER Retail Corporate Spends (in ₹ crore)
35,000

MARK TO MARKET 29,863


We welcome your comments at marktomarket@livemint.com 28,000 26,373

ICICI Bank’s Q4 metrics justify


21,000

14,000

its recent valuation re-rating 7,000 6,056 6,080

TOUGH RACE (CASA ratio at 46%) and retail loan growth of 20% year-on-year. Inter- 0
ICICI Bank’s March quarter numbers compare well with HDFC
estingly, these compare well with HDFC Bank’s 27% y-o-y growth in Q4FY20 Q4FY21
CASA and 7% growth in retail loans” wrote analysts at Jefferies India Source: Company presentation
Bank’s growth metrics.
Pvt. Ltd in a note.

SBI Card’s Q4
ICICI Bank HDFC Bank Year-on-year growth in Q4 (in %)
CASA stands for current account, savings account.
27 Indeed, ICICI Bank’s loan growth at 14% is not only higher than
24 the industry but also that of peer HDFC Bank. The growth was broad-
20 21 20 based with both retail and corporate loan books showing healthy
expansion. Sequentially, retail loans grew 6.6%, while the corporate
reflects slowdown;
14 14

7
book showed growth of 3.9%. The lender has also benefited from the
troubles of HDFC Bank on credit cards. In a call with analysts, man-
agement said that the bank has seen market share gains and sharp
second wave could
Retail loans Total loans Core operating
profit
Current and
savings account
growth in this segment.
That said, one metric where ICICI Bank is yet to give complete make it worse
confidence to investors is asset quality. The silver lining here is that

S
Source: Jefferies report
for the fourth quarter, it has reported an improvement in asset qual- BI Cards and Payment Services Ltd’s
SATISH KUMAR/MINT
ity metrics. To be sure, the lender has one of the highest contingency fourth-quarter performance showed tell-

I CICI Bank Ltd has hit all the right notes with its performance for
the March quarter. Apart from healthy operating metrics, the
management’s message exuded confidence for the coming quar-
ters. Not surprisingly, the company’s shares rose over 3% on Monday.
To be sure, analysts had pencilled in a smart recovery from the
provisions for the pandemic-related risks in the industry. Overall
provisioning coverage ratio is the highest in the industry. To that
extent, analysts said that incremental provisioning needs would be
lower leading to a steady improvement in profitability. This is behind
the re-rating of stock recently and the upgrades in earnings per share
tale signs of a slowdown in business growth
and pressure on asset quality. Credit card
spends dropped sequentially, albeit the fall
was marginal. Both retail and corporate
spends showed a decline, indicating that there
pandemic’s impact in FY21, which the lender seems to have deliv- by some brokerages. Those at Nomura expect credit costs to taper off is a broad-based loss of momentum.
+ ered. ICICI Bank’s operating profit grew by 15.5%, on the back of from here on. Total card spends stood at `35,943 crore for
16.8% growth in its core interest income during the fourth quarter. But what investors may also fret about is that the bank’s fastest the March quarter, registering a 11% growth
But what is working for ICICI Bank is not just better performance growing loan segment was that of small and medium enterprises. from the year-ago period. This growth rate is
but one that seems to have caught up with the most valuable lender These are the most vulnerable during lockdowns, and the second far lower than the pre-pandemic trend, a
HDFC Bank Ltd. This single factor has meant that ICICI Bank is on wave has increased instances of curbs in the country. What’s more is reflection of covid’s impact on the firm. But
the path to bridge the valuation gap with the latter. that retail stressed loans are still higher compared with pre-pan- what investors should note is that the steady
Analysts said in terms of both deposits and loan growth, ICICI has demic levels. ICICI Bank may deserve the boost to its valuations improvement in spends every quarter has lost
given tough competition to HDFC Bank. “We are encouraged to see recently, but the lender would have to navigate stress for these valua- its footing in the March quarter. This has
the bank report healthy growth of 24% in average CASA balances tions to stick. come even as arch rival HDFC Bank Ltd has
not been able to add credit card customers
due to a regulatory ban. Perhaps, SBI Card has
not been able to take full advantage of this.
Rallis shows margin Tech Mahindra lags behind on Another factor behind lower spends could
also be the fact that the company has had to
rely on spending on essentials by customers.
uptick in Q4 amid
price headwinds revenue, races ahead on deals Its tie-ups with e-commerce platforms, rail-
ways and other utilities have been focused
towards this.
However, as analysts at Motilal Oswal

R allis India Ltd reported a decent Q4 per-


formance, thanks to a favourable monsoon
T ech Mahindra Ltd’s March quarter
(Q4FY21) earnings have disappointed on
some key parameters. On a sequential basis,
LAGGING BEHIND
In the 2021 calendar year so far, shares of Tech
Mahindra have underperformed the benchmark
Financial Services Ltd pointed out in a 1
March note, SBI Card has a large proportion
of premium credit cards that are targeted for
season in 2020. Improved rural incomes post a the IT services provider’s revenue growth in Nifty IT index. discretionary spending.
healthy kharif harvest, good water reservoir lev- constant currency terms was a mere 0.7%, Tech Mahindra Nifty IT The impact on discretionary spends is stark.
115
els and winter crop or rabi crop all added up to much lower than the 2.5-4% growth reported Such spends that include travel, hotels, air-
healthy profitability for the agri-input manufac- by tier-1 peers. 110 105.89 lines and entertainment saw a 57% drop in
turer. Not surprisingly, the crop care division Analysts were estimating a growth of 1.5-2% 105 FY21, while spends towards apparel, jewel-
witnessed revenue growth of 38% year-on-year for Tech Mahindra. The communications ver- lery, furnishing and health dipped 5%. On the
100
(y-o-y), while the seeds business registered a tical is responsible for the company’s muted contrary, spends on essentials grew 18%. Indi-
revenue growth of 7% y-o-y. As a result, overall performance. 95 98.87 ans couldn’t spend in April and May last year
revenues grew 36%. In a post-earnings conference call, the man- 90
because of the lockdown and didn’t want to
Not only did the domestic business record a agement said Tech Mahindra was in a repair 31 Dec 2020 26 Apr 2021 spend in the rest of the months due to benign
Note: Values rebased to 100 Source: Capitaline and Bloomberg
14% revenue growth, international business too phase in FY21 and now that the phase is com- economic outlook. Further, even after a year,
SATISH KUMAR/MINT
registered a robust growth. This was despite plete, verticals such as communications and discretionary spending remains elusive.
weakness in contract manufacturing revenues enterprise are starting to show improvement. quarterly deal-win run-rate of $450 million Given that spends towards essentials are
and soft prices for metribuzin, a herbicide. Ral- Forex losses and higher tax provisions and gives the confidence of double-digit small in size than discretionary, the second
lis commands a sizeable market share for met- weighed on its Q4 adjusted net profit, which organic growth going into the next fiscal year. wave of the pandemic poses significant risks
ribuzin and is among the global leaders. was 17% lower than consensus estimates at Akin to peers, the company also saw an to growth for SBI Card. What’s more, the com-
Given the favourable farm sector perform- `1,081.4 crore. increase in its attrition rate from 12% in the pany has sourced 38% of its new customers
ance, domestic growth was expected but inter- For the March quarter, the company’s Ebit previous quarter to 13% in the March quarter. from tier-1 cities, which have been hit hard in
national business growth was a positive sur- margin stood at 16.5%, remaining flat sequen- The management said it has started giving the second wave and are facing stricter
prise, analysts said. The company is now tially, but was a tad higher than expected, hikes starting 1 April. It should be noted that restrictions on activity.
focused on driving contract manufacturing aided by operational efficiencies. Ebit is earn- Tech Mahindra had delayed salary hikes Another factor for investors to be wary is
business. The capacities for metribuzin have ings before interest and tax. between January 2020 and March 2021. asset quality. The company saw its gross bad
been doubled and that of at least two more On the bright side, new deal wins are Analysts had cautioned that a further delay loans rise to 4.99% of its total book from 4.51%
molecules are being ramped up. Further, metri- encouraging for investors in the company’s in salary increases would lead to higher attri- in the previous quarter.
buzin prices may have bottomed out, analysts stock. Tech Mahindra added net new deals tion as demand for talent increases in the sec- Impairment and losses have risen sequen-
at Antique Stock Broking Ltd had said in a worth $1.04 billion in the March quarter ver- tor. The management said that hiring will tially and the total restructured book stood at
March note. Hence, exports growth would be sus $455 million in the December quarter. increase by 8-10% in the coming quarters. `1,908 crore. In all probability, the provision
monitored closely by investors. Analysts at Emkay Global Financial Services Meanwhile, so far in this calendar year, coverage ratio improved substantially because
Forecasts of normal rainfall for 2021 also Ltd said deal wins have crossed the $1 billion Tech Mahindra’s shares have given negative of large write-offs. The upshot is that the sec-
bodes well for Rallis and Street sentiment in the mark for the first time since Q3FY20. returns of around 1%, underperforming the ond covid wave threatens both growth and
near term will be governed by the monsoon’s The company’s management said that deal Nifty IT index, which gained by around 6%. asset quality for the company. The pressure
progress. UJJVAL JAUHARI wins in Q4 have been much better than the HARSHA JETHMALANI on valuations, thus, may remain. APARNA IYER

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M&M Financial
Services’ results
For Indian stocks, 2nd back after bottoming out in March last year.
So we don’t expect investors to offload equi-
ties in a big manner this time because, largely,
the expectation is that with vaccination pick-

wave is not deadly yet


ing up pace, this curve will flatten,” he said.
In March 2020, when a nationwide lock-
were resilient, down was announced, the Nifty50 corrected
by 13% in one day. Consequently, the VIX
surged 20% in one trading session.
but covid surge A GRIM SCENARIO
States with high active covid infections account for around 65% of India's gross domestic product (GDP).
But one year down the lane, shares have seen
a sharp bounce-back. A recent Mint analysis of

clouds outlook Localized restrictions could weigh on economic growth.

% of country’s GDP
Active cases
(% of country total)
stocks in the Nifty500 index showed that more
than 400 stocks have risen more than 50% from
their March 2020 lows, and 247 stocks have ral-
Maharashtra 13.5 30.44 lied more than 100%.
SHIELDING UP Uttar Pradesh 8.09 10.57
Besides the feel-good factor from global
markets, investors are hoping that India’s
Mahindra & Mahindra Financial Services jacked up Karnataka 7.8 7.69
its provisioning in the March quarter even as central bank would keep its accommodative
Kerala 4.09 5.93 stance longer, given the risks from the second
incremental stress reduced slightly.
Chhattisgarh 1.65 5.36 wave. The minutes of the Reserve Bank of
Provision coverage ratio (in %)
60
Gross bad loan ratio (right-hand scale) 57.9 12 Rajasthan 4.79 4.21 India’s (RBI’s) April policy show that mem-
Delhi 3.98 3.73 bers of the monetary policy committee are
50 9 10 Tamil Nadu 8.84 3.68 very worried about growth. “We feel RBI will
Gujarat 7.9 3.67 be as accommodative as possible for the fore-
40 8 Madhya Pradesh 4.49 3.59 seeable future. The market is pricing in a
5.9 Source: Ministry of health and family Welfare, CEIC, Nirmal Bang Institutional Equities Research
laxed monetary policy stance for now, which
30 6 is preventing a steep fall. At the most, we
SATISH KUMAR/MINT
could see a 10% correction from the top,

T
20 19.2 4 he second wave of coronavirus infec- the performance of their global peers. Global unless there is complete lockdown, and we
tions has hit India harder, with new equity markets, especially in the US, have don’t think India can afford a complete lock-
10 2 cases rising every day. To curb the been in good shape, courtesy of improving down,” said Amit Shah, head of India equity
resurgence, state governments have imposed economic data. The S&P500 and Dow Jones research, BNP Paribas.
0 0 stricter restrictions. These curbs, though Industrial Average index hit an all-time high Be that as it may, there is no better stimulus
Mar 2019 Mar 2021 milder than last year so far, have begun to of 4,195 and 34,200, respectively, earlier in for the equity market than a faster pace of vac-
Source: Company presentations
limit mobility and affect business activity. this month. cination. The latest official data shows that
SATISH KUMAR/MINT
The impact would be reflected in India’s “Global equity markets are doing well, and India’s vaccination count currently stands at

V ehicle financier Mahindra and Mahindra


Financial Services Ltd may have swung to
profit in the March quarter, but the company
gross domestic product (GDP) growth in the
coming quarters, and analysts have begun
pruning expectations.
that does have a positive rub-off on Indian
equities. So, we haven’t seen a sharp correc-
tion in Indian equities despite having one of
127 million.
The government has allowed everyone
above the age of 18 years starting 1 May. Ana-
is not out of the woods yet in terms of growth Still, this pessimism hasn’t caught up with the highest infection rates in the world,” said lysts say this is sentimentally positive and
or even asset quality. the equity market so far. From its all-time high Sanjay Mookim, head of research, JP Morgan. increases hopes of normalcy resuming. How-
The lender reported a net profit of `149.97 of 15,431.75 seen in February, the Nifty50 Besides this, the benefit of hindsight seems ever, supply constraints would make speeding
crore for the March quarter, compared with index is down by about 7%. Fear gauge Nifty to remind investors that if indices go down, up the vaccination process a herculean task.
the `274.14 crore net loss reported in the pre- volatility index (VIX) is currently at 23, much they also go up. “We don’t think fund manag- Mookim said that the second wave could peak
vious quarter. lower than the intra-day high of 86 levels it ers will make the same mistake of selling now, in the first week of May. But to flatten the
+ As such, the net profit was lower than the touched in March last year. Compare this with as they did in March last year. We have seen infection, the inoculation process must speed
consensus estimate of analysts surveyed by the massive drop in indices last year. that the market has bounced back from those up.
Bloomberg. Behind the net profit disappoint- What is keeping the market afloat? Analysts levels, so aggressive selling is unlikely this Foreign institutional investors are already
ment is not just a fall in revenues but also the point to a confluence of factors behind this time,” Mookim said. getting antsy and have sold equities worth
lender’s need to make provisions. complacency, despite the grim on-the-ground Naveen Kulkarni, chief investment officer at $934 million so far this month. On a year-to-
Mahindra Finance jacked up its provision- situation. Axis Securities Ltd, agrees. “Prior experience date basis, though, they remain net buyers to
ing against delinquencies and other stressed Market participants are taking succour from shows how the market made a massive come- the tune of $6.39 billion. HARSHA JETHMALANI
loans by 31% from the year-ago period. The
motivation behind this was not just necessity
but also regulatory glare.
“In accordance with the regulatory expec-
tation of the Reserve Bank of India to bring
down the net NPA ratio below 4%, which the
management has agreed with, the company
HCL Tech’s March quarter performance was
recorded an additional provision of `1,320
crores during the quarter on stage 3 loans,”
Mahindra Finance said in its release.
dull, but strong deal wins offer some comfort
Notwithstanding the surge in the provi-
sioning coverage ratio to 57.9%, the company
managed to bring down its net bad loan ratio
just a shade below 4%.
T he March quarter earnings performance
of IT services provider HCL Technologies
Ltd was hardly exciting.
LAGGING BEHIND
Revenue growth of HCL Technologies in the March quarter was lower than some of its larger
peers, which reflects in its valuations.
On a gross basis, bad loans still form 9% of Marred by one-off items, its operating mar-
One-year forward price-to-earnings (in times) Sequential constant currency revenue growth in the March quarter (in %) (Right-hand scale)
the book, marginally lower than 10% in the gin took a sharper-than-expected hit. For the 30 5
previous quarter. quarter, Ebit margin declined 630 basis points
24 27 4.2 4
One silver lining for the lender on asset (bps) sequentially to 16.6%. Ebit is short for 23
quality is the relatively low restructured loan earnings before interest and tax. One basis 18 21 3
pile. By March, the lender had restructured point is one-hundredth of a percentage point. 3
12 16 2.5 2
only `63 crore worth of loans, which is less Margins were seen getting impacted by the 2
than 1% of its loan book. one-time special bonus of `728 crore offered 6 1
What’s more is that the lender has been to employees, salary hikes and seasonality in 0 0
able to collect repayments from all of its cus- its products and platforms segment. But ana- TCS Infosys Wipro HCL Technologies
Source: Emkay Global Institutional Research, Bloomberg
tomers in the March quarter. Collection effi- lysts point out that margin contraction is
SATISH KUMAR/MINT
ciencies have improved to 100%. This bright- 230bps higher than consensus estimates.
ens the outlook on asset quality. Sequential revenue growth in constant cur- as per new tax laws effective 1 April 2020. an increase of 49% on a year-on-year basis for
Even so, the company may now face head- rency terms at 2.5% was marginally below the Going ahead, HCL Tech eyes double-digit Q4.
winds from the second wave of the pandemic, 3% estimate many analysts had pencilled in. revenue growth for FY22. Usually, the com- For FY21, TCV improved by 18% compared
which has necessitated lockdowns in various Organic revenue growth in constant currency pany assigns a numerical value to its revenue to the last fiscal year. The company’s manage-
states. terms was 1.5% on a quarter-on-quarter guidance, but this time, it refrained from ment said that most of its deals were with
Although the restrictions are milder than basis. doing so. According to analysts, this revenue Fortune 500 companies and one of the largest
last year, the effect of these lockdowns are HCL Tech has lagged some of its tier-1 guidance implies at least a 2% compounded deals was with a global technology company
being felt in collections and loan offtake of competitors on this parameter in the March quarterly growth rate over Q1-Q4. As for mar- as a preferred partner. The management said
lenders. quarter. For instance, Tata Consultancy Servi- gins, the company expects them to be in the that its all-time high deal pipeline gives it
Mahindra Finance is particularly vulnera- ces Ltd (TCS) and Wipro Ltd saw a sequential 19-21% range, after factoring in salary hikes, confidence going into the new fiscal year.
ble given that semi-urban areas have also constant currency revenue growth of 4.2% normalization of travel costs and planned HCL’s total headcount in the March quarter
begun to see restrictions. On the growth side and 3% in the March quarter. HCL Tech’s Q4 investments in leadership augmentation, stood at 168,977 with a net addition of 9,295
too, things are not looking up for the lender. revenue growth was impacted by weakness in among others. during the quarter, the management said.
Disbursements were down 15% from the its aerospace and manufacturing verticals, But analysts broadly expected this gui- The company plans to hire 15,000 entry-level
year-ago period, but this was expected. The which according to the management has bot- dance. What investors can seek solace from is employees across geographies. Attrition at
outlook on growth is riddled with challenges tomed out and should improve in the coming the company’s strong deal wins, which augurs 9.9% was down 640bps on a y-o-y basis, indi-
given the second wave. In a call with analysts, quarters. well for revenue growth. HCL has signed 19 cating that measures to retain talent yielded
the management has indicated an improve- Further, in a post-earnings media confer- new large deals across verticals, including results. The management said that it will con-
ment in disbursements going forward. But it ence call, the management also clarified that financial services, consumer goods and man- tinue to take steps to keep attrition under
remains to be seen how strong this improve- its March quarter net profit decline was on ufacturing. Its new deal total contract value control.
ment would be. APARNA IYER the back of a one-time increase in tax outgo (TCV) was at an all-time high of $3.1 billion, HARSHA JETHMALANI

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Capital goods cos


to recover further
Refining margins improve, but concerns
in Q4, but covid over virus-led demand weigh on OMCs
risks remain VISIBLE UPTICK
Improving benchmark GRMs provide comfort, which coupled with firm marketing margins, can likely
inventory gains, higher crude prices do not
bode well for the companies, as it would lead
drive earnings of oil marketing companies.
to a rise in working capital requirements and

C apital goods firms are expected to post a


decent set of results for the March quar-
ter. Improving trends seen in the December
Singapore gross refining margins (in $ per barrel)
1.8
increase the risk of marketing margins coming
under pressure. But what offers comfort is
that, after rising continuously, crude oil prices
quarter are likely to continue, helped by a are softening and it should bring respite to the
pick-up in economic activity. Even so, rising 1.2 1.2 OMCs.
covid-19 infections and mobility curbs could Brent crude oil futures, after having crossed
act as an impediment to recovery in the near $70 a barrel levels in March, are now trading
term. close to $65 a barrel. “With increased oil sup-
So, investors will closely follow manage- 0.1 ply, we expect Brent to soften to $50-60 a bar-
Q1FY21
ment commentary on the impact of the sec- rel, which would provide further leeway to
ond covid-19 wave on business operations Q4FY20 Q2FY21 Q3FY21 Q4FY21E OMCs to maintain healthy margins for auto
and labour availability. fuels,” Motilal Oswal analysts said.
When companies announce their March While all of this augurs well, rising covid
E stands for estimates
quarter numbers, investors will focus on bal- -0.9 cases is a threat to demand for auto fuels, after
Source: Motilal Oswal Financial Services Ltd
ance sheet health as well. Analysts from Jeffer- having rebounded to pre-covid levels in
SATISH KUMAR/MINT
ies India Pvt. Ltd in a report on 21 April said: March. Now, analysts see a risk from a fresh
“Government supported companies on pay-
ments in H1, limiting working capital deterio-
ration. Debtor days and working capital at the
year end will help gauge whether it reverted to
pre-covid levels.”
G ross refining margins (GRMs), a meas-
ure of profitability for oil refining com-
panies, remained subdued since the
onset of the pandemic last year. For perspec-
tive: during FY19, FY20 and FY21, GRMs aver-
“Singapore GRM has improved to $2.4 per
barrel in April 2021 (to date) after posting
lows of $0.7 per barrel in FY21,” said analysts
at Motilal Oswal Financial Services Ltd in a
note on 20 April. There has been an improve-
set of curbs to control the pandemic. The
movement restrictions, including lockdowns,
will have a bearing on the demand for petro-
leum products in the near term, said analysts.
“It is difficult to assess the possible quan-
A favourable base and pick- up in execution aged at $4.9 a barrel, $3.2 a barrel and $0.7 a ment largely in petrol crack spreads which, as tum of the impact of mobility restrictions
will aid revenue growth of capital goods’ firms. barrel, respectively. Indeed, the declining per the brokerage firm, is on the back of the imposed by several states on OMCs; however,
Motilal Oswal Financial Services Ltd said in trend has been a cause for concern. commencement of the driving season in the a fall of 15-20% in demand cannot be ruled
its preview: “With revenue decline of 34%/ State-run oil marketing companies (OMCs), US, the largest consumer. out, which can weigh on the June quarter per-
13%/3% observed in Q1/ Q2/Q3FY21 due to which refine crude oil and are engaged in the Notably, benchmark Singapore GRMs had formance on a sequential comparison,” said
covid-19 lockdown, we expect strong double- marketing of auto fuels and other petroleum averaged at $1.8 a barrel in Q4FY21. For Binod Modi, head of strategy, Reliance Securi-
digit growth (+20%) on an aggregate basis.” products, have seen weak GRMs impact their Indian refiners, spreads of gas oil, petrol and ties Ltd. Additionally, weakness in the Indian
The brokerage estimates strong year-on- earnings in the recent past. This is despite the jet fuel are more important, said analysts at rupee can also impact the marketing margins
year revenue growth for Bharat Heavy Electri- fact that marketing margins have remained ICICI Securities Ltd. of OMCs.
cals Ltd (BHEL), helped by a favourable base firm. Spreads of all three products saw sequential Given these issues, it is not surprising that
given that Q4FY20 performance was hit by the OMCs include Bharat Petroleum Corp. Ltd, recovery last quarter. Besides, in Q4, the GRM despite some green shoots, shares of OMCs
pandemic. BHEL’s Q4FY20 revenues had Hindustan Petroleum Corp. Ltd and Indian is expected to be supported by inventory have corrected 7-16% since their March highs.
+ declined by around 50% year-on-year. Exclud- Oil Corp. Ltd. gains (carrying forward lower-priced invento- Having said that, the privatization of BPCL
ing BHEL, revenue growth across Motilal Nevertheless, there is some ray of hope ries during the rising crude oil price environ- remains a key re-rating trigger for OMCs and
Oswal’s coverage universe is expected to be at now. The benchmark Singapore GRM has ment). the progress on the same should be closely
around 13% year-on-year. been showing some signs of improvement. While OMCs may have benefited from watched. UJJVAL JAUHARI
In Larsen and Toubro Ltd’s (L&T) March
quarter results, investors should evaluate the
improvement in execution trend, outlook
across segments and the management’s gui-
dance on order inflows.
According to Jefferies, L&T should report
HDFC-Indiabulls Housing deal needs risk-sharing clarity
17% year-on-year revenue growth, given reve-
nue slippages in the base from the lockdown.
“We believe L&T’s prudent capital allocation,
I TWO FOR GROWTH
ndia’s largest housing finance company
and one of its competitors have joined
hands to co-lend at a time when home loans
HDFC and Indiabulls Housing Finance’s tie-up to
co-lend home loans is expected to help both
kept delinquencies low. That said, HDFC
has seen its loan growth drop over time. On
an assets under management basis, the len-
E&C revenue recovery, and improving ROCE are the strongest growing segment in retail lenders boost growth. der’s growth was down to 9% in the Decem-
(return on capital employed) in FY20-23E are loan portfolio. HDFC assets under management Indiabulls Housing Finance loan assets ber quarter from 15% five years ago.
triggers for a re-rating from current levels,” HDFC Ltd and Indiabulls Housing Finance 6 The lender needs to expand its reach,
(in ₹ trillion)
said Jefferies’ analysts. Ltd (IHFL) through a partnership will provide 5 which it can do by way of this partnership.
Shares of L&T touched a 52-week high of retail home loans, something that is the 4 It seems like the partnership essentially
`1,593 apiece on 2 February on the NSE and mainstay of these lenders. 3 holds more benefits for Indiabulls Housing
have declined by 16% since. In the arrangement, Indiabulls Housing 2 Finance. Not only does the lender get to ben-
On the profitability front, aggregate sector Finance would originate these loans, of which 1
efit from HDFC’s low cost of funds, but it
earnings before interest, tax, depreciation and 20% would be retained by it and 80% would 0
would also get access to superior risk man-
amortization (Ebitda) performance may reflect on HDFC’s balance sheet. The motiva- FY15 FY16 FY17 FY18 FY19 FY20 agement and underwriting processes.
Source: ICICI Securities report
improve year-on-year. tion behind this arrangement is the former’s “For IHFL, the partnership is in line with its
SATISH KUMAR/MINT
In general, companies with stronger bal- efforts in becoming an asset-light company. strategy to pursue an asset-light growth, and
ance sheets and better working capital cycle For HDFC, this is an additional avenue to weathered the protracted slowdown in real will lend further credibility to the quality of its
will be able to deal with the current crisis boost loan growth. The mortgage lender’s estate as well as the pandemic’s effects so far. lending origination,” wrote analysts at ICICI
more effectively. PALLAVI PENGONDA balance sheet heft has meant that it has Its superior loan underwriting process has Securities Ltd in a note. APARNA IYER

ICICI Securities Q4 show mirrors larger buoyancy in equity markets


I CICI Securities Ltd reaped the benefits of a
combination of buoyant equity markets
and an emerging trend of Indians increas-
indices have lured many into investing, most
brokerage firms have witnessed a surge in cli-
ent additions.
BEEFED-UP PROFITS
Besides a sharp increase in customer base, ICICI
Securities has also brought down costs, both of
But adding new customers doesn’t guaran-
tee revenue unless clients use services
actively. Here too, the company has per-
ingly putting their savings into equity. The Even Zerodha, the largest trading and which have boosted its profit margins. formed better than before.
effects were visible as net profit more than investment platform, saw its market share Cost-to-income ratio Net profit margin (in %) ICICI Securities’s active client base grew by
doubled for the March quarter, beating Street surge in terms of active NSE clients. With the 56.9 29% for the quarter to 1.91 million customers.
52.5
estimates by a mile. heft of parent ICICI Bank Ltd’s customer base, 45.3 That said, it is still just 35% of its total client
It shouldn’t come as a surprise that inves- faster customer addition was expected from 40.9 42.3 43.1 40.3 44.6 base.
tors rewarded this performance by driving up ICICI Securities. 32.3 35.3 Chandok said even accounts that show
the share price on Thursday. Shares settled What helped the company is going beyond ‘inactive’ do generate revenue. The firm’s two
5% higher despite the broad market ending in parentage. Around 60% of the new customers main revenue streams are fees and commis-
the red. are outside the bank’s base. The company has sion through brokerage, distribution and
Analysts at Motilal Oswal Financial Servi- also been able to defend its market share Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 advisory, and interest income through lend-
Source: Company presentation, Motilal Oswal report
ces Ltd upgraded their earnings per share through new product launches. ing. Both have grown at a fast pace.
SATISH KUMAR/MINT
estimate for FY22 by 10% and foreign broker- Vijay Chandok, managing director of ICICI Chandok said rationalizing cost by reduc-
age CLSA lifted estimates by 16-18%. Securities, said the company’s new ‘NEO’ year. The ‘NEO’ plan has helped counter ing physical presence and making the entire
The net profit beat comes on the back of an plan is aimed at active equity traders. competition from discount brokers as well as process digital has helped. Indeed, the cost to
all-time high addition of 350,000 customers “Changes in ISEC’s product and sourcing some traditional brokers who offer discount income ratio has fallen sharply.
in a single quarter. But in a year when equity strategy have yielded results over the past plans,” a Motilal Oswal note said. APARNA IYER

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mintasia Leisure

COMING HOME
Four professionals who left the metros they worked in to escape the pandemic find that they may
not return—they have grown used to the rhythms and charms of smaller cities and towns, and a
slower way of living, and have finally discovered a sense of home
ple,” says Corey Stixrud, principal of the Kodai-
kanal International School, India’s first Interna-
tional Baccalaureate school and my alma mater.
Originally from Portland, US, Stixrud returned
to the town he had grown up in, nine years ago.
“You see the deterioration of Kodai as a beauti-
ful hill station,” he says. “But during the lock-
down it was a bucolic town again; there was a
wonderful return to the 1970s.”
“Kodai usually does not change this much,”
says Naveena Selvaraj, 30, a stylist who
returned seven years ago, describing its
strange stillness and “ghost town” feel last
summer. She opened a restaurant this year
with her husband, who owns the hotel which
houses it, and works on the occasional film
shoot. “To see wildlife passing through what
was a busy town was extraordinary.”
“My first trip down the Ghats, with leaves
strewn and covering the road as there had
been no movement, took me back,” says
40-year-old Hari Shanker Mani, a friend who
runs Kodai Cheese, the well-known dairy busi-
ness. He describes how those dependent on
+ tourists for income started farming the lands
they had left. “The agri-business thrived during
this time,” he says. “I spotted farmers selling
not through the designated wholesale outlets
but on the periphery of their farms.” In Kodai,
around 10,000kg of butter and 3,000kg of ghee
went unsold last summer, leading to losses of
`5 lakh locally, but overall profits soon went up
by 20% after the company “pivoted into the
retail segment” nationwide, he says.
“The lockdown created a wonderful oppor-
tunity to slow down and get to know others in
the community,” recalls Patti Tower, managing
trustee of the Aeon Center of Cosmology, who
Perched in the skies: Kodaikanal is a shola sky island, a geographically-isolated, high-elevation region full of valuable evergreen forests in the Western Ghats. describes how her team helped neighbours
pick up groceries when transport was halted

LIVING IN A ‘SKY ISLAND’


and hired the temporarily unemployed. Origi-
nally from upstate New York, Tower lives 18km
from Kodaikanal at the trust’s Skamba farms
and has been here for a decade. She and the
Skamba team help supply the town’s organic
B Y R AJNI G EORGE and those who test positive usually go to the become fashionable, even aspirational. eager beavers with a variety of leafy greens via
······································· plains. And so, the town was sealed off, literally I saw it as the world of my childhood, living an active WhatsApp group (one of several).

A week before the lockdown slammed


the lid on life as we knew it in March
last year, I fled the city. Instinctively, I
made my way to the mountains—knowing I
might be safest and least restricted in Kodai-
a “sky island”, as my mother (the writer Lathika
George) remarked. Kodai is a shola sky island, a
geographically-isolated, high-elevation region
full of valuable montane evergreen forests in the
Western Ghats, so this is not just a dreamy term.
in New York and Delhi and visiting my family
frequently. But I have worked remotely for
years (in publishing and development), and
the pandemic did away with any excuse I had
to resist the better life. Like a handful of
Reduced cash flow was a pressing issue for
many, already denied a year’s profits after
some businesses were deemed illegal in 2019.
When it was announced that the town would
stop admitting non-locals again this week,
kanal, the hill station I grew up in. I made It was surreal—we lived, in many ways, as if “Kodai kids” stranded outside their current businesspeople held a large protest, many of
marmalade and grew kale; I dodged bison and not much had changed. In fact, we had para- country of residence or escaping their urban them not wearing masks. Kodai’s traders’
porcupines, and rat-proofed a house; I bought dise all to ourselves. apartments, this is the first time I have been association secretary Sheikh Abdullah told
a car and planned a home for my end of days. “There were more animals in the forest here for longer than a couple of months as an The New Indian Express: “We entirely depend
Of course, end times were here, already. A because no tourists went there,” says Sahaya adult. I have an office in Bangkok but it can be on tourists for our livelihood. We already
year later, my partner and I are still here, as is Mary, a 60-year-old forager and produce managed remotely for now—and so, our time struggled a lot to make ends meet during the
the pandemic—and a whole new way of life, seller. Descended from the tribals who first out of time continues. total lockdown last year and have barely
even as we try to understand what an unantic- resided in Kodai, she is permitted into First the home of the Palaiyar and Pulaiyar recovered from it.” He claimed the govern-
ipated idyll might mean for the town. restricted parts of its forests. “I have been tribals, Kodaikanal was established by British ment was “leaving us in the lurch”.
Beleaguered by tourist footfall and over-de- going there since I was a small girl,” says officials and American missionaries in 1845; This year has also led to some transforma-
velopment, Kodai, a small town of about 70,000 Mary, who home-delivers raspberries and later, upper- and middle-class Indians discov- tions, however. “The pandemic has helped
which swells to accommodate hundreds of pinecones, stopping for a chat on our front ered it. It offers sanctuary to all sorts today. My bring people to their senses in terms of what
thousands every month during the tourist sea- stoop. Business was hit, and she is trying to friends and familiars include teachers, farmers, Kodai has to offer,” says Stixrud, who, like
son, has not been able to contend with its popu- adapt by producing new products: home- artists, pastors, writers, honey producers, shop- many, suggests Kodai be made a walking town
larity. Its limited medical facilities and infra- made peanut butter and preserves. keepers, finance and IT professionals, policy that people pay to enter. “The town has fooled
structure led to the authorities barring non-resi- Returning to your hometown is usually analysts, lawyers, retired folk and full-time hip- itself into thinking it has to have tourism to
dents for five months, till those with pre- daunting if you are from a small town: You pies. Class and cultural differences may persist survive—with enough will and governance,
approved e-passes were allowed in September. tread lightly when you visit and make it clear but relative tolerance and open-mindedness we could come up with a sustainable model
Covid-19 caseloads remained low, from a cou- you will soon be elsewhere, having grown up prevail, for the most part, in this community- that preserves what’s good about Kodai.”
ple of hundred cases at the height of the pan- knowing you will need to leave to do better. minded settlement. Kodaiites are often strong It is hard to predict which way we will go.
demic to around 15 today, and vaccination is Some remain in Kodai out of duty, nostalgia, individuals: quirky to the point of being eccen- But on 20 April, the sky island pulled up its
underway slowly (in April, even those below 45 comfort, and some choose to return, after time tric and wary of outsiders (pandemic notwith- drawbridge once more as cases skyrocketed
were inoculated since doses weren’t being in the West or the city—joining working profes- standing), to the point of being insular. around the country—and Kodai turned
used). This is all according to occasional report- sionals tired of urban living—to embrace this “It’s this strange place, a place of forgetting, of inwards, yet again.
age, informal communication from officials and lifestyle anew. For, this life I grew up with, close comfort, of leaving the mainstream—and it
word of mouth; there is no local news source, to nature, organic goods and fresh produce, has traps exotics, whether flora and fauna or peo- Rajni George is a writer and editor.

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IS TOCKPHOTO

AMBLING TOWARDS
METRO-HOOD NEIL BORATE
B Y N E I L B O R AT E
neil.b@livemint.com
·······································

L ike thousands of young professionals in


metros, the covid-19 lockdown sent me
scurrying back to my hometown. I had
resigned myself to a lifetime of paying (ever-
increasing) rents in Mumbai but here was
Changing landscape: Over the past few years, startups have set up offices in Bhubaneswar.

some unexpected relief. As Pune was gradu-


ally “unlocked”, I got the chance to rediscover
a place I had not lived in since my college
days. Old drab neighbourhoods seemed to
have come alive. The restaurants, cafés and
OLD-WORLD CHARM,
bars that lined the streets of Kothrud and
Erandwane seemed to match their south
Bombay counterparts. Old Pune seemed to
have embraced a much more modern tone.
Growing up, going out meant going to the local
YET MODERN
B Y A N K I TA M O H A N T Y that way. Public transport has improved, with
Udupi restaurant. The first Café Coffee Day branch ······································· many new routes and air-conditioned buses—
opened around the time I was in class XI and gath-
ered lines of college kids in the initial days. Restau-
rants and bars, however, were largely confined to
tony areas like Koregaon Park, far from my house.
Parental guilt about spending kept me well away
T he longer you have lived outside Bhuban-
eswar, the more you realise how much
you missed it when you were away. Col-
lege, then a job, took me away from home, and
before I knew it, a decade had passed. My hus-
and more people use it now.
Older localities such as Old Town, which
has many temples, have been beautified. Her-
itage walks are being conducted; there is a
musical fountain, and a mall. So there’s a
from watering holes, as did the absence of a dating Welcome change: Little-known initiatives such band and I had always thought of settling in our touch of modernity, though the city still
life. Pune seemed small, boring, a city I couldn’t as the Hirwai Garden Path seem to have helped hometown at some time in the future. Thanks to exudes an old-world charm. Bhubaneswar
wait to get out of. Little did I imagine I would be the city preserve some of its green spaces. covid-19, what we had thought of doing in, say, never had an apartment culture but that’s
longing to return 10 years later—and the transfor- 10 years happened last October. changing. The rental rates are more or less on
mation that would await me. connect it to IT or auto, the industries that have We moved from Mumbai to Bhubaneswar a par with Pune or Hyderabad, where I have
“A lot of the restaurants and cafés that were driven Pune’s economy for several decades. “IT mainly because we were worried about our lived. There are organic salad bars. Home
earlier confined to particular localities like Kore- and auto workers buy homes close to IT districts parents, who found it hard to manage during chefs and cloud kitchens have gained popu-
gaon Park have spread out across the city, includ- rather than the old centre of Pune,” she says. the lockdown. I was worried about giving up larity. Rooftop cafés have live music gigs.
ing residential neighbourhoods. That’s a welcome Instead, Watve sees a city that is growing my job but fortunately, two weeks before we Bhubaneswar has a nightlife now!
change. Pune is quite cosmopolitan that way. You upwards after years of spreading outwards. were to move back, I got one with a local It’s not just me. When I speak with friends who
will find restaurants serving, say, meat and fish in “Two shifts, in my opinion, are ‘re-centralising’ startup. My husband’s office has allowed peo- have returned due to the pandemic, they feel the
fairly orthodox neighbourhoods and doing great the city. First, floor space index rules which ear- ple to continue working from home. same. Professional opportunities are improving.
+ business there,” explains Gouri Dange, a writer lier encouraged integrated townships to be built For the past decade, we had never been in Earlier, I couldn’t have got a job here in my line
and food columnist based in Pune. “The things outside the core city areas are now more favour- Bhubaneswar for more than a week at a time, of work. Over the past few years, startups and
that set Pune apart—its weather and low crime— able to building in central areas. Second, the spending most of those short vacations at firms have set up offices, giving people like me a
have been there for a long time. What’s new is a Pune Metro will bring some demand back to the home or visiting relatives. Now that we were chance to come home. Over the last few years,
spreading out of commerce, driven by yet more city centre,” she says. To these two forces, cov- back for good, we began to explore the city Mumbai has increasingly seemed too crowded. I
educational institutions and IT companies com- id-19 may have added a third—dislocated work- and discover what had changed. wanted a slower pace, peace and a sense of com-
ing up,” she adds. ers from metros. Once the disease recedes, its It’s no longer a place with patchy internet munity, along with the amenities of a big city.
The proliferation reflects an underlying eco- covid-19 returnees too may have to make their and undependable public transport, without Suddenly, I realise that my hometown, Bhuban-
nomic reality: Pune is growing wealthier. I speak way back. A hyperloop project between Pune malls or multiplexes, where the only hang-out eswar, checks all these boxes.
to Aditi Watve, city head-Pune, ANAROCK and Mumbai, which will use magnetic levitation was the local Café Coffee Day or chaat cor-
Property Consultants, about this. “The gentrifi- for a super-fast commute, is reportedly being ners. The government has been trying to turn Ankita Mohanty is a communications pro-
cation of neighbourhoods is simply a result of planned. But until then, a slow amble towards the state into a tourist destination and that fessional at a dairy startup.
the original inhabitants of old Pune becoming metro-hood rather than a furious dash may well means the capital has got a facelift. The city is
more prosperous,” she says. Watve does not be just the thing for Pune. cleaner, and people take pride in keeping it As told to Rashmi Menon.

AN ENTREPRENEURIAL SPIRIT, A SENSE OF CARING INSTAGRAM @1000THINGSINLUDHIANA


B Y A K S H AY K U M A R I A old city landmarks and markets revamped to
······································· welcome a younger audience. There was

I grew up in Ludhiana, but left for boarding


school in Rajasthan in 2004, going on to
Delhi university for my graduation. I
would visit during festivals and for short lazy
vacations, but after I moved to Bengaluru in
proper car parking, aesthetically renovated
buildings—even though houses in Ludhiana
still looked like something out of movie sets.
Ludhiana now had the best of Indian and
global brands, but what impressed me was
2018 and my grandmother died, there were the kind of experiences the home-grown
fewer reasons to return. businesses were serving. When the city
I have lived in Bagli, a village in Madhya opened up fully in October, going for a gedi (a
Pradesh, smaller cities like Ajmer and Soni- Punjabi term for driving around with friends),
pat, as well as metros like Mumbai and Ben- I discovered a bunch of new local businesses.
galuru, over the past decade. But I would I talked to the owners and found an enthusi-
never have believed it if you had told me I asm for the city that had been missing before.
would live in Ludhiana and continue doing When I was growing up, most people wanted
the work I love. to emigrate; it’s what adults encouraged us to
Exploring life like a professional gypsy, I do. The entrepreneurial spirit Ludhiana is
often had conversations about where I would known for was now infused with a sense of
ultimately “settle down”. I believed it would caring for the city and doing good by it.
be a city not as fast as Mumbai or as aggres- Until covid-19 brought me back, I had learnt
sive as Delhi, one with a small-town feel like to say home was “just a feeling”—it could be
Ludhiana, opportunities for young people like any place one felt at home. But returning to
Bengaluru. But after all this, in July 2020, I Ludhiana and falling into its old-new patterns
was sitting in my 70-year-old family home, has made me rethink the idea of home. It has
which was being renovated. Cosmopolitan look: Ludhiana now has the best of Indian and global brands. not only made me entrepreneurial but also
The logic of why anyone would want to set- helped me own a part of my identity with
tle in Ludhiana always eluded me—it’s an the psychological freedom I had won during school and movie theatre, now had the feel of pride. It has given me the courage to believe
industrial town, it doesn’t have places to hang the years of big-city living. Shimla’s Mall Road. It was wide and green, lit that no matter what I do next, where I go and
out, it has no parks, no heritage or cultural The lockdown changed my perspective. I with the signboards of 60-80 new cafés, study, I may return and settle here one day.
centres. It’s extremely polluted in parts and saw the cultural shift that had taken place microbreweries and gyms. There were nature
despite huge concentration of wealth, social while I was away. Sarabha Nagar, for instance, walks, cycling clubs, weekend rides along the Akshay Kumaria is a consultant in the equi-
responsibility seemed to be missing. I missed previously known only for the city’s best day Sutlej, cafés by the canal. I started noticing table social-impact sector.

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mintasia LEISURE 27
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM
ISTOCKPHOTO

ON THE
RAMZAN
BREAD TRAIL
IN DELHI
This is the time of year when the national capital’s
‘roti galis’ usually come to life with locals and visitors
feasting on treats such as ‘baqarkhani’ and ‘sheermal’
—rarely do the small shops turn away a diner

PHOTOGRAPHS BY SADAF HUSSAIN


B Y S ADAF H USSAIN away from Mirza Ghalib’s haveli in Ballima-
······································· ran. Naeem Roti Waley, a 70-year-old estab-

+ E very year, during Ramzan, traditional


bread-makers set up shop in the lanes
and by-lanes of many Delhi neighbour-
hoods. These naanbais create a variety of fer-
mented loaves, and if there is anything that
lishment, is run by Mohd Salman and his
brother, who inherited the business from
their father and grandfather. The brothers run
two shops, one that makes only nihari and
the other only rotis—a winning combination.
connects them apart from flour, water, yeast, Salman is popular as a supplier of breads for
ghee and tandoor, it is the love of feeding weddings in the locality. In 2019, when Sufi-
people. I ventured out to hear their stories yan and I were celebrating the Heritage Cui-
before the Capital locked down again, and sines of Purani Dilli, all our bread—like mas-
found them as welcoming as ever despite the ala roti, besani and sheermal—came from this
pandemic taking its toll on the usual festive shop.
mood. I then headed back to south Delhi—Lajpat
I met a few naanbais from the lanes of Del- Nagar 2, Block 1 Market, where most of the
hi-6 (Old Delhi), Lajpat Nagar, Mehrauli and bread-makers are of Afghan origin. Many of
Khirkee Extension—lanes I call the “roti galis”. them, who have fled their troubled country
Here’s something of the history of these individually or in groups since the Soviet
areas: Small parcels of land became de facto invasion of Afghanistan in 1979, are from the
settlements of refugees and migrants after Hazara community, a Shia ethnic minority.
Partition. Mohd Ghiasuddin and Mohd Sakhi have
Delhi absorbed everyone who came to earn been living in Delhi for eight years; both
their bread (literally and figuratively), and to brothers learnt the art of bread-making in
this day you can see and smell the diversity Breaking bread: Adam Rehman Qureshi, a third-generation ‘naanbai’ in Delhi. Kabul, Afghanistan. They make two kinds of
when you take a walk in these lanes. Afghani naan, a whole-wheat variety and a
Although the original naanbais belonged to he does brisk business, ensuring the fire in har to reach Rehmatullah Hotel, one of the refined-flour one. Afghani bread is soft and
a community from Uttar Pradesh, many of the his tandoor never dies out and the dough oldest naanbais (also a restaurant) in the delicious when it’s fresh out of the tandoor,
bread-makers today are actually from Bihar. does not dry up. area, established in 1940. The current owner but as it gets exposed to air, it starts toughen-
What surprised me is that even though these The fastest-moving products at his shop are is Adam Rehman Qureshi, a third-generation ing and is best paired with evening tea. I
naanbais have perfected the art of making the regular khamiri naan (`5) and “double naanbai. He offers sheermal, laal roti, masala noticed Sakhi was sprinkling water on the
sheermal, khamiri, Afghani naan and similar roti” (`7), which is essentially the khamiri wali roti, zaafran roti, paratha, tawa roti and bread while it was baked in the tandoor. He
rotis in Delhi, they didn’t grow up doing so naan but double the size and softer. In a khamiri naan, a stupendous range that can told me this is important to soften it.
and have learnt the skill on the job. glass-covered box, Aalam keeps the more cost between `5 and `2,000 (with gold varq) The last naanbai on my trail is in Khirkee
“Who will buy such expensive roti in our expensive sheermal (`20). for a roti. Extension in Malviya Nagar, run by another
villages?” one of them tells me. In the villages His shop has a good assembly line, with A famous roti at Qureshi’s shop is the shahi Afghan who works with his father and brother
they come from, people don’t buy bread from one man to make small balls of the dough sheermal, also known as the Meerut sheermal, and took over the shop from a fellow Afghan
the market, though Bihar has a couple of its and another to roll, with Aalam on the tan- full of dry fruits inside and outside. Qureshi who left for Canada after a seven-year stay in
own varieties of sheermal. My personal door baking all the rotis, and a fourth man tells me this bread is neither shahi (royal) nor India. He did not disclose his name, nor did
favourite is the baqarkhani you get in Sabzib- packing the rotis and collecting the cash. from Meerut. “Sheermal originated in the he allow me to take photographs, but his
agh in Patna. It is flaky, sweet and semi-dry They do make a few other special rotis on royal kitchens but in today’s era, if we load story moved me. His family is from Jowzjan
and goes best with spicy mutton qorma or pre-order, like anda roti, keema paratha, anything with dry fruits, it becomes shahi. province, 500km from Kabul, and after escap-
Bihari kebab. I have never had such delicious doodh roti, palak paratha, besani, masala roti This is true of qormas, ice cream and many ing bomb blasts in 2013, they flew to Delhi,
bread. and tandoori paratha—all of them cooked in other dishes,” he adds. The bread is flaky and staying with relatives in Bhogal and Jangpura,
Most naanbais have small shops, with just one tandoor. too sweet for my liking. You can have it by and eventually moving to Khirkee Extension
enough space for a tandoor, a table for raw One bread I found interesting was the itself, with chai, qorma or other spicy dishes, because they were getting the bread shop. It
materials and a few benches for three-four “German-quality sheermal”, which in all prob- or even as dessert. may not be wise for them to return to Kabul
people to sit and continuously roll and bake ability has nothing to do with Germany but The sale of bread usually goes up during but they do want to visit their country and
plain naan, the one that is most in demand— has been branded as such to indicate a high- the Ramzan month, says Qureshi, because meet their family before finally settling in
it’s also the cheapest of the lot. quality product. Loaded with nuts and dry visitors and locals pick up khamiri or tawa Canada. They are saving up for their visas.
The first stop on our bread trail is Meh- fruits, these breads cost upwards of `40 each. roti when they return home after maghrib or The 14th century Moroccan scholar and
rauli, in south Delhi. We meet Mohd Tau- Aalam says these usually go to the farm- isha namaz (evening prayers). Since its incep- explorer Ibn Battuta considered Delhi the
feeq Aalam, originally from Kishanganj, houses of Mehrauli and Chhattarpur. tion, he says, Rehmatullah Hotel has been metropolis of India, a magnificent city. He
Bihar. Twenty-five years ago, he packed his My friend Abu Sufiyan guided me to some known to never disappoint a diner. Pay if you was right. Delhi folds everyone into its gigan-
bags and came to Delhi looking for work— of the popular naanbais of Purani Dilli (Old can, else the same food will be served for tic wings, while its famous breads break barri-
and ended up learning the craft from a Delhi). We started our journey from Matia free—whether you are a faqir or well-off, ers of religion, region, caste and creed.
naanbai. In 2012, he rented a small shop in Mahal, the always bustling hub of streets nobody goes away hungry.
Mehrauli and started his own business. Sur- flanking the Jama Masjid. Walk for a minute Sufiyan and I move on to another popular Sadaf Hussain is a chef and author of the
rounded by small houses and meat shops, or two past the famous Karim’s and Al Jawa- but small shop in Baradari, just a few metres book Daastan-E-Dastarkhan.

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28 LEISURE
April 30 - May.6, 2021 , SINGAPORE/KUALA LUMPUR° WWW.MINTASIA.COM
mintasia

HOW AFFLUENT INDIANS BECAME


COVID SUPERSPREADERS
Middle- and high-income
HT
that the “It can’t be us” attitude is a prevalent
one amongst India’s middle class.
people repeatedly breached In October, the World Health Organization
(WHO) had noted that people were exhausted
pandemic protocols for and fatigued from following appropriate behav-
frivolous reasons iour. Response fatigue is real, says Anoop
Amarnath, head of geriatric medicine at Mani-
pal Hospitals, Bengaluru, and a member of the
B Y S H R E N I K AV L A N I Karnataka government’s critical care support
feedback@livemint.com unit for covid-19. “It was a huge lifestyle change
······································· for people to stay locked in their homes, wear-

I n mid-March, The Calcutta Swimming


Club hosted an inter-club darts tournament
in Kolkata. It was a lively affair, with dart
stations and a bar set up in an air-conditioned
hall. Waiters in uniform, with their names
ing masks, keeping physical distance and not
meeting friends and family. People were waiting
to meet and talk to each other. Man is a social
animal and if you don’t let him socialise, fatigue
is bound to set in,” he says. He adds that such
embroidered above their shirt pockets and fatigue played a significant part in the covid-19
masks carefully pulled over noses and mouths, peaks in September last year.
ferried cocktails, beers and snacks. The con- In Mumbai, Megha, 36, has been religiously
testants, and those viewing the competition, following pandemic guidelines. A freelance
did not exercise as much caution. Masks rest- assistant director living in Andheri, she ven-
ing on their chins or tucked away in their pock- tures out to work for shoots only when she
ets, they tossed darts and shared laughs. can’t avoid it, always wears a mask when out
Just days after the tournament, some of the and carries a bottle of sanitiser. She says she
participants tested positive for covid-19. As a was shocked when a friend told her in August
precautionary measure, several clubs had that her family was going to perform Ganesh
asked their team members to take a test. The puja at home. Till then, Megha says, her
Calcutta Swimming Club, the host, too asked its friend’s family had been very careful. “The
players to undergo RT-PCR tests. It also family invited their cousins for the puja. There
requested the participants to stay away from were 10 people in the two-bedroom flat who
the club for 10-14 days, regardless of the result. sat for the puja and then had a meal together.
Within a week of the tournament, there came a Eight of them tested positive for covid-19 after
+ flurry of covid-positive results. According to a text that puja,” she says, adding that she has heard
message received by several members of the of many such instances across the state.
clubs, 54 participants had tested positive for cov- If people let their guard down due to
id-19—20 from the Royal Calcutta Golf Club, nine fatigue, one reason could be poor communi-
from the Calcutta Cricket & Football Club, six each cation of rules and time frames.
from The Saturday Club and Calcutta Interna-
tional Club, four from Dalhousie Institute, two When bravado turns into recklessness
each from the Tollygunge Club and Calcutta Pun- Mehta, chastened by his experience and
jab Club, and five from the host club, a participant wary of being reinfected, didn’t step out for
who received the text confirmed. either a coffee or a meal until December,
Last August, when the country was coming Throwing caution to the winds: A file photo of a gym in Mumbai that reopened in October after being when the covid-19 infections seemed to be on
out of the pandemic lockdown in phases, Jai- closed for nearly six months; the staff of a Mumbai hospital with a message to stay indoors, in March 2020. a downward trajectory. His work as a wedding
pur-based Sidhartha Mehta, 44, and 15 of his planner had resumed in November, when the
friends, including their spouses, met at a resort Swimming Club. Just like the party on the out- thing…there is sort of an element of bravado that wedding season kicked in. In the first few
45 minutes outside the city to celebrate Friend- skirts of Jaipur. A vast majority of low-income this can’t happen to us,” says Dr Mithal. weddings that he organised, Mehta says
ship Day. Ten people from the group contracted people in the country often couldn’t afford to stay This was exactly what went through the mind guests were nervous and wary and kept their
the virus. It then spiralled into a mini super- at home and maintain social distance. Every day of 42-year-old marketing consultant Sooraj masks on till food or drinks were served. “By
spreader event. In Mehta’s household, nine spent at home meant a day without pay. Their when he chose to watch Indian Premier League December, fear was on the wane. After a
people tested positive. This included his wife, cramped and poor living conditions didn’t help games in early October with four friends in his point, mask was just a protocol, sanitisers
children, septuagenarian parents, household even when they stayed put. But many in India’s man-cave one floor below his flat in south Kolk- were barely used. People were saying, jo hoga
help and driver. Each of those infected at the middle- and high- income classes had the means, ata. Like several others quoted in this story, he dekha jayega,” he recalls.
meet-up passed on the infection to at least one and the choice, to abide by the guidelines. And did not want his full name to be used. In Kolkata, stock market investor Pavan,
more person in their households. yet, they didn’t. This is their story. “We five have been friends for more than who had maintained strict covid-appropriate
From Unlock 1.0 onwards, middle-class two decades. We were all staying at home, fol- behaviour till November, held a puja in his
Indians across the country have been getting The false notion of a bubble lowing covid-19 guidelines, wearing masks office to celebrate Diwali. Members of his
together and flouting covid-19 guidelines. The Why did so many people become so care- when we stepped out, washing hands and sani- family from two separate households
reasons for doing so have ranged from watch- less? Ambrish Mithal, chairman of endocri- tising everything and meeting no one else. But attended the puja in person, while office staff
ing cricket to holding weddings; from cele- nology and diabetes at Max Healthcare, Delhi, then one of us went for a birthday party and attended virtually via a video link. After the
brating birthdays and festivals to hosting says much of this behaviour stems from a came to watch the game. He tested positive for puja, Pavan and three others in his household
poker nights and weekend soirees at farm- refusal to take any responsibility. covid-19, so we went for a test,” he says. Sooraj tested positive.There were five covid-19 cases
houses and holiday homes. Many of these “People belonging to these sections of our tested positive, along with his wife and mother. in the other household. “It was just our imme-
turned into personal superspreader events. society believe that they and their friends are safe “People also have a false notion of a ‘bub- diate family, so once we entered the office the
Just like the darts tournament at The Calcutta as they maintain hygiene and sanitise every- ble,’” says Dr Mithal, adding, “there have been masks were off,” says Pavan. Like Mehta, he
HT plenty of such instances in Delhi at weddings, too suspects they caught the virus from an
birthday parties, vacations and even gather- “outsider”. “It couldn’t have been one of us.”
ings for funerals where several members from Such risky behaviour was on the rise across
the group have been infected.” India from Diwali and probably peaked around
the turn of the year, doctors say. It is entirely
Response fatigue possible that a variety of factors played a role in
In Jaipur, when Mehta and his friends met to this vicious new wave. But while looking at the
celebrate Friendship Day, it was their first larger causes, we may forget that the seemingly
in-person catch-up since the nationwide lock- small actions of individuals probably played a
down was imposed on 24 March last year. “We significant role. One thing is inescapable:
were very careful as our parents live with us and Countless affluent middle-class Indians chose
we didn’t meet anyone for more than four to breach the covid-19 protocols often and for
months. After a point, Zoom sessions and video frivolous reasons. Many of these breaches
calls don’t cut it. We had had enough. All 16 of ended up having serious consequences.
us who met for dinner agreed it was about time Why did they do it? Was it arrogance? Dr
we met in person,” says Mehta, a wedding plan- Mithal feels that Indians from this strata of
ner by profession. Neither he nor his friends still society simply aren’t used to being told what
know who was Patient Zero in their group. They to do. Even during a deadly pandemic.
suspect that they might have caught the virus Shrenik Avlani is a writer and editor and
from one of the resort staff. Such an assumption co-author of The Shivfit Way, a book on func-
is a perfect example of Dr Mithal’s hypothesis tional fitness.

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mintasia LEISURE 29
April 30 - May.6, 2021, SINGAPORE/KUALA LUMPUR ° WWW.MINTASIA.COM

A STITCH OF THAT
WARM, FUZZY FEELING
Through covid, quilting and
ISTOCKPHOTO

knitting have been less about


need and more about warmth,
nostalgia, individual whimsy—
and hope for the future
B Y P O OJA S INGH
pooja.s@livemint.com
·······································

I t’s like being in a normal world for six


hours,” says Mona Absalam, looking for
the perfect shade of pink in a box over-
flowing with multicoloured threads to finish a
bright shirt she is tailoring. She is describing
the world of work that distracts her from the
loop of anxieties and worries when we meet
on a sunny morning in March, when it was
still possible to go out reporting in Delhi, dou-
ble-masked of course.
Absalam, who came from Somalia to Delhi
as a refugee in 2018, spent two years learning
knitting, tailoring and quilting at a five-year-
old centre in Khirkee run by the Fair Trade
Forum, an India-wide network for fair trade, in
collaboration with the United Nations High
Commissioner for Refugees and the non-profit
Samarpan Foundation. “I never had the time to
+ stitch back home. Now, I look forward to com-
ing here. It makes me forget about the pan-
demic, my past life,” says Absalam, 34, who
hopes to open a tailoring shop at some point. In the loop: (Clockwose, from above) the famous ‘kantha’ quilts; Mehjabeen Sultana (standing) has been teaching refugees at a centre in Delhi’s Khirkee
The garments she and over 30 other women area quilting, knitting and sewing for five years; for its fall 2018 collection, Dior sent models in dresses in quilt patterns to the runway.
refugees from Somalia, Afghanistan and PRADEEP GAUR
Myanmar make are sold online or at motions, and the joy of a challenge that
exhibitions; each refugee gets a share “psychologically uplifts” people, making
from the sale. Absalam used to spend them experience a “flow” that boosts self-
five days a week, 9am-3pm, learning esteem, motivation and offers a sense of
the delicate dance of thread and needle creating something unique.
and explaining Somali jokes in broken
Hindi to women from Afghanistan and Threads of hope
Myanmar who have become part of a Dehradun’s Shama Dwivedi
big happy family. “This is the only is one of them. The 50-year-
time I am not thinking about my old took up knitting again
son,” says Absalam, who used in March last year, after a
to work as a translator and 20-year break. With her
guide till the pandemic children living in the
struck. Her eldest child dis- US, the HR pro-
appeared from outside fessional was
their house in Mogadi- tired of spending
shu in 2018, the same her work-from-
year a militant group home days on
killed her husband. “It’s Zoom meetings and
a small thing but stitching emails. Her husband had
pieces of cloth, joining threads, died a year earlier and she
filling holes to create something, had lost interest in socialis-
a blanket, a quilt, it is so reas- ing with family, even on
suring, so calming.” WhatsApp, but loneliness
Perhaps it was this act of crea- kept her on edge. A chance
tion and the promise of a refuge visit to a Facebook page,
from harsh reality that made peo- Knitting Club, piqued her
ple across the world turn to knit- interest—and as summer caps or sweaters.” on intricate patchwork quilting, in 2016—are
ting, sewing and quilting in 2020. tightened its tentacles, she In the Rathi household in Delhi, quilting creating 1,000 quilts that will be gifted to
For Absalam, the anxiety may run pulled out her old needles and has become a family activity. Usha, along with front-line workers as “a token of gratitude” on
deeper but for many others around the yarn to create something for the her younger brother, grandmother, father and 15 August, Independence Day.
world, dealing with the uncertainty of winter season. mother, spends two hours daily stitching “My idea is to show gratitude for the con-
the virus, working with needle and “I am still doing it, even in sum- quilts using old clothes, an activity they sistent work they have been doing,” says Sethi,
thread has been just as calming. mer. It brings me that warm, fuzzy started in October. 56. To reach the target, she’s collaborating
Stitching together fabric can be feeling… reminds me of the time I “I saw an Instagram post where people were with textile companies, which are contribut-
more than just a need or an art in used to sit with my dadi (grand- making these colourful quilts. I thought, instead ing fabric scrap, training non-profits across
resourcefulness. If you are creating a mother) and watch her make of spending my free time thinking about what to the country to create quilts, and requesting
quilt using old patches, it can be an sweaters for me and my brother,” eat next, I would do something creative,” says people to make contributions in the form of
exercise in nostalgia. If you are knit- she says during a video call. Usha, 29, a sales executive. Her grandmother patches or quilts. “It’s open to anyone and
ting, it can be an expression of care. If Dwivedi, who spends at least immediately offered to help. “We grew up doing everyone. People can make 12.5x12.5-inch
you are sewing, it can be a playground three hours every day sipping tea these things,” says Roshni, 86. squares. It can be patchwork, sewing, embroi-
for individual whimsy. and knitting, has created a WhatsApp dery or painting on a cloth. They can send
Over the years, research too has shown knitting group where friends and The art of gratitude them to us and we will turn them into a quilt,”
that creative craft hobbies promote a sense of strangers from around the country It was with the idea of creating something says Sethi, adding they are “almost halfway
well-being in difficult times. For instance, a share their work. “I have become closer different that Taruna Sethi started India’s Kar- through to the target. Nothing says gratitude
nine-year-old study, published in the Journal to my extended family now,” she says. una Quilt Movement in August last year. Sethi better than a quilt and creating something
Of Public Health, says it’s the play of colours, “No matter what the occasion, these days and her staff of about 20—she set up Simply with your own hands has a different kind of
the demands on concentration, repetitive my gifts to everyone are knitted socks, Beautiful Always, an enterprise that focuses magic.”

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30 LEISURE
April 30 - May.6, 2021 , SINGAPORE/KUALA LUMPUR° WWW.MINTASIA.COM
mintasia

Nikhil Ranjan
THE PERFECT PENMANSHIP The founder of William Penn shares the ups and downs of running a premium stationery
business in the digital age—and why it is here to stay in spite of the pandemic
BY S OMAK G HOSHAL Mont Blanc, Cross, Sheaffer, Waterman and
somak.g@livemint.com Sailor in the Indian market. Today, it offers
······································· something for every price point, ranging from

Y ou may remember the scene from the


2009 movie 3 Idiots. Viru Sahastrabud-
dhe, the tyrannical head of the Imperial
College of Engineering (played by Boman
Irani), is busy haranguing a new batch
`35,000-40,000 for a Mont Blanc to a few thou-
sand rupees for colourful Lamy fountain pens.
In 2004, the time was right to launch a busi-
ness with high street brands, be it clothes or
fancy writing instruments. Shopping malls
of students with a pep talk. At one were sprouting in India’s urban centres and
point, he brandishes a pen from his William Penn took advantage of the growing
pocket and proceeds to brag footfall in those spaces. By 2007, it had stores
about its unique qualities. Mil- in Bengaluru, Mumbai, Hyderabad and Delhi.
lions of dollars had been spent But the turning point came in 2010, when it
to create its special design, he set up shop at the Delhi airport. “It gave us
tells his attentive audience, in huge visibility,” says Ranjan. “Pretty much
his inimitable lisp. It is the only anyone who flew into the country either
pen in the world that can write landed in Delhi or used the city as a transit
in space, under zero gravity. But point. We were suddenly on the world map, as
the dramatic impact of the it were.”
moment is deflated by Ran- But there was pushback from some custom-
choddas Shamaldas Chanchad ers too. “People wondered why they should
(Aamir Khan), who pipes up buy from us when they could pick up the
with a question. Why did astro- same product 25-30% cheaper during over-
nauts not consider writing with seas travel,” says Ranjan. “Our pitch was that
a pencil? he asks—they could they could get now what they wanted in India,
have saved everyone a lot of without having to wait for their next
money! Amid much tittering, overseas trip, and that too from an
Sahastrabuddhe beats a hasty authorised dealer, who promised
+ retreat, fumbling for an answer. them a warranty.”
Nikhil Ranjan, founder and However, more than individ-
managing director of the pre- ual buyers, it was the culture of
mium stationery company gifting, especially in India’s cor-
William Penn, who is telling porate sector, that gave a tremen-
me this anecdote, supplies the dous boost to sales. “When we
answer to why they couldn’t did a market survey in 2015-16,
have used a pencil. “Most pen- we found that gifting drove at
cils have graphite, which can least 50% of our business,” says
cause havoc inside a space Ranjan.
shuttle,” he says, sitting in his The findings were serious
headquarters on a quiet street enough for William Penn to
in Koramangala in Bengaluru. rebrand itself and expand its top
“That’s why the Fisher space line. In 2016, the company
pen was created in the 1950s dropped its original tag line, “The
as an anti-gravity device to world pen store”, and decided to
write with in space.” look beyond the premium sta-
The pen, with an hermeti- tionery and writing instruments
cally sealed refill pressurised market—towards lifestyle prod-
by nitrogen, works under ucts like wallets, belts, organisers,
extreme temperatures. It was desk lights and other accesso-
part of the lunar expedition ries—and bring brands like Lapis
that sent the first humans to Bard, Zippo, Hugo Boss and Sec-
the Moon in 1969 and is used rid into its list.
by the US space agency Nasa to this day. In The other key reason behind
India, you can buy it from William Penn, the this strategic shift was the steady
American company’s authorised partner, erosion of the customer base
which has been selling the Fisher space pen since 2013-14, as pen and paper
for the last 10 years or so. ILLUSTRATION BY PRIYA KURIYAN
made way for phones and digital planners.
Of course, you can get the same product Those were also the years of the e-commerce
from e-tailers like Amazon, too, but it isn’t Indeed, providing a thoughtfully curated Until then, buying stationery was a transac- boom in India, when online retail began to
quite the same thing. Apart from its meticu- in-store experience was one of the unique tional, over-the-counter affair, not an activity catch on, forcing William Penn to reinvent its
lous packaging, warranty and care manuals, selling points for the company when Ranjan people spent much thought on. Instagram business and expand its range. “In the last
Ranjan’s company offers to personalise the founded William Penn in the early 2000s. Back and YouTube, havens for stationery addicts, year, we have seen a resurgence of interest in
pen with your name, logo or message of your in 2001, he was working with IBM as an engi- weren’t there to blow your mind. “You went to writing instruments,” Ranjan says. “Our foun-
choice. “In the last 12 months, especially, per- neer, but raring to start a venture of his own. a store, asked for what you needed, and the tain pen sales, for instance, have grown by
sonalisation has been one of our most suc- His father worked in the stationery trade, a storekeeper handed it to you,” Ranjan says. 30-40% from 2019.” The spike, he adds, is
cessful innovations,” he says. field Ranjan loved and understood well. He “But at William Penn, the customer had a partly due to a wider awareness of the options
You would think the pandemic has wasn’t keen to join the family business, how- chance to interact with world-class prod- available in the fine writing segment.
impacted a “non-essential” business like pre- ever. Instead, he launched William Penn in ucts—touch, feel and try them out—for the “Social media promotions heavily influence
mium stationery worse than many others, but 2002, whimsically naming it after the English first time.” our business by generating customer interest,”
it’s not all doom and gloom. It’s true, William writer, religious thinker and founder of Penn- While Ranjan didn’t undertake formal mar- says Ranjan, “though we haven’t been able to
Penn had to close down some of its 30-odd sylvania, US. ket research before launching his business, he quantitatively track its impact yet.” Aside from
stores across India, especially those at inter- “We were greatly inspired by the good work had a fair idea about the supply chain and customers in their late 30s with a taste for the
national airports (though one store recently William Penn did in the 17th-18th century,” deep knowledge of products, courtesy his finer things in life and disposable income (the
opened at the Delhi airport’s T2 terminal, a Ranjan says. “We liked the name and it father’s trade. “In any case, there was hardly “sweet spot” for the company, he says),
sign of cautiously optimistic recovery). “As a sounded like a ‘pen’, which was, and is, an any data available in those days,” he says. “The younger buyers are coming to William Penn in
company, we have suffered because we were integral part of our offering.” A shade under 24 import duties were upwards of 50% for pre- search of ethical modes of writing, opting for
heavily invested in offline retail,” says Ranjan. at the time, he was ready to take calculated mium products and few organised players finely crafted and long-lasting fountain pens
Focused online sales, especially through risks. “We opened the first William Penn store were willing to pay such heavy taxes. William rather than disposable plastic ballpoint pens
social media, have filled some of the gap, but not far from where we are sitting today, on 1st Penn saw a big uplift because it was the first that would eventually end up in the world’s
”the tactile experience of browsing in a brick- Cross Road in Koramangala,” says Ranjan, entity to organise an unorganised market.” landfills. It’s a trend William Penn capitalised
and-mortar store, trying products, picking up now 43. “It was an entirely new concept to the Its business model was based on acting as on last June, when it ran a campaign to pro-
tips from the staff —it all matters,” he adds. city, probably to the country, but it paid off.” the authorised dealer for premium brands like mote its line of fountain pens.

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