Innholdsfortegnelse for 21 July 2024 i Business Today

“We only know how to run, we don’t know how to walk.” That’s what Swami Ramdev, the Co-founder of the Patanjali group told us in 2021 when we ran the cover story on his plans for Ruchi Soya, which he acquired for ₹4,350 crore in 2019 through the insolvency process. Ruchi’s turnover at the time was ₹16,383 crore. Cut to 2024, and Ruchi Soya, now christened Patanjali Foods Ltd (PFL), clocked a turnover of ₹31,962 crore in FY24. Moreover, primarily an edible oils company at the time, PFL today sees 30% of its turnover coming from the fast-moving consumer goods (FMCG) business. Swami Ramdev and group Co-founder Acharya Balkrishna have shown Patanjali can run. But this run hasn’t been without its hurdles, and the group has stumbled along the way.…

QUANT MUTUAL FUND’S (MF) growth trajectory has been nothing short of remarkable, with its assets under management (AUM) shooting up by a staggering 250.76% in just a year. The fund’s AUM stood at ₹23,956 crore in May 2023, but by May 2024, it surged to a substantial ₹84,030 crore. But now, a shadow of suspicion looms over this skyrocketing growth. Sandeep Tandon, the CEO and Director of Quant MF is under scrutiny from the Securities and Exchange Board of India (Sebi) for suspected front-running. This development raises a crucial question for every investor: Are their investments at risk? “If the allegations of front-running are proven true, it could lead to volatility in the stocks Quant MF holds or has traded in recently. Investors might temporarily lose confidence in these stocks,…

→ 2006-15: Patanjali Ayurved set up by Swami Ramdev and Acharya Balkrishna; in 2015, clocks ₹2,000 crore yearly sales → 2016-18: Hits ₹10,000 crore in group revenue; in 2018, revenue growth plateaus amid its focus on expanding distribution through general trade → 2019: Acquires Ruchi Soya for ₹4,350 crore through insolvency process → 2021: Ruchi renamed Patanjali Foods Ltd (PFL) after Patanjali Ayurved hands over foods business; group revenue jumps → 2022: IMA files plea against Patanjali for spreading misconception → 2023: Sebi freezes promoters’ shares in PFL; raises public stake to 25% via OFS; Supreme Court warns Patanjali for its claims of curing diabetes and high BP → Jan-Jun 2024: Supreme Court issues show-cause notice to Ramdev and Balkrishna; both tender unconditional apology → July 2024: PFL board approves proposal to…

SMALL IS BEAUTIFUL. Take India’s micro, small, and medium-sized enterprises (MSMEs) for instance. They play a crucial role in India’s economic growth, often attributed to large conglomerates and corporations. These MSMEs—currently more than 60 million—are the crucial backbone of the Indian economy, generating thousands of jobs, fostering innovation and entrepreneurship, and contributing nearly 45% to India’s exports and 30% to the gross domestic product (GDP). Despite playing a pivotal role in the country’s development, these firms encounter immense challenges in securing the capital required for their expansion. They often struggle to obtain loans from traditional banking institutions, which are known for their lengthy approval processes, high collateral requirements, and stringent criteria. As of April 19, 2024, the MSME sector had received ₹10.4 lakh crore in credit from banks, compared to…

Small and medium enterprises (SMEs) are facing challenges on multiple fronts. But some of them have made the move towards formalisation and tasted success on D-Street. This is evident from the funds they have raised in the primary market in FY24. More than 190 SMEs raised a record ₹5,971 crore through the BSE SME and the NSE Emerge platforms between April 2023 and March 2024, data shows. Of these, 72% companies have delivered positive returns to investors up to May 24, 2024. SMEs had raised ₹2,235 crore and ₹965 crore in FY23 and FY22, respectively, according to data provider primedatabase.com. Market watchers say the working environment of SMEs has undergone significant changes over the past decade due to various policy implementations and regulatory reforms, and SME IPOs have been helping…

● It is expected that the upcoming Union Budget will include several measures to generate more employment opportunities 1 BOOST PRIVATE INVESTMENTS AND TWEAK PLI SCHEME TO INCLUDE MORE SECTORS 2 PLI SCHEME COULD BE LINKED TO MSMEs THAT ALSO CREATE JOBS 3 APPRENTICESHIP SCHEME COULD BE REVIEWED TO BRING JOB OPPORTUNITIES FOR EDUCATED YOUTH 4 RURAL FOCUS WITH MORE FUNDS FOR ROAD CONSTRUCTION, WELFARE SCHEMES, AND AGRICULTURE 5 SCHEMES TO BOOST WOMEN’S PARTICIPATION IN WORKFORCE, FLEXIBLE WORKING…

TAX EXPERTS’ ANTICIPATION ▸ The tax slabs and rates under the old and new tax regimes are expected to be revised ▸ The standard deduction limit may rise to ₹75,000 from ₹50,000 under both regimes ▸ The government can consider increasing the interest deduction limit on house property under Section 24(b) from ₹2 lakh to ₹3 lakh ▸ New tax benefits similar to 80EEA could be introduced to give a boost to the affordable housing sector ▸ The government may introduce a single ITR form for easier tax filing (replacing ITR-1 to ITR-6) ▸ Tax compliance can be eased through digitalisation TAXPAYERS’ DEMANDS ▸ Deduction limits for Section 80C of the Income Tax Act should increase under the old regime ▸ Taxpayers are looking for one tax regime, as picking the…

NOTE WHOLESALE PRICE DATA AS OF JUNE 15; SOURCE CMIE ECONOMIC OUTLOOK 63% Increase (YoY) in onion prices in the past year; while potato and tomato witnessed a rise of 61% and 21%, respectively 20% Decline in onion production in 2023-24; during the same period, potato output fell 6% to 56.8 million tonnes 58% Surge in lemon prices in the past year, while banana and mango prices increased 23% during the same period 7.87% Inflation recorded in food and beverages in May 2024—which is unchanged from the previous month’s reading…

AFTER A GAP of over eight months, the Goods and Services Tax (GST) Council met on June 22. Coming as it did after a brief hiatus brought about by the General Elections, the meeting was keenly awaited by trade and industry, which was hoping for clarity on many issues. The Council, chaired by Union Finance Minister Nirmala Sitharaman with representatives from all states—including as many as 11 new members—clearly had a busy agenda and announced as many as 52 decisions. Almost all of them were procedural and compliance-related and gave respite to industry and taxpayers by improving the ease of doing business and providing certainty on tax rates. Some of these decisions include extending the due date for input tax credit, setting monetary limits to file appeals under the GST…

1 Currently, Zomato’s ‘going-out’ business is divided into two categories: dining reservations in India and the UAE, and an event ticket booking segment—Zomato Live 2 Expanding into the online movie and event ticket booking business will strengthen its position in consumers’ wallet 3 Upon the deal’s closure, Zomato will be empowered with consumer behaviour data to drive further growth in the entire ‘going-out’ segment 4 What seems to be a distress sale for Paytm may turn out to be another ‘Blinkit bet’ for Zomato 5 The deal may lead to the emergence of a big competitor for BookMyShow…

▸ Amid stagnant top-line growth for Patanjali Foods Ltd (PFL) and legal troubles, Swami Ramdev aims to double group revenue to ₹1 lakh crore by 2028 ▸ Continued focus on strengthening manufacturing, expanding distribution and exports will be crucial for PFL to achieve ₹50,000 crore top line in four years ▸ By involving professional management, the Patanjali group is improving operational efficiency and charting a clear corporate strategy ▸ With an aim to boost sales, profits and secure investors’ interests, PFL is acquiring Patanjali Ayurved’s key home and personal care portfolio ▸ After successfully taking over Ruchi Soya (now called PFL), Ramdev is eyeing a bunch of acquisitions in the consumer goods space to boost top line ▸ To lure young, urban and well-off consumers, PFL is establishing a premium…

SOMETIMES THE MOST helpful of things can have an unintentional fallout. Take the 45-day payment rule for MSMEs for instance. With preparation underway for the Union Budget 2024-25, finance ministry officials are trying to understand the unintended impact of the new provision under the Income Tax Act that mandates payments to micro, small and medium enterprises (MSMEs) within a 45-day time period. According to sources, some relief may be on the cards to ensure that payments are not tied up to the 45-day window. Finance Minister Nirmala Sitharaman had—at an interaction with MSMEs in Ludhiana on May 29—said that if MSMEs do not want the 45-day payment rule, then the Centre is willing to reconsider it. The genesis of the issue lies in the Finance Act 2023, which inserted a…

India has over 60 million micro, small, and medium enterprises (MSMEs), with only 14% having access to formal credit Fintechs are filling up this payment gap by providing quick, unsecured loans using alternative data and advanced analytics They also offer supply chain financing by providing trade credit solutions to MSMEs Fintechs in the payments space offer loans to MSMEs and leverage information on their credit profiles through payment histories Registration with Udyam and GST enhances MSMEs’ credibility and access to financial support…

HERE’S THE INDIAN dream: A well-paying job in a good company. And to achieve this, students study late into the night, and often dip into family savings. But in recent times, this dream has soured for the millions of workers entering India’s workforce annually. The lack of adequate jobs remains a challenge for policymakers in the country despite the high economic growth rate of 7% and above in recent years. The issue was a hot topic during the General Elections this year and the expectations are that the upcoming Union Budget will announce at least a few measures to create more employment opportunities. According to World Bank data, India has a workforce of 593.7 million, with an estimated 90% being in the informal sector. The annual Periodic Labour Force Survey…

SHIVAM Type of employment: Private sector Income range: Up to ₹10 lakh per annum FRUSTRATION: The two tax regimes are a constant source of stress. Every year, figuring out which one will save me more money on taxes is a guessing game. In the past, things were simpler—deductions and investments were the way to go. Now, with these new choices, I cannot make decisions, and it’s preventing me from making any investments at all, directly impacting my finances. EXPECTATION: The current system with two tax regimes is not just overly complex, it’s a burden that we can no longer bear. It would be far more efficient to simplify the tax code by eliminating one regime. In the regime that remains, I urge the government to provide clear and accessible tax benefits…

3.39% CAPITAL EXPENDITURE AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT (GDP) IN THE INTERIM BUDGET 2024-25, COMPARED TO 3.23% IN FY24 (REVISED ESTIMATES) AND 1.67% IN FY20 56% THE ESTIMATED WORKER POPULATION RATIO IN FY23 AGAINST 52.90% IN FY22 AND 47.3% IN FY19, INDICATING THAT EMPLOYMENT HAS AN INCREASING TREND, ACCORDING TO MoSPI ₹173.82 LAKH CRORE SIZE OF INDIAN GDP AT CONSTANT PRICES IN FY24 AGAINST ₹105.28 LAKH CRORE IN FY15; GDP AT CURRENT PRICES WAS AT ₹295.36 LAKH CRORE IN FY24 AND ₹124.68 LAKH CRORE IN FY15, AS PER THE CMIE ECONOMIC OUTLOOK SPENDING SPREE BUDGET EXPENDITURE OF THE GOVERNMENT HAS GROWN AT A CAGR OF 11% SINCE FY15 #REVISED ESTIMATES; *INTERIM BUDGET SOURCE CMIE ECONOMIC OUTLOOK ASSET CREATION CAPITAL EXPENDITURE IN THE BUDGET HAS INCREASED NEARLY SIXFOLD SINCE…

HYUNDAI MOTOR INDIA (HMIL), the country’s second-largest passenger carmaker, is gearing up for an initial public offering (IPO). The Gurugram-headquartered local subsidiary of Korean automaker Hyundai Motor Company (HMC) recently filed a draft red herring prospectus with the market regulator Sebi (Securities and Exchange Board of India) to dilute a part of its promoter stake. Although it has not announced any specific date for its IPO, sources indicate that HMIL, a 100% subsidiary of HMC, might make its market debut as early as 2025. As per the DRHP, the company’s plan involves an offer for sale (OFS), through which the parent HMC intends to sell 142.2 million of its shares, representing 17.5% of HMIL. The company has not disclosed the expected proceeds from the IPO. However, according to estimates by…

MSMEs account for nearly 30% of India’s business economy and employ 60% of the workforce Their productivity falls short of that of large companies, which are four times as productive Narrowing the gap is equivalent of 10.5% of India’s GDP, says a McKinsey Global Institute report But these enterprises face challenges in accessing funding and technology and have high compliance requirements The government has taken steps to address the credit needs, but more needs to be done…

THIS SECTOR CONTRIBUTES a chunk to India’s GDP and exports and employs the highest number of people outside farms. Yet, when it comes to companies in the sector raising money, it is an uphill struggle, with insufficient working capital stunting their growth. The sector is none other than the country’s micro, small, and medium enterprises (MSMEs)—the hidden heroes of the economy—where the current solutions, both from the government and the private sector, seem ineffective in addressing their funding needs. Sample this: there exists a staggering $530-billion credit gap in the MSME sector, despite the number of enterprises nearly doubling each year, according to a report by Avendus Capital. While some credit schemes and policies offer some relief, stakeholders argue that loans only add to their burden. With an existing shortage…

A NATIONAL CAPITAL REGION-based chemical maker with under ₹100 crore in annual turnover approached Sculpt Partners, a sustainability-centric advisory firm, seeking environmental, social, and governance (ESG) assessment. The trigger was a demand from its customer, a large domestic manufacturer supplying rubber to global tyre players like Yokohama and Michelin, which sought to know its decarbonisation road map. There is no regulation mandating the chemical company—classified in the micro, small, and medium enterprises (MSME) category—to have such a road map in place. The need in this case arose because it is a value chain partner of a multinational company that is required to report the carbon impact of such partners. This is not an isolated case. Indian MSMEs, primarily in the export business, are being pushed to provide ESG reports from…

JOB CREATION HAS BEEN LOW IN INDIA, DESPITE A HIGH GDP GROWTH RATE RECENT REPORTS HAVE HIGHLIGHTED THE CHALLENGES OF HIGH UNEMPLOYMENT AMONG YOUTH AND WOMEN INDIA COULD LOSE THE ADVANTAGE OF THE DEMOGRAPHIC DIVIDEND WITHOUT HIGH-QUALITY JOBS LACK OF ADEQUATE JOBS WAS ALSO AN ISSUE FOR VOTERS IN THE GENERAL ELECTIONS CREATING JOBS AND INCREASING INCOMES CAN ALSO BOOST FLAGGING CONSUMPTION DEMAND WHILE A QUICK-FIX SOLUTION MAY NOT BE POSSIBLE, THERE ARE EXPECTATIONS FOR MEASURES IN THE BUDGET…

SHIVAM confronts a dilemma every year. The 28-year-old private sector employee gets stressed making the annual choice between the two taxation regimes for individuals in India—the old, which allows deductions for investments and some other expenses, and the new regime introduced in April 2020, which does not allow such deductions but has lower rates. “Every year, figuring out which one will save me more money on taxes is a guessing game,” he says. “Now, with these new choices, I cannot make decisions, and it’s preventing me from making any investments at all, directly impacting my finances.” Many like him have demanded that the government ensure parity between the two regimes. They want the comforts of the old, with its many deductions, but with the lower slab rates of the new.…

What was the problem you were grappling with? A few years after starting Vu Technologies, one of the employees whom I had trained since she was an intern and had risen through the ranks to become a marketing manager, wanted to leave the company. I had a small team back then and when she told me she wanted to quit, I could feel the blood rushing to my face and it caused me immense stress. Whom did you approach for advice and why? I spoke to my friend and celebrity chef Moshe Shek, who is good at handling employees and vendors at the back-end and customers at the front-end. He has worked across the globe and I told him about my predicament and how stressed I was. What was the…