LIC Board Approves Cut In IPO Issue Size To 3.5% From 5%: Sources - NDTV Profit

LIC board approved a cut in its initial public offering (IPO) issue from 3.5% to 5%

New Delhi:

The LIC board has approved a cut in its initial public offering issue size from 5 per cent to 3.5 per cent, sources have said. The government will now dilute 3.5 per cent of its shares in LIC for Rs 21,000 crore, subject to approval of the capital markets regulator Securities and Exchange Board of India, or SEBI.

In the draft red herring prospectus, the government had proposed sale of its 5 per cent equity. This would value LIC at Rs 6 trillion.

Earlier government estimates had called for the insurer to be valued at around Rs 17 trillion.

The drastic lowering of ambitions for the IPO - which would still be India's largest to date - is seen as a setback for the government, which had positioned the sale as the first and biggest of a wave of privatisations aimed at replenishing state coffers.

"Investors have become very risk averse in the last few months. After roadshows we realised there was no point in putting high valuation up front. Higher valuation can be discovered post the listing. After all, the government will still hold nearly 95 per cent of the issue," news agency Reuters reported on Friday, quoting an unnamed source.

The LIC IPO is likely to be launched in the first week of May, investment banking sources told Reuters.

The government had initially wanted to list LIC in the last financial year that ended March 31 but had to delay the sale after Russia's invasion of Ukraine triggered a market rout.

The 66-year-old company dominates India's insurance sector with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.

Investors have been concerned that LIC's investment decisions, including those in loss-making state companies, could be influenced by government demands.

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LIC Board Approves Cut In IPO Issue Size To 3.5% From 5%: Sources - NDTV Profit
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Tata Motors hikes passenger vehicle prices by 1.1 percent, new rates kick in today - Moneycontrol

The auto major has hiked prices by 1.1 percent on average to partially offset the rise in input cost. Maruti Suzuki, too, recently hiked the prices of its cars

Tata Motors on April 23 raised the prices of its passenger vehicles (PVs) with immediate effect to partially offset the rise in input cost, the second vehicle maker to go for a hike in less than a week after Maruti Suzuki India.

Tata Motors' weighted average increase would be 1.1 percent, depending on the variant and model, CNBC-TV18 reported. This is the second hike by the vehicle manufacturer in less than a month. On March 22, Tata Motors announced that it would hike prices of its commercial vehicle (CVs) range by 2-2.5 percent, depending on the model and variant, with effect from April 1.

In a filing with the exchanges, Tata Motors called the CV price hike “impending price”. India’s largest commercial vehicle manufacturer cited an increase in the prices of commodities such as steel, aluminium and other precious metals, in addition to higher costs of other raw materials, as reasons for the hike.

“While the company has initiated actions to absorb a significant portion of the increased costs, at various levels of manufacturing, the steep rise in overall input costs makes it imperative to pass on some residual proportion via a minimised price hike,” the statement said.

The country’s top carmaker Maruti Suzuki India on April 18 on average increased the prices of all its models (ex-showroom Delhi) by 1.3 percent.

 

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Tata Motors hikes passenger vehicle prices by 1.1 percent, new rates kick in today - Moneycontrol
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Petrol Price Today Announced: Fuel Rates in Delhi, Mumbai Remain High; See City-Wise Price - News18

Petrol, Diesel Price Today: Petrol price today, on April 23, Saturday, was kept unchanged for the 17th consecutive day, as per a notification by state-owned Oil Marketing Companies (OMCs). Diesel price was also kept unchanged on the day, as per the notification. The prices of the auto fuel have been at an all-time high in several months and have been operational amid record inflation across the country. The high fuel prices have affected common man, who is bearing the brunt of an overall price rise, caused by the increase in prices of petrol and diesel.

According to the price notification from fuel retailers, petrol in Delhi costs Rs 105.41 per litre and diesel Rs 96.67 per litre. In Mumbai, petrol and diesel prices per litre are standing at Rs 120.51 and Rs 104.77 respectively. In Chennai, petrol costs Rs 110.85 per litre and diesel Rs 100.94 per litre. Petrol price in Kolkata stands at Rs 115.12 per litre and diesel is retailing Rs 99.83 per litre in the city.

The price of petrol and diesel varies from state to state depending on many factors. Some of these include daily changes in international crude oil prices and foreign exchange fluctuations, and different taxation rates in different state. Transportation cost is also one of the key reasons of varying fuel prices across the country.

Amid the high petrol and diesel prices, Union petroleum minister Hardeep Singh Puri on Friday said the oil marketing companies take autonomous decisions on retail prices. After the elections, when the price reviews started, the hike has only been by Rs 10 per litre which is far less than others, he said, adding that the ministry is cognizant of inflation concerns as well. The minister urged non-BJP ruled states to reduce the Value Added Tax (VAT) on petroleum products to give relief to consumers, pointing out that the Centre has already reduced its duties in one action.

International crude oil prices slipped on Friday, posting a weekly loss of nearly 5 per cent as Brent crude settled down $1.68, or 1.6 per cent, at $106.65 a barrel. U.S. West Texas Intermediate (WTI) crude declined $1.72, or 1.7 per cent, to $102.07, as per a report by Reuters.

Petrol, Diesel Prices on Friday, April 23, in Delhi, Mumbai and Other Major Cities in India:

Delhi

Petrol – Rs 105.41 per litre

Diesel – Rs 96.67 per litre

Mumbai

Petrol – Rs 120.51 per litre

Diesel – Rs 104.77 per litre

Kolkata

Petrol – Rs 115.12 per litre

Diesel – Rs 99.83 per litre

Chennai

Petrol – Rs 110.85 per litre

Diesel – Rs 100.94 per litre

Bhopal

Petrol – Rs 118.14 per litre

Diesel – Rs 101.16 per litre

Hyderabad

Petrol – Rs 119.49 per litre

Diesel – Rs 105.49 per litre

Bengaluru

Petrol – Rs 111.09 per litre

Diesel – Rs 94.79 per litre

Guwahati

Petrol – Rs 105.66 per litre

Diesel – Rs 91.40 per litre
Lucknow

Petrol – Rs 105.25 per litre

Diesel – Rs 96.83 per litre
Gandhinagar

Petrol – Rs 105.29 per litre

Diesel – Rs 99.64 per litre

Thiruvananthapuram

Petrol – Rs 117.19 per litre

Diesel – Rs 103.95 per litre

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Petrol Price Today Announced: Fuel Rates in Delhi, Mumbai Remain High; See City-Wise Price - News18
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Worries on high inflation dominated MPC meet, show minutes - Moneycontrol

Majority of the Monetary policy committee (MPC) members emphasised on the rising risks of a persistently high inflation in the last round of monetary policy meeting, according to the minutes of the meeting released on April 22.

“The current geopolitical situation has led to an upward revision of our inflation projections for 2022-23. The estimates now point to inflation remaining above the upper tolerance band in the near-term even as growth projections have undergone downward revisions,” Reserve Bank of India Governor and head of the six-member Monetary Policy Committee Shaktikanta Das, said in the minutes of the panel’s latest meeting. “These are indicative of the sheer magnitude of the adverse exogenous supply and price shocks.”

While the risks to domestic growth call for continued accommodative monetary policy, inflationary pressures necessitate monetary policy action, Das said in the minutes.

The circumstances warrant prioritising inflation and anchoring of inflation expectations in the sequence of objectives to safeguard macroeconomic and financial stability, while being mindful of the ongoing growth recovery, the governor added.

Michael Patra, a deputy governor of the RBI, said that as the projections show, if inflation persists in high reaches, the drainage of liquidity already achieved and planned for the year ahead will reduce risks of excess liquidity fanning inflationary pressures and posing threats to financial stability.

In the latest policy on April 8, the MPC had held the benchmark repo rate steady for the eleventh straight time at a record low of 4 percent but narrowed the policy corridor by introducing a so-called Standing Deposit Facility at a rate of 3.75 percent. The MPC had signalled that it is now shifting to a 'less accommodative' stance in the backdrop of heightened inflationary risks.

India’s consumer price inflation (CPI) rose to a 17-month high of 6.95 percent in March and wholesale price inflation (WPI) stayed in double-digits for 12 consecutive months. Most economists expect the MPC to hike the repo rate at its next meeting in June.

The MPC is mandated to target inflation at four percent with a tolerance band of two percentage points on either sides.

In the latest policy, the MPC had revised its retail inflation forecast upwards to 5.7 percent for the current financial year that began April 1, as compared with 4.5 percent projected earlier. This was because of rising geopolitical tensions between Russia and Ukraine had sent crude oil prices to multi-year highs.

Meanwhile, external member Jayanth Varma said that it was “wholly appropriate” to drop the word “stance” from the monetary policy resolution.

“In the extremely uncertain situation that prevails today, it is very important for the MPC not to issue any forward guidance that would tie its hands,” Varma said in the minutes. “It is necessary to communicate clearly that in future meetings, the MPC would consider itself completely free to take any action on the policy rates that may be warranted by the data that becomes available in the coming weeks.”

Varma, who has been arguing for the normalization of the policy corridor for several months now, added that was “imperative” for the MPC to communicate its resolve to ensure that inflation remains within the target going forward.

According to Ashima Goyal, the policy in the future will either pause or raise rates. A rate rise that responds to excess demand, as well as to persistent inflation, so that the real rate adjusts smoothly and does not deviate too far from equilibrium will best be able to anchor inflation expectations yet sustain the growth recovery while minimising market volatility and output sacrifice, Goyal said in the minutes.

“Rebalancing of liquidity started in 2021, and has now reached a level, with new facilities to absorb liquidity, that is compatible with raising policy rates. Short rates are set to rise to make the repo rate the operational policy rate again,” Goyal added.

External member Mriddul Saggar said that with a wide variety of tools, it should be possible to bring back inflation closer to the central bank’s target, without much growth sacrifice and without a very high terminal rate. Meanwhile, another member Shashank Bhide added that the MPC needs to tackle the evolving price conditions and broadbased policy measures to effectively bring down inflationary pressures without disrupting the favourable environment for sustaining growth.

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Demand is not an issue for Tata Elxsi, supply definitely is: MD - Economic Times

“Demand is pretty strong. We continue to be very bullish and as long as we execute on our strategies, I believe we are on a good wicket to show consistent growth,” says Manoj Raghavan, MD & CEO, Tata Elxsi.

Your FY22 revenue growth was a solid 34%. Is this kind of growth rate sustainable? What is your assessment of demand versus what you saw 12 months ago?
We have a pretty good financial year with upwards of 35% growth in revenues and more importantly consistent quarter-on-quarter growth between 7% and 8% from Q1 to Q4. At this point of time, the demand is pretty strong, I do not see any reason why we should be worried about it. We continue to be very bullish and as long as we execute on our strategies, I believe we are on a good wicket to show consistent growth.

This quarter the growth was led by the European region which grew almost 10% quarter-on-quarter. Now with the inflationary pressure and geopolitical tension, are you seeing any impact on the client spend and the Budget given that inflation across the globe is at decadal high levels?
We really do not see any effect of the geopolitical situation. We do not have any customers or any business in the eastern European region and Russia. We really do not see a cause for worry. But the good thing about Tata Elxsi is that we are spread over the US, Europe and the rest of the world. Also we are well diversified among three different industry verticals.

We have de-risked our entire business portfolio as well as our geographical mix. So to that extent, even if there are some issues in a particular region or a particular industry vertical, I am pretty confident that we will be able to manage that because of exposure to other regions and other verticals.

The Tata Elxsi share price has been flirting in the Rs 9,000 zone. The way it has gone up year to date, what do you make of that? Is that a reflection of the earnings we are seeing today or what is it?
I do not really understand this market and why the share price is where it is. We are focussed on ensuring that we deliver consistent results. So I would say whatever you are seeing is a result of the consistent performance quarter-on-quarter and at the same time, we are engaging with various stakeholders, investors, coming out with a lot more disclosures, having a lot more conversation on a regular basis. All of this gives confidence to our investors that they are in safe hands.

Earlier you did say that you are going to see growth in the automotive market. Is there any change on that front given the way the automotive market is performing? Will the slowdown in everything from commodity inflation to supply solution have a trickle-down effect on Tata Elxsi?
Last financial year we had a dip in the growth of the automotive industry but this financial year, the growth has come back and the performance over the last three quarters has been primarily led by the automotive vertical. So we continue to clock new deals and grow our existing accounts, carrying out deeper mining of our existing accounts.

Our existing large customers are very bullish about their business and a lot of projects coming our way. So I am not really worried if the automotive industry is going to go down. In the next two to three quarters, I do not see that affecting us.

You have ended Q4 with an EBITDA margin profile of 32.5%. What should we expect for FY23 given that a wage inflation impact is likely on IT companies earnings as well?
We do not usually give these projections but at the same time, for a majority of our junior workforce, we have already done the wage hike in January. SO, the numbers that you see today are after the wage hike.

The embedded product design forms a bulk of your portfolio. It has reported robust quarter-on-quarter growth despite a heavy base. Is this growth rate also likely to continue?
The embedded product design business is the main business of Tata Elxsi and the growth over the last two to three years that we have seen in the organisation, is primarily because of the consistent growth in the embedded product design business.

Again, we are focussed on three verticals, the transportation business, the media and communication business and the healthcare vertical. What we look at is that over a period of three years, the business mix would be about 40-40-20 and that is where we are moving towards. Healthcare and medical has been the smallest business for us but it has been growing very rapidly.

In the last financial year, we grew almost 66 or 67% over the previous year and that will continue to lead our growth. In the automotive business, I do not see a slowdown happening and I am pretty bullish there also. Media and communication has been a very steady business for us clocking very good returns quarter-on-quarter.

What about attrition? It has come in at almost 21%. What is the game plan and how is this going to continue to eat into the balance sheet?
Yes, attrition is a prime sort of concern for any IT leader. We track the attrition very closely. Yes, attrition has shot up to slightly above 20% but compared to a lot of our competition and the larger industry, we are still in a better place I would say. We are taking a number of steps. We talked about the wage hikes, there are a number of other things that we are doing including learning and development opportunities, leadership development opportunities for our resources. So there are a number of things that we are doing internally to ensure that employees who work with us continue to work with us.

The challenge for us has been that during this pandemic, when a majority of our employees have been working from home, a lot of this attrition has been happening. I would say about 50-60% of the people who are leaving us have joined us in the last six or 12 months and there are people who have joined us virtually and has left us virtually. That is the main challenge that we are facing – a lot of infant attrition.

However many of the long termers are definitely continuing with us and the attrition among the key employees and the long term employees at least is much smaller than the reported attrition. So I would say attrition is under control. However, we are watching it on a day-to-day basis and taking steps to ensure that we do not get into a bigger mess.

What is the deal pipeline looking like?
The deal pipeline, the demand situation has never been stronger over many quarters and I have absolutely no concerns on that front. The sales engine is rocking. We have ramped up our sales engine over the last four quarters and that is really delivering results for us. The challenge for us would be to ensure that we service all the requirements that are coming our way with the attrition and with the hiring situation. So demand is not an issue, supply definitely is an issue and we need to figure out ways to address that.

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Demand is not an issue for Tata Elxsi, supply definitely is: MD - Economic Times
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Sensex, Nifty off to strong start; HCL Tech, Nestle India fall ahead of result - Economic Times

NEW DELHI: Benchmark indices opened on a high note on Thursday amid buying in shares of banking and financials and index heavyweight .

At 9.30 am, the BSE Sensex was trading 350.14 points or 0.61 per cent higher at 57,387.64. Nifty50 stood at 17,238.05, 101.50 points or 0.59 per cent. Midcap and smallcap indices rose up to 1.1 per cent.

This is even as Brent prices rose over 1 per cent to $108.17 per barrel and the dollar index, which has an inverse relationship with equities, ticked up 0.11 per cent to 100.45, following its retreat in the previous session. Asian markets also were trading mixed.

"We are back above 17,000 convincingly and hence, any positivity from the global peers or the domestic banking space could bring strength to our market. As far as levels are concerned, 17,200-17,300 remains a stiff hurdle and only a sustainable move beyond this would result in a strong momentum," said Sameet Chavan of Angel Broking.

Considering the overall tentativeness, we advise traders not to trade aggressively and should continue with a stock specific approach, he said.

Among Sensex stocks, IndusInd Bank climbed 1.28 per cent to Rs 984.70. Maruti Suzuki advanced 1.13 per cent to Rs 7,755.20. Dr Reddy's Labs, Bajaj Finance, Bajaj Finserv and Reliance Industries gained over 1 per cent each. Asian Paints, SBI, ITC, HDFC Bank and TCS also gained up to 1 per cent.

Losers included India, Tata Steel, HCL Tech and Tech Mahindra and Axis Bank. Nestle India and HCL Tech are scheduled to report quarterly earnings today.

Nestle India, which follows the January-December financial year, may report 5-10 per cent year-on-year growth in revenue and low single digit growth in profits, analysts tracking the company said. Margins may also come down during the quarter.

HCL Technologies, the third largest IT services company in India, is likely to report mid-teens revenue growth and a strong profit growth for the March quarter. Analysts expect year-on-year (YoY) revenue growth in the range of 15-16 per cent, while the growth in USD terms will likely be closer to 10 per cent. Profit growth is likely to be around 40 per cent, but adjusted profit growth is likely to be lower, said analysts. Sequentially (QoQ), revenue and profits are likely to be flattish.

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Sensex, Nifty off to strong start; HCL Tech, Nestle India fall ahead of result - Economic Times
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Explained: What are the key proposals in Niti Aayog’s draft battery swapping policy? - The Indian Express

Government think-tank Niti Aayog has prepared a draft battery swapping policy, under which it has proposed offering incentives to electric vehicles (EVs) with swappable batteries, subsidies to companies manufacturing swappable batteries, a new battery-as-a-service business model, and standards for interoperable batteries, among other measures.

Finance Minister Nirmala Sitharaman had announced during this year’s Union Budget that the government was set to roll out a battery swapping policy, in a bid to reduce upfront costs of purchasing EVs and drive adoption among buyers. It also comes amid several instances of EVs erupting into flames, raising concerns about their safety.

The policy is targeted at supporting the adoption of battery-swapping, primarily for battery swapping systems used in electric scooters and three-wheeler electric rickshaws. The draft is up for consultation, and the Niti Aayog has invited comments on it until June 5.

What is battery swapping?

Battery swapping is a mechanism that involves exchanging discharged batteries for charged ones. This provides the flexibility to charge these batteries separately by de-linking charging and battery usage, and keeps the vehicle in operational mode with negligible downtime. Battery swapping is generally used for smaller vehicles such as two-wheelers and three-wheelers with smaller batteries that are easier to swap, compared to four-wheelers and e-buses, although solutions are emerging for these larger segments as well.

What are some of the key proposals?

The draft policy has suggested that the GST Council consider reducing the differential across the tax rates on Lithium-ion batteries and electric vehicle supply equipment. Currently, the tax rate on the former is 18 per cent, and 5 per cent on the latter.

The policy also proposes to offer the same incentives available to electric vehicles that come pre-equipped with a fixed battery to electric vehicles with swappable batteries. “The size of the incentive could be determined based on the kWh (kilowatt hour) rating of the battery and compatible EV,” the draft policy states.

“An appropriate multiplier may be applied to the subsidy allocated to battery providers to account for the float battery requirements for battery swapping stations in different battery swapping ecosystems,” the draft policy said. The government will also specify a minimum contract duration for a contract to be signed between EV users and battery providers to ensure they continue to provide battery swapping services after receiving the subsidy.

The policy also requires state governments to ensure public battery charging stations are eligible for EV power connections with concessional tariffs. It also proposes to bring such stations under existing or future time-of-day (ToD) tariff regimes, so that the swappable batteries can be charged during off-peak periods when electricity tariffs are low. Transport Departments and State Transport Authorities will be responsible for easing registration processes for vehicles sold without batteries or for vehicles with battery swapping functionality, the draft says. Municipal corporations will be responsible for planning, zoning permissions and land allocation for battery swapping stations.

The policy also proposes to assign a unique identification number (UIN) to swappable batteries at the manufacturing stage to help track and monitor them. Similarly, a UIN number will be assigned to each battery swapping station. It also proposes to install battery swapping stations at several locations like retail fuel outlets, public parking areas, malls, kirana shops and general stores etc.

What is the battery-as-a-service model?

Niti Aayog said battery swapping will fall under the battery-as-a-service (BaaS) business model, and such models would have to ensure interoperability between EVs and batteries for a successful mainstreaming of battery swapping as an alternative. “Given the nascency of battery swapping, interoperability between EV batteries and other components within a battery swapping ecosystem is adequate for eligibility under the policy, as long as all components within the ecosystem adhere to the technical and performance standards defined for BaaS and battery swapping services,” the draft policy says.

Apart from the batteries themselves, major battery providers will be encouraged to sign data-sharing agreements to provide information on battery health and performance, and to enable more flexibility to consumers through peer-to-peer roaming networks. “For the classification of collected data under the broad categories of proprietary, restricted-access, private and open-data, a non-restrictive detailed guideline will be developed for adherence by all industry players,” the draft adds.

“This policy requires ecosystems to be ‘open’ to allow participation from other market players in order to be considered for support under the policy”. The policy will only support batteries using Advanced Chemistry Cells (ACC), with performance that is equivalent or superior to EV batteries supported under the government’s FAME-II scheme.

As of now, two-wheel EV maker Bounce has launched an electric scooter with a swappable battery. Under the company’s business model, customers can pay to swap their battery at one of their stations, whenever it runs out of juice.

Does the draft policy talk about EV safety?

To ensure a high level of protection at the electrical interface, a rigorous testing protocol will be adopted, the draft said, to avoid any unwanted temperature rise at the electrical interface. The battery management system, which is a software that controls battery functions, will have to be self-certified and open for testing to check its compatibility with various systems, and capability to meet safety requirements, it added.

This particularly assumes significance given the recent incidents of electric two-wheelers bursting into flames.

“Batteries shall be tested and certified as per AIS 156 (2020) and AIS 038 Rev 2 (2020) standards for safety of traction battery packs, as well as additional tests that may be prescribed for swappable batteries which are subject to multiple coupling/decoupling processes at the connectors,” the draft said.

Additionally, for better protection of assets, swappable batteries will have to be equipped with advanced features like IoT-based battery monitoring systems, remote monitoring and immobilisation capabilities.

The Aayog has proposed that all metropolitan cities with a population of more than 40 lakh will be prioritised for the development of battery swapping networks under the first phase, which is within 1-2 years of the draft policy getting finalised. Other major cities such as state capitals with a population greater than 5 lakh will be covered under the second phase.

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Explained: What are the key proposals in Niti Aayog’s draft battery swapping policy? - The Indian Express
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