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Morning Scan: All the big stories to get you started for the day

A round-up of the biggest articles from newspapers

July 26, 2021 / 07:55 AM IST

Below is a shortlist of all the important articles from newspapers.

India must use, share covid data transparently: Kiran Mazumdar-Shaw

A lack of sufficient vaccines has hampered India’s drive to inoculate a majority of its population by year-end, according to Biocon chairperson Kiran Mazumdar-Shaw, in an interview with the Economic Times.

What she says: She emphasised the need to speedily ramp up domestic production of vaccines.

Decrying the country’s “lack of scientific temperament,” she urged greater transparency in sharing data on the pandemic and said India has great potential to plan and respond to the virus based on such inputs.

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She calls for a smarter, more data-led initiative to deliver vaccines and inoculate the most vulnerable.

Vaccine imports will be limited. The government cannot rely heavily on imported vaccines.

India is missing out on a huge opportunity by not focusing on data gathering and analysis.

Local automakers flag Tesla sops call

Indian automakers have raised concerns about the tax concessions sought by the world’s most valued automotive company, Tesla Inc, on fully built imported electric vehicles (EV) ahead of the local launch, the Economic Times reports.

Why it's a concern: The concern from domestic vehicle makers comes close on the heels of the US electric carmaker’s letters to the ministries of finance, commerce and industry, road transport and highways, and Niti Aayog.

Elon Musk: “We want to do so (launch vehicles ASAP in India), but import duties are the highest in the world, by far, of any large country.”

The Tesla CEO said that the company can only consider setting up a factory locally if it succeeds with imported models.

Vocal for local: Leading automakers said that at a time when New Delhi has outlined stringent localisation norms for electric vehicles, including advanced chemistry cells, it will be a striking deviation if another manufacturer gets duty benefits on the entire vehicle, including tyres and seats.

“The government has put very high threshold conditions in most EV schemes for local content, and the industry is stretching and making investments to meet these,” the SIAM said.

The government wants the industry to achieve 60% localisation for the advanced chemistry cell, which is part of the battery.

Mastercard ban: RBI seeks action plan from banks

The RBI has asked lenders to put in place business continuity plans (BCP) after it ordered operational curbs on Mastercard, reports the Economic Times.

Why it's important: It has also sought details on their preparedness to regularise the issuance of credit and debit cards on alternative payments platforms, such as Visa and RuPay.

The RBI has also reached out to various lenders on the problems being faced by the broader banking system after it barred the US payments major.

Banks are hopeful that the curbs on Mastercard would be lifted soon but a section of the industry feels it could take nearly three months to return to normal.

You may soon get to trade silver ETFs; Sebi considers nod

Silver-backed exchange-traded funds (ETF), one of the most popular products globally, may soon find their way into India, The Economic Times reports.

Why it's important: The Sebi will consider a proposal allowing mutual funds to launch bespoke plans that mimic the price moves of silver.

It will create an affordable and liquid investment proxy for the precious metal that has robust local demand.

The regulator may soon accept the recommendations of the panel unless there are legal or operational hurdles.

Silver ETFs will give mutual funds and asset managers one more option to enhance their asset allocation products.

Govt’s capex push, the emergence of new themes to help drive recovery: JPMorgan CEO

JPMorgan chief executive Madhav Kalyan tells the Economic Times what’s happening on the ground after the viral infections and lockdowns have thrown conventional ways of doing business out.

What the CEO says:

The stress in asset quality that some banks have reported is a one-time blip and a result of a systemic shock from the second wave.

With the first round of vaccination rollout and the larger healthcare ecosystem has largely done, the situation ought to normalise soon.

One of the key drivers of growth revival has been the government’s focus on capital expenditure.

There has been a 75% increase in government spending in infrastructure since September. In turn, there is capacity addition in sectors like cement and steel that feed into this government capex spending, resulting in a pick-up in economic activity.

Over the last few years, private investments have tended to be in the areas of renewable energy.

A new set of opportunities have emerged due to the commodity super-cycle, making a business case for private capacity building in energy, metals and agri commodities.

The pandemic has led to a rethinking of global supply chains by MNCs and the emergence of a China plus one strategy.The recently announced giga projects will create a new paradigm of opportunity.

‘We are holding on to Zomato, there’s tremendous potential’

Sanjeev Bikhchandani, the founder and vice chairman of Info Edge, who wrote Zomato’s first cheque of ₹4.7 crore in 2010 and was its sole investor in the first four funding rounds, told the Economic Times in an interview that it will hold on to the bulk of the shareholding (around 15%) as it sees tremendous growth potential in Zomato.

What he says: Info Edge, which runs portals like Naukri.com and 99 acres.com, has seen its investment value zoom nearly 1,050 times after the food delivery app’s IPO.

It’s a mistake to think that Indian startups need to list overseas to succeed.

Overall, the Zomato investment has delivered handsome returns – our back-of-the-envelope calculation is that the IRR is more than 60%. The Indian public market is evolving.

Rakesh Jhunjhunwala's advice: He gave me some advice — “Sanjeev, if you come across a good company which is growing fast why should you ever sell? Hold on for life”.

Covid claims to exceed 50% of Q1 health payouts

Even as the second wave of Covid-19 ebbs, claims continue to pour in for health insurance companies, the Times of India reports.

Why it's important: Payout due to Covid-19 claims may exceed the insurance claims of all other ailments combined in the first quarter of the current fiscal.

Insurance companies have already settled claims of more than Rs 16,000 crore due to Covid and the numbers are still rising.

Ritesh Kumar, MD & CEO, HDFC Ergo General Insurance: "As an industry, we had 10 lakh claims in the first quarter of this year, the same as the whole of last year. The claims are close to the provisions that we had made last year.”

Centre to scrap 51% holding clause to privatise insurer

The government is ready with a proposal to amend insurance laws to privatise one of the three unlisted general insurance companies, the Times of India reports.

What the plans are : The draft Bill seeks to remove the 51% floor on government holding.

Foreign investors will be able to hold up to 74% in the divested general insurance firm subject to Indian management and control. But no plans to sell New India Assurance or GIC.

While NITI Aayog has suggested the name of at least one general insurer to be privatised, a decision on which one of the three — United India, National or Oriental Insurance — will be privatised is yet to be taken.

Vodafone Idea promoters may dilute their stake

Vodafone Group Plc and Aditya Birla Group may cede control of Vodafone Idea Ltd (VIL) if a strategic investor wants to take control of the telco, Mint reports.

Why it's important: The telco desperately needs to raise capital to deal with its liabilities of ₹1.8 trillion. The development marks new thinking on the part of Vodafone Idea’s promoters. They were initially looking to bring in financial investors but have not been successful in raising the required funds. It was putting a question mark on the telco’s survival.

The two promoter groups are in talks with at least five investors, both strategic and financial, including three US-based funds, to sell a combination of Vodafone Idea shares and convertibles to be able to raise money for the cash-starved telco, repay government and bank dues.

Regulator intensifies scrutiny on lenders and shadow banks

Regulatory scrutiny of banks is increasing, and so is the severity of penalties—from an occasional rap on the knuckles earlier to substantial fines and outright bans, Mint reports.

Why it's important: Over the past two years, RBI has raised the quantum of fines and severity of punitive action on banks and their business partners. In the six months to June, RBI imposed a penalty of over ₹43 crore on 23 commercial banks, compared with ₹20 crore on eight banks in 2020 and ₹143 crore on 49 banks in 2019.

In 2021, penalties were imposed for a range of violations, from account-related provisioning shortfall to fraud classification. RBI is losing patience with banks and other regulated entities that don’t comply with regulations.

RBI has intensified its scrutiny of banks, moving towards risk-based supervision from the earlier transaction-centric approach.

Byju’s adds a new chapter with two more acquisitions

Edtech unicorn and India’s most valuable startup Byju’s is continuing its acquisition spree, Mint reports.

What they are doing: Byju’s is expected to shell out $600 mn for acquiring upskilling platform Great Learning and $150 mn for after-school learning app Toppr. With this, Byju’s has shelled out more than $2.2 billion in acquiring complementary businesses in 2021 alone.

Byju’s has acquired six startups in 2021, across India and the US.

The edtech company recently raised $1.5 billion from UBS Group, Abu Dhabi sovereign fund ADQ, and Blackstone Group LP among others, at a valuation of $16.5 billion.

It is the highest valued Indian startup, as it overtook IPO-bound Paytm’s $16 billion valuations.

Steel demand will see a boom next quarter: JSW Steel Seshagiri Rao

In an interview with Business Standard, Seshagiri Rao, joint managing director, and group chief financial officer of JSW Steel, says that the industry is going through a structural shift and demand is very strong globally.

What he says: In India, post-second wave, there are signs of good recovery in June. Globally, a huge amount of supply has come into the market.

Despite that, prices went up by 70 per cent in the US and Europe in the first half; in China, it was up by 30 per cent. Investment in infrastructure by various governments and energy transition is driving steel demand. I think there will be a boom next quarter.

Import dependence in steel sector worrisome: Steel Minister

Ram Chandra Prasad Singh talks about two recent government decisions on the production-linked incentive (PLI) scheme, coking coal imports from Russia, and the tightrope walk between free pricing and high cost of steel in an interview with Business Standard.

What the Minister says:

What is most worrisome is our dependence on imports.

We are spending ₹ 1 trillion on imports alone. We have to work towards reducing these imports. To address both, we have got two Cabinet approvals.

One was to enter into a memorandum of understanding with Russia for importing coal to India and diversify supply.

The announcement of the PLI scheme for specialty steel is also a step towards making Bharat atmanirbhar. Financial infusion and liquidity into the steel sector pose a twin challenge to the sector, especially for smaller players. The other aim is to reduce carbon footprint while staying globally competitive.

Real money in the market is made by remaining invested for long: Vikas Khemani

Vikas Khemani, founder, Carnelian Capital Advisors, tells Business Standard in an interview that as the world is changing to new ways of technological adoption, fresh companies will come to the markets in search of money.

What he says:

The markets are always vulnerable to corrections. Investors always get hit when the markets are unprepared. The real money in the market is made by remaining invested for long. India is in one of its best super-cycle periods for the next five seven years. Waiting for a market correction and optimising entry time in the markets will be akin to missing the woods for the trees.

Liquidity is here to stay for a few years.

India is well placed from an investing point of view. There is no other market that offers such attractiveness.

Finance Ministry for extension to PNB, 2 other PSB chiefs

The finance ministry has recommended extending the tenure of three MDs and CEOs and 11 executive directors of public sector banks, for up to two years or until the age of retirement, whichever is earlier, Business Standard reports.

Why it's important: It looks to ensure stability and continuity at state-owned lenders amid the pandemic.

Who they are: A tenure extension for S S Mallikarjuna Rao, MD and CEO of Punjab National Bank, until January 31, 2022, when he is due for superannuation.

A two-year extension to Atul Kumar Goel, MD and CEO of UCO Bank. His term is ending on November 1.

A S Rajeev, MD and CEO of Bank of Maharashtra, also has been recommended for an extension of two years beyond December 1.
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