Author: Swapnil Deshpande

Interview: India and the US are always stronger working together, says US Ambassador Eric Garcetti

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Climate action and green energy are some of the biggest pillars of the US-India alliance. What is the future of this partnership? To talk about this and many more contours of the bilateral ties, CNBC-TV18’s Parikshit Luthra spoke with the US Ambassador to India, Eric Garcetti.

Here are the edited excerpts:

Q: What are some of the key pillars of Indo-US cooperation on climate and clean energy?

India and the United States are always stronger together when we’re working on climate. At the recent COP in Dubai, we came together and are putting in a $1 billion fund, half of it from the United States government and half of it from the Government of India to accelerate green infrastructure and energy investments here in India. And vice versa we’re seeing investments from Indian companies $1.5 billion to do solar manufacturing, to do elements for batteries for electric vehicles, Indian companies in the United States. If you told somebody 20 years ago, that Indian companies would be creating jobs in America, leading in technology, they would have said, are you sure?

Q: What are some of the opportunities that you see for US investments in the renewable energy space in India in the next few years?

About 10% of all the business that we do in the world is in India, the next biggest country is about a quarter of that globally. We love India, and we want to see more and more green deals. If you’re a company, a community, a state government, central government, that is looking for accelerating financing, come to us because we are open for business, and we love working in India.

Q: How can Indian companies take advantage of incentives in the United States under the Inflation Reduction Act? 

The Inflation Reduction Act or IRA is the largest piece of green legislation in world history, not just American history. And it doesn’t discriminate. You don’t have to be an American company. You just have to be willing to invest in America. And by the way, you can export from America to the rest of the world. It works for jobs outside of the United States as well as inside the US.

Q:  On concerns about the dumping of cheap and low-quality solar energy components, how can this alliance between India and the US on green energy benefit not just the two countries but the Indo-Pacific and the world?

Every country benefits when we have a diverse supply chain and multiple options. It’s part of the reason that I’m here as an ambassador, I want to see India become not only a great domestic market but a manufacturing centre for the region and the world. We need more options in the United States. And we see the success of this in healthcare for instance, where 40% of our generic pharmaceuticals come from India, that’s a positive for the health of the people of Los Angeles. And in the future, if India can be not just a great creator to green sectors inside the country, but an exporter of those products, those vehicles, those solar cells, those fuels of the future, that’s a good thing for the entire world, which is why the US is so invested.

Q: The Indian government has recently agreed to lower tariffs on imported electric vehicles. Elon Musk’s visit has been postponed but on the whole, how do you see this policy to attract global investments including the likes of Tesla?

The electric vehicle policy is great. It’s smart, it will be great for domestic as well as for foreign investors who are trying to build an electric vehicle infrastructure. I know that Indian manufacturers can compete and win not just here, but probably in the future by exporting to the rest of the world. But vice versa, for a lot of companies that we are looking at here, they said give us a few years where you don’t tax at this super high rate the vehicles we make today, and we promise to little by little work the supply chains so that we can make them here in India tomorrow. That’s smart. It’s keeping the leverage and demanding – you give something to India, but it’s also not stopping the investment before it even happens.

Q: About the current election process that is underway in India, now we’ve seen a lot of criminal action against certain opposition leaders, this was a cause for concern. Was the summoning of the US Deputy Chief of Mission unprecedented? And have US concerns been addressed?

We are very excited that the democratic aspirations of almost a billion voters are being realised in what is the biggest vote anywhere in the world. We know that elections are complex things. There’s always rhetoric that comes out, there’s always complicated ways of getting voters. Here in India, I’m always inspired by people who hike up for two days to a remote village or find one person living on top of a mountain to make sure that he can vote. But we will always raise concerns that we have, but we’re I think in awe of the entire democratic process as it happens.

Q: The probe into the attempted assassination of a Sikh activist, how satisfied are you with developments on the investigations so far?

So far the Indian government has met the thresholds that we have put forward and we have collaborated with them on what was a very serious matter. There’s a criminal case going on. So I’d refer specific questions to our Department of Justice. But I think for any country, we look to a friend and a partner and say, if there are accusations or evidence of something, we expect it to be taken seriously not just by us, but also by India. So far, the government of India has done just that and we are satisfied with the progress thus far.

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Lok Sabha Election 2024: Gurugram gears up for crucial polls amidst economic boom and civic woes

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gurugram, the bustling industrial powerhouse neighbouring New Delhi, is poised for a significant electoral showdown on the 25th of May, as 24.9 lakh eligible voters prepare to cast their ballots.

Often dubbed the “millennium city,” Gurugram boasts the presence of over 250 Fortune 500 companies, including corporate giants like PepsiCo and Nestle, alongside hosting the headquarters of the International Solar Alliance.

Spanning over 9 assembly segments, Gurugram’s Lok Sabha constituency encapsulates a diverse landscape of urban, rural, and urbanised village settings, reflecting the multifaceted fabric of the region.

Situated approximately 25 kilometers from the national capital, Gurugram stands as a cornerstone of India’s financial and technological prowess, attracting a staggering 70% of total investments into Haryana. Renowned as a prime manufacturing hub for automobiles, electronic components, chemicals, and FMCG goods, the city symbolises economic dynamism on the national stage.

Yet, beneath the veneer of prosperity lies a persistent challenge of inadequate civic infrastructure, starkly evident during the monsoon season. Persistent waterlogging, substandard drainage systems and crippling traffic congestion remain pressing concerns for residents.

While Gurugram has witnessed rapid developmental strides in recent decades, the lack of cohesive infrastructure planning has engendered civic grievances, prompting residents to seek robust policy interventions from elected representatives.

Amidst this backdrop, divergent sentiments prevail among the electorate, with a section expressing commendation for governmental initiatives, particularly those spearheaded by Prime Minister Narendra Modi. However, the electoral landscape is also marked by nuanced fault lines, notably in areas with significant Muslim populations.

Nuh, a district within Gurugram boasting one of North India’s highest concentrations of Muslims, grappled with violent unrest last year, stemming from communal tensions exacerbated by tragic incidents. The aftermath of these disturbances looms over the electoral calculus, potentially shaping voter sentiments on polling day.

Moreover, the spectre of the Agniveer scheme looms large over certain constituencies, with pockets of dissent emerging among voters regarding its efficacy and implications. The pledge by the I.N.D.I alliance to retract the short-term Agniveer scheme for the armed forces adds a layer of complexity to the electoral discourse.

In the quest to clinch the coveted Gurugram Lok Sabha seat, political heavyweights are gearing up for a fierce battle. The Bharatiya Janata Party (BJP) has once again nominated Rao Inderjit Singh, a five-time incumbent MP, to spearhead its electoral campaign. In a strategic move, the Jannayak Janta Party (JJP), an erstwhile ally of the BJP, has fielded popular singer and rapper Rahul Yadav, known as Fazilpuria, in a bid to wrest control of the constituency.

However, the political landscape is fraught with challenges for Singh, who confronts mounting anti-incumbency sentiments compounded by public grievances regarding investment deficits, job scarcity, infrastructural inadequacies, and apprehensions surrounding the Agniveer scheme.

As the electoral fray intensifies, all eyes are on Gurugram, poised at the crossroads of economic prosperity and civic imperatives, promising a riveting showdown that could redefine the region’s political trajectory.

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Here’s why Cipla stock rallied over 3% on Wednesday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Cipla, one of India’s leading pharmaceutical companies, saw an upsurge of over 3% in its stock value on Wednesday, following an initiation of coverage by brokerage firm Investec.

Investec’s analysis attributes the recent 10% decline from the 52-week high to several factors. Firstly, there is anticipation surrounding Amneal’s potential entry into the market with a competitive offering of Albuterol, an inhaler drug within Cipla’s portfolio. Additionally, muted performance in India during Q4 is also expected to have influenced market sentiment negatively.

Despite these challenges, Investec maintains an optimistic outlook on Cipla’s resilience and market positioning. They emphasise that Cipla’s dependency on Albuterol is relatively low, constituting only 7% of the FY24 EBITDA. Consequently, they anticipate a limited impact on EPS even in the face of new competition. Furthermore, Investec envisions the possibility of upgrades for FY25 and FY26.

Valuation-wise, Cipla appears to be trading favourably compared to its sector peers. At approximately 20 times the FY26 estimated PE, Cipla’s valuation stands below Investec’s sector coverage average of 26 times and domestic branded-focused names at around 32 times. This suggests that Cipla may present an attractive investment opportunity relative to its industry counterparts. The brokerage firm has a long fast call on the stock with a target price of ₹1,550 per share.

Headquartered in Mumbai, Cipla boasts a market capitalisation of ₹1,12,789.04 crore. The positive market response was evident as the company’s stock closed 3.92% higher at ₹1,399.50 on Wednesday. Over the past six months, Cipla has delivered impressive returns of over 20%, underscoring its resilience amidst fluctuating market dynamics.

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Macquarie launches Vertelo to accelerate EV adoption in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The electric vehicles (EVs) market in India is currently valued at approximately $2 billion, with projections soaring to reach $5 billion in the near future. Recognizing the immense potential of this burgeoning sector, Australian financial services powerhouse Macquarie has unveiled its latest initiative: Vertelo, a cutting-edge platform dedicated to accelerating the widespread adoption of EVs across India.

Abhishek Poddar, Group Head of India at Macquarie Group, outlined the ambitious goals of Vertelo, emphasising its pivotal role in facilitating the transition of heavy transportation from conventional diesel to electric power. “Our objective is to provide comprehensive solutions that encompass financing, leasing, charging infrastructure, energy and battery management, as well as fleet maintenance services,” stated Poddar.

The Vertelo platform comprises two key entities: one offering non-credit solutions such as operating leases and services, and the other geared towards providing credit solutions, pending approval from the Reserve Bank of India for a non-banking financial company (NBFC) license. Once the NBFC is in place, that company aims to provide credit as a solution, alongside other services such as charging infrastructure and fleet management.

With a commitment of $1.5 billion earmarked for investment over the next decade, Vertelo aims not only to drive the adoption of EVs but also to significantly reduce greenhouse gas emissions. Strategic partnerships have already been forged with industry stalwarts including Tata Motors, BEST, JBM Group, and Eka Mobility.

Poddar further announced Vertelo’s inaugural transaction involving 444 electric buses with Chalo Mobility, a prominent travel aggregator and bus operator in Mumbai. These buses are poised to play a pivotal role in advancing the city’s decarbonisation agenda. Additionally, agreements have been inked with Tata Motors for the acquisition of 2,000 cars over three years, along with procurement plans for 2,000 buses from both Eka Mobility and JBM Auto.

Macquarie’s entry into the EV solutions arena is marked by its comprehensive approach, encompassing credit provision, operational support, and infrastructure development. However, this initiative arrives amidst a backdrop of tepid global demand for EVs, highlighting both the challenges and opportunities inherent in the evolving automotive landscape.

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Accacia raises $6.5 million in pre-Series A funding to drive decarbonisation in real estate and infrastructure

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Accacia, a decarbonisation platform focusing on the real estate and infrastructure sectors, has successfully closed a $6.5 million pre-Series A funding round. The round was spearheaded by Illuminate Financial, a specialised venture capital firm known for its focus on enterprise fintech companies.

Speaking to CNBC-TV18, Annu Talreja, Founder & CEO of Accacia, emphasised the significance of their platform in addressing the complex emissions tracking challenges prevalent in real estate sector. Talreja stated, “Our platform is specially designed for real estate companies. Real estate has emissions across the value chain and hence it’s a very complex emissions tracking problem.” She further explained, “Our platform automates data collection from different parts of the real estate value chain, enabling us to calculate carbon emissions across the entire value chain.”

The pre-Series A round also saw participation from AC Ventures, a Southeast Asia-based investor, in addition to early supporters Accel and B Capital.

Talreja highlighted that the company is already EBITDA positive and makes revenue by selling software. She added that backing from leading players like Accel, B Capital, Illuminate, and AC Ventures not only provides encouragement but allows the company to have a greater customer reach.

Accacia, initially established in Asia, has already deployed its solution to over 25 million square feet of commercial real estate, with Singapore emerging as a significant market, contributing approximately 70% to its revenue. Talreja outlined plans for expansion, stating, “We plan to utilise this capital to further expand our presence in Southeast Asia, alongside our recent venture into the North American market.”

Commenting on the broader industry landscape, Talreja stressed the importance of investing in innovative technologies to decarbonise the real estate sector. She emphasised the need for investment in technologies spanning energy optimisation, renewable energy, and other innovative solutions to drive sustainable practices within the industry.

In a separate development, Bengaluru-based aerospace components manufacturer JJG Aero announced securing $12 million (approximately Rs 100 crore) in its maiden funding round from CX Partners.

Anuj Jhunjhunwala, CEO of JJG Aero, outlined their plans for expansion, stating, “Most of the funds will be used to expand our capacity and add high precision CNC equipment.”

Jhunjhunwala added that the company plans to move towards higher value-added components, more complexity parts, and make a big foray into adjacent industries like aircraft engines.

Additionally, Viraj Bahl, Founder of Veeba, shared insights into the company’s journey to success. Veeba, is India’s leading home-grown sauce and condiments brand, boasts a portfolio of over 300 SKUs and a distribution network spanning 700 cities.

Watch accompanying video for entire conversation.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Lok Sabha elections 2024: BJP’s bid for breakthrough in Kerala is an uphill battle, say experts

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With less than 72 hours remaining before the second phase of the Lok Sabha elections, all eyes are on Kerala as the state prepares to cast its votes for all 20 parliamentary seats on April 26.

In Kerala, the primary electoral battle is between the alliances led by the Congress and the Left parties. However, the Bharatiya Janata Party (BJP) is seeking to make significant strides, particularly in Trissur, where it has nominated popular actor Suresh Gopi as its candidate.

According to MG Radhakrishnan, a senior journalist, “Kerala is the only state in the south where the BJP has never won a single seat until now. Though there are contests in about four to five constituencies that the BJP considers to be ‘A grade constituencies’, there is a bitter fight going on between these three major political friends, but I don’t think there is any particular seat where the BJP has a very easy chance at all.”

In the 2019 elections, the Congress secured victory in 15 out of 20 seats, while the Left parties claimed two seats. Despite failing to secure any seats, the BJP garnered a notable vote share of 12%.

Political analyst Rahul Easwar notes, “Prime Minister Narendra Modi is trying to tap into the Hindu and Christian vote banks in a major way. That’s the reason why he was connecting with the Christian bishops in a very meaningful and deep manner. But unfortunately, due to the Manipur issues and all, there is some kind of a dampening that has really happened. But Narendra Modi is a hugely popular brand. Even though the BJP will increase seats, it is still doubtful how many seats will come; they may increase votes for sure, but brand Modi has a very strong presence even in Kerala because he has a pan India appeal and he has rightly reached out to Kerala many times.”

One of the most closely watched contests is in Thiruvananthapuram, where incumbent MP Shashi Tharoor faces stiff competition from prominent CPI (M) leader Panniyan Raveendran and the BJP’s Rajeev Chandrasekhar.

MG Radhakrishnan emphasises, “Thiruvananthapuram is actually the constituency where the contest is the sharpest. This is the only seat among the 20 where the BJP came in second in the last election and the election before that. So with the candidature of Rajeev Chandrasekhar, this has become a hot seat. Shashi Tharoor has already completed a hat trick here; he is trying it for the fourth time. Tharoor was absolutely formidable in the beginning, but with the entry of Rajeev Chandrasekhar, the match has become quite unpredictable.”

As Kerala braces for the upcoming elections, the political landscape remains dynamic, with key battles shaping the state’s future representation in the Lok Sabha.

Watch the accompanying video for the entire conversation

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India’s market volatility sees the sharpest fall in five years

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The India Volatility Index (VIX) has witnessed its most pronounced decline in half a decade. The last time such a substantial drop occurred coincided with counting day, marking a trend worth noting for market observers.

The India VIX serves as a crucial metric, gauging market expectations regarding volatility in the near term. Volatility, often dubbed the “fear index,” encapsulates the speed and extent of price fluctuations within financial markets.

The recent plunge in India VIX can be attributed to several factors, prominent among them being the de-escalation of war tensions and the unfolding electoral landscape aligning favourably with the incumbent BJP government. Essentially, the market seems to be signalling a period of relative calm, devoid of imminent disruptions.

Analysts interpret these developments as indicative of an impending market breakout following a prolonged four-month consolidation phase. However, amidst this optimism lurks a potential concern: complacency. The absence of perceived threats might inadvertently breed a sense of overconfidence among investors, necessitating cautious navigation of market waters.

Delving into options data sheds further light on the market sentiment. A notable strategy in play is the short straddle positioned at 22,400, with a cumulative premium of 200. This suggests a projected near-term trading range spanning from 22,200 to 22,600.

On Tuesday, the Nifty50 index exhibited a subdued performance, hovering marginally above the flatline with gains of 0.14%, closing at 22,368. Over a span of six months, the Nifty50 index has yielded returns of approximately 16%, underscoring its resilience amid evolving market dynamics.

As investors navigate through this period of subdued volatility, all eyes remain fixated on unfolding geopolitical developments and electoral outcomes, poised to shape the trajectory of Indian markets in the days to come.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow