Q&A WITH FINANCE MINISTER NIRMALA SITHARAMAN ON BUDGET 2023-24

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March 5, 2023 ` 150

ADANI
UNDER ATTACK
BILLIONAIRE GAUTAM ADANI FACES HIS BIGGEST CHALLENGE AS ALLEGATIONS BY A
US-BASED SHORT-SELLER SEND HIS COMPANIES’ STOCKS PLUMMETING. LENDERS HAVE
TURNED WARY, AND HIS MEGA $107-BILLION GROWTH PLAN IS NOW IN JEOPARDY.
CAN ADANI STAVE OFF THIS CRISIS? AN INSIDE LOOK AT HIS OPTIONS
 FROM THE EDITOR
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F
or the better part of 2022, it was all about the Adani Group Executive Editor: Krishna Gopalan
Senior Editor, Businesstoday.in: Mukesh Adhikary
stocks in the markets. A dizzying run-up in all Adani stocks saw
CORRESPONDENTS
the overall market capitalisation of the group rise over 100 per Senior Editors: Neetu Chandra Sharma, Nidhi Singal,
Smita Tripathi, Sohini Mitter
cent. As investors and analysts saw the group’s meteoric rise Editor (Money Today): Teena Jain Kaushal
Senior Associate Editor: Ashish Rukhaiyar
on the bourses, Gautam Adani, the 60-year-old boss of the Adani Group, Senior Assistant Editor: Binu Paul
rose to No. 3 in the global wealth ranking, leaving the mighty Mukesh Assistant Editors: Arnab Dutta, Manish Pant
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Ambani far behind. It was as if the Adani Group could do no wrong, PRESENTER AND SENIOR EDITOR, BUSINESS TODAY TV:
Aabha Bakaya
and the stratospheric growth of the group—which is in the midst of
RESEARCH
a massive play on the India infrastructure story by way of its airports, Assistant Editor: Rahul Oberoi
Principal Research Analyst: Prince Tyagi
ports, roads, power and cement, among other things—was the subject COPY DESK
of animated discussion in corporate circles. Cut to February 2023 and Senior Associate Editor: Abhik Sen
Senior Assistant Editor: Shishir Kumar Behera
the aftermath of the damaging report by little-known US short-seller Senior Sub Editor: Pranay Prakash
Hindenburg Research—which accused the Adani Group of pulling off PHOTOGRAPHY
Principal Photographer: Rajwant Singh Rawat
what it called “the largest con in corporate history” by way of stock Photographer: Hardik Chhabra
ART
manipulation, accounting fraud and routing of funds through overseas Deputy Creative Editor: Anirban Ghosh
shell companies—has shaken the group like never before. While the Deputy Art Director: Rahul Sharma
Associate Art Director: Raj Verma
conglomerate issued a detailed rebuttal to the charges, it wasn’t before Chief Designer: Prabal Biswas
EVENTS
over $100 billion of the group’s market capitalisation was wiped off Senior Manager: Sourabh Dutta
in just a few days. And while the stocks have stabilised somewhat, PRODUCTION
Chief of Production: Harish Aggarwal
the erosion in market cap was still at a whopping `10 lakh crore or Senior Production Coordinator: Narendra Singh
Production Coordinator: Ayekpam David Meitei
thereabouts as of February 10. Worse, global banks like Credit Suisse,
LIBRARY
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BUSINESS TEAM (MAGAZINE)
securities. And Indian institutions, including State Bank of India and National Head: Siddhartha Chatterjee
Life Insurance Corporation, which have exposure to the group, have Assistant General Managers: Ankush Madan, Girish C,
Priya Gaur (Govt Sales)
come in for intense criticism after the Hindenburg allegations. BUSINESS TEAM (BT TV)
With a massive $107-billion growth plan lined up for the next 10 years, Senior General Managers: Masuma Parekh, Nisha Sharma
SALES STRATEGY
the Hindenburg report has hit Adani like the proverbial iceberg it never General Manager: Sanjay Bhoir
AD OPS
saw coming. The question now is, how will Adani fund his ambitious Deputy General Manager: Avinash Karkera
growth plans, which include a big bet on green hydrogen and a brand Marketing: Vivek Malhotra, Group Chief Marketing Officer
new airport project in Navi Mumbai? More important, questions are Newsstand Sales: Deepak Bhatt, Senior General Manager
(National Sales); Vipin Bagga, General Manager (Operations); Rajeev
now swirling around whether the group can service its massive `2.25- Gandhi, Deputy General Manager (North),
Yogesh Godhanlal Gautam, Deputy Regional Sales Manager (West),
lakh crore debt and make scheduled repayments on time. In our cover S. Paramasivam, Deputy Regional Sales Manager (South)
story, Ashish Rukhaiyar and Krishna Gopalan speak to bankers, analysts,
corporate executives and market participants to put together a detailed Vol. 32, No. 5, for the fortnight February 20, 2023
to March 5, 2023. Released on February 20, 2023.
picture of what Adani’s options look like. What quite a few agree on is that Editorial Office: India Today Mediaplex, FC 8, Sector 16/A, Film City, Noida-201301;
Tel: 0120-4807100; Fax: 0120-4807150 Advertising Office (Gurgaon): A1-A2, Enkay Centre, Ground
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Tel: 0124-4948400; Fax: 0124-4030919; Mumbai: 1201, 12th Floor, Tower 2 A, One Indiabulls Centre
substantial cushion as far as its debt servicing ability is concerned. With (Jupiter Mills), S.B. Marg, Lower Parel (West), Mumbai-400013; Tel: 022-66063355;
Fax: 022-66063226; Chennai: 5th Floor, Main Building No. 443, Guna Complex, Anna Salai,
strong assets on the ground generating predictable cash flows, Adani Teynampet, Chennai-600018; Tel: 044-28478525; Fax: 044-24361942; Bangalore: 202-204 Richmond
Towers, 2nd Floor, 12, Richmond Road, Bangalore-560025; Tel: 080-22212448,
may yet be able to stave off the biggest crisis of his career and live to fight 080-30374106; Fax: 080-22218335; Kolkata: 52, J.L. Road, 4th floor, Kolkata-700071;
Tel: 033-22825398, 033-22827726, 033-22821922; Fax: 033-22827254; Hyderabad: 6-3-885/7/B, Raj
another day. But his ambitious growth plan will have to be made much Bhawan Road, Somajiguda, Hyderabad-500082; Tel: 040-23401657, 040-23400479; Ahmedabad:
2nd Floor, 2C, Surya Rath Building, Behind White House, Panchwati,
more realistic as the funding environment turns challenging. And as the Off: C.G. Road, Ahmedabad-380006; Tel: 079-6560393, 079-6560929; Fax: 079-6565293; Kochi:
Karakkatt Road, Kochi-682016; Tel: 0484-2377057, 0484-2377058; Fax: 0484-370962
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at more explicable levels, the regulators will also be taking a close look (Monday-Friday, 10 am-6 pm) from Rest of India; Toll free no: 1800 1800 100 (from BSNL/ MTNL lines);
Fax: 0120-4078080; E-mail: [email protected]
at the allegations. Clearly, the damage inflicted by Hindenburg—named Sales: General Manager Sales, Living Media India Ltd, C-9, Sector 10, Noida (U.P.) - 201301;
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 8 PHOTOGRAPHIK

CONTENTS March 5, 2023 Volume 32 Number 5

Gold Rush
Gold prices continue
to rise in 2023. As a
result, demand for
the yellow metal
has fallen

10 POINT

High Stakes
Promoters and insti-
tutional investors
raised stakes in many
companies in 2022
even as the equity
market stayed volatile

12 THE BUZZ

Game of
COVER STORY Estimation

20
Forecasts of GDP
growth and inflation
are risky and prone
to major corrections
over time

THE BUZZ
14
Wooing Private
Capex

ADANI
The Finance
Minister has hinted
at creating a
framework to bring
in large private
sector investments

UNDER
into infrastructure

ATTACK
PHOTO MONTAGE BY BANDEEP SINGH

42 HEALTHCARE IPOs
BILLIONAIRE GAUTAM ADANI FACES HIS BIGGEST CHALLENGE AS ,
ALLEGATIONS BY A US-BASED SHORT-SELLER SEND HIS COMPANIES
STOCKS PLUMMETING. LENDERS HAVE TURNED WARY, AND HIS Healthy Sign
MEGA $107-BILLION GROWTH PLAN IS NOW IN JEOPARDY. CAN
Spurred by the
ADANI STAVE OFF THIS CRISIS? AN INSIDE LOOK AT HIS OPTIONS
Covid-19-induced tilt
towards healthcare,
13 health-related
COVER BY NILANJAN DAS firms have gone
public in two years

Business Today 5 March 2023

 THE UNION BUDGET 2023-24
Q&A 64
An Aspirational Budget 84
Finance Minister Nirmala
THE GOOD LIFE:
Sitharaman talks about social
TRENDS
sector spending, capex, the new
tax regime and why this year’s Precious Brews
Budget isn’t a populist one
From ties to the Ming
The Budget Round Table 70; Column: Sanjeev Krishan dynasty to pandas
to silver tips, a look
on Preparing for Amrit Kaal 76; Column: Sumant Sinha at some of the most
on Boosting the Economy 78; Column: Romal Shetty on A expensive teas
globally
Tech-driven India 80

88
E-COMMERCE 34 TECHNOLOGY 48 TECH TODAY

Can Meesho Deliver Profits? Hello Robot Frame it Right

Meesho has climbed to No. 3 in Bots that chat with you and help you Here’s our pick of
India’s e-commerce pecking order on buy stuff are the new rage in e-com- gadgets that will
the back of VC money. Now, it needs merce; these transactions are known capture good videos
to show profits for further growth as conversational commerce and make recordings
hassle-free

92
DOWNTIME

The Yogic Way

Naveen Soni of Lexus
India believes yoga
THE BT INTERVIEW MONEY TODAY helps him cut through
54 60 the clutter and
, concentrate better
Don t get distracted
, by
, In Search of Greener
what you can t control Pastures
Bob Moritz, Global Chairman of PwC, In a scenario where international
talks about dealing with the tough markets have started recovering due
times, ESG and the role of India in the to a slowly stabilising outlook, should
new world order you invest in foreign stocks?

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

Business Today 5 March 2023

8|

PHOTOGRAPHIK
Photograph by GETTY IMAGES
GOLD RUSH
Text by RAHUL OBEROI GOLD PRICES CONTINUE TO RISE IN 2023
AFTER JUMPING IN 2022. AS A RESULT,
SOURCE COGENSIS, WORLD DEMAND FOR THE YELLOW METAL HAS
GOLD COUNCIL, MCX FALLEN, EVEN AS THE INDIAN ECONOMY
REBOUNDS.
Business Today A LOOK AT THE KEY NUMBERS
26 December 2021
 |9

`58,932 13 2
PER 10 GM PER CENT PER CENT
The price of gold—an all-time Surge in prices of the yellow Fall in gold jewellery demand last
high—on February 2, 2023; metal in 2022 compared to year in India—the second-largest
it has increased 8 per cent benchmark equity index BSE consumer of gold globally—as
year-to-date Sensex’s
Business4.4 per26cent
Today gain 2021
December higher prices took away its allure
 THE POINT

HIGH STAKES
There has been a steady rise in the stakes held by promoters and institutional investors of various hues in a tough business
environment. Latest shareholding data shows that promoters, domestic fund managers and global investors have raised their stakes
in many companies in 2022 even as the domestic equity market was volatile due to the geopolitical crisis, rising interest rates and an
exodus of FII money from India. A look at some relevant numbers:
By RAHUL OBEROI and PRINCE TYAGI; Graphics by RAJ VERMA

LEADERS OF THE PACK

TWO ADANI COMPANIES ARE AMONG THE TOP 5 NIFTY FIRMS
THAT HAVE THE HIGHEST PROMOTER HOLDINGS

72.94
Wipro
72.63 72.30
Adani Enterprises
Tata Consultancy Services 66.13
Coal India
65.13
Adani Ports and Special
Economic Zone
Top 5 Nifty companies with highest promoter holding; data as
of December 31, 2022; promoter holding in per cent
Source: ACE Equity
 BANKING ON BANKS FOLLOWING THE MONEY
BANKING, IT AND POWER ARE TOP PICKS OF MFs AMONG NIFTY COMPANIES FOREIGN INVESTORS ARE BETTING BIG ON INDIA’S FINANCIAL SYSTEM

28.69% 23.22% 18.91% 67.22% 49.45% 47.94% 45.10% 44.79%

18.37% 17.71%
ICICI BANK AXIS BANK NTPC HDFC BANK INFOSYS HOUSING DEVELOPMENT AXIS BANK APOLLO HOSPITALS ICICI BANK INDUSIND
FINANCE CORPORATION ENTERPRISE BANK
Top 5 Nifty companies with highest MF holding; data as of December 31, 2022; Source: ACE Equity Top 5 Nifty companies with highest FII holding; data as of December 31, 2022; Source: ACE Equity

HOLDINGS OF GLOBAL INVES- RISE IN THE HOLDINGS OF INDIVIDUAL INVES- INVESTED VALUE OF MUTUAL FUNDS
TORS IN THE NIFTY 500 STOCKS TORS, INCLUDING HNIs, IN NIFTY 500 FIRMS IN IN NIFTY 500 STOCKS; IT IS 18.6 PER
` 48.39 AS OF DECEMBER 31, 2022; IT IS 3.51 2022, TO `21.84 LAKH CRORE ON DECEMBER ` 21.74 CENT MORE THAN THE `18.33 LAKH
lakh crore UP 4.39 PER CENT YEAR-ON-YEAR per cent 31, 2022, FROM `21.10 LAKH CRORE IN 2021 lakh crore CRORE IN 2021

BUILDING BLOCKS MUTUAL PROGRESS INTERNATIONAL CHURN SINGLE SUPPLEMENT

PROMOTERS OF 53 COMPANIES FROM NIFTY 500 IN 85 NIFTY 500 COMPANIES, MUTUAL OVERSEAS INVESTORS (FIIs AND FPIs) CONTINUED IN THE PAST FOUR QUARTERS, INDIVIDUAL
INCREASED THEIR HOLDINGS LAST YEAR AMID THE FUNDS HAVE INCREASED THEIR STAKES IN TO ADD SELECT STOCKS IN 2022 DESPITE OFFLOAD- INVESTORS HAVE RAISED THEIR HOLDINGS IN
ONGOING VOLATILITY IN THE MARKET EACH QUARTER OF 2022 ING SHARES WORTH OVER `1.20 LAKH CRORE LESS THAN 10 PER CENT OF NIFTY 500 FIRMS
Dec ’21 Mar ’22 Jun ’22 Sep ’22 Dec ’22
80.00 30.00 45 45

40 40
70.00 25.00
35 35
60.00
20.00 30 30
50.00
25 25
40.00 15.00
20 20
30.00
10.00 15 15
20.00 10 10

(MF holding in per cent)

(FII holding in per cent)
(Shareholding in per cent)

5.00
10.00 5 5

(Promoters’ holdings in per cent)

0.00 0.00 0 0
Samvardhana CG Power and Vodafone Sundaram UPL Sapphire Zee Gland GR IDFC Aster DM YES Bank Brightcom Angel One Mastek Indian Energy HEG Zensar Sudarshan Birlasoft
Motherson Industrial Idea Finance Foods Entertainment Pharma Infraprojects Healthcare Group Exchange Technologies Chemical
International Solutions India Enterprises Industries
Top 5 companies with highest growth in promoters’ holdings in Nifty Top 5 companies with highest growth in MF holdings in Nifty Top 5 companies with highest growth in FII holdings in Nifty 500; Top 5 companies with highest growth in individual investors’
500; data as of December 31, 2022; figures are for the respective 500; data as of December 31, 2022; figures are for the respective data as of December 31, 2022; figures are for the respective holdings in Nifty 500; data as of December 31, 2022; figures are
quarter Source ACE Equity, exchanges quarter Source ACE Equity, exchanges quarter Source ACE Equity, exchanges for the respective quarter Source ACE Equity, exchanges
 THE BUZZ
ECONOMY

Game of Estimation
Forecasts of GDP growth and inflation are risky and prone to major corrections over time

BY ANAND ADHIKARI

X “WE ACTUALLY CAN’T forecast

all that well, and yet we pretend
that we can, but we really can’t.”
Famous words by Alan Greenspan,
the long-serving former chairman
of the US Federal Reserve, who left
office in 2006 just before the global
financial crisis. Having dealt with
the high and lows of forecasts all his
life, Greenspan would know.
And so it happened that exactly
12 | a year ago, when the economy was
still under the cloud of the pan-
demic, Finance Minister Nirmala
Sitharaman (in picture) presented
the Economic Survey with an
optimistic real GDP growth projec-
tion of 8-8.5 per cent for 2022-23.
Reserve Bank of India (RBI) Gov-

WHAT COULD
GO WRONG
A below normal
monsoon
Elevated inflation
and interest rates
Reduced capital flows
via FDI, FPO, PE and VCs
Sharper rupee
PHOTO BY BANDEEP SINGH

depreciation against the

US dollar
Resurfacing of the
pandemic
Default or big
bankruptcy in global or
domestic market

Business Today 5 March 2023

ernor Shaktikanta Das followed up for India and Indonesia at HSBC, is a In addition, the government’s
10 days later with a forecast of 7.8 bit puzzled by the 6.4 per cent GDP own consumption expenditure, or
per cent. The retail inflation rate, forecast, as her own bank’s estimate revenue expenditure, which is 80
or the consumer price index (CPI), in her research note is far lower per cent of the total expenditure,
was estimated at 4.5 per cent for the at 5.5 per cent. Research teams of is expected to grow by a paltry 1.27
same period. private sector HDFC Bank, rating per cent in 2023-24. In fact, there is
These estimates were thrown agency CRISIL and Axis Mutual a cut in subsidies, and schemes like
out of the window by the sud- Fund, among others, have predicted MGNREGA have lower allocations
den conflict between Russia and lower growth next year. under the revenue expenditure.
Ukraine, the global tightening of So, what could derail the GDP There is a preference for capital
monetary policy, and fall in India’s and inflation forecasts in 2023-24? expenditure, which will grow by
exports. The real GDP will likely India is primarily a consumer- 38 per cent to `10 lakh crore in the
close the year at 6.5 per cent, down driven economy, with consump- next fiscal. Only time would tell
150-200 basis points from the fore- tion accounting for more than whether sustained government
casts. CPI, estimated by RBI at 6.5 half of GDP. In certain corporate capital expenditure will rekindle
per cent for FY23, too, is up by 200 circles, the Budget is being hailed India Inc.’s animal spirits.
basis points from the forecasted as boosting consumption and India’s exports are also weaken-
level of 4.5 per cent. Should one now demand. A case in point is the lower ing due to the global slowdown,
believe RBI’s 2023-24 forecasts of tax structure for those who choose and imports continue to rise on the

UP AND DOWN
The Year Gone By (FY23) The Year Ahead (FY24)
Parameters Projections Actual Parameters Projections Market Estimates
Real GDP 8.0-8.5% 6.5% Real GDP 6.5% 6.0%
Retail inflation 4.5% 6.5% Retail inflation 5.3% 4.5-5.0%

real GDP at 6.4 per cent and retail the new tax regime, which has no back of government capex. This
inflation at 5.3 per cent? exemptions. The government has will put pressure on the current
The answer probably lies in what proposed a reduced tax surcharge account deficit and also the rupee
Greenspan said about economic rate on income above `5 crore to against the US dollar, which has
forecasts. There is always a risk of 25 per cent, bringing down the already depreciated over 10 per
things turning topsy-turvy because maximum tax rate from 43 per cent last year. There is a threat of
of Black Swan events. Madan cent to 39 per cent. “It is unlikely imported inflation, although the
Sabnavis, Chief Economist of Bank that the lower tax rate would boost market is projecting lower inflation
of Baroda, whose research team’s consumption. This new regime than RBI’s forecast. And, if the final
estimates match the government is already a non-starter,” says a print of GDP is lower, there would
and RBI figures, believes that a private banker. In a Budget size of be a negative impact on the fiscal
disastrous monsoon, a drop in `45 lakh crore, the total income tax deficit as well as tax collection.
corporate profitability, a reduction collection—with the bulk under The 96-year-old Greenspan,
in bank credit growth, or oil prices the old tax regime—is only `9 lakh who doesn’t shy away from making
beyond $90 per barrel might affect crore. There are also expectations future projections even today, now
the current projections. “The fore- of slowing pent-up consumption anticipates a US recession. Some
casts are ultimately based on some demand—higher interest rates and would say this is not good news for
assumptions,” says Sabnavis. higher inflation will dampen shop- India. Take it with a pinch of salt if
Experts are already surprised pers’ spirits. The full impact of the you are not betting against India.
by the optimistic GDP numbers. 250-basis point hike in the repo rate
Pranjul Bhandari, Chief Economist will be felt next year. @anandadhikari

Business Today 5 March 2023

 INFRASTRUCTURE for infrastructure projects. “Today,
over 60 per cent of the infrastruc-

Wooing Private
ture funding is being contributed
by them,” says Jaishankar. Also,
following the announcement of the
National Monetisation Pipeline, the

Capex funding ecosystem has expanded

to include instruments like infra-
structure investment trusts and
The Finance Minister has dropped a hint in
infrastructure debt funds.
her Budget speech about the creation of a Meanwhile, the FM has also
framework to bring in large private sector talked about an enabling mechanism
for private sector investment in her
investments into infrastructure. Will it work? speech. “The secretariat might look
at credit guarantees and securitisa-
BY MANISH PANT tion-cum-asset-backed securities
(ABS). There are a lot of outstand-
PHOTO BY RACHIT GOSWAMI
ing loans on the books of banks and
NBFCs like Power Finance Corp. and
the Indian Railways Finance Corp. If
one can come up with a securitisa-

THE PRIVATE
14 |
SECTOR HAS TO
SUPPLEMENT
THE GOVERN-
MENT’S INVEST-
MENTS IN INFRA
PROJECTS
NON-BANKING FINANCIAL COMPANIES AND INTERNATIONAL FINANCE CORPORATI-
ONS HAVE EMERGED AS THE LARGEST SOURCE OF FUNDS FOR INFRA PROJECTS

tion platform to restructure those

X EVEN AS FINANCE Minister Nirmala Sitharaman has asserted the impor- loans and offer them as ABS to
tance of infrastructure in economic growth, apprehensions have been raised institutional and private investors,
about subdued private sector investments in the space. In Budget 2023-24, that could be a good way out,” says
she has allocated capex of `10 lakh crore, the highest in more than a decade. Arindam Guha, Partner-Govern-
Experts such as Rishi Agarwal, MD-India & Head-Asia at consultancy FSG, ment and Public Services Leader at
attribute the low level of private sector participation to a challenging eco- Deloitte India. Similarly, the setting
nomic environment. “It comes back to what the cost of capital looks like. And, up of a credit guarantee facility to
also... there is a clear view of a recessionary market shortly,” he says. Agarwal raise the credit perception of PPP
points out how sunrise sectors such as EVs and green energy have attracted projects would enable private players
sizeable private capital due to the government’s policy support and incentives. to raise long-tenure loans. “When
Theoretically, the private sector has to supplement the government’ invest- you have projects qualifying under
ments in infrastructure. But government investments will still need to be there the mechanism, their ratings will
to provide momentum for private investments, says P.R. Jaishankar, MD of improve to attract investments from
Indian Infrastructure Finance Co. Ltd, the government-owned infrastructure domestic pension funds,” says Guha.
financier. “Till FY14, we were trying to push the public-private partnership Will these steps help attract
(PPP) model,” he adds. The model has resulted in several marquee projects private capital investments into in-
such as the Bandra-Worli Sea Link in Mumbai, the Pune IT City Metro and the frastructure? The caveat: infrastruc-
upcoming mega airports at Noida and Navi Mumbai. ture has a long gestation period.
Besides, non-banking financial companies and international finance
corporations have overtaken commercial banks as the largest source of funds @manishpant22

Business Today 5 March 2023

 THE BUZZ

PHARMA

Eye on the Horizon

With a combined strategy of inorganic and organic measures, Dr. Reddy’s has
chalked out a plan to sustain growth
BY NEETU CHANDRA SHARMA

10
X DRUGMAKER DR. REDDY’S Labo- India business for both Horizon 1
ratories has a two-pronged strategy and 2, which includes ramping up
to keep chasing growth. Coming the internal portfolio, collabora-
in the backdrop of a 27.3 per cent tions, innovation and inorganic op-
per cent
year-on-year growth in revenues to portunities,” says CEO Erez Israeli.
`6,770 crore in Q3FY23, the pharma YEAR-ON-YEAR Dr. Reddy’s is eyeing double-digit
major has classified its short- and GROWTH IN DR. REDDY’S growth in FY24 on the back of its
long-term plans into Horizon 1 and LABORATORIES’ INDIA plan to launch around 30 products
Horizon 2, respectively. It plans to BUSINESS IN Q3FY23 in the US market. It is also investing
chase long-term growth through in various businesses that may sus-
M&As, while focussing on its core Reddy’s plans to explore new areas tain long-term growth. For instance,
businesses of active pharmaceuti- such as digital healthcare services, it is building a global pipeline of
cal ingredients, generics (reverse biologics (drugs made from living biosimilars, developing new chemi-
16 | engineered drugs similar to their things), cell and gene therapy, and cal entities for immune-oncology
branded counterparts), branded ge- disease management, apart from therapy, and building up a neutra-
nerics, biosimilars (biotherapeutic looking for inorganic opportunities. ceuticals (products derived from
products similar in terms of quality, The company is taking a mea- food sources that have nutritional
safety and efficacy to licensed sured approach to inorganic growth and medicinal benefits) portfolio,
reference biotherapeutic products) due to its strength in the domestic along with developing vaccines and
and over-the-counter drugs to grow market, which was visible in the its contract development (CDMO)
over the short term, company of- 10 per cent YoY growth in its India operations. “We are evaluating
ficials say. business in Q3FY23. “We are creat- several inorganic opportunities
For its Horizon 2 bets, Dr. ing several growth engines for the across businesses. We believe all of
these will lead to several growth op-
portunities, both in the short- and
long-term,” says Israeli.
Analysts are also upbeat about
the Dr. Reddy’s stock, considering
the new launches and healthy rev-
enues posted in the recent quarter.
Dr. Reddy’s share price has grown
at 17.75 per cent CAGR over the past
three years. The company’s “ramp-
PHOTO BY GETTY IMAGES

up across geographies on the back of

new launches, strong free cash flow
generation to be driven by Revlimid
(adult cancer-myeloma drug) and
other niche launches and calibrated
cost approach based on better prod-
uct mix,” are positives, as per a
report by ICICI Direct research.
DR. REDDY’S IS EYEING DOUBLE-DIGIT GROWTH ON THE BACK OF ITS PLAN TO
LAUNCH CLOSE TO 30 PRODUCTS IN THE US MARKET IN FY24 @neetu_csharma

Business Today 5 March 2023

 THE BUZZ

X THE UNION BUDGET’S proposal START-UPS

to include non-resident investors
in the scope of angel tax has led
to widespread concern in venture
capital (VC) and start-up circles.
This provision, under Section
56(2)(viib) of the Income Tax Act,
Angel’s Pinch
states that any premium paid above The Budget’s move to include non-resident investors
the fair market value of unlisted within the scope of angel tax has the start-up and
company shares by an investor— investor communities worried
Indian or foreign—will be subject
to taxation. Earlier, this tax was ap-
plicable only for investments made
BY BINU PAUL
by domestic investors.
Start-ups—on whom the tax will
be levied—fear this would hit their
fundraising prospects as foreign
investments are estimated to make
up over 90 per cent of private capital
invested in them. The additional tax
liability on start-ups is expected to
deter foreign investors from betting
on Indian ventures.

GRAPHICS BY RAJ VERMA

“Start-ups that raised capital
would get tax notices asking them to
18 | justify their valuations against ac-
tual performance. If the divergence
of the projections in the valuation
report and actual performance is
high, the tax officer would dismiss
the valuation report and tax all

SPORTS X CRICKET HAS LONG been considered a sport for men but that is
set to change with the inaugural edition of the Women’s Premier
League (WPL). The mega event, created on the lines of the men’s

PUSHING Indian Premier League (IPL), will be held between March 4 and 26.
The BCCI expects the WPL to bring in a seismic change in women’s
cricket and turn it into a money-spinner. BCCI has already raked in

BOUNDARIES
The inaugural edition of
`4,670 crore from the auction of five WPL teams—Mumbai, Delhi,
Bengaluru, Ahmedabad and Lucknow. On average, each team was
sold for `930 crore, compared to the average `500 crore fetched by
the eight IPL teams in 2008. Men’s cricket, however, has tradition-
ally attracted a large audience base. As per financial services firm
WPL is expected to bring in a Elara Capital, the average reach of women’s cricket in India is 20
seismic change in women’s million, and the number for IPL goes up to around 500 million.
cricket in India But broadcasters and advertisers are hopeful, says Anil Jayaraj,
CEO (Sports) at Viacom18 Media. The company has paid `951 crore
BY PRERNA LIDHOO for the media rights of WPL for five years and Jayaraj is confident
that this will prove to be an invaluable asset. “My philosophy is that

Business Today 5 March 2023

share premiums as income. This
would lead to tax litigation during
which no investor would invest, as
TAX PANGS are more favourable.
Rahul Singh, Co-founder of
eco-friendly products maker Eco-
any capital they invest may be used The Union Budget 2023- Soul Home, says the amendment
to clear the company’s angel tax 24 seeks to extend the increases the risk of litigation for
liability,” Siddarth Pai, Co-founder scope of angel tax provisions Indian start-ups as they primarily
of VC firm 3One4 Capital; and Co- to transactions involving depend on global investors for
Chair, Regulatory Affairs Council, foreign investors funds. “It may also incentivise
Indian Venture and Alternate Capi- start-ups to relocate overseas
tal Association (IVCA), wrote in an Investors fear this would to avoid paying taxes. India-
online post. lead to more tax litigations registered domestic alternative
Pankaj Makkar, MD of Bertels- and instances of VC money investment funds are exempted
being used to clear angel tax
mann India Investments, says that from this, but a significant por-
liabilities
while the intent is right, the rules as tion of growth- and late-stage
prescribed could unintentionally capital is foreign in nature,” says
Start-ups worry the
impact cases such as convertible additional tax liability
Vinod Shankar, Co-founder and
notes (a short-term debt utility that would decrease foreign Partner of early-stage VC fund
converts into equity). investment, which constitutes Java Capital. Start-ups recognised
The Budget proposal has left the majority of start-up funding by the Department for Promotion
start-ups and investors surprised as in India, thus hindering their of Industry and Internal Trade are
the Economic Survey 2022-23 had funding prospects exempt from taxation. But it’s not
placed special emphasis on simplify- a blanket exception. Shankar says
ing procedures for capital flows to The new angel tax DIPP’s definition of a start-up “is
encourage India-focussed start-ups proposal is expected to narrow, and it does make it a chal-
give a further push to start-up
to shift their domicile to India. Many lenge to fund Series A+ stages”.
flipping, which refers to | 19
start-up founders and investors are companies setting up The start-up and investor
of the view that such restrictions headquarters in overseas communities have appealed to the
will give a further push to start-up locations with favourable legal government to reverse its deci-
flipping—a term used to describe and tax laws sion and are awaiting a favourable
companies setting up headquarters resolution.
in overseas destinations where legal
environments and taxation policies @binu_t_paul

your business objectives must be achieved. Our first objective is

financial and the second is enhancing the brand’s reputation,” he
says, adding that every event needs to stand on its own. Plus, there’s
the larger goal of aggregating audiences for the app (Jio Cinema)
that WPL is expected to do, and the interest from advertisers has
also been immense, he adds. This investment, says Karan Taurani,
senior VP at Elara Capital, can pay rich dividends only in the long
term, provided women’s cricket attracts a mass following. “WPL
will bring in a wider target audience to market its brands to women.
Return on capital employed would improve in the medium to long
term only if it is accepted in a big way and if media rights revenue
has a multiplier impact at the next round of auctions in CY28.”
For WPL to garner a scalable viewership is certainly an uphill
task. But stakeholders are in it for the long haul and are willing to
put in the work required to ensure WPL’s victory on the pitch.

@PLidhoo
PHOTO BY GETTY IMAGES
Gautam Adani,
Chairman and
Founder, Adani Group
 COVER STORY ADANI

GAUTAM ADANI’S EMPIRE

HAS BEEN BAT TERED AND
BRUISED BY ALLEGATIONS
OF STOCK MANIPUL ATION
AND FRAUD LEVELLED BY
AMERICAN SHORT-SELLER
HINDENBURG RESEARCH.
AS THE BILLIONAIRE FIGHTS
BACK WITH SEVERAL
CONFIDENCE-BUILDING
MEASURES, HIS COMPANY
STOCKS CONTINUE TO
WOBBLE AND GLOBAL
BANKERS TURN WARY. CAN
HIS MEGA PL ANS SURVIVE
THIS ONSL AUGHT ?

BY ASHISH RUKHAIYAR AND KRISHNA GOPALAN

PHOTO BY BANDEEP SINGH

 THE
ROAD AUTAM ADANI, 60, is like
the proverbial cat with
But with the circumstances having
changed, the management deliber-
AHEAD nine lives. The highly ated on whether to look at overseas
controversial school markets to raise money, shelve the
dropout-turned-global issue altogether, or lower the offer
business tycoon has faced price. In the end, Adani and his ‘A’

1
Needs to strengthen countless challenges team stuck to their guns and went
balance sheet and in his lifetime, even death, and ahead as originally planned. After
reduce debt only emerged stronger. In 2008, much huffing and puffing, the FPO
the Adani Group Chairman scraped through on the last day,

2
Could divest equity
in group firms to
and Founder survived the 26/11 January 31, with a subscription of
raise funds terrorist attack at Mumbai’s Taj 1.12 times, thanks to sustained bid-
Mahal hotel, where he was dining ding by institutions, family offices

3
Needs to review when the attackers struck. A and high net-worth individuals.
immediate growth/ decade prior, on New Year’s Day of The same day, even as Adani
expansion plans 1998, Adani was kidnapped by two Enterprises’ FPO hobbled past
gangsters in Ahmedabad, and was the finish line, Gautam Adani was

4
Markets to closely held to ransom. Whether he paid pictured in Israel with its Prime
monitor loan
the ransom or not is not known. Minister Benjamin Netanyahu,
repayments
Neither is it consequential. smiling assuredly as his Indian

5
ESG, sustainability What’s important is: he sur- conglomerate acquired Israel’s key
compliance needs vived. Both times. Haifa port for $1.2 billion. Adani
to be prioritised Will he survive Hindenburg? was trying to send a signal to the
There is no evidence to suggest markets—this was just another
anything to the contrary, at least day at the office; he was on top of
22 | not yet, albeit the Adani empire the situation. After all, his group
CONFIDENCE- has shrunk dramatically since the spans key infrastructure seg-
BUILDING US-based short-selling research ments like airports, ports, roads,
MEASURES firm’s allegations of accounting power and cement, among other
fraud, stock manipulation and things, which have physical assets
f Prepaid $1.1 billion to
routing of funds through overseas generating enough cash to stave
release pledged shares
shell companies were revealed in off any worries. Under normal
f Share pledges its report on January 24 (see chart circumstances.
were due for maturity in ‘Hindenburg Alleges…’). Despite a But circumstances were not
September 2024 413-page rebuttal to the charges, normal and, clearly, Adani’s sig-
which Hindenburg dismissed as in- nals were not having their desired
f Coupon payments consequential, Adani’s listed firms effect. On February 1, global
on dollar-denominated were battered by the markets, banks like Credit Suisse, Citi and
bonds done on schedule
recovering now and then only to Standard Chartered stopped
plunge further on more bad news. accepting Adani’s bonds and se-
f Adani Group mulling
independent assessment All through this mayhem, the burly curities as collateral, resulting in
of its firms billionaire has maintained a stoic a hammering of group stocks. The
posture, once in a while floating same day, the group called off the
f Assessment to look a confidence-building measure FPO. Shares of Adani Enterprises,
into compliance with all here, and another there (see chart which had touched a high of `4,189
requisite regulations ‘Confidence-Building Measures’). in December 2022, plunged to a
On January 27, three days after 52-week low of `1,017 on February
f Highlighting strong the Hindenburg assault, the `2.4- 3 (both intra-day trading figures).
guidance, cash flows in
latest financial results
lakh crore Adani Group’s mother- Since January 24, when the Hin-
ship, Adani Enterprises, opened its denburg report became public,
f FPO withdrawal much-anticipated `20,000-crore shares of Adani Enterprises, Adani
will not affect existing follow-on public offering (FPO). Green Energy, Adani Total Gas
business, future plans,
says Gautam Adani

Business Today 5 March 2023

 COVER STORY ADANI

BONDS DUE FOR REPAYMENT

and Adani Transmission more
than halved in a matter of days,
wiping off over $100 billion in Company Issued in Amount When due
market capitalisation in the big-
Adani Green May 2019 500 2024
gest stock rout Indian markets
have seen, though the losses have Adani Green Sep 2021 750 2024
been partially recouped. Adani Ports & SEZ Jul 2019 650 2024
“I am not surprised, since the Adani Transmission Aug 2016 500 2026
Adani Group is heavily leveraged
and the high debt is a cause for Adani Ports & SEZ Jun 2017 500 2027
concern,” says Mark Mobius, the Adani Ports & SEZ Jul 2020 750 2027
widely followed global investor and Adani Enterprises 2022 750 2029
Founder of Mobius Capital Part-
Adani Ports & SEZ Jul 2019 750 2029
ners LLP. So much so that capital
markets regulator Securities and Adani Transmission Feb 2020 1,000 2030
Exchange Board of India (Sebi) has Adani International Terminal Dec 2020 300 2031
also got into action. “Sebi is already Adani Ports & SEZ Jan 2021 500 2031
enquiring into both the allegations
Adani Transmission Jul 2021 300 2031
made in the Hindenburg report as
well as the market activity imme- Adani Ports & SEZ Jul 2021 300 2032
diately preceding and post the pub- Adani Transmission Nov 2019 500 2036
lication of the report, to identify Adani Green Oct 2019 362.5 2039
violations of Sebi regulations...,”
Adani Ports & SEZ Jul 2021 450 2041
the regulator told the Supreme
Court on February 13. Adani Transmission Mar 2020 400 2050
Questions now swirl around Total 9,262.50
how the group would manage
AMOUNTS IN $ MILLION SOURCE COMPANY, BT RESEARCH
to salvage its reputation and
service its staggering gross debt
of `2.25 lakh crore. For Adani,
who is used to lenders chasing
THE $100-BILLION-PLUS CAPEX PLAN
him to fund his various projects, Project Amount ($ billion)
the changed circumstances are Green hydrogen 60
bound to pose serious challenges.
Airports 15-20
How will Adani, a man perceived
to be close to the ruling political Data centres 10
dispensation, recover from this Others 17-22
crisis? There is a lot at stake for his
NOTES: (A) THIS WAS ANNOUNCED JUST BEFORE THE ADANI ENTERPRISES’ FPO
investors, joint venture partners, (B) THE CAPEX OUTLAY WAS FOR THE NEXT 9-10 YEARS SOURCE COMPANY, BT RESEARCH
lenders and the family of share-
holders. The coming weeks and

T
months are expected to see the
Adani story continue to play out HE KEY FOR the group is The other major issue is the
as the embattled billionaire—who to strengthen the balance limited retail holding in Adani
has dropped out of the global top sheet and probably cut Group stocks—the promoters hold
20 billionaires’ list (he was at No. down on the number of anywhere between 57 per cent (in
24 as of February 14)—struggles projects... now is not the time to the recently acquired ACC) and 88
to keep his empire and investment raise debt but to reduce it,” says per cent (in FMCG major Adani
plans, earlier estimated at $107 Mobius, who generally advises in- Wilmar)—which Adani tried to
billion over 9-10 years, on course. vestors to avoid heavily leveraged partially correct through the
The question, then, is: where does companies in a rising interest rate FPO of Adani Enterprises. “They
the Adani Group go from here? environment globally. wanted to increase the public

Business Today 5 March 2023

 COVER STORY ADANI

FOLLOWING TH
float. That made sense, but the Hindenburg report was
totally unexpected,” says a banker familiar with the
group. Another corporate banker who has lent to the
HINDENBURG group says equity valuation has little meaning. “We
ALLEGES… have never lent against equity. The Adani Group went
for leveraged growth, which was at a time when debt was
easily available. In the new scenario now, expansion will
be difficult,” he says.
BRAZEN STOCK MANIPULATION The view on the street is that until a strategic investor
AND ACCOUNTING FRAUD puts in cash in one of the operating firms, raising money
SCHEMES would be a challenge. “That will entail a process of due
diligence and can address some of the issues raised by
Hindenburg,” says a banker. The conglomerate could
still look at foreign banks, even as domestic lenders
SUBSTANTIAL DEBT, SHARE including State Bank of India have come under scrutiny
PLEDGING AND PRECARIOUS over their exposure to the group. In fact, the bulk of the
FINANCIAL FOOTING group’s incremental funding for new businesses and
acquisitions in recent years has come through overseas
sources like foreign banks and bonds. Large acquisitions,
such as cement, have been fully funded by foreign banks,
24 | stated a report by financial services firm CLSA.
SHELL COMPANIES IN
MAURITIUS; ROUND-

G
TRIPPING OF FUNDS OING AHEAD, while the Adani Group is among
the Top 3 across the businesses it operates in—
ports, airports, power, cements, solar panels,
etc.—it would still need funds for expansion
ADANI GROUP SUBJECT OF such as in Adani Ports, where 100 million metric tonnes
FOUR MAJOR GOVERNMENT capacity will be added, or the massive expansion for
FRAUD INVESTIGATIONS airports including the new one in Navi Mumbai, or to
fund more buyouts in the cement sector. Undoubtedly,
the terms of lending would be different now. “For any
corporate, the credit line is its lifeblood. Any hindrance
RAJESH ADANI ACCUSED BY to that will have a cascading effect and at this point, it is
DRI FOR ALLEGED ROLE IN an area of concern,” says Mahesh Singhi, Founder & MD
DIAMOND TRADING IMPORT/ of Singhi Advisors, an M&A advisory firm. Creditors
EXPORT SCHEME and other bond holders, he says, need to take a long-term
approach to the Adani Group businesses from now on.
“That’s what they did when they lent money. Nothing
SAMIR VORA ACCUSED BY should change when it comes to that. Adani is certainly
DRI IN THE SAME DIAMOND not a Satyam and all its businesses are fundamentally
TRADING SCAM well-placed.” Singhi says the assets are as hard and real
as the liabilities are.
Indeed, the group’s assets are valued higher than even
its astronomical debt. The total debt of the group’s seven
VINOD ADANI ALLEGEDLY
listed entities—Adani Enterprises, Adani Ports & SEZ,
MANAGED NETWORK OF Adani Power, Adani Green Energy, Adani Transmis-
OFFSHORE ENTITIES TO
FACILITATE FRAUD

Business Today 5 March 2023

HE WHIRLWIND
sion, Adani Wilmar and Adani Total Gas—was pegged at
around `2.25 lakh crore at the end of FY22. Total assets,
on the other hand, were valued at `4.1 lakh crore, per
data from corporate database ACE Equity. Further, the ADANI
cumulative net profit of the seven companies in FY22 was RESPONDS…
nearly `13,200 crore, with none in the red. Add recent ac-
quisitions ACC, Ambuja Cements and NDTV to the mix,
and the cumulative profit goes up to more than `18,800
crore. There is also the extra cushioning of the seven ALLEGATIONS MADE
companies’ total cash reserves of over `30,000 crore. WITH MALA FIDE INTENTIONS
In addition, Vinit Bolinjkar, Head (Research) at AND LACKS CREDIBILITY, ETHICS
Ventura Securities, points out that at the group level,
the Ebitda generated is around `50,000 crore per year.
“They could pull back on their investments in hydrogen
or reduce the planned capacity in green energy. That SELECTIVE, MANIPULATIVE,
will help reduce the debt levels,” he says, adding that on INCOMPLETE EXTRACTS OF
the debt burden, the domestic piece is well backed by as-
DISCLOSED INFORMATION
sets and healthy cash flows from its businesses. “In the
international markets, the bonds have back-ended pay-
ments and there is no serious cause for concern. Their
approach has been about projects with scale and a domi- | 25
HINDENBURG AIMS TO
nant market share. Now, that needs to be fine-tuned in
a few places.” Bolinjkar explains that projects like green PROFIT THROUGH SHORT
energy give not just very high operating margins (in POSITIONS
excess of 90 per cent) but also throw up enough cash to
service existing debt.
Speaking of energy, in yet another setback, Euro-
pean multinational energy major TotalEnergies, which DIAMOND EXPORTS MATTER
has a stake in Adani Total Gas and Adani Green, has CLOSED BY CESTAT; ORDER
put on hold its hydrogen partnership with the Indian CONFIRMED BY SC
conglomerate, although it said that its $3.1-billion
investment in the group is still healthy. “It makes no
sense to add more (projects) until there is clarity.
Adani has to explain the allegations,” Patrick Pouy- CASES AGAINST RAJESH ADANI,
anne, CEO of TotalEnergies, said in an earnings call in
VINOD ADANI AND SAMIR VORA
early February.
Incidentally, rating agencies—whose words matter DISMISSED IN GROUP’S FAVOUR
in the bond market—seem to be divided over their
outlook on the Adani Group. S&P cut its outlook on
two group firms (Adani Ports and Adani Electricity),
ALL RELATED PARTIES,
and Moody’s downgraded its outlook for Adani Green
Energy, Adani Green Energy Restricted Group, Adani TRANSACTIONS DISCLOSED
Transmission Step-One and Adani Electricity Mumbai AS PER INDIAN LAWS
from stable to negative. On the other hand, Fitch said
loans to all Adani Group entities “generally account
for 0.8-1.2 per cent of total lending for Fitch-rated
Indian banks… Even in a distress scenario, it is STRONG INTERNAL CONTROLS
AND AUDIT CONTROLS IN ALL
GROUP FIRMS

Business Today 5 March 2023

 ADANI’S ICEBERG
unlikely that all of this exposure
would be written down, as much
of it is tied to performing proj-
IN ITS OWN words, (say, `X or `X+10). If ing short positions on ects”. Fitch added that Indian
Nathan Ander- the value falls to, say, them. Its report on banks’ exposure to the group is
son’s New York-based `X-10, the borrower US-based automaker
not enough to present a substan-
Hindenburg Research buys back the shares Nikola grabbed head-
is a firm that spe- from the market at `X- lines in September tial risk to the banks’ standalone
cialises in forensic 10, and returns them 2020, scything the credit profiles. For instance, SBI
financial research on to the lender, thereby stock’s value from Chairman Dinesh Kumar Khara
issues like accounting making a profit. Of $66 in June 2020 to has publicly said his bank’s ex-
irregularities, undis- course, if the bet fails around $2.5 currently. posure of around `27,000 crore
closed related-party and the shares climb Hindenburg had was just 0.9 per cent of its total
transactions, illegal in value instead of taken a short posi-
or unethical business falling, then the bor- tion in Nikola before
loan book.
or financial reporting rower makes a loss, releasing its report. Despite the pummelling
practices, and also which is why this is so Similarly, the shares the group has received of late,
undisclosed regulato- risky. of Genuis Brands, bankers and analysts continue
ry or financial issues, Hindenburg took the target of a June to express confidence in the
among others. the risk, and its ruse 2020 report, fell from high-quality assets owned by the
Noble objectives. worked, although it is around $7 to $1.50
group. Says an infrastructure
But there’s also a difficult to ascertain with Hindenburg
slightly different the quantum of gains again having a short sector chief executive who sold
underlying to this de- it might have made. position. Shares a key asset to the Adani Group
scriptor. Hindenburg Before releasing its of China Metal Re- a few years ago: “It’s not as if
is a short-seller, which report, Hindenburg sources Utilization, the assets do not have value. If
the valuations have soared to
unrealistic levels, it does not
26 | HINDENBURG MAKES A PROFIT take away from the fact that
FROM ITS REPORTS WHILE EXPOSING the assets have a lot of intrinsic
CHINKS IN FIRMS’ ARMOUR value.” Take the case of Adani
Power, which sits on a capacity
of 20 GW. At today’s valuations,
means it could make took short positions Predictive Technol- a potential buyout can be struck
a profit from its damn- on Adani Group firms. ogy Group and HF at `5 crore per MW taking the
ing reports as well, (In India, there are Foods, among others,
in addition to expos- many restrictions all witnessed huge
value of the company to `1 lakh
ing chinks in firms’ imposed on short- falls in the months crore. Knocking off a debt of
armour. Adani Group selling and, hence, following reports by `40,000 crore in Adani Power’s
companies’ implosion Hindenburg took Hindenburg, which books, the equity component
in the stock markets its short positions had taken short posi- will still fetch `60,000 crore.
is the outcome of one through Adani’s US- tions in each of the (Of course, in the case of a dis-
such shorting invest- traded bonds and companies.
tressed asset, the story is quite
ment by Hindenburg. non-India-traded de- Ostensibly, Ander-
Going short on a rivative instruments.) son and Hindenburg different. For perspective, this
stock is a complex Subsequently, the would have made January, Vedanta acquired the
and risky investment markets got jittery money from these debt-ridden Meenakshi Energy’s
manoeuvre designed after the report was stocks’ crashes. 1,000-MW plant in Andhra
to generate a profit released, and Adani This profit-making Pradesh for `1,140 crore or
if the share price of Group firms lost $100 objective puts to `1.14 crore per MW. But Adani’s
a ‘shorted’ firm falls, billion-plus in market question the motive
power plants are not distressed
especially one that capitalisation. of short-sellers such
is perceived to be Hindenburg has as Hindenburg, albeit by any stretch.)
overvalued. How made a habit of the the corporate gover- Using the same logic for the
does it work? Shares shorting strategy. nance aspects of their cement businesses, Ambuja and
are borrowed at, say, In 2020, the firm reports surely can’t ACC, which Adani acquired from
`X, from a broker released reports on be wished away. Swiss major Holcim for $10.5
and then sold at their as many as seven billion, leave behind an equity
current market value companies after tak- —Ashish Rukhaiyar

Business Today 5 March 2023

 COVER STORY ADANI

A PERFECT STORM
US-based short-seller Hindenburg Research, led by Nathan Anderson, released a
scathing report on the Adani Group on January 24, 2023. Here’s what followed

JANUARY 31 FEBRUARY 3
JANUARY 27 FPO subscribed 1.12 times RBI says the banking
with institutions, HNIs, sector is resilient and stable;
Adani Enterprises corporates bidding; retail Adani Enterprises shares
FPO opens; Adani investors stay away touch 52-week low of `1,017
Group stocks go into
free-fall mode
FEBRUARY 1
Adani Enterprises calls off FEBRUARY 4
FPO; going ahead with FPO
will not be “morally correct”, If any information comes
says Gautam Adani; Credit to our notice, action
JANUARY 29 Suisse stops accepting Adani will be taken after due
bonds as collateral examination, says capital
Adani Group refutes
Hindenburg’s allegations, markets regulator Sebi
releases 413-page
response FEBRUARY 2
S&P Dow Jones Indices
decides to remove FEBRUARY 6
Adani Enterprises from
sustainability indices Promoters prepay $1.1 billion
to release share pledge
JANUARY 30 in three Adani Group firms

LIC clarifies that its

exposure towards Adani
Group firms is less than 1
per cent of its total assets
under management FEBRUARY 10
Moody’s revises outlook on
four Adani firms to negative
from stable; MSCI lowers free
float of Adani Enterprises,
Adani Transmission, Adani
Total Gas and ACC

W
Nathan Anderson
Founder,
Hindenburg Research

PHOTO BY GETTY IMAGES

Business Today 5 March 2023

 SHORT AND SQUEEZED
value of more than `90,000 crore after knocking Adani Group stocks have been pounded in
off their debt of `50 crore. recent times at the bourses
The Adani Group did not respond to a detailed 120
questionnaire from Business Today for this story. S&P BSE
SENSEX
110

M
100
UCH AS THE robustness of the businesses
is acknowledged, but the ability to raise 90
money with ease, as it was earlier, is
bound to be hit as lenders turn jittery 80
after the Hindenburg charges. Despite the brave
70
faces, even Indian lenders will need to think hard
before cutting big cheques for the group in the 60
near future.
As part of his media interactions in January— 50
ahead of the ill-fated FPO—Jugeshinder Singh,
40
Group CFO of the conglomerate, had said that $50
billion was the planned capex for the green hydro- 30
gen business alone. Lenders point to the inherent
difficulties of this exercise in the domestic and 20
international markets given the current situation. JAN 2, JAN 24, FEB 14,
2023 2023 2023
On the face of it, the stakes outside Indian shores
are more complicated. After the Credit Suisse and ADANI ENTERPRISES ADANI GREEN ENERGY ADANI PORTS AND
Citi actions, S&P Dow Jones has removed Adani SEZ ADANI POWER ADANI TOTAL GAS ADANI TRANSMISSION
ADANI WILMAR S&P BSE SENSEX
Enterprises from its sustainability indices while
28 | Morgan Stanley Capital International has lowered BASE=100
SOURCE ACE EQUITY
the free float factor of Adani Enterprises, Adani
Transmission, Adani Total Gas and ACC.
Bankers say that in the international market,
some investors will hold on to the group’s bonds BOTTOM LINE
but the worry is that “investors generally panic”. Profit across all Adani Group firms
Besides, they explain, there are “vulture investors”
who will come in to push the price down and lead to 6,000
higher bond yields. “At the crux is to restore confi- 5,000
dence to ensure the repricing of bonds takes place.
Besides, the vulture funds will be hugely attracted 4,000
to the yields, which they don’t see in any other part 3,000
(PAT IN ` CRORE)

of the world,” says a corporate banker.

Speaking of confidence-building measures— 2,000
a term used more in diplomacy and military 1,000
warfare—the group is leaving no stone unturned.
On February 6, the group said that the promoters 0
have prepaid $1.1 billion to release share pledges in -1.000
three group companies—Adani Ports & SEZ, Adani
-2,000
Green and Adani Transmission—although it was
accompanied by the usual speculation around mar- -3000
POWER
ENTERPRISES

& SEZ

ENERGY

TRANSMISSION

WILMAR

TOTAL GAS
ADANI

ADANI

ADANI GREEN

ADANI

ADANI

ADANI
ADANI PORTS

gin calls being triggered that typically happen post

a sharp and swift fall in share prices. The money for
this came from the group’s unlisted entities, which
are said to have reserve capital of close to $3 billion
to meet any contingency.
FY18 FY19 FY20 FY21 FY22
Then, the development related to timely coupon
SOURCE ACE EQUITY

Business Today 5 March 2023

 COVER STORY ADANI

STRONG ASSET BASE

All Adani Group firms have more assets than debt

ADANI ENTERPRISES ADANI GREEN ENERGY

70,000
1,20,000 58,605.00
1,01,586.36 60,000
1,00,000 50,000

(IN ` CRORE)
(IN ` CRORE)

40,000
80,000 53,612.00
30,000
15,462.89
56,177.66 20,000
60,000
10,000
40,508.04 9,864.15
40,000 0
FY18 FY19 FY20 FY21 FY22
17,636.69 TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY
20,000

0
FY18 FY19 FY20 FY21 FY22 ADANI TRANSMISSION
47,464.11
50,000
TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY
40,000
(IN ` CRORE)

30,000
ADANI PORTS & SEZ 17,873.69 32,870.23
20,000
1,00,000
93,883.38 10,000 12,276.97
80,000 0 FY18 FY19 FY20 FY21 FY22
(IN ` CRORE)

TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY

60,000
46,064.58
45,752.28
40,000 ADANI WILMAR
22,204.16 25,000
21,317.26
20,000 20,000
(IN ` CRORE)

15,000
0 9,749.40
FY18 FY19 FY20 FY21 FY22
10,000
TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY
5,000 2,568.11
2,244.02
0
ADANI POWER FY18 FY19 FY20 FY21 FY22
TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY
1,00,000
81,981.02
80,000 ADANI TOTAL GAS
(IN ` CRORE)

69,548.75
5,000
60,000 4,415.25
(IN ` CRORE)

4,000
52,834.81 2,802.54
48,795.68
40,000 3,000

2,000
20,000 1,344.70 995.47
1000

0 0
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY TOTAL ASSETS TOTAL DEBT SOURCE ACE EQUITY

Business Today 5 March 2023

 In May Barred The Adani
2007, the from Secu- Group
SKIRMISHES Securities
and Exchange
market
for two years for
rities
Appellate
comp-
anies filed for
WITH SEBI Board of India (Sebi)
barred certain
abetting Ketan
Parekh in
Tribunal (SAT)
stayed the Sebi
consent and
the matter
promoter entities manipulating order in July was settled
of Adani Export shares 2007 with Sebi

payments on dollar-denominated wishes to remain anonymous. ture group in India. For many
bonds was also disseminated He says it is a good opportunity years, one has seen how the
promptly by the Adani Group. As to change the composition of likes of GMR, GVK and Lanco
things stand, the repayment sched- the board and just up the game have struggled, and Adani is
ule is on track (See table ‘Bonds Due on corporate governance. the only survivor,” says Deven
for Repayment’) with around $2 bil- Analysts point out that Choksey, Promoter and MD of
lion needing to be repaid by the end Adani’s play is in the infrastruc- KRChoksey Group, a wealth
of next year. Just on the basis of the ture space, which is one that has management firm. He picks out
`30,000-crore cash on the books, serious entry barriers. “He is the government’s thrust on the
meeting that is not a challenge. the only pure-play infrastruc- sector through the allocation of
Further, the group announced
that it is mulling an independent
assessment in terms of compli-
ance and governance to ensure all
transactions and disclosures have “The key for the group is
30 | been made as per the requisite regu- to strengthen the balance
lations. It is also planning to prepay sheet and probably cut
$500 million worth of loans that down on the number of
are due in March, which relate to a
part of the loan raised to finance the projects in order to reduce
purchase of Holcim’s cement assets the debt. So, now is not
in India. The group was earlier mull- the time to raise debt but
ing refinancing the loans, but then [to] reduce it”
thought it best to prepay given the
current scenario. The latest finan- MARK MOBIUS
cial numbers of some of the group FOUNDER, MOBIUS CAPITAL
companies have also highlighted PARTNERS LLP
strong guidance, future cash flows
and the quantum of debt that will
be reduced over time—all aimed “A valuation of Adani
at addressing the concerns in the Enterprises with upbeat
domestic and international markets. assumptions on revenue
Speaking of domestic markets, growth and operating
banks are expected to be reticent
till there is clarity on the group’s
margins... without factoring
financial structure. “There is a [in] the Hindenburg
good chance that the group will accusations... yields a value
go into consolidation mode for the of about `945 per share”
next 1.5-2 years. Diluting stakes
in profitable companies may be a ASWATH DAMODARAN
sensible and viable option,” says PROFESSOR, STERN SCHOOL OF
a leading investment banker who BUSINESS, IN A BLOG POST

Business Today 5 March 2023

 COVER STORY ADANI

In November Adani Separately, All Adani

2020, Ports, the capital Group
markets Adani markets companies
watchdog Sebi Total Gas and regulator had responded with
sought certain Adani sought required details; no
information from Transmission information show-cause
three Adani Group were the subject from Adani notice has been
companies of Sebi’s probe Global as well issued by Sebi as yet

SOURCE DRHPS

more than `20 lakh crore over Choksey, who adds that since dramatic run-up, the entire Adani
the last three Union Budgets. “In these projects “are meant for de- pack surged northward for the better
the infra space, players have to cades and centuries, valuations part of 2022, increasing the group’s
deal with the government, to- must be calculated based on market capitalisation by over 100 per
gether with high interest costs, current value of currency under cent. This surge also catapulted Gau-
execution of projects using right replacement costs and time”. tam Adani to the position of the third-
technology in a time-bound The critical issue relating to richest person on the planet for a fair
manner. Judging a player only the Adani Group seems to be period, before Hindenburg struck.
on the basis of its stock price is the high valuations the stocks Most market observers now say the
an incorrect approach,” reasons commanded till last year. In a stocks were seriously overvalued
despite assets being on the ground.
Aswath Damodaran, one of the
world’s most renowned experts on
valuations, believes that the fair
“There is not even value of Adani Enterprises shares is
1 per cent risk for `945, as opposed to its current trad- | 31
policyholders [and] ing value of around `1,600. “Inves-
shareholders [from tors in family group companies, no
matter how honourable the family,
LIC’s holdings in the are buying into cross-holdings,
Adani Group]. There opacity and the possibility of wealth
will be no impact on the transfers across family group com-
investments... It is just a panies. Those risks increase, if the
family group companies are built
drop in the ocean” around political connections...,” he
M.R. KUMAR said on his blog.
CHAIRMAN, LIC But valuations apart, despite the
high debt levels, market experts
don’t reckon that there is a serious
“The markets have concern around debt. “Debt is not
brought some discipline really a concern for the group as it
to the Adani Group has good quality assets. The only
concern was the high valuation,”
stocks as shares of some
says Samir Arora, Founder of Helios
of the group firms were Capital, a portfolio management
highly valued. Debt is not services firm. “The message from
really a concern... as it the market seems to be that ‘don’t be
so aggressive in your growth; focus
has good quality assets” on sustainable growth’. This ongoing
issue, however, could impact the fu-
SAMIR ARORA ture growth plans of the group. The
FOUNDER, HELIOS CAPITAL markets have brought some amount

Business Today 5 March 2023

 COVER STORY ADANI

of discipline to the Adani Group will not impact any other group compared to a loss of `12 crore in
stocks as shares of some of the group company. On management Q3FY22. Other group companies’
companies were highly valued.” bandwidth, one can say Gautam Q3FY23 results have been mixed.
Adani and his family members Adani Ports & SEZ recorded

T
are involved in all companies of consolidated revenue growth of
HERE IS NO denying the fact the group. Though there could 17 per cent, but profits fell 16 per
that the top brass of the be an issue here, each company is cent. Adani Power’s revenues rose
Gujarat-headquartered con- headed by a professional CEO,” 45 per cent, but net profit plunged
glomerate will have to go back says Gupta, a former ED of Sebi. 95 per cent. And Adani Green’s
to the drawing board and review The financial health of the revenues grew 53 per cent, and
every single aspect of its growth group may not be an immediate profits also doubled. Still, the
strategy. “Adani Group’s calling off concern, but that is not stopping companies’ shares are on brittle
of its fully-subscribed FPO has left investors from questioning the ground, and it will take a while for
more questions unanswered. One management on its strategy. In things to return to normal.
question that is awaiting clarity is an interview to BT TV, LIC Chair- So, let’s get back to our origi-
how the group intends to meet the man M.R. Kumar said that while nal question: Will Gautam Adani
objectives as stated in the prospectus the insurance behemoth has not survive Hindenburg?
of the FPO,” says Sumit Agrawal, reduced its exposure in the Adani The market’s general as-
Managing Partner of Regstreet Law Group (less than 1 per cent of its sessment is that he will, but the
Advisors and a former legal officer of
Sebi. Among other things, the aim of
the `20,000-crore FPO was to repay

`2,25,000
debt amounting to `4,165 crore and
fund capex for businesses related to
green hydrogen, airports and roads to
the tune of `10,869 crore.
32 | A top executive close to the group
says there is no question of defaults on CRORE GROSS DEBT OF ADANI
debt for the next three to five years. GROUP COMPANIES
“The operating businesses generate
high levels of cash, and are in a good
position to service debt,” he says. This
is exactly what the group seems to be total assets under management bruise will last long and need
telling the markets—that its business adding up to around `36,000 special treatment. For one, Adani
model has been centred on predictable crore) after the Hindenburg will need to get realistic about his
cash flows from existing businesses. report, it wants the embattled ambitions—he has reportedly
“For a group of this size, the debt that conglomerate to “throw some halved the growth target to 15-20
it has is not a big amount especially light on what is happening in the per cent for FY24 and might hold
when you see that all businesses are market”. “We will be calling them back on fresh capex for some
asset-based and are appreciating [the Adani Group management] time. For another, the markets
in value. They also have cash flows sometime just to know the busi- will have to pare expectations
to support that quantum of debt,” ness profile and what they are around the valuations of Adani
says J.N. Gupta, Founder & MD of planning to do and how are they stocks in the days ahead. And for
Stakeholder Empowerment Services, a planning to manage the whole yet another, lenders and regula-
proxy advisory firm. thing,” said Kumar while adding tors too have to draw lessons
Gupta, however, believes that while that the investment was “just a from this saga to strengthen
the group does not face any inter- drop in the ocean”. lending, surveillance and corpo-
dependence risks in terms of cross- A point to note here is that Ad- rate governance practices.
holdings, inter-company guarantees ani Enterprises’ Q3FY23 results The cat appears not to have ex-
or loans, one could say that there is a have been outstanding—con- hausted his nine lives. Not yet.
“management bandwidth” issue that solidated total income growth of
the group should look at resolving. 42 per cent, Ebitda growth of 101 @ashishrukhaiyar,
“The financial health of one company per cent, and profit of `820 crore @krishnagopalan

Business Today 5 March 2023

E-COMMERCE MEESHO

T H E S M A L L - TO W N W O N D E R H A S
AC C E L E R AT E D TO N O . 3 I N I N D I A ’ S
E-COMMERCE PECKING ORDER ON THE
B AC K O F V C M O N E Y . B U T N O W , M E E S H O
NEEDS TO SHOW PROFITS FOR FURTHER
G R O W T H . I T W O N ’ T B E E A SY

BY S O H I N I M I T T E R

P H OTO BY H A R D I K C H H A B R A

Business Today 5 March 2023

 | 35

THE RIGHT FIT

Meesho Co-founder
and CTO Sanjeev
Barnwal (left) with
Co-founder and CEO
Vidit Aatrey

Business Today 5 March 2023

 E-COMMERCE MEESHO

SANJAYBHAI SAVALIYA, a Surat- ucts displayed to the most relevant customers. Meesho
based textile manufacturer, has recently notified sellers that it will now charge them a
nominal fee per order in exchange for quicker payouts—
been selling on home-grown e- within 24 hours instead of its usual seven days.
commerce platform Meesho since While this is a new stream of monetisation that Mee-
2019. He’s retailed his merchandise sho has embarked upon, given its rising expenses and
ballooning losses (more on that later), sellers aren’t too
on Amazon and Flipkart, too. But in excited. “Saat din rukne se kuch nahi ho jayega. Kyun hum
the past two years, Meesho has come extra paisa bhare? (Nothing will change in seven days, so
to be his preferred platform. Savali- why should we pay extra?),” says Savaliya.
The impact of this new seller policy is yet to play out,
ya says Meesho’s zero-commission but what is amply clear is Meesho’s hunt for monetisa-
policy attracted him to the online tion. Although it continues to be a zero-commission
marketplace at a time when Ama- platform for its 825,000 registered sellers, it has now
become imperative for the Bengaluru-based seven-
zon’s and Flipkart’s 17-18 per cent year-old e-commerce firm to pave a path to profitability.
platform fees were eating into his Especially after a brutal 2022 that was defined by a pro-
margins. Besides, a Meesho listing longed funding winter and mass layoffs at start-ups.
ensures he starts receiving orders Meesho, too, laid off employees as it scaled down its
grocery division (Farmiso) to cut costs. While the offi-
within a day or two; on Flipkart and cial number of layoffs is pegged at 150, company insiders
Amazon, it takes 15-20 days. say at least two more rounds of firings took place in 2022,
which saw Meesho’s large HR team trimmed significant-
ly. “Some product and engineering people were also asked
36 | to leave,” a person told BT on condition of anonymity.
Savaliya dispatches more than 1,000 orders a day, Meesho, however, denies laying off any people be-
and earns an average of `300 per order. In three years, sides those in the grocery division. “Our business re-
he’s also earned the label of a ‘bronze seller’ on Meesho structuring cost folks in the grocery unit their jobs. But
by clocking annual sales of `5-6 crore through his mul- those were restructuring exits and not layoffs to save
tiple seller accounts—without ever advertising on the costs,” says CHRO Ashish Kumar Singh.
platform. But things are changing. As Meesho ramps Nonetheless, in the absence of free-flowing venture
up its seller monetisation efforts, people like Savaliya capital (VC) and given the tough macroeconomic envi-
will have to shell out more money to continuously ap- ronment, unicorns like Meesho are compelled to arrive
pear on top of its home page as well as get their prod- at a clear path to profitability and a sustainable growth

WE RAISED A SUBSTANTIAL AMOUNT OF MONEY IN 2021, MUCH

MORE THAN NEEDED... AND CAN KEEP RUNNING THE BUSINESS
IN A VERY HEALTHY MANNER FOR MANY YEARS. THERE IS A GOOD
LIKELIHOOD THAT OUR NEXT ROUND WOULD BE AN IPO”
VIDIT AATREY CO-FOUNDER AND CEO, MEESHO

OUR VALUE PROPOSITION IS AROUND TWO THINGS—LOWEST

PRICES AND WIDE SELECTION. THESE BECAME SO STRONG THAT WE
HAD A LOT OF END CUSTOMERS ORGANICALLY COMING TO MEESHO AND
BUYING FOR THEMSELVES”
SANJEEV BARNWAL CO-FOUNDER AND CTO, MEESHO

Business Today 5 March 2023

model. While the first phase of Meesho’s dramatic rise in
India’s e-commerce landscape was funded by VC dollars
and an unbridled optimism around the new economy, the
next phase must be self-borne. Can it get there?
Meesho Co-founder and CEO Vidit Aatrey is unfazed
by the funding slowdown, and refutes claims that his
firm has struggled to raise an external round since Sep-
tember 2021. For the record, Meesho’s last fund-raise
was a $570-million Series F round led by Fidelity and
B Capital Group, valuing it at $4.9 billion—six months
after its unicorn round of $300 million led by SoftBank
Vision Fund. Between August 2019 and September 2021,
Meesho’s valuation zoomed from $700 million to $4.9
billion, according to Tracxn, a private markets database. THE MONEY TRAIL
“We are fortunate that we raised a substantial Meesho, one of India’s most-funded
start-ups, has raised over $1 billion till date
amount of money in 2021, much more than we needed.
We have more than enough in the bank, and can keep y MAY 2016 VENTURES, DST
running the business in a very healthy manner for many y $350,000 PARTNERS
years. There is a good likelihood that our next round [of y ANGEL ROUND
financing] would be an IPO. But the plan in 2023 is to get y INVESTOR y JUN 2019
to profitability as quickly as possible,” says Aatrey. RAJUL GARG y $25 MILLION
Prosus Ventures (earlier Naspers), one of Meesho’s (LEO CAPITAL) y SERIES D ROUND
key shareholders since 2019, echoes Aatrey’s quest for y INVESTOR
profitability. “Meesho has enough cash now... and there y JULY 2016 FACEBOOK
y $120,000
is no immediate need to raise money… It is on track to get
y SEED ROUND y AUG 2019
to Ebitda profitability very soon. And by soon, I mean
y INVESTOR y $100 MILLION
months, not years,” says Ashutosh Sharma, Head of In- Y COMBINATOR y SERIES D ROUND
vestments for India at Prosus. y INVESTORS
y AUG 2016 NASPERS
y UNDISCLOSED (NOW PROSUS
EBB AND FLOW y SEED ROUND VENTURES), RPS
GROUP
While attaining profitability may be a key focus in 2023, y INVESTOR
Meesho’s last reported financial results suggest that the VENTURE
HIGHWAY y APR 2021
company is far from it. Its losses surged 6.5x to `3,247 y $300 MILLION
crore in FY22 on account of increased expenditure, as it y SERIES E ROUND
y OCT 2017
rushed to acquire customers in a bid to emerge as India’s y $3.44 MILLION y INVESTORS
third e-commerce alternative after Flipkart and Amazon. y SERIES A ROUND SOFTBANK
Not only did it splurge on promotional campaigns, it also VISION FUND,
y INVESTOR PROSUS 
saw a rise in its employee costs as it rolled out fancy ben- ELEVATION
efits, insurance packages, ESOPs, and more. CAPITAL
y SEP 2021
Overall, Meesho’s FY22 expenses jumped 5x to y $570 MILLION
`6,607 crore from `1,337 crore in FY21. Its revenues dur- y JUNE 2018
y $11.5 MILLION y SERIES F ROUND
ing the period grew 4.5x to `3,232 crore and its transact- y INVESTORS
y SERIES B ROUND
ing user base reached 140 million riding on pandemic FIDELITY
y INVESTOR INVESTMENTS,
tailwinds. The growth was also partly triggered by Mee- SEQUOIA CAPITAL B CAPITAL
sho’s pivot from an earlier reseller-based model to pure- GROUP
play e-commerce (like its larger competitors). y NOV 2018
In the earlier model, intermediary sellers (mostly y $50 MILLION
homemakers from India’s small towns) placed bulk or- y SERIES C ROUND MEESHO’S
FUNDING ROUNDS;
ders on Meesho, added margins, and re-sold the prod- y INVESTORS SOURCE TRACXN,
ucts to end customers via their social media networks. SHUNWEI COMPANY
CAPITAL, RPS ANNOUNCEMENTS
This tried-and-tested model of ‘social commerce’ has
ILLUSTRATION BY RAJ VERMA

Business Today 5 March 2023

 E-COMMERCE MEESHO

“FY22 WAS CLEARLY A “INDIAN E-COMMERCE

TIME TO GAIN MARKET 1.0... [BROUGHT] ORGAN-
SHARE... WE INVESTED ISED RETAIL ONLINE...
SIGNIFICANTLY TO GAIN MEESHO WENT AFTER
MARKET SHARE. AND WE UNORGANISED RETAIL AT
GREW OUR GMV 25x IN `500-600 PRICE POINTS
TWO YEARS” AND BROUGHT IT ONLINE”

DHIRESH BANSAL SARTHAK MISRA

CFO, MEESHO INVESTMENT DIRECTOR,
SOFTBANK VISION FUND

seen massive success in China, birthing giants like Pin- bution of resellers may have come down, but the number
duoduo. In the middle of 2021, however, Meesho tran- of resellers has remained pretty strong,” says Utkrishta
sitioned to the direct e-commerce model. Kumar, CXO-Business at Meesho. “But we’ve become a
Co-founder and CTO Sanjeev Barnwal calls it an “or- big consumer destination for those who had no access to
ganic” progression. “Our value proposition is around these products earlier.”
two things: i) lowest prices; and ii) wide selection. These It was by Meesho’s design, of course. “Social com-
became so strong that we had a lot of end customers or- merce was a way to transition small-town people who
ganically coming to Meesho and buying for themselves. are offline to come online. But it was never the perma-
Even the persona of those customers was not very dif- nent way of people buying online,” says Aatrey.
ferent from the resellers’—they came from small towns To attract more direct e-commerce shoppers, Meesho
and had a certain purchasing power. So, we tweaked galvanised thousands of small-town sellers and urged
38 | our platform to make sure that both personas could be them to put their entire assortment on its platform by go-
served.” That tweak resulted in 80 per cent of Meesho’s ing commission-free. It also ran aggressive promotions
business coming from direct e-commerce today. App and sales events, thereby incurring high customer ac-
downloads also surged past 270 million, making it the quisition costs on its balance sheet. At the start of 2022,
most downloaded shopping app globally in 2022, per Meesho’s monthly burn was estimated to be at $30-40
Apptopia, that tracks the space.
While Meesho’s pivot may please end consumers,
resellers—the mainstay of its growth between 2016 and
2020—feel shortchanged by the platform. They con- HAND OVER FIST
tribute only 20 per cent to sales today. “Meesho is a clas- Between FY21 and FY22, Meesho’s losses have
sic case of a company dictated by VCs, even though Vidit widened 6.5x, and its expenses have also
[Aatrey] wants to do the right thing,” says a former Mee- jumped nearly 5x during the same period
sho employee who quit the firm in 2022. “It started as
8,000
6,607

an earnest company that told the average Indian wom-

7,000
an in a village that you can earn an income without any 6,000
expenses of setting up a business. They then stabbed 5,000
3,232

the same woman because they wanted to scale up.” 4,000

(IN ` CRORE)

Sector observers, however, don’t fault Meesho’s 3,000

1,337

change in business model. “Private investors have ex- 2,000

793

655

1,000
307

pectations from the capital they invest, and they want

84.8

185

LOSSES
0
11
6

scale… You improvise to the market conditions. Social

EXPENSES
-5

-1,000
-100

REVENUES
-306

commerce was facing headwinds. To go further up, Mee-

-499

-2,000
sho needed a change of gear,” says Ankur Bisen, Senior
-3,000
Partner & Head-Consumer, Food & Retail, Technopak.
-4,000
-3,247

Meesho, meanwhile, asserts that its reseller base

continues to grow in absolute terms even though the
platform’s direct customer base has far outpaced its y FY18 y FY19 y FY20 y FY21 y FY22
growth. “On the demand side, the percentage contri- SOURCE ROC FILINGS, TOFLER

Business Today 5 March 2023

 “MEESHO HAS ENOUGH “MORE THAN 70 PER CENT
CASH NOW. THE BURN HAS OF SHOPSY’S [A MEESHO
REDUCED CONSIDERABLY... RIVAL] NEW CUSTOMERS
IT IS ON TRACK TO GET TO COME FROM TIER II AND III
EBITDA PROFITABILITY MARKETS... WITH OVER 75
VERY SOON. AND BY SOON, I PER CENT OF ITEMS COST-
MEAN MONTHS, NOT YEARS” ING `300 AND BELOW”
ASHUTOSH SHARMA ADARSH MENON
HEAD OF INVESTMENTS FOR SVP & HEAD-NEW BUSINESSES,
INDIA, PROSUS VENTURES FLIPKART

million, which it claims to have reduced by 80 per cent. E-COMMERCE FOR BHARAT
CFO Dhiresh Bansal explains that Meesho is using a Meesho was founded in 2015 by IIT Delhi batchmates
lesser number of dollars to achieve the same outcome, Aatrey and Barnwal with the goal of democratising in-
and that’s what has led to this improvement in burn. “We ternet commerce in India. Flipkart had been around for
expect to cut it down to zero in 2023,” he says. a while, and Amazon was two years into its India jour-
Bansal says FY22 was a time to gain market share. ney. But both catered to the top tier of India’s population
“We invested significantly to gain market share and we or the first 100 million online users. Meesho identified
grew our gross merchandise value (GMV) by almost 25x a gap that involved the ‘next billion users’—a Google
in two years. From April 2022, we’ve been focussing on coinage—who were new to the internet, new to e-com-
profitability in a meaningful manner,” he says. merce, more value-conscious, and less likely to transact.
Even as Meesho strives to strike the delicate balance “Indian e-commerce 1.0 had succeeded in bringing
between growth and profitability over the next 12-15 organised retail online—smartphones, TVs, fridges— | 39
months (until FY24), which many say will be a humon- but those were just one set of spends. If you looked at
gous challenge, it continues to be a significant player in spends like offline apparel at ``500-600 price points,
India’s $72-billion e-commerce sector. How did it get they were not coming online. So, we were very excited
there? about the fact that Meesho was going after an unorgan-
ised retail market and bringing it online,” says Sarthak
Misra, Investment Director at SoftBank Vision Fund,
who led the Meesho deal in 2021.
E-COMMERCE ARENA By 2016, following the roll-out of Jio’s low-cost data
India is one of the world’s fastest-growing plans, Meesho started seeing a sharp growth in users.
e-commerce markets, with most new shoppers “From mid-2016 to mid-2017… we went from 300 or-
coming from Tier II+ markets ders to 30,000 orders per day within 12 months. And a
big tailwind that enabled it was Jio,” says Aatrey.
Meesho targeted women in Tier II and III towns
E-commerce market 2022 2027*
because they had been traditionally underserved. “We
went with a category where trials were easier, which is
Market size $50 billion
$150–$170 fashion. A lot of women would buy these low-cost fash-
billion ion items and be pleasantly delighted. And then they
would start to buy more items on the platform over
time,” says Aatrey.
Gross merchandise
value (GMV)
$100 billion $350 billion By 2019, Meesho was one of the fastest-growing
start-ups in India. It went on to attract a $25-million
investment from Facebook, making it the tech ma-
No. of e-commerce 180-190 450-500 jor’s first Indian bet. “WhatsApp for Business had just
shoppers million million launched in India, and very quickly Facebook realised
that a large share of WhatsApp for Business users were
*PROJECTIONS SOURCE BAIN & COMPANY AND ACCEL REPORT ‘THE
the women entrepreneurs of Meesho. They saw the
RISE OF DIGITAL BAZAARS IN INDIA’ power that our platform had in empowering people to

Business Today 5 March 2023

 E-COMMERCE MEESHO

start their businesses via What- A SNAPSHOT high rate of returns, and a funding

OF MEESHO
sApp,” says Aatrey. quiet, it also has to contend with a
Until about two years ago, over changing competitive landscape.
60 per cent of Meesho’s sales came It is one of the world’s most Flipkart and Amazon have entered
from the women’s fashion seg- downloaded shopping apps, the value-shopping arena. Flipkart
with 70 per cent of its users
ment. That number is now less has floated Shopsy, which closed
coming from smaller towns
than 40 per cent because other cat- 2022 with 140 million app installs.
egories such as home and kitchen Within a year of its launch, Shopsy’s
CURRENT
utilities, beauty and personal care, EMPLOYEE COUNT share of Flipkart’s new customers is
and electronics accessories have 1,980-2,000 about 40 per cent. “Over 70 per cent
also grown after the pandemic. “As of our new customers come from
trust built up, women started buy- TOTAL FUNDING RAISED Tier II and III markets. At Shopsy,
ing products for their kids, families $1.1 BILLION we have consistently focussed on
and households, too. So, our goal is providing value-based products to
not to serve just a category. It is to LAST VALUATION  consumers, with over 75 per cent
become a single shop that consum- $4.9 BILLION of products under various catego-
ers can come to and fulfil all their ries costing `300 and below,” says
needs,” says the Meesho CEO. KEY INVESTORS Adarsh Menon, SVP & Head-New
But womenswear remains PROSUS, SOFTBANK Businesses at Flipkart.
Meesho’s bestselling category. In VISION FUND, FACEBOOK, That is taking the competition
2022, it sold 148 sarees a minute, FIDELITY INVESTMENTS, B straight to Meesho. Then there’s
with demand coming from across CAPITAL GROUP, SEQUOIA Amazon, which acquired social
the country. What’s interesting, CAPITAL, SHUNWEI commerce firm GlowRoad last year,
however, is the growing number CAPITAL, RPS VENTURES, to penetrate deeper into small-town
40 | of male shoppers on the platform. India. The reseller-based platform
“Men are showing a higher pro-
DST PARTNERS, ELEVATION also introduced a ‘zero-commission’
pensity than ever for grooming
CAPITAL, VENTURE HIGHWAY, policy for sellers, which is helping
products, with more than 60 per Y COMBINATOR them bring more of their selections
cent of orders coming from Tier APP DOWNLOADS
online without worrying about list-
IV markets,” Meesho stated in its ing fees. “Today, more than 85 per
year-end wrap. Overall, 910 mil-
300 MILLION cent of new customers and 65 per
lion orders were placed on Meesho TOTAL GMV cent of total orders on Amazon.in
during the year, which is a 135 per $5 BILLION come from customers in Tier II and
cent growth over 2021. It also on- below [towns]. Our total seller base
boarded 500,000-plus new sellers. AVERAGE on Amazon.in (one million-plus) has
“Most of India shops in local ORDER VALUE (AOV) almost doubled since January 2020
markets for unbranded products. `300-400 and more than 50 per cent of sellers
There is a joy associated with un- come from Tier II and below towns,”
organised shopping. But tradition- ANNUAL Kishore Thota, Director-Customer
TRANSACTING USERS
al e-commerce is very search-driv- Experience and Marketing, Amazon
140 MILLION
en. You come in, type something, India, tells BT over email.
see one or two options, you buy REGISTERED Hence, it’s evident that the next
and exit. That’s not how you shop SELLERS phase of competition in the e-com-
in a local market. You spend time, 825,000 merce space is in the small towns.
browse, discover, negotiate, and Aatrey, however, is undeterred. “We
that is what Meesho is trying to TOTAL don’t think of them as competition
PRODUCT LISTINGS
do,” says SoftBank’s Misra. because we play in very different
68 MILLION segments. Close to 60 per cent of
ORDERS what is sold on Shopsy is electron-
THE CHALLENGES RECEIVED IN 2022 ics. Our assortment is very different
So, what ails Meesho? A bunch of 910 MILLION and that determines the kind of cus-
things. Besides its growing losses, tomers we get,” he explains.
SOURCE TRACXN, ALLIANCEBERNSTEIN,
COMPANY FILINGS
 Meesho’s other concern is its low average order value fillip to hyperlocal businesses. “ONDC will also play an
(AOV) of `300-400 compared to peers. The ‘average’ important role in expanding India’s e-commerce sector
AOV in Indian e-commerce is `800 (less than $10), ac- by bringing more consumers online,” he says.
cording to a report by AllianceBernstein. Meesho’s is less Some sector analysts reckon Meesho must now
than average due to its high sales among low-income cus- look at solving the logistics quandary and bring down
tomers. Its GMV stood at $5 billion in June 2022, which dependence on third-party players. “Meesho has been
is also significantly lower than Flipkart’s $23 billion, and solving for reach in the last two to three years and for
Amazon’s $18-20 billion, as estimated by AllianceBern- people who have never purchased online. But reach is a
stein. “A price-sensitive customer is hardly loyal to any capital-intensive problem,” says Sanjay Kothari, Associ-
single platform,” says Technopak’s Bisen. ate Partner at RedSeer Strategy Consultants. “The next
If Meesho has to break the Flipkart-Amazon duopoly problem to attack would be logistics and the high rate of
in India and become profitable at the same time, it must returns. Meesho could start charging for logistics from
devise new strategies. “How to make money is no longer sellers to build an indirect revenue model even as the ad
just a strategic question. Today, it involves politics, poli- business becomes a large contributor,” he explains.
cy, and tech. In a free market, Meesho could do an inven- But is all this enough to attain profitability? Ques-
tory model, push its own labels, charge a service fee from tions have been asked of Meesho’s P&L and its ‘growth-

PLATFORM KING
Meesho is India’s third-largest online marketplace in terms of total value of products sold annually 

FLIPKART AMAZON MEESHO BIGBASKET

$23
BILLION
$18-20
BILLION
$5
BILLION
$1.6
BILLION
TOP E-COMMERCE MARKETPLACES BY GMV; SOURCE ALLIANCEBERNSTEIN (REPORT DATED JUNE 2022)

vendors, create loyalty programmes for customers, etc. at-all-costs’ mentality. This is, of course, more system-
But in an environment of regulatory uncertainty, you ic than specific in hyper-funded start-ups.
could start monetising in a certain way and tomorrow it SoftBank believes Meesho is better placed than a lot
could be deemed illegal,” says Bisen. of “upstarts”. “Given the strength of the balance sheet,
Then, what are Meesho’s options? It has started ex- it gives them a runway of more than two years. They
perimenting with financial services to meet the work- will be profitable before that,” says Misra.
ing capital needs of its sellers who may not be eligible for But can any new-age company surrender rapid
formal credit. “Financial services fall fairly and squarely growth at the altar of profitability? Aatrey says one
into the things that we can do to increase monetisation. can’t choose one over the other. “If you become profit-
We’ve seen some successful examples as well. Alibaba able and are not growing, then why would the investor
had Ant Financial, which emerged from its commerce back you? They would rather go for an old-economy
business,” says CFO Bansal. “We want to ensure avail- company that is growing at least 20 per cent YoY [year-
ability of credit, so that our existing sellers can grow on-year] and is still profitable,” he says. “We’d rather
their businesses on Meesho.” grow somewhere around 50-70 per cent, with profits.”
To increase its reach, Meesho joined the government’s Can Meesho then become India’s Pinduoduo? Well,
Open Network for Digital Commerce (ONDC) in Novem- time will tell.
ber. Aatrey believes this integration will fuel the discov-
erability of products for consumers, while also giving a @mittermaniac

Business Today 5 March 2023

HEALTHCARE IPOs
Spurred by the Covid-
19-induced tilt towards
healthcare and pharma-
ceuticals, 13 health-related
firms have gone public in the
past two years. And many
more are queuing up
BY NEETU CHANDRA SHARMA
 HEALTHCARE IPOs

another `9,700 crore, according to

PRIME Database. New Delhi-head-
quartered Mankind Pharma’s IPO
size alone is expected to be approxi-
mately `5,500 crore, one of the larg-
est by a domestic pharma company.
“We like companies that are fo-
cussed on the manufacturing of
active pharmaceutical ingredients
IDING ON BULLISH investor interest, companies in (APIs), which are the biologically
the healthcare, pharmaceuticals and diagnostics active component of a drug prod-
sector are rushing to tap the initial public offer- uct, and have proven capability to
ing (IPO) market. The Covid-19 pandemic, which be either cost leaders or have strong
created special interest in healthcare and related research and development capabili-
sectors, seems to have been the trigger. According ties,” says Aditya Sood, Fund Man-
to PRIME Database, which tracks India’s primary ager at InCred Multicap Portfolio.
capital markets, at least 13 IPOs were launched in Several of the bourse-hitting firms
the past two years in these sectors. That is a significant rise from earlier answer to that description.
years. “There is a pickup in the number of IPOs in the past two years. Not surprisingly, more are plan-
There were three IPOs in one year on an average over the past five ning to join the party. Companies
years, but there were seven IPOs per year in the past two years, which is like Emcure Pharma, VLCC Health-
a very good number,” says Pranav Haldea, Managing Director of PRIME care and Skanray Technologies have
Database Group. The most recent IPO, in November 2022, was that of made announcements about launch-
44 | Global Health, which operates the Medanta hospital in Gurugram. The ing their IPOs of `4,500 crore, `300
IPO comprised fresh issuance of shares worth up to `500 crore and an crore and `400 crore, respectively.
offer-for-sale of up to 50.76 million equity shares. In diagnostics, Vijaya Diagnostics
As Haldea points out, the pipeline of IPOs in healthcare, pharmaceu- was listed on the BSE on Septem-
ticals and diagnostics looks strong. Data from PRIME Database shows ber 14, 2021, and online pharmacy
that at least eight companies from the sector have already received mar- PharmEasy is also planning to come
kets regulator Securities and Exchange Board of India’s (Sebi) approval up with an IPO, per PRIME Database.
for raising around `18,000 crore, and would launch their IPOs soon. Then, biotech major Biocon’s
These are Veeda Clinical Research, GPT Healthcare, Wellness Forever subsidiary Biocon Biologics says it
Medicare, API Holdings, Kids Clinic India, Macleods Pharmaceuticals, will look at an IPO over the next 12-
Yatharth Hospitals & Trauma Care Services and Concord Biotech. In 24 months, with the exact timing be-
addition, several others have filed their Draft Red Herring Prospec- ing governed by market conditions.
tuses (DRHPs) with Sebi for IPOs, and are awaiting approvals, includ- The company, which raised about
ing Mankind Pharma, Infinion BioPharma, Innova Captab, Healthvista $330 million in January 2021 from
India and Blue Jet Healthcare. These companies may together raise private equity investors such as
True North, Tata Capital, Goldman
Sachs and ADQ, acquired the global
biosimilars (medicines similar to
their branded reference medicines)
business of its long-term partner

`18,000
Viatris in November 2022. “These
investments and the Viatris acqui-
sition are a testament to Biocon
CRORE Biologics’ proven capabilities and
reflect the high level of conviction
THE TOTAL AMOUNT LIKELY TO BE RAISED BY investors have in the company,” says
THE EIGHT HEALTH SECTOR COMPANIES THAT Shreehas Tambe, CEO & MD of Bio-
HAVE SEBI’S APPROVAL FOR PUBLIC OFFERS con Biologics. “With over $70-bil-

Business Today 5 March 2023

lion worth of biologics expected to
lose exclusivity over the next five
years, we are well positioned to
capitalise on this opportunity and
unlock value for all stakeholders.”
However, while the 13 IPOs
since November 2020 have gar-
nered around `9,000 crore from ALIVE AND
the primary market, these firms
have delivered mixed returns to KICKING
investors so far. Data collated
In terms of listings, even though the past five years have
by PRIME Database shows that been a mixed bag for healthcare-related companies, the
Krishna Institute of Medical Sci- performance of the past two years has been impressive
ences, Sigachi Industries, Ami
Organics, Rainbow Children’s Since November 2020, as many as 13 such companies have
Medicare and Global Health have raised around `9,000 crore from the primary market so far
gained between 35 per cent and 78
per cent from their respective of- In CY22 (till mid-December), IPOs in edible oil, insurance
fer prices as of February 8, 2023. and hospital & healthcare services contributed 56 per cent
The biggest gainer has been Tatva to the total issuances of `55,472 crore in the primary market
Chintan Pharma Chem Limited, a Despite the muted performance of some of these health
Gujarat-headquartered specialty and pharma firms, analysts remain bullish on companies
chemicals manufacturing com- like Glenmark Life Sciences and Vijaya Diagnostics
pany. It listed on the bourses on | 45
July 29, 2021, and its share price Government support and investments in this space further
has increased nearly 85 per cent to spurs the interest of investors in these companies
`1,998.55 on February 8 from the
The Indian healthcare industry is expected to post a
issue price of `1,083.
healthy 13-15 per cent CAGR between fiscals 2022 and
On the other hand, Krsnaa Diag-
2026, per CRISIL Research estimates
nostics, which made its market de-
but on August 16, 2021, has declined
53 per cent to `445 on February 8
compared to its issue price of `954.
Windlas Biotech, Glenmark Life
Sciences, Medplus Health Services,
Vijaya Diagnostics Centre and Su- while returns in the healthcare panding manufacturing capacity
priya Lifesciences have all declined services industry are modest at at its existing plant in Dahej SEZ,
between 18 per cent and 48 per cent best,” says Sonal Badhan, Econ- Gujarat. It is also expanding its
so far (February 8, 2023) from their omist with Bank of Baroda’s Eco- R&D facility at Vadodara, which is
respective issue prices. nomics Research Department. expected to be completed by FY23-
According to a research done by end, it said in a regulatory filing.
ACE Equity and Bank of Baroda, in The company has successfully
ET’S NOW TAKE

L
CY22 (till mid-December), IPOs in a deeper completed plant-scale trial runs
edible oil, insurance and hospital look at some of the com- of a new product using continuous
& healthcare services contributed panies joining the public flow chemistry (a kind of chemical
56 per cent of the total issuances of markets. Tatva Chintan reaction), which is expected to be
`55,472 crore in the primary mar- Pharma Chem, which had rev- commercialised by 2024.
ket. “While the edible oil industry enues of `433.6 crore in FY22, Another new entrant on the
has performed very well on the saw its Q3FY23 top line grow to bourses, Ami Organics, reported a
stock market, the insurance in- `120.6 crore from `104.67 crore growth of 7.9 per cent in its consol-
dustry (read: LIC) has taken a hit, in Q3FY22. The company is ex- idated revenues at `152.4 crore in

Business Today 5 March 2023

 HEALTHCARE IPOs

IPO HEALTH hospitals,” Jefferies Group said in

a November 2022 report. ‘Mature’
It has been a mixed outing for health-related companies hospitals refer to the group’s origi-
on D-Street in the past couple of years nal hospitals at Gurugram, Indore
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
and Ranchi, which accounted for
81 per cent of its revenue and 77 per
Global Health
(35.62%) cent of its total operational bed ca-
Listing Date: Nov 11, 2022
pacity in FY22. “Medanta’s expan-
Rainbow Children’s Medicare
(40.72%) sion into Central and East India
May 10, 2022
along with a 550-bed expansion un-
Supriya Lifescience
(-22.63 %) derway in Noida (phase I to be com-
Dec 28, 2021
missioned in FY25) should de-risk
MedPlus Health Services
(-14.70%) it from any adverse policy decisions
Dec 23, 2021
impacting the Delhi/NCR region,”
Sigachi Industries the Jefferies report said.
(66.66%)
Nov 15, 2021
Glenmark Life Sciences, mean-
Vijaya Diagnostic Centre
Sept 14, 2021 (-18.15%)

AMI Organics (48.71%)

Sept 14, 2021
Windlas Biotech
(-47.60%)
Aug 16, 2021
Krsnaa Diagnostics (-53.35%)
Aug 16, 2021
UPCOMING
46 |
Glenmark Life Sciences (-47.87%)

IPOs
Aug 6, 2021
Tatva Chintan Pharma Chem
(84.54% )
July 29, 2021 Health-related companies
Krishna Institute of Medical
(77.50%)
that have received Sebi’s
Sciences June 28, 2021 approval for their IPOs
Gland Pharma (-10.44%)
Nov 20, 2020

BARS REPRESENT ISSUE SIZE IN ` CRORE; FIGURES IN BRACKETS INDICATE

CHANGE OVER ISSUE PRICE IN PER CENT; DATA AS OF FEBRUARY 8, 2023;
LISTING OF HEALTH, PHARMA AND DIAGNOSTIC COMPANIES SINCE
NOVEMBER 2020 SOURCE PRIME DATABASE

Q3FY23 as against `141.2 crore in Q3FY22. The performance was driv-

en by growth in the advanced pharma intermediates business, while
the specialty chemicals business remained flat in terms of growth.
The biggest success, of course, has been Medanta or Global Health.
Led by Dr Naresh Trehan, a noted cardiologist, Medanta is considered
amongst the top private hospitals in North India, specialising in cardi-
ology and cardiac science, neuroscience and oncology. “Over the past
three years, Medanta has expanded its network to cities like Lucknow
and Patna, which are underserved and have dense populations. We ex-
pect a 17 per cent CAGR in revenues over FY22-25E, led by ramp-up of
Lucknow and Patna hospitals along with steady growth from mature

Business Today 5 March 2023

while, reported a rise in revenue cent YoY and QoQ, respectively. sector remained sought after last
to `540.7 crore in Q3FY23, from Covid-19 revenue, not surpris- year due to Covid-19 and is expected
`522.5 crore in Q3FY22. Anand ingly, slumped 67.6 per cent YoY. to remain in the limelight with non-
Rathi Research says the company “We expect 6.9 per cent CAGR communicable disease testing and
is able to sustain margins despite in patient volume growth over preventive healthcare tests rising.
industry headwinds. FY22-FY25E driven by the addi-
“With capex coming live, di- tion of new centres and increas-

W
versification of product portfo- ing footfalls. We remain positive ILL THE UPCOMING IPOs in
lio and increasing geographic on the stock mainly due to the the sector be able to retain
presence, we expect Glenmark company’s B2C focus (95 per cent investor interest? “Health-
Life Sciences to perform better,” of revenue in Q2FY23), highest care and pharma sectors
Anand Rathi said in a report. margin within the industry and have done well and have a good vis-
For Vijaya Diagnostics, non- continued focus on deeper expan- ibility for revenue and profit growth
Covid-19 revenue witnessed sion in its dominant regions,” says in a country like India where higher
healthy growth in Q2FY23; it Vinay Bafna, Research Analyst at insurance coverage, greater afford-
was up 15.1 per cent and 15.9 per ICICI Securities. The diagnostics ability and new supplies have all re-
sulted in medium-term demand vis-
ibility. These sectors are defensives
and, hence, the seemingly high Nifty
price-to-earnings (P/E) ratio does
not impact their valuations much,”
says Deepak Jasani, Head of Retail
Research at HDFC Securities. “Also,
7,000
6,250 a lot of unlisted companies have in- | 47
6,000 vestments from private equity or
5,000
5,000 venture capitalists who would want
(IN ` CRORE)

4,000 to exit (at least partially) after re-

3,000 maining invested for two to four
1,800 2,000 years. Appetite from IPO investors
2,000 1,500
800 900 1,200 also remains strong as possibility of
1,000
getting high negative returns from
0
these IPOs is minimal (unlike new-
Yatharth Hospital

Kids Clinic India

Blue Jet

Concord Biotech

API Holdings
Macleods
& Trauma Care
Services

InnovaCapTab

Wellness Forever
Medicare

Healthcare

Pharmaceuticals

age tech companies).”

According to CRISIL Research
estimates, the Indian healthcare in-
dustry is expected to post a healthy
13-15 per cent CAGR between fiscals
FIGURES ARE ESTIMATED ISSUE SIZE; SOURCE PRIME DATABASE 2022 and 2026. The government’s
increased investment in health-
6,000 5,500 care is also a factor—the central
Companies government’s allocation towards
awaiting 5,000
Ministry of Health and Family Wel-
Sebi’s
4,000 fare clocked a promising 11 per cent
(IN ` CRORE)

approval
CAGR between FY11 and FY23, albe-
3,000
it healthcare budget as share of GDP
FIGURES ARE 2,000 at 1.98 per cent is still rather low.
ESTIMATED 1,000 Nonetheless, overall it is a
ISSUE SIZE 1,000
SOURCE PRIME 500 healthy state of affairs.
DATABASE
0 With inputs from Rahul Oberoi
Infinion Healthvista Mankind
Biopharma India Pharma @neetu_csharma

Business Today 5 March 2023

 HEY, I NEED TO BUY SOME
GROCERIES. CAN YOU HELP ME FIND
SOME PRODUCTS?

OF COURSE! WHAT KIND

OF GROCERIES ARE YOU
LOOKING FOR?

I NEED SOME APPLES

AND BANANAS.

OKAY. OUR APPLES ARE PRICED AT `80

PER KG AND OUR BANANAS ARE `60 PER
DOZEN. WOULD YOU LIKE TO PROCEED
WITH THE PURCHASE?

YES, GO AHEAD AND

PURCHASE 1 KG APPLES AND
ONE DOZEN BANANAS.

ALRIGHT. YOUR TOTAL COMES TO `140.

PLEASE MAKE YOUR PAYMENT USING UPI.

SURE, IT IS DONE

THANK YOU FOR YOUR PURCHASE. YOUR

ORDER WILL BE DELIVERED TO YOUR
ADDRESS IN THE NEXT 3-5 HOURS. IS THERE
ANYTHING ELSE I CAN HELP YOU WITH?

NO, THAT'S ALL. THANK YOU!

Business Today 5 March 2023

BOTS THAT CHAT WITH YOU AND
HELP YOU BUY STUFF ARE THE
NEW RAGE IN E-COMMERCE
BY ABHIK SEN

Business Today 5 March 2023

 TECHNOLOGY E-COMMERCE

to confirm that the payment was made, and then wait for
the delivery to happen. The stress then led to many daily
shoppers, like a relative based in Kolkata, to make—hor-
ror of horrors—weekly purchases.
After the lockdowns were lifted, the daily shoppers
were back at their favourite neighbourhood grocery
stores. My relative, a retired corporate executive, too,
went back to his old routine, but a service he started using
recently is causing some disruption in his habits. The ser-
vice in question is JioMart on WhatsApp, which helps him
order groceries and provisions in an interactive and seam-
less manner. And the convenience has convinced him to
give his daily morning trips to the local grocer a miss.
But grocery is just one way you can use the messaging
app. According to Ravi Garg, Director of Business Mes-
saging-India, at Meta, you can also buy tickets for the
FOR THOSE OF us who love buying fresh vegetables from Bengaluru metro on WhatsApp, and scan the e-ticket to
the neighbourhood store daily, the Covid-19-induced board the train; and even book an Uber cab! These types
lockdowns were a stressful time. Using WhatsApp as of transactions on messaging apps are called conversa-
a notepad to make lists of things one needed to buy— tional commerce, a term believed to have been coined by
which many people were prone to do—one had to first Chris Messina, the inventor of the hashtag, in 2015.
send the list to the grocer on the messaging app and What exactly is conversational commerce? Accord-
hope that he checked it before the fresh produce was sold ing to experts, conversational commerce is shopping
out; next, one had to wait for the grocer to get back with on a messaging platform, where a chatbot engages in
50 | the bill and then make the payment via an e-wallet or a conversation with a customer and helps her to buy a
UPI. Sometimes, one would even have to call the grocer product, which is usually a small-ticket item. According

86
PER CENT
THE FUTURE OF SHOPPING
Spends on conversational commerce channels worldwide
are expected to spike in the next few years
SHARE OF INDIANS 350
SPENDING TIME ONLINE
WHO MESSAGE A BUSINESS
AT LEAST ONCE A WEEK 300 290
AMOUNT IN $ BILLION

250

83
PER CENT
200

150
109
178

SHARE OF INDIANS 100

SPENDING TIME ONLINE
41 67
WHO AGREE THAT
MESSAGING IS A QUICK 50
AND EASY WAY TO CONNECT
WITH A BUSINESS
0
SOURCE: ‘BUSINESS MESSAGING 2021 2022 2023* 2024* 2025*
USAGE RESEARCH’ BY KANTAR SOURCE STATISTA; *PROJECTIONS
(COMMISSIONED BY META) TOTAL EXPECTED SPENDING OVER CONVERSATIONAL COMMERCE CHANNELS GLOBALLY

Business Today 5 March 2023

to Prashant Garg, Technology Consult- than 500 million users in India per an IT
ing Partner at EY India, conversational ministry release in February 2021, while
commerce usually involves products JioMart—part of billionaire Mukesh
like apparel, fashion products, FMCG, Ambani-led Reliance Industries—has
fresh foods or other consumer goods. BUYING more than two million merchant part-
He adds that if a generative AI-powered
chatbot starts conversing with cus- SMART ners. The tie-up was a “lighthouse
example” for the world, Nicola Men-
tomers, a third of them end up buying delsohn, Vice President of Global Busi-
a product. “The bot has methods and a 1 ness Group at Meta, had told BT in an
mechanism built in to engage with cus- earlier interaction, adding that all types
tomers and keep them engaged till the CONVERSATIONAL of businesses were already working or-
COMMERCE PLATFORMS
decision to buy is made,” he says. ganically on WhatsApp.
ENGAGE CUSTOMERS
According to independent data IN A CONVERSATION TO Ravi Garg says that since the roll-
platform Statista, total spending over HELP THEM SHOP out of the service in late August, a lot of
conversational commerce channels businesses have approached Meta and
worldwide will jump to $290 billion shown interest in building a similar ex-
in 2025 from $41 billion in 2021. And 2 perience. “We built the business plat-
while the market is still nascent in In- form—WhatsApp—and it can enable
dia, it has huge potential. According SUCH PRODUCTS ARE any type of business on the platform,”
to Akhilesh Tuteja, Partner & Head of USUALLY SMALL-TICKET he says. Business messaging can be used
Technology, Media and Telecommuni- ITEMS LIKE APPAREL, across all of Meta’s platforms, and Ravi
FASHION PRODUCTS,
cation at KPMG in India, India is home FMCG OR FRESH FOODS Garg says that the company is looking
to the largest consumer base for the at three ways to monetise its messaging
biggest conversational commerce en- platform. First is the WhatsApp Busi-
ablers. “India is home to more than 600 3 ness App, which is free to use for small | 51
million smartphones with one of the businesses; now, Meta is planning to
cheapest internet connections in the AI-ENABLED CHATBOTS add a subscription layer, which will give
world. This infrastructure, along with PROVIDE A PERSONALISED users access to advanced features. Sec-
the reach provided by these platforms EXPERIENCE AND KEEP ond, its WhatsApp Business Platform
and vernacular accessibility through THE CUSTOMER ENGAGED API, which is for medium and large busi-
TILL A DECISION TO BUY
voice commands, sets the right plat- IS MADE nesses. Here, businesses are charged for
form for Indian as well as global brands conversations they have with custom-
to penetrate the Tier II and Tier III cit- ers. The third revenue stream is click-
ies. The new generation in these cities is 4 to-messaging ads, wherein, by clicking
more aspirational, tech-savvy and has on an ad on Facebook or Instagram, one
increased disposable income,” he says. TOTAL SPENDING OVER lands on a messaging conversation.
Although India is a long way from Chi- CONVERSATIONAL
na, it still has 200 million-plus online COMMERCE CHANNELS
WORLDWIDE WILL JUMP
ETA’S BULLISHNESS ON

M
shoppers, 65 million-plus MSMEs and busi-
TO $290 BILLION IN 2025
$100 billion in gross merchandise value FROM $41 BILLION IN ness messaging in India is
(GMV) today—the total addressable 2021, PER STATISTA backed by research. According
market for conversational commerce to a Kantar survey commis-
is huge, he adds. EY’s Prashant Garg sioned by Meta in April 2022, more than
agrees. “In two years’ time... we will be 5 70 per cent of Indians surveyed said
nearly a quarter of whatever China is they prefer to message businesses rath-
now,” he says. WHILE IT IS STILL IN er than send emails, call or visit their
No wonder that for Meta, conversa- A NASCENT STAGE, website, while 75 per cent said they are
tional commerce, or ‘business messag- RISING SMARTPHONE more likely to do business with/pur-
PENETRATION AND CHEAP
ing’ as the company calls it, is its next INTERNET ARE LIKELY TO chase from a company that they can
big bet. In India, its tie-up with JioMart DRIVE CONVERSATIONAL contact via messaging. The survey adds
is significant since WhatsApp had more COMMERCE IN INDIA that 86 per cent of adults in India mes-

Business Today 5 March 2023

 TECHNOLOGY E-COMMERCE

, sage a business at least once a week, considerably

“What s happening on
WhatsApp in India is higher than the global average of 66 per cent.
inspiring customers Ravi Garg says that business messaging provides
across the world. Meta customers with a personalised experience, some-
thing that shopping online generally lacks. EY’s
is committed to helping
Prasahant Garg adds that if an AI-powered chatbot is
businesses in India build at work, it can provide customers with a personalised
valuable journeys on experience that even a brick-and-mortar store is un-
WhatsApp” able to, since the bot has to engage with a single cus-
MATT IDEMA tomer while a shop assistant has to attend to many.
VP, BUSINESS MESSAGING, META He adds that AI-powered chatbots can be added to
existing websites or apps to drive customer engage-
ment. This is done by using turnkey solutions pow-
“We built the business ered by conversational AI that uses data, machine
platform, WhatsApp, and learning, and natural language processing to imitate
it can enable any type of human interactions, recognise speech and text in-
business. You can buy puts, and translate their meanings across languages.
tickets for Bengaluru For instance, software giant IBM has such a solu-
metro and scan the e- tion called IBM Watson Advertising Conversations,
ticket to board the train; which helps facilitate personalised AI conversations
and even book cabs” with consumers virtually anywhere online.
While the space is set to grow rapidly in India, it is
RAVI GARG not without its challenges. Tuteja of KPMG in India
DIRECTOR, BUSINESS
MESSAGING-INDIA, META says that customising and training a conversational
52 | AI product in a country with around 22 official lan-
guages along with the required accuracy, is possibly
“India is a long way from the biggest challenge. The next challenge is enabling
China, but it still has 200 security and privacy for the users of the conversation-
million+ online shoppers, al AI product in a manner compliant with the local
65 million+ MSMEs and laws, he says, adding that ensuring human bias and
$100 billion in GMV examples of unethical behaviour from the training
today—the opportunity data do not pass into the AI is another big challenge.
for conversational Meta’s Ravi Garg says that for WhatsApp, user
commerce is huge” privacy remains at its core, despite it being open for
business. “Messaging is the best way for people and
AKHILESH TUTEJA businesses to connect, and India has led that trans-
PARTNER & HEAD OF TECHNOLOGY, formation on WhatsApp. The scale, use-cases, and
MEDIA AND TELECOMMUNICATION,
KPMG IN INDIA new buying experiences from the region are things
we are really excited to see. What’s happening on
WhatsApp in India is inspiring our customers all
“A third of customers over the world. With business messaging as a top pri-
conversing with a ority for Meta, we’re committed to helping business-
generative AI-powered es of all sizes in India to build valuable journeys on
chatbot end up buying WhatsApp and keep innovating in this space,” says
a product. The bot... Matt Idema, VP of Business Messaging at Meta.
keeps them engaged As for my Kolkata-based relative, he is happy with
till the decision to buy the convenience afforded by technology as it offers
is made” him more time for other pursuits. Wonder what oth-
er chatbots he will start conversing with next.
PRASHANT GARG
TECHNOLOGY CONSULTING
PARTNER, EY INDIA @abhik_sen

Business Today 5 March 2023

54 |
 THE BT INTERVIEW

‘Don’t get
distracted by what
you can’t control’
Bob Moritz, Global Chairman of PwC, talks about dealing with the tough times,
ESG and the role of India in the new world order

PHOTOS BY MILIND SHELTE

new global framework. In a freewheeling

chat with Business Today’s Krishna
Gopalan, Moritz outlines his views on
inflation, disruption, China, ESG and, of
course, India. Edited excerpts:

Q: You have seen many a phase in your long

career. From a global point of view, what is
remarkably unique about the period that we
are in today?
A: I would say the biggest moment that we have is
He has seen the India growth story from the existence of two phenomena. One, the C-suites
close quarters. Bob Moritz, who has of governments and corporates are facing an enor-
been visiting the country for more than mity of challenges to deal with. All this is coming
three decades, remains upbeat about with tremendous speed and impact. The question
is, are we going to make the right decisions, be agile
what lies ahead for the country. The
and move in the right direction, or will we miss the
59-year-old Global Chairman of PwC,
opportunity?
who joined the professional services On the other side, you see the world going through
network in 1985, likes what is being done some seismic shifts with the demographics chang-
on digitisation in India and believes that ing dramatically both in terms of size and the rise of
the country’s talent pool is impressive. those in the lower class and middle class. You see a
That said, the current global uncertainty polarisation of the world as the haves and the have-
means a new role for the country in the nots, from a political and economic perspective. You
world order. The PwC veteran says that see the implications of technology and climate, plus a
India has to make a mark for itself in this combination of this changing the labour force.

Business Today 5 March 2023

 THE BT INTERVIEW

56 |
Q: How much has changed from the past and
how much from your earlier experiences can “The difference between
perhaps be adapted today? China and India is that in
A: Today, we talk about global capital markets and the case of China, you had
capitalism being dead. No, [they are] not dead. We need
each other more than ever before. It has just got a dif- uniformity relevant to how
ferent way of rewiring itself. government and business
I was fortunate enough to spend some time going interacted. In India, you’ve
through various crises. Those include 9/11 or the got the federal-like level and
global financial crisis or the dotcom story. At times, the state-like level and not as
we reflect too much on what has served us well in the much alignment as necessary
past but that may not be fit for what lies ahead. Our
definition of key metrics like GDP is a great example
to drive speed, certainty
of this. But in today’s environment with zero interest and scalability”
rates or even negative interest rates, a fully employed
labour force in some countries or a potential reces-
sion [in others], a lot of economic philosophy may be A: The reality is that certain parts of the world have
relevant but not absolute. had to deal with inflation for the past two decades and
There is also a need for leadership to be more India is one of them. Some of the emerging economies
engaging, and listening to ensure it can be much more in South America have also faced it.
responsive with speed and urgency. That’s going to be a But let’s go back to the fundamental principles. You
challenge and I think, for the next decade, the question can control what you can control, but not get disrupted
will be on how we move with speed and certainty to and distracted by what you can’t control. Your job is to
take advantage of the opportunities and at the same pull the levers of change. And then when things change
time, mitigate or minimise the downside risks. around you or move fast, you need to adjust. And that’s
the leadership challenge now. So, for corporates, the
Q: We live in uncertainty coupled with dis- traditional budgeting for the next three to five years
ruption. If those can possibly be dealt with, is less certain now. It’s more about the scenarios and
how does one contend with inflation? figuring out what do I do in x-, y- and z scenarios,

Business Today 5 March 2023

 ON A WORLD forth. It is the trust that you will do things
IN FLUX the right way and trust in the numbers—
both financial and non-financial—that
The world is going people will rely on to make a decision on
through some
seismic shifts investing.
in terms of the I like the labour force that has been
demographics created and also the digital assets and the
changing—both digitisation of the economy that is being
in terms of size
and the rise of the
leveraged. Those two things are super im-
lower and middle portant to the future of this economy. Now,
classes. You see a there are two things that are yet to come.
polarisation of the One is the climate aspect and the other is,
world as the haves how will the infrastructure continue to be
and the have-nots,
from a political and
built out?
economic pers-
pective. You see Q: Much has been said about China
the implications of and about China-plus one. What is
tech and climate,
plus a combination
your view?
of this changing A: First, in the case of China, you had a
the labour force country that developed very, very fast, and
had a huge impact on the world and took
ON CAPITAL a role that some would argue is equal to a
MARKETS AND leading country like the US. And in doing so,
CAPITALISM it created alternatives. Other than the US
from a dependency perspective, it did that | 57
both financially and economically. Equally Today, we talk by enhancing the growth in the local domes-
about global
important is climate. If I can’t predict the capital markets tic economy that’s creating 20-30 million
weather, how am I going to get 1.5 degrees of and capitalism new jobs a year.
mitigation? being dead. No, it’s Now the difference between China and
not dead. We need India is that in the case of China, you had
each other more
Q: You first visited India in 1992. uniformity relevant to how government and
than ever before.
What do you like about what you see It has just got a business interacted. In India, you’ve got
today? different way of the federal-like level and the state-like level
A: I think there are two things that we have rewiring itself and not as much alignment as necessary to
to think about. As a country, you have much drive that speed, certainty and scalability.
more interaction and involvement in the ON ECONOMIC Having said that, where India now has a big
global economies than what it was 30 years PHILOSOPHIES advantage is that it is seen as that second
ago. Then, it was domestic-focussed and source or that third source. If it delivers an
today, the world is seeing India as a much In today’s affordable supply chain, manufacturing
environment with
bigger opportunity. The discussion today is zero interest rates and goods and services and labour—if all
about how this country can become a bigger or even negative this can be delivered in a climate-friendly
asset to the rest of the world in areas such interest rates, a way with the right digitisation and the right
as supply chain. And clearly, infrastructure fully employed data connection points, people will see that
labour force in
has changed tremendously and a lot more as a benefit [to the world].
some countries
needs to be done. or a potential
If you go to the financial side of the recession, a lot Q: There is a lot going on around
equation, the amount of FDI or trade has of economic ESG. But it is also a situation where
seen a huge leap. In 10-20 years from now, philosophy may be one has to deal with the conflicting
relevant but not
you have the potential to be right up there absolute objective of meeting current energy
with the US and China. So, that is a huge requirements. It is a difficult situa-
flip. In order for it to secure that place in the tion to be in…
world, you need to have trust in the society A: Not necessarily. We have a slowing
that you’re interacting with, plus trust in economy and institutions need to survive
the government policies that have been put the next two to three years to thrive in the

Business Today 5 March 2023

 THE BT INTERVIEW

next 10-20 years. To make it in the immediate future, A: You are in a difficult economy, but you are going to
you actually have to deliver the bottom-line results see winners and losers. The winners will be the ones
and start to make progress on the non-financial that move with speed. They’ll continuously refine
results. It’s not that hard. What one needs to do on the their balance sheets and operating cost structure for
ESG agenda is to start to make a commitment, bring better short-term returns and also make faster, better
about a behavioural change and then measure oneself decisions. They will deploy financial and people capital
to demonstrate progress. in the right places and take risk as much as they will mi-
If you want to move away from coal or oil or any nimise it. And the organisations that do that well will
other carbon-intensive energy or supply chain source, emerge stronger.
and if you want to say ‘stop that tomorrow’, I’ve got
issues related to cost, security and availability. And Q: Are we then going to see valuations cor-
that’s what you’re dealing with right now in Europe, as recting themselves?
we think about the energy crisis. A: You’re already starting to see valuations come down
Now what I can do, though, is to say I will be on a sustained basis. But let’s recognise that the system
greener. I will make progress over the next couple of we have today has put a premium on revenue growth
years and do that in a fair and equitable way such that I amid a stagnant economy. Now you’re going to see rev-
enue growth that should be equating the inflationary
pressures. So, let’s make sure [that] we’re recognising
the value for product innovation, bottom line contri-
“The biggest moment is bution or gaining market share.
the existence of C-suites of
Q: In that case, the composition of M&A ac-
governments and corporates tivity, too, will be different, right?
facing an enormity of A: Very much so. You’re going to see organisations
58 | challenges. This is coming with now being more diligent and probably take a little more
tremendous speed and impact. time in analysing why am I buying/potentially buying
The question is, are we going these assets. The other question will be: what comes
to make the right decisions, with them, including the market, the margins, IP and
the ESG agenda.
be agile and move in the right
direction, or will we miss the Q: What is your economic outlook for the
opportunity?” different parts of the world from where we
are now?
A: Europe today probably has the most concerns in
terms of economic uncertainty that goes straight to
don’t assert the negative attributes, while at the same the inflationary pressures and the energy price issues.
time make the change the world needs. To me, these I do think Europe is going to have a much more acute
things go hand in hand. It’s an end statement and not time of dealing with the severity of this. On the other
one or the other. If any organisation is developing a side of the equation, India, and APAC more broadly, has
strategy or re-articulating or refining it, you cannot do a lot more upside potential, which organisations will
it without ESG. want to take advantage of. And it’s not only the domes-
Coming to behavioural change, this is where tic organisations in these countries—it’s going to be
governance bodies become really important. The fact the rest of the world saying that there is an opportunity
is, if I do a good job on climate, I should have a better to deploy capital and to actually get a return from it.
brand. If I do a better job on climate, more employees The US is placed smack in the middle. You’ve got an
will work for me. And if I do a better job on climate, I economy that is still strong, as is the labour market;
should have more consumers. I will also be cost-bene- plus, you have a consumer that is still confident on
ficial and deliver a better RoI [return on investment]. spending power. The question is going to be, ‘How do
All these things are very much linked together. we manage our way through some of the monetary
policy changes that are in place; what will be the effect
Q: It looks like a challenging year ahead glob- of that and the speed of that effect?’
ally. How can countries stand up to face what
looks like a turbulent period? @krishnagopalan

Business Today 5 March 2023

 NOT TOO LONG AGO, many Indians
took to investing abroad as stocks of
tech firms like Meta (Facebook), Al-
phabet (Google) and Netflix, among
others, hit record highs. It was in the
midst of this euphoria that India’s
capital markets regulator, the Secu- | 61
rities and Exchange Board of India
(Sebi), had to step in and stop mutu-
al fund (MF) companies from taking
IN A SCENARIO WHERE INTERNATIONAL fresh subscriptions in international
MARKETS HAVE STARTED RECOVERING schemes on account of crossing
DUE TO A SLOWLY STABILISING OUTLOOK , the regulatory limit of $7 billion for
SHOULD YOU INVEST IN FOREIGN STOCKS ,
overseas investments.
However, the story soon changed
PARTICULARLY OF LARGE TECH FIRMS ? when high inflation and recession-
ary fears in some developed econo-
BY TEENA JAIN KAUSHAL mies sent their stock markets on a
downward spiral. Sample this: Nas-
ILLUSTRATION BY RAJ VERMA daq in the US, China’s Shanghai SE
Composite Index and Germany’s
DAX fell by 34 per cent, 15 per cent
and 12 per cent, respectively, in
CY22. The crash in the global mar-
kets was so steep that Sebi again
allowed MFs to invest in foreign
stocks due to the headroom that
became available. However, after
underperforming over the past year,
international MFs have again start-
ed rallying. Consider this: over the
past one year, international funds
have delivered an average negative
return of 4 per cent. However, over
the past three-months they have giv-
en an average return of 13 per cent,
 MONEY TODAY FOREIGN EQUITIES

In Recovery Mode
Foreign markets have recovered in the past three months
25
20

(RETURNS IN PER CENT)

15
10

according to Value Research (as on 5

February 10). With no increase in 0
the investment limit by the Reserve -5
Bank of India (RBI), recently Edel-
weiss Mutual Fund and Kotak Mutu- -10
al Fund have decided to temporarily -15
suspend subscriptions to their sev-
-20
en and one international-focussed

Dow Jones
CAC 40
(France)

Nikkei 225
DAX

Shanghai*
(China)

FTSE 100
(UK)

Straits Times

Nasdaq (US)

(Japan)

(US)
(Germany)

(Singapore)
MFs, respectively.
So, a good question to ask now is
this: is it a good time to invest when
international markets have started 3-MONTH 1-YEAR 3-YEAR
DATA TILL FEBRUARY 10, 2023; *DATA TILL FEBRUARY 9, 2023
looking attractive again? Take for in- SOURCE ACE EQUITY
stance, the S&P 500 Index, currently
trading at a price to earnings (P/E)
ratio of 19.72x compared to 25.96x a
year ago, and 40x two years ago. Indi-
vidual stocks such as Alphabet, Tesla “does play out really well”. While the sification means that there will be
and Meta have also fallen sharply by Nasdaq fell by 33 per cent in 2022, the years when India does well and these
62 | 25 per cent, 43 per cent and 50 per Nifty 50 gave a return of 5 per cent. countries do badly, and you can’t get
cent, respectively, over the period of An important point to keep in hyper about it. You just need to find
one year (as of January 30, 2023). mind is the proposal made by Fi- the right asset allocation,” she adds.
Experts say this provides an nance Minister Nirmala Sitharaman Experts believe that while sail-
opportunity to buy international in Budget 2023-24. Per the proposal, ing in overseas waters, it is essen-
stocks at lower prices as their funda- from July 1, 2023 onwards, if you tial to differentiate between ma-
mentals still remain strong. More- convert the rupee to any other cur- ture tech and new-age tech firms.
over, overseas investing ensures rency for investments abroad, then “During Covid-19, we saw a lot of
that investors don’t put all their eggs 20 per cent of the amount will have these companies go up, obviously
in one basket, and provides their to be set aside as tax collected at because interest rates were too low
portfolios with the much-needed source (TCS). Currently, TCS of 5 and, hence, funding was easy. But on
geographical diversification, espe- per cent is levied on foreign outward the other side were the mature tech
cially when India accounts for just remittances above `7 lakh. firms such as Google, Facebook, Mi-
3 per cent of the world’s market cap. crosoft; they do have fundamentals,
“Investing internationally works are profitable, and they are growing
well because of diversification. ATTRACTIVE well. And if you see over the past 20
Investors gain by having some of VALUATIONS years or so, a 20-30 per cent fall in
their portfolios outside their coun- So, should investors cash in on the tech stocks is not uncommon. So,
try as international markets or the cheap valuations? “Last year wasn’t I would differentiate between the
US markets move in very differ- easy for tech stocks. Do these themes two; I’m not too confident about
ent directions compared to Indian still make sense? I think they do,” the new-age tech firms, but I’m
markets. And that provides a lot of says Radhika Gupta, MD & CEO very confident about the mature
flexibility to a portfolio,” said Pra- of Edelweiss Asset Management. tech space,” said Neil Parag Parikh,
tik Oswal, Head of Passive Funds at “When we sold international invest- Chairman and CEO of PPFAS AMC
Motilal Oswal Asset Management ing, we had been proponents of this at the Market Today Summit. He
Company (AMC) at BT’s Market To- in 2016-2018. One of the things we added that the mature tech space is
day Summit recently. He added that said was that this belief was non- stable, and it provides a good entry
the fact that Indian markets were re- sense that just because Nasdaq made point for international investing.
silient last year and the US markets money for every year last decade, it So, should one invest in interna-
weren’t, showed that diversification will never lose money. Second, diver- tional MFs now? “There is no fur-

Business Today 5 March 2023

Tax Tangle
A look at how your foreign investments are taxed
Mode of Nature of Tax Rates
Buying Income
Long-term capital gains
(LTCG) tax rate of 20 per cent
applicable for investments held
Capital for over 24 months invest in rupees without getting into
Gains the hassle of remittances and forex
If investments are held for less than
charges. So, for the uninitiated, it
Direct 24 months, short-term capital gains is
charged according to your income tax slab is always good to make an entry in a
Buying
staggered manner with 10-15 per cent
Dividends are taxed in the US at a flat of equity investment to be allocated
Dividend rate of 25 per cent. The broker pays the to overseas funds. Once you are com-
Income dividend after subtracting tax, which inves-
tors can adjust when filing taxes in India fortable with these funds, you can ex-
plore further by investing directly in
If held for three years or more, it is treat- foreign markets, the experts add.
Capital ed as LTCG and attracts a tax rate of 20 per Another aspect to keep in mind
Mutual
Gains cent after indexation. If held for less than
Funds while investing directly in foreign
three years, it is treated as STCG and taxed
as per their tax slab markets is capital gains tax, as
generally, international investors
churn their portfolios a lot. In the
case of international MFs, just like
debt funds, if they are held for three
ther update. What you are allowed
to do is take money, net of redemp-
Overseas years or more, long-term capital
gains (LTCG) attract a tax rate of
tions. So, depending on each indi- investing 20 per cent after indexation benefit, | 63
vidual fund’s situation, we are tak- whereas if they are held for less than
ensures that
ing money via SIPs, and we’re doing
, three years, short-term capital gains
so in compliance with guidelines. In
fact, we are seeing people starting
investors don t (STCG) is taxed as per their tax slab.
If you invest directly in foreign
SIPs in funds like Greater China at put all their eggs equities, LTCG tax rate of 20 per cent
lower levels. Different industry play- (plus applicable surcharges and cess)
ers are taking very different stances. in one basket, is levied on gains made on them if held
We want to request the RBI to look at
enhancing these limits,” says Gupta.
and provides for over 24 months. If the investment
is held for less than 24 months, then
their portfolios STCG is levied as per your income tax
slab. Moreover, dividends are taxed
FUTURE FORWARD with the in the US at a flat rate of 25 per cent.
So, which route is better—investing
directly or through MFs? The cost of
much needed The broker paying the dividend sub-
tracts the tax before distributing the
investing directly is high. Hence, if geographical remaining profits. However, one can
your portfolio value is large and you claim credit for the dividend tax paid
have the time to devote to analyse diversification when filing taxes in India.
and track foreign stocks, then you Last but not the least, it is advis-
can consider investing directly, say able to take the plunge after under-
experts. Here, investments are made standing the costs involved in foreign
by using the liberalised remittance investing if you are investing directly.
scheme (LRS) of the RBI, which For small investors, overseas MFs
is available to all resident Indians. could be the best route to diversify
Through this scheme, an individual tional fund as it is cheaper and has- your portfolio. In the end, it is always
can remit up to $250,000 per finan- sle-free. One doesn’t need to have an a good idea to be on the lookout for
cial year for such transactions. overseas broking account, as there greener pastures, whether domestic
Otherwise, for small investors, are many international schemes that or international.
the most efficient way to invest are available in India. The biggest ad-
abroad is to buy a passive interna- vantage of these funds is that you can @teena_kaushal

Business Today 5 March 2023

 THE BUDGET ROUND TABLE

FINANCE MINISTER NIRMALA SITHARAMAN TALKS ABOUT

SOCIAL SECTOR SPENDING, CAPEX, THE NEW TAX REGIME
AND WHY THIS YEAR’S BUDGET ISN’T A POPULIST ONE

PHOTOS BY HARDIK CHHABRA

REFUTING SUGGESTIONS THAT the Bud- addressing India’s collective aspira-

get 2023-24 proposals were populist in tions. Edited excerpts:
nature, Finance Minister Nirmala Sith-
araman tells a panel of Business Today fff
and Aaj Tak Editors that the Budget is, Rahul Kanwal: What is your reac-
in fact, rather forward-looking. Taking tion to the Opposition’s remarks on
questions on a wide range of issues from the reduction in allocation for social
social sector spending to revision in in- sector schemes?
come tax rates to the Adani-Hindenburg I invite them to go and look into the details
saga, Sitharaman says that the next 25 of the Budget. When it comes to the Ma-
years of Amrit Kaal would be all about hatma Gandhi National Rural Employment

Business Today 5 March 2023

 | 65

Business Today 5 March 2023

Guarantee Act, 2005, (MGNREGA), MGNREGA workers. I would like to in Tier II and III cities, civil aviation
the allocation is announced at the ask the Opposition to please spare is growing in India. Similarly, the
time of the Budget because it’s a de- some time to look at these initiatives roads & highways sector has shown
mand-driven programme. We keep and then come back to me. a capacity to absorb a higher alloca-
adding to it by raising the supple- tion. For states, the `15,000-crore
mentary demand for grants. Before fff allocation in Budget 2021-22 was
the Covid-19 pandemic, and also Udayan Mukherjee: This `10 expanded to `1 lakh crore in Budget
after the pandemic, there has never lakh-crore capex has to be 2022-23. And now that has gone up
been a drop. However, if the focus is lauded by everyone. But the to `1.3 lakh crore because states are
only on MGNREGA, you are missing sectors—roads, railways showing a clear appetite to absorb
out on several other items. Who are and defence—that you have more capital expenditure.
the ones building homes? There is a targeted, do you think they
66 per cent hike in Pradhan Mantri have the capacity to absorb the fff
Awas Yojana. Will the `79,000 crore number? Anjana Om Kashyap: So, is it a
spent there not benefit the same Last year, while talking about the populist Budget?
set of people? We have also given a supplementary demand for grants No, it is a programme for the people.
higher allocation through our water in the Lok Sabha, I openly said that I Several things kept languishing. It’s
programme, Jal Jeevan Mission. am even giving `10,000 crore more not just about the centre’s need to
Building water tanks, taking piped for this year because the Indian Rail- keep up the engagement with the
water connections to the villages ways was moving ahead in terms of states, which will happen anyway.
and from there to households, these things that had been pending for de- It’s also about addressing the collec-
tasks are now being performed by cades. Also, with runways being built tive aspirations of this nation.

Business Today 5 March 2023

 THE BUDGET ROUND TABLE

fff their profits have been going up. The fff

RK: But given the standoff on health of public sector banks in the SZ: What’s your philosophy
our border with China, hasn’t last few years has improved consider- behind sweetening the new tax
there been a reduction in the ably. They haven’t sought funds for regime? Some are saying it may
money allocated to the defence recapitalisation for the past three lead to disincentivising savings.
services? years. This indicates the health of You first tried this in 2020…
We have taken care of defence Indian banks. Not really. I couldn’t have anticipated
without any pilferages and also with that in 2023, I would need people to
the One Rank, One Pension scheme fff spend more, so I brought in those
for our personnel. All of that never UM: Have you also thought measures in 2020. The new tax
happened before. I would also like to about what is stoking so much regime was brought in because we
highlight our defence preparedness job creation in nations such as wanted a simplified and reasonably
in terms of the increased accessibil- Bangladesh and Vietnam? lower taxation rate, particularly for
ity by road to the border areas. It would be very difficult for me to an- those people who are in the lower-
swer that question if you conflate us and middle-income bands. Since we
fff with Bangladesh and Vietnam. I am couldn’t have done it in one go, we
Siddharth Zarabi: What is the not refuting that they are doing well. have gone about doing that steadily.
status of public sector banks at However, they create certain kinds That’s why we have retained the old
present? of jobs while India is at a stage where tax regime, whilst bringing and mak-
For the past two years, the non- industries, while expanding capacity, ing the new tax regime even more
performing assets of public sector are also looking at boosting produc- attractive through easier compliance
banks have been going down, while tivity in terms of bringing in higher for those slabs that the majority of the
levels of tech such as Industry 4.0 and Indian middle class belongs to. We
Web 3.0. My conversations with in- haven’t shut down the old tax regime
dustry have revealed that they are on because people are still using it. I am | 67
the lookout for people appropriately not forcing anyone to come into the
skilled for those jobs... We are rushing new tax regime, but I would certainly
the certification of institutions that like to make it more attractive so that
can train [people] for the industry. people see some merit in coming into
a system that is a lot simpler.
fff
UM: Why is the huge impetus to fff
the credit cycle not happening SZ: On tax slabs, if you’re earn-
W in terms of greenfield projects? ing up to `15 lakh you are in the
DECODING THE Then what are those immense 20 per cent slab, but the moment
BUDGET (From left) achievements by the private sector you cross that threshold, you
Anjana Om Kashyap, in renewable energy? What about go to 30 per cent. The question
Senior Executive those component manufacturers people are asking is why isn’t
Editor, Special
getting into chip manufacturing? the rate of personal income tax
Projects, Aaj Tak;
Rahul Kanwal, News What about electronics? As I said, the same as that of the corpo-
Director, India Today we have got much used to the core rate tax rate of 25 per cent?
and Aaj Tak, and industries. However, even they have Interesting. Let me work on it the
Executive Director, a challenge before them. Take the next time.
Business Today; Union example of steel. No longer can the
Finance Minister Indian steel industry claim that fff
Nirmala Sitharaman;
Udayan Mukherjee,
it’s expanding and producing more RK: You’ll work on it next time?
Global Business steel. No longer can the industry I will work [on it], but then I’m not
Editor, Business expand capacity unless it is produc- promising anything!
Today; and Siddharth ing green steel. Existing steel will
Zarabi, Managing face prohibitive non-tariff barriers fff
Editor, Business as the measure of quality is now RK: But this is an idea that ap-
Today TV
green steel. peals to you Finance Minister?

Business Today 5 March 2023

 THE BUDGET ROUND TABLE

As I said, a simpler and more attrac- fff appointment have been given by the
tive new tax regime… it can start and AOK: Is markets regulator Sebi government as far as unemployment
end at every stage of it. investigating the Adani-Hin- is concerned. We are also regularly
denburg saga? doing programmes related to skilling
fff The markets regulator has already and upskilling. We are also adding for-
RK: So, the finance ministry given its statement. eign languages in the training process
will consider in the months to considering overseas opportunities.
come a reduction in personal fff Lastly, despite various issues for
income tax from 30 per cent to UM: The Adani Group is one of farmers in the year 2020, they have
25 per cent? the important players in the managed to get good produce. We
No, I am not saying that! infrastructure space. Is it big have been keeping interest rates on
enough to be termed ‘too big farmers’ loans under control. We have
fff to fail’? There are suggestions brought them under interest subven-
RK: It will be applauded very that the recent setbacks suf- tion so that their interest rates do not
loudly… fered by the group may have an go up. Expansion of the Shree Anna
No, I don’t want applause. I have to impact on some of our impor- scheme, installation of solar panels
work. tant infrastructure projects. that have helped cut electricity bills
Do you see any serious risks? and several other programmes have
fff Any institution on the verge of fail- proved to be beneficial for farmers.
RK: Are you satisfied with the ure or any institution in a high-risk We are committed to doubling farm-
results you have got from the environment for an economy like ers’ income as promised.

WE HAVE TRIED DEALING WITH INFLATION

BOTH IN THE BUDGET AND OUTSIDE. WE ARE TRYING
OUR BEST TO TAME INFLATION

reduction in corporate taxes? India can have its impact. I can’t say fff
Like, publicly and privately, we that this would be greater or lesser. UM: What is your view on the
have seen you and others in the I will give you the lived experience national debt? How do you
government nudging India Inc. of 2019 where I would wonder which pare it down before it becomes
to do more... non-banking financial company a huge problem?
First of all, I would like to bring in might be in difficulty the following Debt is a concern and we will bring it
the dimensions that the reduction day. Like, who would fall off the down. But why have we reached this
in corporate tax rate has brought in. cliff? If I had disclosed my fears level? I empathised with states when
It has helped in cleaning up the bal- at that time what would have hap- the economy dipped in 2020 as they
ance sheet of the industry so that it pened? My job is to run the economy did not have any money. As a result,
could de-leverage to return a lot of its smoothly. Where I have to intervene, back-to-back borrowings were
loans to banks. The problem of twin I intervene. undertaken; otherwise where would
balance sheets was also addressed. they be? However, even now we are
Thus, the economy has received so fff in a better position than many other
many benefits from a reduction in AOK: What is your view on countries.
corporate taxes. However, I don’t inflation, unemployment and
expect the money saved through this farmers’ distress? fff
measure to come into the industry We have addressed all of these issues RK: How have you changed as
this year itself. Yes, it will come in. in Budget 2023-24. We have tried a Finance Minister in the past
But, more than that, it has helped dealing with inflation both in the few years?
clear a lot of backlogs. And I see that Budget and outside. We are trying I am now a lot cooler when it comes to
as a benefit. our best to tame inflation. Letters of taking criticism!

Business Today 5 March 2023

 1

THE SMILE WAS RESPLENDENT. Fi-

BUDGET BURST
GRACED BY A LONG LIST OF LUMINARIES,
nance Minister Nirmala Sitharaman
has not had an easy time helming
the economy in some of the most
difficult years in recent times. Life
was made difficult by the Covid-19
pandemic and the consequent
economic slowdown in India, fol-
THE INDIA TODAY-BUSINESS TODAY BUDGET
lowed by the shock of war in Ukraine
ROUND TABLE PROVIDED DEEP INSIGHTS INTO that tore supply chains asunder and
THE ANNOUNCEMENTS MADE IN BUDGET thrust the West onto the threshold
2023-24 BY TEAM BT of a recession. As inflation spiked,
PHOTOS BY MANISH RAJPUT exports slowed, and the rupee fell,

PRESENTS CO- PRESENTED BY CO- PRESENTED BY

Business Today 5 March 2023

 1. Aroon Purie, (left), Chairman and
Editor-in-Chief, India Today Group,
and Nirmala Sitharaman, Minister of
Finance and Corporate Affairs, unveil
the special 31st Anniversary Issue of
Business Today

INDIA’S ECONOMIC
SUPERHIGHWAY
2. Rahul Kanwal, (left),
News Director, India Today and
Aaj Tak, and Executive Director,
Business Today, with
Ashwini Vaishnaw,
Minister of Railways;
Communication,
Electronics and IT

The construction work for India’s

first bullet train is happening at a
very fast pace. Already 140 km of
pillars have been cast, almost 28
km of girders have been laid, the
bridges over all the eight rivers
have reached deck level, and work
is going on at all the 13 stations
High-speed rail is not merely a
transportation product. It makes
big cities into one single economic
zone for growth
2
Semiconductors are vital
for India’s future. Electronics
manufacturing was practically
negligible 10 years ago. Close
the FM held steady and unleashed a hotel. The day-long programme, to $87 billion of electronics
spectacular capex war that sought of which the FM’s was the last and manufacturing is happening in
to bring the economy on keel and showstopping session, was graced by India now, and we are reaching
almost $9 billion in exports of
provide jobs to a population trauma- a long list of luminaries—including mobile phones this year
tised by the horrors of a once-in-a- Union ministers, opposition leaders,
The government has contacted
century pandemic. After presenting finance ministry Secretaries who each and every participant of the
her fifth and last full Budget for the were instrumental in drafting the chips ecosystem, and they have
current government’s tenure, the Budget, industry leaders and leading committed to come here
FM looked relaxed and assured as economists, among others. Attended There is a very strong, positive
she held forth on her Budget initia- by more than 200 top industry lead- reaction by chip majors for India.
tives at the India Today-Business To- ers, the programme provided a high The decision on fab applications
will be announced in 14-16 months
day Budget Roundtable on January degree of insight. Some highlights from the date of opening the
6 in New Delhi’s posh ITC Maurya are given here for your perusal. bidding process

BANKING PARTNER CO-POWERED BY ASSOCIATE PARTNERS

Business Today 5 March 2023

 ON THE HIGHWAY TO
PROSPERITY
Nitin Gadkari,
Minister of Road Transport and Highways
READING THE The government
has done well by
The central govern- awareness about
BUDGET’S FINE PRINT giving precedence
(From left) Sourav Majumdar, Editor, to growth over
ment is aiming to road safety along
Business Today, with populism at a time
develop India’s road with improving road
when general
infrastructure on par engineering T.C.A. Anant, elections are due in
with that of the US by Former Chief Statistician of India;
NHAI’s infra 2024
the end of 2024 Former Member, UPSC
investment bonds—
Soumya Kanti Ghosh, Ruling parties
There are robust NHAI InvITs—are
Group Chief Economic Advisor, SBI are finally being
future plans for the supporting the gover-
Abheek Barua, forced to seek votes
Bharatmala project nment’s national
Chief Economist, HDFC Bank based on economic
and Green Express monetisation pipeline
72 | highways performance,
Ramesh Chand,
Politics prevents rather than merely
The government exempting VIPs from Member, NITI Aayog announcing doles
is trying to create paying tolls ahead of elections

DEBATING THE
BUDGET
(From left)
Rahul Kanwal, with
Sudhanshu Trivedi, BJP MP,
Rajya Sabha, and National
Spokesperson, BJP
Supriya Shrinate, Chairperson,
Social Media & Digital Platforms
and National Spokesperson,
Congress
Ashwani Mahajan, National
Co-convener, Swadeshi Jagran
Manch

Although PM Narendra Modi has BJP-led government has presented SBI and LIC have exposure to the
termed the MGNREGA scheme as a Budget that will strengthen the Ahmedabad-based group
a monumental failure of the UPA fundamentals of the economy, said
Agreeing with her, Ashwani
government, his government has Sudhanshu Trivedi
Mahajan said that the issue should be
continued to increase the outlay for
In the backdrop of the Adani- discussed in Parliament
the scheme even after nine years in
office, said Supriya Shrinate Hindenburg issue, Shrinate
demanded a discussion in Parliament
Unlike the UPA government, the as public sector institutions like

Business Today 5 March 2023

 THE LONG AND SHORT
OF TAXATION
Nitin Gupta,
The Budget displays lakh crore for the
Chairman, Central Board of Direct Taxes
a clear intent of infrastructure sector
moving towards an era will help provide a fillip
of enhanced capex to projects across a The new tax regime is of income in a very simple
and asset creation, diverse spectrum expected to be a game manner, without the help of
and reducing the over- changer
India will need to a professional
reliance on revenue
expenditure and do things differently The number of tax slabs Certain people are taking
subsidies to ensure that have been reduced and
investments in advantage of the trust
the surcharge for the rich that the government has
At a time when the manufacturing and super-rich has been
private sector has complement other reposed in them by claiming
moderated. So, a lot has wrongful deductions and
been shying away sectors of the economy changed despite there
from investing in the exemptions. The changes
being no deductions or | 73
infrastructure sector, proposed in the Budget are
exemptions expected to make these a
a higher government
allocation of `10 You can file the returns thing of the past

THE PRIORITIES OF
A BUDGET BEFORE
AN ELECTION
Siddharth Zarabi (left), Managing
Editor, Business Today TV, with
Jayant Sinha,
BJP MP, Lok Sabha

Capital expenditure is the secret effect on the economy projects yield benefits to the
sauce for growth as it yields long- economy to the tune of 2.5 times; it’s
term growth, apart from creating a The government is creating even higher for airports at six times
massive number of jobs assets that are going to turn us
more productive and more efficient By keeping inflation and interest
Investments in infrastructure, over the next 30 to 50 years rates under control, the government
such as railways, airports, highways has provided the right environment
and metro lines have a multiplier Investments in infrastructure for private capex growth

Business Today 5 March 2023

 THE HITS & MISSES
IN TAXATION
(From left) Ved Jain,
Senior Tax Advisor
Neeru Ahuja,
APAC Tax Head, Deloitte
Sanjay Tolia,
Partner, PwC

It is expected that more and more The government should have new regime should be appreciated as
people over the next two years will extended the deadline for 15 per it supports making investments
join the new tax regime. As a majority cent corporate tax rate for a company
Increasing the tax exemption limit
of people go for the new tax regime, manufacturing in India, which was
to `7 lakh is the biggest plus along
the old regime will lose its relevance introduced in 2019, to beyond
with reducing the surcharge for
March 2024
Tax rates have remained stable for income exceeding `5 crore
corporates and that is a good thing There is no advantage in the old tax
for businesses regime for resident individuals. The

74 |

DRIVING INDUSTRIAL India has a real opportunity of

becoming a large economy in the
rebate-linked savings
unattractive for the
GROWTH next 25 years, not only in terms of average taxpayer is a pain
(From left) Patu Keswani, per capita GDP increase, but also point
CMD, Lemon Tree Hotels as an example of a sustainable and
inclusive society The start-up industry
Parvesh Minocha, has requested for the
Chairman, Feedback Infra Unless there is another Black equalisation of long-
Navneet Munot, Swan event, the hospitality term capital gains tax
MD & CEO, HDFC Mutual Fund industry will grow for the next on unlisted equities.
Kunal Bahl, CEO, Snapdeal four to five years, with hotel room Currently, if you invest as
Rahul Garg, Founder & CEO, Moglix prices doubling in the next two an overseas investor in
Prashant Tripathy, years an Indian company, you
MD & CEO, Max Life Insurance While the Budget has a lot of get a lower tax rate when
positives, the scrapping of tax you sell your shares in
Aabha Bakaya, Presenter and Senior
benefits for large-ticket traditional a start-up, versus if you
Editor, Business Today TV
life insurance plans while making invest in a company as a

Business Today 5 March 2023

THE BUDGET The government has set a realistic
growth target; the global economic
next financial year

MAKERS environment is not conducive for a The government is on course to

10 per cent GDP growth rate like in spend `7.3 lakh crore (out of the `7.5
(From left) T.V. Somanathan, lakh crore Budget Estimate) in FY23;
Finance Secretary the past
the shortfall is due to some states not
Sanjay Malhotra, Increase in customs duty is a tool being able to utilise the funds initially
Secretary, Department of that has been used by many countries planned
Revenue like Japan and Korea in the past, who
are now global powerhouses The current economic realities
Tuhin Kanta Pandey, Secretary, dictate that the fiscal deficit may
Department of Investment and The government is confident about remain higher than the FRBM
Public Asset Management achieving its ambitious `10-lakh crore (Fiscal Responsibility and Budget
capital expenditure target for the Management) target of 3 per cent

| 75

domestic investor, which makes A BUDGET FOR THE WORKFORCE

it unattractive for domestic
investors to invest in start-ups Dharmendra Pradhan,
Minister of Education
The start-up ecosystem has
been asking for the easing out of
angel tax but that has not come The education sector has around 300 million students
through. Access to money is received the highest allocation
of `1.25 lakh crore in post- The National Education Policy,
essential for the start-up sector
independent India 2020, is expected to help create
and investments from angels play
citizens with a global mindset
an important role in that The ministries of Education; who not only solve the country’s
Health and Family Welfare; problems but also complement
Electronics and IT; and the the global workforce
departments of Science &
Technology; and Space will be `9,000 crore has been
spending a substantial sum on allocated towards skilling to
both skilling and education of create a robust MSME ecosystem

Business Today 5 March 2023

 PREPARING FOR
THE AMRIT KAAL
Budget 2023-24 focusses on infrastructure development,
laying the foundation for achieving the $5-trillion economy
BY SANJEEV KRISHAN target and improving prosperity for the populace

this in the latest Budget by attempt- Cities in India are at the heart
ing to develop a robust logistics of economic growth, and a new
network. Around 100 critical trans- fund with an annual allocation of
portation-related infrastructure `10,000 crore would provide a vital
projects have been planned to enable push to the development of urban
first- and last-mile connectivity. The infrastructure across Indian cities.
Railways received the highest-ever Emphasis has been placed on urban
Budget allocation of `2 lakh crore planning and reforms to create
this year. The focus on funding sustainable cities of tomorrow. This
coastal shipping projects and reviv- could mean efficient use of land
ing 50 airports (including heliports, resources and enhanced availability
water-dromes and advanced landing and affordability of urban land.
THE UNION BUDGET 2023-24 is testi- grounds) will improve connectiv- India’s commitment to a greener
76 | mony to the government’s commit- ity across major economic clusters. world as it transitions to a major
ment to accelerate India’s economic This is in line with the multimodal- economic hub is evident from the
growth while balancing sustain- focussed Gati Shakti initiative outlay of `35,000 crore allotted for
ability. There has been a paradigm introduced in the Budget last year. energy transition. This includes
shift in overall macroeconomic However, there has been no incre- an outlay of `19,700 crore for
priorities, from Covid-19 recovery mental allocation towards the FAME green hydrogen that can create an
to scaling new heights. The thrust II scheme that has been a key driver opportunity for export of green
of the Budget is on infrastructure of electric mobility in India. In the hydrogen and hydrogen-embedded
development through higher capital context of the National Electric Bus low-carbon products. The Budget
expenditure, which now stands at Programme that envisages deploy- aims for India to reach annual green
`10 lakh crore (up 33 per cent from ment of 50,000 electric buses, a lack hydrogen production of 5 million
last year), laying the foundation of additional budgetary support— tonnes by 2030, thereby reduc-
for achieving the ambition of a beyond the initial plan—towards ing the dependence on fossil fuel
$5-trillion economy and improving deployment of electric buses could imports and helping us shift away
prosperity for the populace. Strong be a missed opportunity. from a carbon-intensive economy.
infrastructure is a cornerstone of Though no new areas have been The vision builds on the theme of
any developed economy, and this identified under the production- ‘Lifestyle for the Environment’ that
increased spending will provide linked incentive (PLI) schemes, Prime Minister Narendra Modi
great impetus to other critical areas initiatives such as lowering of duties announced during COP26 in 2021,
such as education and skill develop- on component imports includ- and it will help achieve the goal of
ment, urban development, green ing lithium-ion batteries, parts of carbon neutrality by 2070.
economy, job creation and improv- mobile phones and televisions, lab- In terms of availability of skilled
ing global competitiveness. grown diamonds, and concessional manpower in emerging sectors like
It is a well-known fact that tax rates on new manufacturing co- medical devices, where India has
compared to its global peers, India operative societies should aid the huge potential to boost manufactur-
suffers from higher logistics costs. Make in India agenda. At the same ing, the focus on dedicated courses
If we are to truly develop as a strong time, there could be plans to roll out across key educational institutions
manufacturing hub for the world, more such schemes over the course is likely to enable availability of
this is something we must correct. of the year, and this shall indeed be a industry-responsive manpower.
The government has acknowledged welcome move. Leveraging the experiences of Cov-

Business Today 5 March 2023

 BUDGET COLUMN

id-19, the government has proposed highlighted. Digital public infra- the middle class and that is likely to
to facilitate R&D by providing ac- structure for agriculture shall be augment the overall economic situ-
cess to ICMR labs for faculty of pub- set up to support the growth of the ation at the micro level.
lic and private medical colleges. In agri-tech industry. An agriculture The intention of the govern-
addition to this, 157 nursing colleges accelerator fund shall be set up in a ment appears to be to re-emphasise
are to be established in co-location bid to encourage young entrepre- the focus on AatmaNirbharBharat
with existing medical colleges. neurs in rural areas to aid in solving through substantial capital expen-
The Budget also places emphasis challenges of farmers through in- diture, furthering Digital India,
on promotion of R&D in priority novative tech-led solutions. promoting sustainable choices such
areas. Three centres of excellence On the tax front, the key driver as green energy and improving
for artificial intelligence (AI) will has been to simplify compliance, economic stability, as they shall
be set up at top educational institu- rationalise taxes and maintain the together drive inclusive develop-
tions. New-age courses for Industry stability of the tax regime with the ment. The trickle-down effect of the
4.0 such as coding, AI and robotics end goal of amplifying ease of doing ‘Saptarishi’ is likely to touch all sec-
will be introduced, and 30 Skill business in India. Particular empha- tors, including real estate, banking
India International Centres shall sis has been laid on GIFT City IFSC, & finance, manufacturing, logistics
be set up specifically to skill the with the introduction of several and tourism. In essence, they will
youth. This will empower them to incentives and ironing out of the serve as a collective catalyst to pav-
play a more significant role as India challenges faced in approvals and ing India’s way towards a $7-trillion
confidently marches towards inclu- registration by launching a single- economy by 2030.
sive prosperity. The importance of window clearance system. For indi-
technology in traditional sectors viduals, the Budget has proposed to The author is Chairperson
such as agriculture has also been enhance the disposable income of of PwC in India. Views are personal
 FOCUS ON ECONOMY,
QUALITY OF LIFE
The Budget 2023-24 emphasises on infrastructure
development and entrepreneurial growth in
the country, leading it to stride further and faster
BY SUMANT SINHA on its trajectory of development

fiscal expansion and inflation-rein- Therefore, an allocation of `13.7

ing expenditure re-orientation. lakh crore towards effective real
Four cross-cutting themes, capital expenditure, making up 4.5
listed below, are particularly notable per cent of the overall gross domes-
and praiseworthy: tic product (GDP), is just the kind
of aggressive approach that was
Focus on the common citizen: needed to counter the impending
The change in income tax slabs and economic slowdown. More than a
tax rates and increased exemptions third of this is to two ministries—
78 | have got the biggest initial thumbs the Ministry of Road Transport
up from citizens. It will certainly and Highways and the Ministry of
EVERYONE AROUND THE nation enable greater disposable incomes Railways—reflecting the impor-
anticipated that the Union Budget and help sustain the recent growth tance of transport and logistics as
2023-24 would bring in numerous witnessed in sectors like construc- critical growth enablers. An alloca-
reforms. These included updating tion, real estate, gems and jewellery tion of `10,000 crore to the Urban
tax slabs, increasing value and and fast-moving consumer goods. Infrastructure Development Fund,
breadth of tax-exempted invest- The social sector spending, at `8.28 and a 66 per cent increase in the
ments, and providing resources for lakh crore, is 18 per cent of total allocation to the Pradhan Mantri
medical and related expenses. Wom-
en, students, potential homeowners
and small businesses were hoping
that the Budget would address their
The Budget strikes the right balance
troubles caused by rising inflation, on multiple counts amidst the tough
unemployment and slow growth in
the global economy. economic conditions
In the first Budget of the Amrit
Kaal, Finance Minister Nirmala
Sitharaman did not disappoint government spending. This is prob- Awas Yojana are steps in the right
them. She presented a Budget of `45 ably lower than the previous years as direction, too.
lakh crore, nearly 7 per cent higher a percentage of the total Budget, but
than the projected expenditure certainly higher in absolute terms. Unleashing the MSME sector:
for the current financial year. It Several announcements for sup-
strikes the right balance on multiple Thrust on capital expendi- porting micro, small and medium
counts, viz. between short-term ture: Several credible studies have enterprises (MSMEs) were made.
fixes and medium-term solutions shown that public investment in Rightly so, since this sector ac-
for economic management; between infrastructure is more effective counts for 95 per cent of the indus-
strategic structural interventions than other types of public spending trial units, contributing approxi-
and populist measures in a pre-elec- in increasing economic output, mately 50 per cent to India’s exports
tion year; between growth-oriented particularly over the medium term. and employs 100 million people. It is

Business Today 5 March 2023

 BUDGET COLUMN

the largest source of employment in posal in the Budget. Through a third sion lines from Ladakh and the
the country. Tactically, the Budget proposal that buyers will be able to Faster Adoption and Manufacturing
has sought to sustain two trends claim a deduction for expenditure of Electric Vehicles scheme (FAME).
in the MSME sector witnessed incurred only when payments are The role of nature-based solutions
in 2022: one, recovery from the actually made, the FM has sought in both climate mitigation and adap-
pandemic-induced shock; and two, to address the issue of delayed pay- tation has been recognised through
integration into the global supply ments to the MSMEs. This was a key allocations for mangrove planta-
chains, as other countries and ask flagged in pre-Budget consulta- tions and wetlands and biodiversity
large corporations seek to diversify tions by industry bodies such as conservation. And consumers,
theirs. By continuing the successful Assocham. corporates and communities have
credit guarantee scheme with a been provided a tool in the form of
revamp, the government has killed Turning the LiFE movement the Green Credit Programme to
two birds with one stone—that of into action: The Prime Minister voluntarily but meaningfully invest
ensuring that MSMEs are able to had launched the global initiative in environmental protection.
access collateral free credit and that Lifestyle for Environment (LiFE) To sum it up, Budget 2023-24 by
credit cost is 1 per cent lower—in an on World Environment Day in June the Prime Minister Narendra Modi-
environment where we are already 2022. The Union Budget 2023-24 led government is a prudent one,
witnessing interest rates inch up. has provided significant resources within the context of challenging
Improvements in ease of doing to turn it into action. Strong thrust economic conditions.
business through need for reduced has been provided to clean en-
paperwork and one-stop interfaces ergy and cleaner transport sectors The author is Chairman and CEO of
for information provision and acces- through allocations for the National ReNew Power; and President of
sibility is the second welcome pro- Green Hydrogen Mission, transmis- Assocham. Views are personal
 MISSION 2047: A
TECH-DRIVEN INDIA
As the latest Budget lays emphasis on developing India’s
tech know-how in every walk of life and economy, its
BY ROMAL SHETTY future looks brighter than most of its peers

to come. It is, in fact, an opportunity India’s rural economy.

to accelerate India’s development us- At Deloitte India, we have expe-
ing tech that is most exciting. rienced the benefits of tech in rural
Why is this important? Right from India through our collaboration with
education and skilling and creating the Haryana government. Deloitte
jobs to research for interdisciplinary had set up a fit-for-purpose model
business applications, ease of doing along with ASHA workers, medical
business and addressing social chal- experts, students and the government
lenges, the building blocks of the new- during Covid-19 to provide health-
age ecosystem are rooted in digital care in rural areas through remote
80 | tech. India’s ability to mass-ify tech monitoring. It also ran a pilot in three
and use it at scale is one of the key pil- villages in Haryana to tackle anaemia
AT THE WORLD Economic Forum lars driving economic growth. under the Anemia Mukt Mahilayen
summit held in Davos earlier this year, programme. Telecom connectivity
we witnessed the euphoria around TRANSFORMATION and the hundred 5G labs to be set up
‘this is India’s century’. Undoubtedly, THROUGH TECH in engineering institutions can prove
this is a consequence of India’s fa- Aadhaar, UPI and other platforms pivotal in priority areas like classroom
vourable policy regime, economic and of the early India Stack are great education, precision farming, intelli-
demographic fundamentals and the examples of the catalysts powering gent transport system and healthcare.
resilience demonstrated by the nation India’s transformation. Building on Tech will continue to evolve and
during Covid-19. As the fine print of this, the use of existing components a partnership between the govern-
Budget 2023-24 becomes clear, I feel and developing new platforms is ment, academia and industry will be
confident about how we can address something that the government critical in developing innovations.
the challenges of contemporary India must be acknowledged for. For It is commendable that the Budget
by unleashing the full potential of its example, the government-backed makes a start with the Centre of
people by leveraging technology. Open Network for Digital Commerce Excellence framework for 5G and AI
The vision of a “tech-driven and can become a game changer in giving Labs to achieve the vision of “making
knowledge-based economy with small merchants across India access AI in India and making AI work for
strong public finances”, and a com- to a decentralised e-commerce net- India”, along with incentivising devel-
mitment to sustainability, was amply work. If successfully implemented, opment of new-age technologies.
evident in the Budget announce- consumers will be able to discover
ments. The steps unveiled to make any seller, product or service using EASY DOES IT
India future-ready through skilling, any compatible app or platform. Simi- As India builds on its capabilities and
green initiatives and the use of tech larly, the commitment to building competitiveness, it will continue to
are welcome. While these building an open-source agricultural digital move up the value chain. There are
blocks will undoubtedly propel India stack will enable farmers to get better many possibilities lying in wait for
towards its Amrit Kaal goals, the credit, plan crops, source inputs and India. For instance, managing drones
country will reap the outcomes of more. This coupled with the agricul- like an air traffic controller for a firm
these measures not just at 100 years of tural accelerator programme has the in another country, or providing
independence, but for many decades potential to significantly transform cybersecurity globally from India are

Business Today 5 March 2023

 BUDGET COLUMN

These aspects have helped grow the

average GST collections consistently.
Following the trend, the Budget
has offered several policy measures
to achieve a robust digital economy.
However, the most commendable
announcements was of using tech to
ensure the dignity of every human
being. Machine-hole—the concept of
using machines to clean sewer holes
announced in the Budget—therefore,
is both a symbolic and pragmatic so-
lution that defines what India wants
to be known for as a nation.

GREEN GROWTH PATH

Even as India spends billions on phys-
ical infrastructure and incentivises
manufacturing through production-
linked incentive (PLI) schemes,
championing the green objective is an
ethos engrained in Indian tradition.
Therefore, the Budget intends to not
just increase economic activity, but
also make it sustainable in the longer | 81
run. There is an all-round focus on the
critical aspects of energy transition
and energy security paradigm, with
an outlay of `35,000 crore. The objec-
tive is to promote indigenous manu-
The vision of a tech-driven and facturing and use innovative tech
across new energy areas, including
knowledge-based economy with green hydrogen, battery storage and
strong public finances was amply compressed biogas. Basic customs
duty has been exempted on imported
evident in the Budget announcements capital goods/machinery required for
manufacturing of lithium-ion cells.
Other PLI schemes on manufacturing
just some examples. For these aspira- for the average citizen, there are of battery cells, EVs/fuel cell EVs and
tions to become a reality, not only will several programmes that are critical auto components will further boost
we need to innovate continuously, but for ease of living and doing business. domestic innovations.
we also need a supportive regulatory For example, the proposed National So, while India rules the world
environment. As data moves freely Financial Information Registry will of IT and allied services, this Budget
across borders, India has opened its address the problem of asymmetrical has laid emphasis on the quantum of
doors to address the global challenge information in the financial sector tech that is yet to be conquered. The
ILLUSTRATION BY RAJ VERMA

of data security and privacy. For coun- and help companies borrow. Another intentions of the government are
tries and firms looking for digital con- is the government’s efforts to digitise right, and the conviction displayed by
tinuity solutions, the Budget offers a the compliance experience for as- it is that of a developed economy. The
proposal to set up data embassies in sessees, as that has increased since bold vision will propel India forward.
GIFT City. This is a welcome move to the inception of GST. The successful And collaboration will help us build a
manage India’s regulatory priorities implementation of e-invoicing and better future together.
with emerging opportunities. GST analytics has led to sharpened
While some of the initiatives fraud detection, stricter audit proto- The writer is the CEO-designate of
discussed above are very tangible cols and digital GST forensic tools. Deloitte India. Views are personal

Business Today 5 March 2023

 COLUMN Tax Bites

Taxing Transactions as They Are

According to proposals in the Union Budget 2023-24, the government plans
to tax transactions for their true character, and not the form they are in
BY DINESH KANABAR

The proposal to set up a settle- as a tax-planning avenue. While this

ment scheme for arbitration matters is understandable in the context of
of the government and public sector proceeds of other assets invested in
undertakings is interesting and we a house, the proposal needs recon-
eagerly await details. The commit- sideration where proceeds of one
82 | ment to reduce forms and decrimi- house are invested into another. The
nalise offences is also welcome. current regime continues for capital
On taxation of individuals, gains made up to March 31, 2023, and
there was a reluctance by taxpayers we may witness taxpayers realising
to move to the new tax regime. To gains to avail the current regime.
THE UNION BUDGET 2023-24 has remedy this, the Budget proposes Proceeds received from life
been widely hailed as a positive to increase the threshold level of insurance policies (other than on
and progressive Budget, and taxation to `3 lakh (from `2.5 lakh death), where the annual premium
rightly so. The key pre-Budget ex- earlier), reduce the number of slabs exceeds `5 lakh, will be taxable. This
pectations were that there would and reduce the overall tax, increase will make insurance policies a genu-
be a thrust on capital spending, the tax rebate and reduce the maxi- ine life insurance product rather
particularly in the infrastructure mum marginal rate of tax from 43 than a savings one.
sector, and that there should be per cent to 39 per cent—all benefits Another proposed amendment is
consistency in the tax regime only for those who opt for the new tax taxation of gains on market-linked
with not too many changes. Fi- regime. This will clearly help make debentures; these will now be taxed
nance Minister Nirmala Sithara- the new tax regime, which does away at full rates as short-term capital
man has obliged on both counts. with deductions and exemptions, a gains rather than as listed securities
Moreover, she has avoided popu- default tax regime. Every individual that are taxed as long-term capital
list proposals that are common in will need to analyse the deductions gains. Clearly, the gains on these de-
pre-election Budgets. foregone, particularly the interest on bentures are in the nature of interest
There is a massive thrust in housing finance loans, before making and ought to be fully taxable. Deben-
the Budget on capital spends, an informed choice. Interestingly, the tures issued earlier, whose proceeds
up by more than a third over the tax-free limit for leave encashment are realised after April 1, 2023, will
preceding fiscal. This should help for salaried employees has been in- also be hit by the new provisions.
continued creation of jobs and ex- creased from `3 lakh to `25 lakh. One proposal that has the
pansion of the economy. There are The capital gains tax exemption potential of derailing REIT and
no changes on the corporate tax limit to invest in a residential house InvIT issues—and therefore needs
front and the widely rumoured has been capped at `10 crore. This serious reconsideration—is a new
changes to the capital gains tax will ensure that citizens buy a house tax. According to the proposal, the
regime were not on the table. for genuine residential needs and not repayment of the principal amount

Business Today 5 March 2023

 ILLUSTRATION BY RAJ VERMA

| 83

of a loan in the instrument will There is a proposals in this year’s Budget.

be constituted as “other income”. First, the government would like to
While it is understandable that not
massive do away with smart tax-planning
taxing these amounts could result thrust in the avenues such as those to escape
in double non-taxation, taxing these capital gains tax or arguing that
amounts as other income could
Budget on taxability of perquisites of a busi-
have a very serious impact on the capital spends, ness or profession has to be only of
industry. It would be in the fitness of non-cash items. Second, the govern-
things if these amounts were taxed
which are up ment would like to tax transactions
as capital gains. by more than for their true character and not the
With a view to easing the cash
crunch being faced by the MSME
a third over ostensible form, such as taxing in-
terest on market-linked debentures
sector, it has been proposed that the the preceding or taxing high-premium insurance
expenditure incurred by clients of
MSMEs be tax-deductible when the
fiscal policies that are essentially savings
instruments. We should not lose
amounts are actually paid. While sight of these two emerging trends.
this proposal is welcome, we need All in all, this is a very welcome
to be cognizant of the fact that all Budget that should continue to spur
transactions with MSMEs will now growth and help us realise the GDP
need to be tracked to determine tax growth projections.
deductibility.
There are two overarching The writer is CEO of Dhruva
themes that emerge from the tax Advisors LLP. Views are personal

Business Today 5 March 2023

 THE GOOD LIFE
TRENDS TECH TODAY DOWNTIME

PRECIOUS
BREWS
From the Ming dynasty to pandas and
from gold flakes to silver tips, there are
unique features that make these some of the
most expensive teas in the world
BY SMITA TRIPATHI

UICK, HOW MUCH do you think a kg of tea

costs? On an average it costs around `500
per kg. But that is the commercial variety
available off-the-shelf in supermarkets
and grocery stores. Loose leaf tea in ex-
clusive tea boutiques can cost upwards of
a few thousand rupees per kg. However,
that is nothing compared to the most ex-
pensive tea in the world—the Da Hong Pao
from China—priced at over $1 million per kg. What makes it
so pricey? For starters, there are only six such tea trees that
still exist on the planet. Referred to as mother plants, these
are found in the Wuyi Mountains of the Fujian province of
China. They were last harvested in 2005, which means the
few grams of tea available with collectors are worth more than
double their weight in gold. In 2002, just 20 gm of the precious
tea was sold for 180,000 yuan or almost $28,000 (`23.16 lakh
at current exchange rates) at an auction. The tea, declared a
national treasure for its rarity, literally translates to Big Red
Robe. As per legend, an emperor of the Ming dynasty donated
his robe to get a jar of this special oolong tea—thought to have
medicinal properties—for his ailing mother. So special is this
tea that Chairman Mao gifted 200 gm of it to then US Presi-
dent Richard Nixon on his official visit to China in 1972.
But it’s not just the Chinese who value Da Hong Pao. In 1849,
British botanist Robert Fortune went to the Wuyi Mountains
on a secret mission—to steal the seeds, or better, cuttings, of

Business Today 5 March 2023

 IT’S TEA TIME: The global
tea industry is estimated
to be worth $21.3 billion by
2024, according to United
Nations projections

Business Today 5 March 2023

 PHOTO BY GETTY IMAGES

1 2
86 |

the special Chinese tea that Britons it a collector’s item.

had grown to love, and plant them in Japanese tea is Now here’s an exclusive tea that
India. When these seeds reached In- in high demand you can actually sip. The Yellow Gold
dia, they merged with the indigenous Tea Buds from Singapore-based TWG
Indian tea and gave rise to the tea in- at tea auctions. Tea is priced at S$611 (`38,000) for 50
dustry in the country. Recently, less gm. What makes this Chinese yel-
While Da Hong Pao is the most low tea variety special? Each tea bud
expensive tea in the world and avail- than a kg of hand- is covered with 24-carat gold, which
able only at auctions, there is another rolled green tea once infused yields a delicately metal-
Chinese tea that is pretty expensive. lic and floral aftertaste. The company
And while it doesn’t have Ming dy- leaves from Japan even gives instructions on preparing
nasty connections, it is related to a sold for a record- the tea. Pour 75° Celsius water over
rare animal found in China. The Pan- 2.5 gm of leaves per cup and infuse for
da Dung tea uses the panda’s dung as breaking 1.96 3-4 minutes. Remove leaves and serve.
fertiliser. This fertiliser is high in nu- TWG also sells Imperial Gykuro,
trients as pandas eat bamboo from
million yen—or a rare Japanese tea of which only
which they absorb only 30 per cent of about `12.82 lakh around 5 kg are harvested every year.
the nutrients. The balance remains in The tea is painstakingly cultivated
the droppings, which act as fertiliser under handmade rice straw mats for
for plants. The tea was first grown a three weeks. The tea absorbs sig-
decade ago in the Ya’an Mountains of nificant quantities of minerals that
China’s Sichuan by an entrepreneur wash through mats during rains
and panda enthusiast. Among much and morning dew. Thanks to the
fanfare, the first batch was sold for shade, the jade-coloured tea grows
$3,500 (`2.90 lakh) for 50 gm, mak- very slowly developing a sweet and
ing it one of the most expensive teas. concentrated flavour. It is priced at
It is no longer in production, making S$1,272 (`80,000) for 50 gm and is

Business Today 5 March 2023

 THE GOOD LIFE TRENDS

3
| 87

often out of stock, given its limited 1. The Makaibari Tea for $1,850 (`1.53 lakh) per kg in 2014
quantity. It can be pre-booked. Estate in Darjeeling at an auction. Currently it is available
Japanese tea is in high demand at is home to Silver for $36 (`3,000) for 50 gm, or $720
tea auctions. In November, less than Tips Imperial Tea, (`60,000) for a kg on the Makaibari
a kg of green tea leaves from Japan considered one of website. The tea estate says that the
sold for a record-breaking 1.96 million the most expensive tea is anti-ageing and relaxing, and is
yen—or about $15,500 (`12.82 lakh). in India best sipped at bedtime.
This surpassed the previous record In December last year, 1 kg of tea
of 1.08 million yen or $8,500 (`7 lakh) 2. Singapore-based from Assam sold at an auction for
set in 2021. The record-breaking tea TWG Tea sells `1,51,000. Called Golden Pearl from
leaves were grown in Fujinomiya, a exclusive teas such as the Nahorchukbari estate in Assam’s
city in Shizuoka prefecture, known Yellow Gold Tea Buds Dibrugarh area, the tea was bought by
for its high-quality green teas. and Imperial Gykuro a Russian tea company.
In India, one of the most expensive The global tea industry is estimat-
teas is the Silver Tips Imperial Tea. 3. Global tea ed to be worth $21.3 billion by 2024,
Grown at the Makaibari Tea Estate in consumption is according to United Nations projec-
Darjeeling, the tea comes from spe- dominated by China tions. Not surprisingly, global tea
cial buds that look like silver needles. (38 per cent) and India consumption is dominated by China
The tea leaves are plucked only on full (19 per cent) (38 per cent) and India (19 per cent).
moon nights because of the belief that According to the UN, the tea sector
the planetary alignment on full moon proved resilient against economic
nights helps optimise the flavour of recessions triggered by Covid-19. Ex-
the tea. As a result, it can be plucked pectedly. After all, it’s always teatime,
only three to four times during the as the Mad Hatter remarked to Alice
harvest season, making production in Alice in Wonderland.
limited. The semi-fermented oolong
tea has a fruity aroma and was sold @smitabw

Business Today 5 March 2023

FRAME
IT RIGHT
Be it for YouTube or Instagram Reels, most
people seem to be enamoured with vlogging.
Whether you’re a serious vlogger or doing it
just for fun, you’ll still need good equipment.
Here’s our pick of gadgets that will not only
capture good-quality videos, but also make
recording seamless and hassle-free
BY NIDHI SINGAL APPLE
IPHONE 14 PRO
MAX
` 1,39,990

PHONE BUDDY
The iPhone lets you shoot
videos, edit and upload
them to your platform
of choice on the go

If you’ve decided to use your phone

THE
to vlog but don’t plan to invest in a
flagship phone with all the bells and
whistles, how do you ensure that you
shoot super-smooth videos? Invest
in a good quality gimbal like the DJI SHARP
SHOOTER
OM 5. This is a handheld three-axis
smartphone gimbal stabiliser that
comes with a grip tripod and a built-
in extension rod that helps capture
jerk-free videos. Install the DJI Mimo If you aren’t keen to invest in
App—it works with iOS 10.0 or above, a dedicated vlogging camera,
and Android 7.0 or above—and you Apple’s iPhone 14 Pro Max has
have access to smart features like you covered. Using its cinematic
ActiveTrack 4.0, which tracks mode, you can shoot professional
the subject even when moving videos with a shallow depth of
quickly, or ShotGuides, which field and focus transitions for
suggests a shot sequence, a cinema-grade look in 4K HDR
especially useful if you’re a at 24 fps. Its Action mode is
newbie vlogger. And it is the perfect way to avoid shaky
compatible with a range videos—whether you’re walking,
of smartphones. running or in a moving vehicle.
Capable of capturing videos
at multiple frame rates, this is
Available on:
a one-stop solution: using the
amazon.in
DJI OM 5 A16 Bionic chip that powers the
` 10,990 phone, you can edit heavy video
If your camera of choice
files on the go and upload them
is the trusted smartphone, right then and there on to your
then this gadget is your
best friend platform of choice. Plus, it’s a
capable mobile phone.

Available on: apple.com/in

ACTION
HERO
Love adventure sports? You need
a vlogging camera that keeps pace
with your active lifestyle, like
this one from GoPro. Boasting
GoPro’s signature design, its
latest action camera features a
new 1/1.9-inch sensor capable
of recording video at up to 5.3K
resolution at 60 fps in 10-bit
colour depth. Its large sensor
enables an aspect ratio of 8:7 for
the largest vertical field of view,
which can be easily cropped
into different aspect ratios for
Instagram and other apps using
the GoPro Quik app. In addition,
the HyperSmooth 5.0 technology
keeps the footage steady even if
the camera is rotated 360 degrees
GOPRO
while capturing footage. Three HERO11 BLACK
new Night Effect Time Lapse
` 51,500
presets make capturing pro-
If you love live-action
quality Star Trails, Light Painting shots, this powerful
camera will capture all
and Vehicle Light Trails easy. the twists and turns of
your adventure

Available on: amazon.in

SONY ZV-1F
Soon to be
launched in India
This one is the perfect
compact camera for
vloggers who want to
keep it simple

DIGITAL
HANDYCAM
Sony’s ZV-1F is ‘the’ small camera meant for vlogging.
Featuring the Exmor RS CMOS sensor and an ultra-
wide 20-mm prime lens by Zeiss, it can capture
detailed 4K/30p videos. Real-time tracking and Eye AF
are a class apart, and it also has a boken button. The
camera has 10 presets for pro-level footage, a built-in
directional microphone, a fully articulating touchscreen
and a dedicated record indicator. The Imaging Edge
Mobile Plus app ensures seamless transfers to your
smartphone, which can also be used as a remote.

Available on: sony.co.in

 THE GOOD LIFE TECH TODAY

INCREMENTALLY
POWERFUL
Samsung packs in a fantastic camera in the Galaxy S23 Ultra, its latest flagship. And while the phone
does pack a punch, the refresh is incremental

BY NIDHI SINGAL

REVIEW business. It captures the minutest selfie lovers are in for a treat. Selfies
details. Low-light imaging is outstan- clicked by the 12MP front shooter
How does one improve on phones ding—shots of the night sky show are an improvement over the ones
that pack in everything, when no noticeable noise. Although clicked by the S22 Ultra’s 40MP one,
there have been just incremental images are shot at 16MP by default especially in low light. The phone’s
improvements in usable tech? (using pixel binning), a quick tap on imaging prowess extends to video as
The answer lies in enhancing the the top presents options to choose well—the rear camera is capable of
phone’s camera capabilities. And from 50MP to 200MP. While the shooting stable videos at 8K 30 fps!
Samsung has taken this path for its back sports a four-camera setup, The 6.8-inch display is a stunner,
latest flagship, the Galaxy S23 Ultra,
which continues with the legacy of
last year’s Galaxy S22 Ultra. f SPECS: 6.8-INCH DYNAMIC AMOLED 2x, 3,088 x 1,440
Upgrading from last year’s 108 (EDGE QUAD HD+) AT 120HZ; GORILLA GLASS VICTUS 2 PROTE-
megapixel (MP) primary camera,
the 200MP primary camera on
CTION; IP68; 12GB RAM; 256GB/512GB/1TB STORAGE; 234 GM
this device is one of the best in the

even under the scorching sun. The

phone is also a delight to stream
SAMSUNG videos and read books. The best
GALAXY S23 ULTRA aspect is the detailed shots the
` 1,24,999 onwards screen displays. The phone’s
This phone scores over its customised Snapdragon 8 Gen
predecessor in terms of
camera performance, 2 chip is no slouch, and tasks like
thermals and longer
battery backup editing 4K videos or gaming are a
breeze. Samsung has improved on
the thermals too. As a result, there
aren’t any heating issues. And even
with the same 5,000mAh battery
as that of the S22 Ultra, the backup
has improved. Lastly, the built-in S
Pen doesn’t feel as premium as the
one on earlier Note devices. But
nonetheless, every stroke is butter
smooth on the screen.
From the fantastic display to the
S Pen, the stunning camera to the
long battery backup, the S23 Ultra is
packed to the hilt. But in the end, it
is still an incremental upgrade.

Available on: samsung.com/in

Business Today 5 March 2023

 THE GOOD LIFE DOWNTIME

THE YOGIC WAY

Naveen Soni, President of Lexus India, believes yoga helps him cut
through the clutter and concentrate better
BY SMITA TRIPATHI

PHOTO BY SUDHIR DAMERLA

92 |

YOGA JOURNEY Naveen Soni was introduced to yoga as part of an employee engagement programme

OR 56 -YEAR- OLD Naveen Soni, President of Over the years, as many employees dropped out and
Lexus India, yoga is a way of life. It all started others joined, Soni continued to practice regularly. All
in 2006-07 when he was still with Toyota and the way up to 2020 when offices were shut down due to
the company started the concept of employee the pandemic. He then started taking online classes.
engagement. As a part of that, they did various “Online classes give you complete flexibility. Even
meaningful activities including setting up a when I am travelling, I can do an online class and be
public library, having sessions on leadership, regular with my yoga session,” says Soni.
etc. To help employees lead more healthy lives, yoga was While he tries to do yoga at least four times a week, he
introduced. The organisation engaged a yoga guru who admits that due to time constraints the average is two to
would come to the office and post-work there would be three times a week. “Thanks to yoga the body becomes
a one-hour yoga session for those who were interested. more agile and flexible, and the capacity to take on more
“It was my first introduction to yoga,” says Soni, who physical responsibility increases,” says Soni, who took
resides in Bengaluru. over as President of Lexus India in January 2022.
 “Yoga helps concentrate all
your energies. It brings you peace
and calm, and your concentration
abilities are enhanced. What I have
come to realise is that during the
day yoga helps bring clarity to my
mind. There is so much informa-
tion overload on any given day and
I feel yoga helps me cut through
the clutter and concentrate on
what is important,” explains Soni.
For Lexus India, its highest
ever sales were achieved in 2022,
since its inception in 2017. Soni
says SUVs are the flavour of the
HOWZZAT Sairaj Dhond enjoys booking big stadiums and playing cricket there
season and that the average age of
the luxury buyer is going down.
Unlike earlier, when your first car
was a mass-market car, or even a
second-hand car, and you gradually ON THE FIELD
Cricket keeps me alive, says Sairaj Dhond,
progressed to a luxury car, today
the first car is a luxury car, he says. Founder & CEO of Wakao Foods

BY SMITA TRIPATHI
| 93
“Yoga helps concentrate “Cricket is religion,” says 34-year- organise tournaments for people
all your energies. old Sairaj Dhond, Founder & CEO from across India to play. Teams
It brings you peace of Wakao Foods, a Goa-based sus- from Delhi, Mumbai, Goa, etc.,
and calm, and your tainable start-up that offers ready- participate and play against each
concentration abilities to-cook and ready-to-eat products other. “This is something that just
in the Indian market. Dhond repre- keeps me alive.”
are enhanced. What I
sented the state of Goa in cricket For Dhond, sports was an inte-
have come to realise tournaments during his school and gral part of his growing-up days.
is that during the day college days. However, as is the His mother is a national-level
yoga helps bring clarity case with most people, life took basketball player. “I play over ten
to my mind” over and cricket took a back seat. kinds of sports but cricket is my
Over the past few years, he has first love.”
rekindled his love for the sport. “I Dhond is a serial entrepre-
am doing well now professional- neur—Wakao is his fourth ven-
While Lexus introduced the NX ly so I have the leverage to again ture. He is a lawyer by training but
at the beginning of 2022 and LX at explore the game. I realised there quit after practising for a year and
the end of the year, it launched the were several people like me,” says joined his family hospitality busi-
Dhond, who now plays cricket for ness where he lasted six months.
RX— another SUV—at the Auto
several clubs in Goa. “We now play He then set up his first venture,
Expo in January. From a global Members Leagues’ against other which was for solar heating in-
perspective, Lexus plans to shift clubs.” Dhond has played in Lon- stallations. He then moved to LED
completely to electric vehicles by don, Paris and Dubai, and also in lighting, and after that he restored
2035. “You will see more electric stadiums in Dharamshala and Deh- an old heritage home in Goa and
vehicles coming from us,” says radun. “We are like those wannabe sold it before starting Wakao
Soni. In 2022, Lexus added five international cricketers,” laughs Foods two years ago. Wakao is
Dhond. “We could never get an op- bootstrapped with Dhond owning
service points to its seven existing
portunity to play in these stadiums. 100 per cent of the company. Its
guest experience centres. This Today we can afford to book them products are currently available
helps it cover nearly 85 per cent of and play in them,” he smiles. across the country through the on-
the market where Lexus vehicles Dhond explains how this is now line model. Going forward, Dhond
are in demand. an organsied sector where com- wants to set up the QSR model.
panies book stadiums where in-
@smitabw
ternational matches are held and @smitabw

Business Today 5 March 2023

 1

ACE STROKES
THE MUMBAI LEG OF THE BT GOLF TOURNEY TAKES THE
CORPORATE CROWD BY STORM BY TEAM BT

CLOSE TO A hundred golfers teed off on CMD of Parle Products to Shyam Mani,
a balmy Sunday morning at the Willing- Non-executive Director of Tata Mo-
don Sports Club on January 29 to get tors Finance, and Atul Laul, President
the invite-only Mumbai edition of BT at Reliance Industries, among others,
Golf 2022-23 presented by Royal Ran- took on each other at the greens in the
thambore, well underway in style. salubrious conditions, competition
Even though most of the partici- quickly heated up.
pants on the field were familiar with Finally, D.S. Benupani, Commis-
the twists and turns of the course, the sioner of Income Tax; Kailas Shinde,
multiple hazards scattered across the Joint MD at CIDCO; and Naseem Shai-
fairways provided for a testing round kh, Partner at Nosh Agencies, emerged
of golf, made even more challenging by winners in the 0 to 14 handicap, 15 to 24
the rapid greens and pin positions. handicap and ladies’ categories, respec-
As the who’s who of Mumbai’s cor- tively, at the tournament co-presented
porate world, from Vijay Chauhan, by Indian Oil Corp. and Qatar Airways,

Co-Powered by Mobility Partner Tourism Partner

Business Today 5 March 2023

 2

4 5 6

1. Participants of the MD, Indiabulls Real Atul Laul, President,

Business Today Golf Estate Reliance Industries
2022-23 presented by
Royal Ranthambore– 5. Singers performing 8. Participants
Mumbai edition at the BT Golf event in registering for the BT
tournament at the Mumbai Golf 2022-23 Mumbai
Willingdon Sports event, presented by
6. (From left) Royal Ranthambore
Club on January 29 BT Golf award
2. Rahul Kanwal winner in the 0-14
(left), News Director handicap category
of India Today D.S. Benupani,
Commissioner of 7
and Aaj Tak, and
Executive Director Income Tax; Pradipta
of Business Today, Basu, Assistant VP-
in conversation with Marketing, Radico
Shaina N.C., National Khaitan; and
Spokesperson of BJP Shaina N.C.

3. Naseem Shaikh, 7. (From left) Pradipta

Partner, Nosh Basu; Shaina N.C.;
Agencies and BT Golf award
runner-up in the 15-24
4. Mehul Johnson, handicap category

PHOTOS BY MANDAR DEODHAR AND MILIND SHELTE

8

Business Today 5 March 2023

 1 2 3 4

96 |

7 8

1. A. Balasubramanian, 7. Aditya Mehta, 10. Jalaj Kakkar,

MD and CEO, Aditya COO, Bombay Shirt Director, Corporate
Birla Sun Life AMC Company Coverage, CredAble
2. Vinay Dube, 8. (From left) Ankur 11. Ashish Aggarwal,
Founder and CEO, Sachdeva, President- Founder, GOLFEZ
Akasa Air Operations, Radico
12. Jehangir Jejee-
Khaitan; Pradipta
3. Shilpa Singhal, bhoy, Independent
Basu; Shaina N.C.; BT
Artist Counsel, Bombay
Golf award winner
High Court
4. Darius Vakil, (ladies) Naseem
Director, Ontario Shaikh; Rahul 13. Chaitanya Sinh,
Teachers’ Pension Kanwal; Karthik Co-founder & CEO,
Plan Vishwanathan; Alok BOMBAX
Nair, Chief Revenue
5. Rajeev Chopra, Officer, Business
Independent Today; and Sourav
Consultant, Majumdar, Editor,
Hospitality Business Today
6. Pramod Bhambani, 9. Neha Grover, Vice
Advisor, Newforce Ltd President, Nykaa

11

Business Today 5 March 2023

with mobility partner MG Motor and
tourism partner Rajasthan Tourism.
On hand was BJP National Spokes-
person Shaina N.C. to give away the
prizes at the historic golf course that
was abuzz with activity and celebra-
tions of the winners.
While giving away the awards, she
also appreciated the performances of
the packed field of players at the ex-
clusive event. “It’s always good to see
people participating in any sport, and
I would like to congratulate not just
the winners but all those who played
here today for participating in the
true spirit of the sport,” she said. 5 6
As for the winners, Naseem Shai-
kh was elated with her performance.
“I was quite positive in the morning,
though I did not come to win. I just
wanted to play a good round, and I’m
happy, I was able to do that,” said the
winner in the ladies’ category.
While the winners were celebrat-
ing, some like this year’s runner-up,
Jalaj Kakkar, Director of Corporate
Coverage at CredAble, who has par-
ticipated in earlier editions of the
tournament was already looking | 97
forward to the next edition. “I was
really looking forward to seeing BT
Golf make a comeback. It’s a great
event and it’s always good to meet
new people. Looking forward to
coming back to win it the next time,” 9 10
he said.
While the array of top leaders
from the world of commerce and
governance revelled in conditions
perfect for golf, age was no factor as
they rubbed shoulders with younger
participants with great enthusiasm,
and competitive spirit, giving them a
run for their money.
Commencing in 1996 as a stand-
alone single-city Pro-Am, BT Golf
has evolved into one of India’s most-
sought after golf events and its revival
after a three-year break has sparked a
flurry of interest from golf aficiona-
dos and business leaders alike.
Action now shifts to the Hyder-
abad leg of BT Golf 2022-23 present-
ed by Royal Ranthambore that will
be played at the Boulder Hills Golf &
Country Club on February 25. 12 13
 PRASHANT JAIN MD, GE POWER INDIA; REGIONAL GM, GE STEAM POWER SOUTH ASIA

GE Power India is a major manufacturer and supplier of power generation and transmission equipment

98 | PHOTO BY HARDIK CHHABRA

‘Solutions should be for biz, society’

What was the problem you were grappling with? goal is not just to be best-in-class in our
The paradigm shift between COP21 and COP26 in the energy sector business, but also to support our partners
in India posed a challenge to companies working in the sector, like and stakeholders to also become best-in-
ours. We had to create economic empowerment for the country, class. It’s only the beginning and we have
which still heavily relies on coal, to help it reduce emissions by 33-35 lots of work to do in partnership with
per cent by 2030—its COP21 target. Here, we had to envision how our stakeholders. We are on our journey
the existing thermal plants can support renewables’ integration towards contributing to our own and
into the grid and the transition to low- or zero-carbon emission India’s energy transition process. Today
sources. Also, at an organisational level today, GE Power India is on we are executing around 27 GW of emis-
its own transformation journey to become an independent entity. sions control projects to improve air
quality; additionally, we are improving
Who did you approach for advice? efficiency by doing operations and main-
I approached some strong leaders who I’ve known or worked with tenance of coal-fired power plants, mak-
before. I take inspiration from them and enjoy connecting with ing it flexible. We have a long way to go,
them, in order to find ideas to solve problems. but I believe in my team and their com-
mitment towards our vision.
What was the advice you received? —TEAM BT
The advice that I received was to work towards solutions that ben-
efit both the business and society at large.
Vol. 32, No. 5 for the fortnight
How effective was it in resolving the problem? February 20, 2023 to March 5, 2023.
It was very effective. As I seek to follow this advice and find the Released on February 20, 2023.
right balance, I believe it’s critical to keep our employees at the cen- Total number of pages 100 (including cover)
tre of our transformation plan. As an energy sector business, our

Business Today 5 March 2023