Business Standard Podcast

At a time when the foreign investors have been on a selling spree across most emerging markets, including India, flows from mutual funds via the systematic investment plan route and directly into equities by retail investors have supported the markets. However, according to analysts, the headwinds – inflation, rising interest rates and an upturn in the real estate cycle -- may dent flows into equities as an asset class going ahead. According to Jefferies, a record over 60 billion dollars retail inflow, through mutual funds and direct, into domestic equity over the last 12 months has helped absorb heavy foreign selling. But they believe retail inflows cannot be taken for granted.   As trailing one year returns drop towards zero in another three to four weeks, the pace of retail inflows can reduce. History shows that a sustained property market boom and higher market volatility also impact flows, says Mahesh Nandurkar of Jefferies FPIs have, so far this year, sold securities worth 22 billion dollars. However, this has been met by a similar 23 billion dollar purchase by DIIs. Data shows that the domestic participation has broadened over the past 12-months with mutual funds retail-equity folio count and SIP accounts up by 29 per cent and 42 per cent, respectively. Retail investors are also turning to direct stock purchases. The number of demat accounts has gone up 63 per cent year-on-year. Brokerage Jefferies estimates an inflow of 36 billion dollars directly into stocks from retail investors over the last two years. Thus far in calendar year 2022, the S&P BSE Sensex and the Nifty50 have slipped around 7 per cent each. The fall has been less as compared to their global peers such as DJIA, NASDAQ, S&P 500, KOSPI, Hang Seng, Shanghai Composite, CAC 40 and DAX which have lost 12 per cent to 28 per cent during this period. This outperformance of the Indian markets, even in the correction phase, was possible due to strong participation in equities by the retail and MFs, analysts said. Besides Jefferies, Jigar Shah of MIB Securities India, too, believes that the retail participation could shrink going ahead as the RBI hikes rates and more investment avenues open up as interest rates go up. Acclording to Jigar Shah, Chief Executive Officer, MIB Securities India, tt will be interesting to see the May and June data. Markets are likely to crack again when RBI hikes rates in June, he says. Investors may shift to debt MFs, FDs, bonds   Over the past decade, strong retail flows have coincided with declining/ low deposit rates, according to analysts at Jefferies, who expect the deposit rates to go above the 7 per cent level with a lag even if the RBI were to hike rates.   Low property price inflation over the past decade has supported strong equity inflows. Property prices have started rising now and there is room for property market upturn, says Mahesh Nandurkar of Jefferies.   Nandurkar adds the current surge in housing demand is end-user driven but a sustained upturn will likely pull in property ‘investors’ as well. This could negatively impact equity flows, he says. On Thursday, the markets are likely to remain choppy in a range ahead of the F&O expiry for May series. Stock-specific action, however, will continue.  

It is like catching a train which doesn’t halt at a railway station. The only discount that it offers to commuters is that it slows down. But how slow is too slow? While some hop on at a given speed, others wait for a slower pace to charge. But it may or may not slow down. Only an experienced commuter can tell when to board or when to jump and de-board without bruising knees. Entry and exit points in stock markets are just like that. Select technical indicators -- such as moving averages, time frames, breakouts etc help investors spot such points. The first technical indicators that investors can easily use as an entry point is a technical breakout. This can be a profitable entry point for investors if the trend is studied accurately. This could be identified using charts and candlestick patterns. However, it is important to eliminate the noise and wait for the price to settle after the breakout. If the breakout is backed by an extraordinary surge in volume, then traders and investors should wait for the price to show corrective moves. Among these, a trendline breakout is one of the popular ones. As seen in the HUL chart, a trendline breakout, accompanied with strong volume, confirms a major positive upside that can provide over 10 per cent movement in a short span of time. Similarly, the chart of Cummins India’s stock shows that the entry point, in terms of moving averages crossover, can be identified on candlestick pattern such as Marubuzo and Morning Star etc. In order to confirm a trend before entering a trade, one should correlate the same with time frames. For example, it is always wise to look at the daily chart and then at the weekly chart if someone is looking for an intra-day entry. For a Buy side trade, an investor can consider entering if the daily and weekly charts have positive signals. Just like entry points, charts can also help in determining indicative targets for exit points. Price targets tend to be the difference between neckline and the low of the pattern. For targeting higher gains, one can deploy a trailing stop loss strategy. That apart, one should be ready to exit the trade when a particular stock or an index starts witnessing selling pressure above a particular price or range.

Prime Minister Narendra Modi on Monday put the stamp on India’s entry into the US-led Indo-Pacific Economic Framework. India has joined the bloc along with 12 other nations -- including the US -- to create a geostrategic counter to China’s growing clout in the region by ramping up economic cooperation. While these are early days and the final contours of India’s participation are yet to emerge, there could be some areas of friction too.Why India should tread with caution? From the negotiation tables in Tokyo, let us turn our focus to a storm brewing on the dining tables of restaurants back home. It is obviously over the bills. On Monday, the government said that eateries were illegally charging service tax from consumers. The eateries association, on its part, has denied it, saying that it was a matter of individual restaurant policy. So are eateries taking service charges illegally. We take a dive into this debate and find out more.   After the debate over services tax at eateries, let us turn our focus to markets. Soaring inflation, global central bank policies and the Russia-Ukraine war have dampened sentiment across global financial markets. So how does one navigate this uncertain phase? Will investors have to endure more pain ahead as their returns get pruned? What does S Naren, executive director and chief investment officer at ICICI Prudential AMC think of the developments. Business Standard’s Puneet Wadhwa caught up with him to understand his investment mantra. Pandemic and subsequent war in Ukraine has indeed wreaked havoc on markets, with no relief in sight. Meanwhile, the threat of another virus is looming large over Europe. Over 170 cases of monkeypox have been reported in Europe and in four other countries outside the union. India too is on the guard. Let us find out more in next episode of the podcast.  Watch video

While addressing delegates at the launch of the Indo-Pacific Economic Framework (IPEF), Prime Minister Narendra Modi said that the pact will pave the way for development, peace and prosperity in the region. While joining the block floated by US President Joe Biden, India made its intentions very clear. Peace in the region was the foremost priority for it, without which business and prosperity was not possible. IPEF is a critical part of the US President Joe Biden’s plan to counter China’s growing influence in the Asian economic sphere. Biden plans to do so by partnering with other countries which are India, Australia, Brunei Darussalam, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Indo-Pacific Economic Framework (IPEF) has four pillars.  The first is supply-chain resilience. The second involves clean energy, decarbonisation, and infrastructure. The third deals with taxation and anti-corruption. And, the fourth one is fair and resilient trade. The US is also seeking to include digital economy issues like the cross-border flows and localisation of data.   So what will be the shape of the pact? According to a February report by the US Congressional Research Service, US officials have stated that they do not envision the IPEF taking the form of a “traditional trade agreement”. The report cited a USTR official saying in February that the initiative would include different modules covering "fair and resilient trade, supply chain resilience, infrastructure and decarbonisation, and tax and anticorruption". Basically, the pillars we spoke of before. Countries will have to sign up to all of the components within a module, but will not have to participate in all modules.  In particular, the “fair and resilient trade” module will be led by USTR and include digital, labour, and environment issues, with some binding commitments.  As reported by Business Standard, the IPEF joint statement does not call for launching negotiations for a trade pact. Instead, it only promises to begin “collective discussions towards future negotiations”.   Without ruling out tariff negotiations under the proposed trade pact, the joint statement said that cooperation in the digital economy would be part of the efforts under IPEF.   A White House fact sheet spoke of pursuing high-standard digital economy rules with regard to cross-border data flows and data localisation, along with seeking strong labour and environment standards and corporate accountability provisions.     And, it is in these details that the devil lies. As explained previously by Business Standard, India and the US have contrasting views on digital commerce, labour, and environmental standards. In fact, India strongly resists putting such standards in any of the free-trade agreements it enters into.   Speaking to Business Standard, Biswajit Dhar, Professor of Economics, Jawaharlal Nehru University said IPEF intends to bring about regulatory coherence, which is similar to what was happening with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It will impact digital economy, e-commerce, environment and labour regulations, but data portability is one of the key issues for India that remains unaddressed, he said. E-commerce rules are another key issue. India’s labour standards have actually become weaker. Indian institutions lack the depth to address these regulatory issues. All the other countries in the IPEF have a certain amount of preparedness. India is an outlier in this regard, Dhar says. India will have to see what kind of sensitivity other members show towards its concerns. The nature of the framework itself could be a cause for concern. According to a brief written by the Washington-based Center for Strategic and International Studies, or CSIS, the Biden administration has domestically portrayed the IPEF as an initiative that will enable the US t

As pandemic waned and eateries sprung back to life, the old controversy surrounding service charges at restaurants has again come to the fore. After complaints, the Department of Consumer Affairs has warned restaurants across the country against forcibly levying the charge. The government has also called a meeting with restaurant association to discuss the contentious issue. In a letter to the National Restaurant Association of India, which represents the interests of 5 lakh plus restaurants, Consumer Affairs Secretary Rohit Kumar Singh pointed out that restaurants have been collecting service charge from consumers by default, even though payment of any such charge is voluntary and at the discretion of consumers and not mandatory as per law. It has scheduled a meeting with NRAI on June 2nd to discuss four issues pertaining to service charge levied by eateries. The meeting follows the government taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH). The department’s letter points out that consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants. They are also being falsely misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount. Department of Consumer Affairs has already published guidelines in April 2017, which note that the entry of a customer into a restaurant cannot by itself be construed as consent to pay the service charge. Any restriction on entry on the consumer by way of forcing him to pay the service charge as a condition precedent to placing an order of food and beverages amounts to ‘restrictive trade practice’ as defined in the Consumer Protection Act. The guidelines mention that placing of an order by a customer amount to his agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than that, without the express consent of the customer, would amount to unfair trade practice as defined under the Act. Anku Sharma, Associate Director - Competition, Spice Route Legal says the Govt will take proactive steps on issues concerning the public at large. Very few restaurants that take service charge are following 2017 guidelines, he says. Dept of Consumer Affairs guidelines are recommendatory.  Needless to say, the restaurant industry has a different view.  The NRAI, in a statement yesterday, claimed there was no illegality in levying such a charge and whether or not to levy a service charge is a matter of individual restaurant policy.  It argued that once the customer, who is made aware of such a charge in advance, decides to place the order, it becomes an agreement between the parties, and is not an unfair trade practice. GST is also paid on the service charge, the association added. Another industry body, the Federation of Hotel & Restaurant Associations of India, had in 2017 said that while the rights of the consumers are paramount, the rights of individual establishments should not be impinged upon.  Are there merits to the industry’s arguments? Anku Sharma of Spice Route Legal says the agreement remains between restaurant and customer. Ultimately, it boils down to how much the govt can interfere with private contracts, he says. The Consumer Affairs Department had in April 2017 said that paying service charge or the tip to staff should be left to the discretion of customers and it should not be binding. It is high time that the government sets the record straight on this issue which has been dragging on for years. The meeting called by the government may be a step in the right direction. 

Q1: It seems that the markets have been shaken and stirred by the recent economic developments. Have they finally put all the negative news behind? Ans: >Narrative of global central banks has changed >Markets likely to remain volatile >US Fed is focusing on managing inflation Q2: To what extent are the markets discounting the possibility of the Reserve Bank of India being very aggressive with the rate hikes over the next three to six months?  Ans: >The AMC is comfortable with the possibility that RBI will have to increase rates  >Difficult to say whether the markets are factoring this in >Not surprised with the recent out-of-turn rate hike, and likely hikes in June and August Q3: A lot of support has been lent to the markets by the domestic institutions and the retail investors. Do you see a sense of caution creeping in? Or, when do you think they’ll become cautious and throw in the towel as well? Ans: >Worried as regards retail investors’ participation if markets continue to fall >If retail investors were bulling at 17,000/18,000 (Nifty), they should remain bullish now as well >Foreign institutional investor selling was unbelievable >Large-caps have more safety margin compared to mid, small-caps Q4: But at 17,000/18,000 (Nifty), a number of investors were ignorant and had a laid back attitude about what the US Fed may do. The caution, or worry, has only crept in now. Isn’t that a scary sign for the road ahead for the markets?  Ans: >We have been cautioning against the likely headwinds >Markets more attractively valued now than three to six months back  >A further correction will make markets more attractive; investors should realise this >Good time to start systematic investment plans (SIPs) Q5: Is this a flash correction within a structural bull-run like we saw in 2020, or is there more to it?  Ans: >V-shaped movement in 2020; a similar movement is ruled out for now >Synchronized liquidity support from global central banks in 2020 supported markets >No sharp rallies in the near-term. India, however, remains a good story for investors >India more attractive from a long-term perspective than most emerging markets Q6: A lot of heavy lifting was to be done by the growth in corporate earnings. Do you think this is another setback waiting to happen for the markets as India Inc copes with rising input costs amid wage pressures? Ans: >Corporate earnings are not a problem >In an inflationary market (2002-2008), corporate earnings is never a problem >Financial system in much better shape now (compared to 2017-18); can absorb shocks >Challenges were only on market valuation and not earnings Q6: Where do you think the leadership will emerge from in case the markets were to stage a recovery?  Ans: >Banks and autos likely to lead >Capex-related sectors, stocks of public sector enterprises //////////////////

According to the World Health Organization, the name monkeypox originated from the initial discovery of the virus in monkeys in a Danish laboratory in 1958. Human monkeypox was first discovered in 1970 in a 9-year-old boy in the Democratic Republic of the Congo-- where smallpox was eliminated in 1968. Since 1970, human cases of monkeypox have been reported in 11 African countries. In 2003, the first monkeypox outbreak outside of Africa was in the United States and was linked to contact with infected pet prairie dogs. These pets had been housed with Gambian pouched rats and dormice that had been imported into the country from Ghana. This outbreak led to over 70 cases of monkeypox in the US. WHO says that monkeypox is a viral zoonosis -- a virus transmitted to humans from animals-- with symptoms very similar to those seen in the past in smallpox patients, although it is clinically less severe. Evidence of monkeypox virus infection has been found in animals including squirrels, Gambian poached rats, dormice, different species of monkeys and others.  Now, fresh cases of monkeypox have been found in Europe and other parts of the world. 16 countries, mostly in Europe, along with the US, Canada and Australia and Israel have reported outbreaks of the viral disease, with more than 170 confirmed infections. This is the worst outbreak of the virus outside of Africa, where it is endemic.  Britain has reported the most cases at 56, followed by 41 in Spain and 37 in Portugal. Only 10 cases have been detected outside of Europe so far.  So far, reported cases have no established travel links to endemic areas. Based on the available information, cases have mainly but not exclusively been found among men who have had sex with men (MSM), the World Health Organization has said. Monkeypox is usually a self-limited disease with symptoms lasting from two to four weeks. Severe cases occur more commonly among children and are related to the extent of virus exposure, patient health status and nature of complications. The case fatality ratio of monkeypox has historically ranged from 0 to 11 % in the general population and has been higher among young children. In recent times, the case fatality ratio has been around 3–6%. Animal-to-human transmission can occur from direct contact with the blood, bodily fluids, or cutaneous or mucosal lesions of infected animals.  Human-to-human transmission can result from close contact with respiratory secretions, skin lesions of an infected person or recently contaminated objects. Transmission via droplet respiratory particles usually requires prolonged face-to-face contact, which puts health workers, household members and other close contacts of active cases at greater risk. The illness begins with fever, headache, muscle aches, backache, swollen lymph nodes, chills and exhaustion.

The world’s rich and powerful are descending on Davos for the World Economic Forum’s annual meeting. The lingering effects of pandemic, the rising inflation in many parts of the world and Russia’s war in Ukraine have created a bleak backdrop. Amid all this, global investors will be keenly assessing what the Indian delegation has to say at Davos. So, what will be India’s strategy and what challenges it could face? Back home, spiraling inflation has forced the government to slash the central excise duties on petrol and diesel. This succour to the common man will come at a cost of Rs 1trillion for the government in the next one year. But what about the CNG vehicle users? The prices of CNG have soared about 60% in the last one year in Delhi. The price differential between petrol, diesel and CNG has narrowed like never before. So why is CNG on fire? And can CNG vehicle owners -- including those auto rickshaw and cab owners -- expect relief?   Apart from cutting central excise duties on fuel prices, the government also levied duties on steel exports to curb inflation. But it has come as a setback for the metal and oil marketing space with experts turning cautious on the sectors. We delve into the likely impact of these policy decisions and the outlook for the sectors. From Dalal Street, let us turn our gaze to the skies. Last month, when a 17-seater aircraft lifted-off a short runway of Assam’s Dibrugarh, it not just charged into the clear hill sky, but also into the Indian aviation history. The indigenously built Dornier 228 aircraft was for the first time used to carry passengers. Our next report offers a peek into the aircraft built by Hindustan Aeronautics Ltd and how it may help India meet the regional connectivity target? Lets find out in this episode of the podcast.   Watch video

The effects of the Russia-Ukraine conflict are being felt at the World Economic Forum’s annual meeting in Davos. The political and business leaders of the world are anxious about Europe’s economic future. Meanwhile, energy shortages and the spectre of economic recession have created a sense of gloom among many business leaders.   Other investment destinations are also looking uncertain. But, India has emerged as a region of both economic dynamism and political stability. Keen to capitalise on this prevailing mood, India is drawing the attention of global leaders to its reformist decisions and the fast pace at which new unicorns are being minted in the country. Global investors are also keenly assessing what the Indian delegation is bringing to the table at Davos. Taking place after a two-year pandemic-led hiatus, the ongoing World Economic Forum meeting is now looking at a different world than the last one was. And, that’s a reason for India to find itself in a sweet spot.   According to Shyam Saran, Former Foreign Secretary and Senior Fellow, CPR, Chinese President Xi Jinping was the focus of Davos summit two years ago. Xi Jinping had then presented China as a champion of free trade, while the US under Donald Trump was seen to be on the other side of the fence. But China is not present at the current Davos summit and is on the back foot. Focus has thus shifted to India, says Saran, and India enjoys a potential interest as an alternate investment destination. This has led to the rise of the ‘China+1’ model So, what is the message that India wants to get across at Davos?     According to Pranjal Sharma of Business Standard, India is presenting itself as a stable, dynamic and growing emerging market at Davos. This is in contrast to the troubles in Europe and the US due to the Ukraine war. He says, the idea is to attract investors worried by the uncertainty in markets and rising inflation. State govts and Centre are aligned in their goal to present ‘Brand India’ assertively at Davos.   Sharma says India is showcasing the growth of its legacy companies and the continuous profits earned by global companies manufacturing in India. India is also advertising the rise of unicorns in the country, he points.    As reported by Business Standard, India has adopted a strategy at Davos that is different from previous years. The delegation, led by Commerce and Industry Minister Piyush Goyal, is focused on improving internal coordination. “India’s legacy business leaders are mixing with young unicorn founders like Nikhil Kamath of Zerodha, Prashant Pitti of Easemytrip; Ashish Singhal of CoinSwitch and Vidit Atrey of Meesho. This is the first Davos outing for many young entrepreneurs,”  Pranjal Sharma says, from Davos.    Before the start of the conference, Goyal had invited all delegates to share their views on India’s positioning. The feedback from the meeting was then incorporated into India’s stance and strategy. A microsite dedicated to India was also created as a resource centre. Goyal’s team at the Ministry of Commerce and Industry, the Invest India officers and members of the Confederation of Indian Industry are coordinating with state governments to craft a common response on several crucial issues.  Goyal’s ministry is sharing briefing notes with all delegates on issues like, wheat exports and the government’s flagship production-linked incentive schemes. To ensure least-possible confusion about trade and investment numbers, the latest figures have also been made available. Meanwhile, foreign investors are reportedly fleeing China. As a recent report by The Economist says, Chinese President Xi Jinping’s policies are having a ‘profound’ and ‘painful’ impact on the markets. On the other hand, while India’s growth forecast for FY23 has been slashed in recent days, it has retained its status as an economic bright spot. So, could something possibly go wrong? Well, there

Responding to a petition and also to the worsening air pollution in Delhi, the Supreme Court had in 1998 directed that all the buses, taxis and auto rickshaws will have to switch to CNG.  The apex court had also ordered the setting up of 70 CNG stations to meet with the increased demand. After initial hiccups -- which included a waiting time of over 10 hours at CNG stations-- the national capital finally took the leap of faith. And by 2021, it claimed to have the “cleanest public transportation system”. Apart from the reduced pollution, another big reason for vehicle owners for switching to CNG was the huge difference in operating cost of the vehicle. But, over the years, the gap has narrowed down substantially. On Saturday, the central government slashed central excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 a litre, providing much-needed relief to households that have been hit by 8-year high inflation. The same day, Indraprastha Gas, which retails CNG in the national capital and adjoining cities, hiked the fuel’s price by Rs 2 per kg to Rs 75.61. This was the 13th increase since March 7. In all, the CNG price has risen by Rs 19.60 per kg or 35% during this period. And in the last one year, prices have increased by Rs 32.21 per kg or 60%, according to data compiled by news agency PTI. IGL Managing Director Sanjay Kumar said the prices are likely to remain elevated in the near future due to high international prices of natural gas. Similarly, Mahanagar Gas which supplies CNG to Mumbai and its suburbs, increased the MRP of CNG by Rs 4 per kg on April 30 to Rs 76 on April 30.  While hiking retail prices, Mahanagar Gas cited historically high cost of regasified LNG which is being blended with domestic gas to offset the shortfall in the availability of domestic gas for CNG and PNG segments.  The company also cited the rise in the prices of locally produced gas. The Centre had raised the price of locally produced gas from old fields for April-September to a record high of $6.1 per million metric British thermal units (mmBtu), an increase of 110% from $2.9/mmBtu. But Mahanagar Gas said that the revised price still offered savings of about 57% and 27% as compared to petrol and diesel respectively at the current price levels in Mumbai. The Maharashtra government had on April 1st reduced the Value Added Tax on CNG from 13.5% to 3% providing relief of 6.00 rupee per kg. But the relief was short. Following the recent fuel price relief, the Society of Indian Automobile Manufacturers said the auto industry is keenly looking forward to similar support on CNG prices in order to help the common man, facilitate public transport and enable a cleaner environment.     For instance, Delhi’s public transport, including cabs, autos, taxis and buses, is majorly CNG driven. Around 1 lakh auto rickshaws and a similar number of taxis are currently plying in Delhi, which levies no VAT on CNG.  Various auto-rickshaw, cab and taxi unions have been demanding a hike in fares and slashing of CNG prices to offset the impact of rising fuel prices. Sourav Mitra, Director - Energy, CRISIL, said international gas prices are at very high levels due to the war in Ukraine, adding that domestic prices may go up further in the second half of this fiscal to as much as $8.5/mmBtu. Mitra says the Centre can consider reducing the excise duty on CNG from 14% while states have the option to cut VAT. The industry has been demanding that natural gas be brought under the ambit of GST. And why should consumers expect a breather on the CNG front? According to Sourav Mitra, CNG usage has been growing strongly, even in Tier 2 and 3 cities and any positive direction by govt will encourage use of CNG as a clean fuel. PTI reported in April that the oil ministry has stopped making a fresh allocation of natural gas from domestic fields to the city gas sector, leading to a hike in CNG and piped cooking gas prices to rec

The introduction of a 15% export duty on most steel products, up from zero, and an increase in levies on iron ore and pellets to 45-50% propelled a sharp slump in metal stocks on Monday. Shares of Tata Steel, JSW Steel, Jindal Steel, SAIL and NMDC cracked up to 20% in intra-day trade.   Analysts have now turned pessimistic particularly on metal companies as the recent policy moves are set to undermine their operational performance from hereon.   According to Bhavesh Chauhan, Research Analyst, IDBI Capital, hike in export duty negative for the sector and 15% duty hike means lesser realisations from exports. Steel companies’ exports range between 10-25% of sales, Chauhan says adding that margins, already under pressure, likely to shrink further. Downgrades will happen, evaluation awaited to see if there is any upside left.   Some brokerages have already initiated rating downgrades on leading steel stocks as the hike in export duties is expected to lead to a sharp correction in domestic steel prices.  CLSA, for instance, has reduced domestic steel price estimates by 8-10%. On the back of lower steel prices, the brokerage has cut the Ebitda estimate for steel companies by up to 24%. It sees no near-term upside catalysts for the sector, other than a stimulus in China. ICICI Securities, meanwhile, has highlighted the policy decision as extremely negative for the steel sector expecting a broad-based multiple de-rating for the industry. It has also lowered its ratings for most metal stocks.  The brokerage has broadly assessed a likely Rs 5,000-7,000/te of impact on EBITDA for integrated steel players, while for unintegrated steel equities like JSW Steel the impact can be Rs 5,000/te. “Due to the measures announced by the government, near-term correction in steel stocks is imminent. We believe the ramification of these decisions by the government will be felt widely across all parts of the industry,” says Motilal Oswal   According to Motilal Oswal, the export duty hikes can impact the valuation of the sector and companies’ ability to invest in capacity growth in the long term.  On the contrary, the government has reduced excise duties on petrol and diesel by Rs 8 and Rs 6 per litre, respectively. Following this, Parbhudas Liladhar has cut its FY23 EPS estimates for HPCL and BPCL by 56% and 40%, respectively, as elevated oil prices remain challenging.  According to the brokerage, OMCs ability to reduce high marketing losses will be contingent on crude price correction, as high inflationary pressure will prevent meaningful retail price hikes despite excise duty cuts. [Parbhudas Liladhar]   Technical charts suggest shares of BPCL could see a bounce until their new 52-week low remains unbreached.  The weekly chart of Hindustan Petroleum Corporation, meanwhile, currently signals a bearish trend. The stock price of Indian Oil Corporation is well-placed given its sustenance above the 200-day moving average level.  On Tuesday, logistics player Delhivery’s market debut will be closely watched, while in the primary market chemical company, Aether Industries’ Rs 808 crores-IPO will open for subscription.  Besides, Adani Ports, Balkrishna Industries, Balrampur Chini, Grasim, Ipca Laboratories and Metropolis Health will be on investors’ watch ahead of their Q4 results. That apart, stock-specific action and global cues will dictate the market trend.

The deafening noise of Dornier 228 aircraft completely drowned the sound of clapping at Assam’s Dibrugarh airport on 12th of April. But it didn’t stop those at the airstrip from cheering. On-board the 17-seater aircraft were Aviation minister Jyotiraditya Scindia and Union law minister Kiran Rijuji -- who were flying into history. Built by Hindustan Aeronautics Ltd or HAL, the light-weight aircraft was so far used to transport troops, carry out maritime surveillance and several other government missions. But, on April 12th, it took off on its first commercial flight between Assam’s Dibrugarh and Pasighat in Arunachal Pradesh. From 1985 to the early 1990s, a regional airline called Vayudoot used Dorniers to service 100-odd airports across India. The Dornier-228 made up close to half of Vayudoot’s fleet of 21 aircraft. Back then, however, it was a German-made aircraft. Unfortunately, there were multiple reports of engine failure during flight. In fact, in 1989, a flight from Pune to Hyderabad crashed and killed all 11 on-board. Vayudoot wound up in 1997. However, the HAL-built plane is based on a new generation of Dornier 228 aircraft.  Until recently, the Dornier-228 aircraft were being manufactured under licence from RUAG, a Swiss company. While HAL would supply the fuselage, wings and tail unit, the aircraft itself would be assembled at RUAG’s German facility. So, what about the Do-228s that have been on commercial jaunts in Arunachal Pradesh and Assam for Alliance Air? These aircraft have been made in India from the raw material stage itself.   The aircraft will now help the government meet its targets of providing air connectivity to tier 2 and tier 3 cities of the country under its UDAN scheme. UDAN's aim is to make air travel both affordable and widespread. One of the ways it does this is by connecting unserved airports and airstrips across the country. Recently, HAL Chairman and Managing Director R Madhavan told Business Standard that there were over 150 airports and airstrips that were only suitable for less than 20-seater aircraft, which is the class the Dornier-228s fall in.  Therefore, airline operators can fly Dornier-228s on routes connecting such airports and airstrips. According to Madhavan, the Northeast, with its challenging hilly terrain and the difficulty of travelling there by rail or road, was the obvious area to begin with. It is a modest start. However, Madhavan is confident that the use of two civil Dornier-228s by Alliance Air will bring in other operators, who would also be prospective HAL customers, into the regional aviation market.

Metro AG has reportedly decided to exit India after over 19 years. The German retailer’s decision came about eight years after another European retail giant, France’s Carrefour, wound up its operations and left. And reports have it that Walmart too is not keen on opening direct-to-consumer physical stores here. So why is Indian physical retail a hard nut to crack for international retail giants? Is it the government’s policies? Or a business model tilted in favour of local firms -- like what we have seen in most other countries? Find out the challenges involved in India’s supermarket wars.   Like the foreign retail giants, the start-ups too are on a shaky ground in India. Japan’s SoftBank-backed Cars24 laid off over 600 workers last week, just days after ed-tech unicorn Vedantu fired 424 employees. And startup accelerator Y Combinator has asked founders of its portfolio firms to prepare for the worst. With foreign investors tightening their purse strings, start-ups are shedding weight to stay afloat. So is there a scary twist ahead in the Indian start-up story?  The sentiment on Dalal Street is also sombre. In line with the ongoing global rout, domestic equities have been ravaged this year on stinging inflation and a spate of interest rate hikes. Amid talks of an impending recession, select pockets in the market have been hit the hardest and have entered the bear zone after two years. Find out the fundamental and technical outlook for these sectors. After the bloodbath on stock markets, let us turn our focus to the environment. Did you know that the global textile industry emits more greenhouse gas than those from shipping and international air travel combined? The emergence of fast fashion has played a big role in it. Find out about this phenomenon and more in this episode of the podcast.  

  The battle for dominance in India’s physical retail space has seen many casualties. Even the likes of Aditya Birla Group and Godrej Group, which are among the country’s largest conglomerates, had to pack the bags and leave. In 2018, the Aditya Birla Group sold its More supermarket chain to Samara Capital and Amazon. Then, in 2019, the Godrej Group offloaded its grocery outlets under the Nature’s Basket brand to Spencer’s Retail.   Let us take one more recent example. With more than 1,500 stores, Future Retail was once India’s second-largest retailer. Now, Future Retail, along with other group companies, is being taken to the National Company Law Tribunal as lenders seek to recover their dues under the Insolvency and Bankruptcy Code. This leaves Reliance Retail and Avenue Supermarts-run DMart as India's top retailers. However, the going has been just as tough, if not more, for foreign firms. According to a recent report by one financial daily, Amazon, Reliance Retail, Avenue Supermarts, Tata Group, Lulu Group, and Samara Capital are among those looking to buy German retailer Metro AG's Indian cash-and-carry operations for anywhere between $1.5-1.75 billion. Metro has been running a chain of 31 cash-and-carry stores across India since 2003. According to the report, the decision to cash out came after intense competition and the large investments needed to sustain operations forced the company to carry out a detailed business review.     In 2020, Reuters reported that Walmart Inc, the world’s largest retailer, had fired 56 of its executives in India. The move, agency said that, underscored the challenges Walmart was facing in expanding its wholesale business in India. Carrefour, one of the largest retail chains in the world, had also exited India in 2014, less than four years after it had opened its first store in the country.   According to a report from March this year, a top official at the American retail giant Walmart said that the company was not keen on opening direct-to-consumer physical stores in India. Instead, it would focus on growing its acquisitions -- which are online marketplace Flipkart and payments major PhonePe.   In 2019, Amazon invested close to rs 1,500 crore for a 49% stake in Future Retail’s promoter entity Future Coupons. Thus, indirectly gaining a 4.8% stake in the former. Amazon's aim was to expand its foothold in India’s retail market. But it didn’t happen. As a previous Morning Show story had explained, companies like Amazon face more hurdles when it comes to tapping India’s retail consumer base. This is because foreign investment in offline multi-brand retail is tightly controlled. India allows 51% FDI in multi-brand retail under the government route.

 Investors, founders and CEOs have started sounding bugle on an impending funding crisis for start-ups and are taking a sombre tone on the medium-term outlook of the ecosystem.  After raising a record $35 billion in 2021, Indian start-ups are staring at falling valuations and a slowdown in funding as investor sentiment turns negative after more than a decade of bull-run that saw India mint a 100 unicorns.   This has prompted several start-ups lay off employees as focus turns towards profitability and cash conservation to increase runway. The latest to do so are SoftBank-backed pre-owned e-commerce platform Cars24 and ed-tech start-up Vedantu, which had turned unicorns in the last two years.   Cars24 reportedly laid-off 600 staff, making up 6% of the company’s total employee strength whereas Vedantu laid off 424 employees, about 7% of its workforce. It had laid off 200 of its contractual and full-time employees earlier this month. Ed-tech unicorn Unacademy, too, recently laid off about 10% of its staff or 600 employees, including contractual workers and educators. Back in March, it had cut 100 jobs from its PrepLadder team. That’s not all. Over 800 employees of WhiteHat Jr resigned from the Byju’s-owned start-up in the last two months after being asked to work from office. And in February, ed-tech startup Lido Learning shut down operations. Social commerce start-up Meesho, which more than doubled its valuation last year to $5 billion, sacked 150 employees from its grocery business last month.  Vedantu cited a tough external market environment which means “capital will be scarce for upcoming quarters.” Co-founder and CEO Vamsi Krishna told employees that it was important to build a longer capital runway of at least 30 months given the uncertainties of the outside world and tightening of capital availability expected for the next few quarters. He cautioned that with Covid tailwinds receding, and schools and offline models opening up, the hyper-growth that Vedantu experienced during the last two years will also get moderated. Japan's SoftBank, which is India's biggest tech investor, with more than $14 billion in investments, has reported a record loss of $26.2 billion at its Vision Fund investment arm. Its founder and CEO Masayoshi Son said that this year the firm may invest only half or a quarter of what it did last year. Uber CEO Dara Khosrowshahi said his company will reduce expenditure on its marketing and incentive activities and treat corporate hiring as a “privilege” in response to what he called a "seismic shift" in investor sentiment.  Prominent Silicon Valley incubator and startup fund Y Combinator, which has investments in over 150 Indian startups, has advised its portfolio founders to “plan for the worst” as fears of an economic downturn in the US grow. Regardless of a founder’s ability to raise new funds, it’s their responsibility to ensure the company will survive for the next 24 months even if no new fundraise happens, it added. Y Combinator also said that poor public market performance of tech companies significantly impacts Venture Capital investing. In India, shares of startups like Nykaa and Zomato which had blockbuster listings last year, are down 67% and 43% from their peaks, respectively. Paytm is trading 73% below its IPO price. Nithin Kamath, the founder and CEO of India’s largest brokerage Zerodha, said that misjudging the market size and opportunity, then setting wrong expectations and chasing valuations are probably the biggest reasons why startups fail. Kamath, whose Zerodha is boot-strapped and profitable, noted that sustainability was more important than valuation.  According to Prajakt Raut, Managing Partner, Supply Chain Labs, things will turn a little more bleaker than what they currently are. As such, early-stage startups seeking funding will have to get much stronger fundamentals. Enterprise startups are in a better pos