13 April 2020
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Three-pronged 10-step urgent toolkit for Indian economy
To ensure effective lockdown and strong revival post COVID-19 pandemic
R
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NGINES
F
RIEND
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Before Mar’20 or pre-COVID19, we were among the few market economists who were strongly against any sort of
stimulus, be it fiscal or monetary. Declining domestic savings was one of the reasons for our view. Nevertheless, with
almost negligible discretionary spending, household financial savings should rise as % of GDP/income, making this
concern secondary right now.
In this note, we suggest a three-pronged 10-step actionable approach to be implemented at the earliest so that (a) the
lockdown is extremely effective, and (b) various economic participants get confidence that post-COVID19, recovery
would be strong. Overall, this would mean an additional government spending of INR4t (or ~2% of GDP), which we
expect would be financed by the RBI.
#1: For the most vulnerable working sections – In order to ensure effective lockdown and strong fight against COVID-19,
the government must take care of the casual/migrant workers and the health professionals/police officials by
announcing: (1) Cash transfer of INR200 per day per casual/migrant worker for all unpaid leaves between Apr-Jun’20,
along with an ex-gratia payment of INR1lac for all health/police officials for putting their life and health at risk, (2) An
insurance cover of INR1m for all casual/migrant worker and an INR5m for all on-duty police officers in the country, and
(3) Door-to-door supply of free food (and three cooked meals a day with sufficient provision of drinking water in migrant
worker camps). All this could cost the government INR2.2-2.4t (1.1-1.2% of GDP) in FY21.
#2: Prevent mass bankruptcies/lay-offs by MSMEs/hard-affected sectors: Further, the government needs to ensure the
prevention of widespread bankruptcy among MSMEs (including self-employed enterprises) by announcing: (4) The
relaxation of rent payables (for say, 1QFY21) and electricity charges for all MSMEs, (5) Interest-free uncollateralized 12-
month loans for a maximum of salary/wages worth three months, and (6) A special bail-out package should also be
provided for the most-affected industries such as Aviation, Tourism, Hotels and Restaurants and Exporters/Importers.
However, all such support should be conditional on retaining the number of employees and their salaries/wages at the
st
level as on 1 Mar’20. These steps could cost the exchequer another INR1t (~0.5% of GDP).
#3: To ensure stable financing: Finally, although the RBI has already announced a number of steps, it is time that it
supplements them with: (7) Outright purchases of government – central and states securities – equaling the COVID19-
related spending (INR5-6t or 2.5-3% of GDP), (8) Complete scrapping of the reverse repo window to force banks to either
lend or invest in government/corporate securities, (9) An interest-free conditional uncollateralized 6-month loans to all
affected parties – retail or corporate (non-MSMEs), and (10) Re-thinking the absence of moratorium for all repayments of
the non-banking financial companies (NBFCs).
To conclude, we do not expect Indian authorities to announce an economic stimulus worth 5% or 10% of GDP. However,
our three-pronged 10-step targeted approach will help save human lives and also maintain their livelihood.
In this note, we discuss a
three-pronged 10-step
approach that Indian
authorities must ideally
adopt at the earliest.
As our readers know, we are one of the few market economists who have strictly
been
against massive monetary easing
(in the form of interest rate cuts or outright
quantitative easing), whether to support the country’s fragile financial sector or to
boost lending growth in the economy. Further, we have always believed that there
exists
negligible space for fiscal stimulus
in the country. The major reason was the
rapid decline in domestic savings, which gets adversely hurt by any stimulus.
Not anymore though! The advent of COVID-19 has changed the fundamentals
dramatically and so have our views. In this note, we discuss a three-pronged 10-step
approach that we believe the Indian authorities – the government and the RBI –
must adopt at the earliest to ensure (a) an effective lockdown, and (b) economic
participants become confident that recovery would be strong post COVID-19.
Nikhil Gupta – Research Analyst
(Nikhil.Gupta@MotilalOswal.com); +91 22 6129 1555
Yaswi Agarwal
– Research Analyst
(Yaswi.Agarwal@motilaloswal.com); +91 22 7193 4196
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
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EXHIBIT 1: THREE-PRONGED 10-STEP TOOLKIT FOR INDIAN ECONOMY
1
2
#2. TO PREVENT MSMES/WORST-
AFFECTED INDUSTRIES:
4) Three-month vacation on rent
payables and electricity charges
5) Interest-free uncollateralized
loans to ensure timely payments
of salary/wages
6) Special bail-out packages for
hotels & restaurants, aviation,
tourism and
exporters/importers
3
#1. FOR THE VULNERABLE WORKING SECTIONS:
1) Cash transfer of INR200/day for all casual/migrant
workers and ex-gratia of INR100,000 for all health
professionals and police officials
2) Insurance cover for all these workers
3) Subsidized/Free sufficient supply of cereals, gas
cylinders and dinking water for all (including
cooked meals)
#3. TO ENSURE UNINTERRUPTED FINANCING:
7) RBI's purchases of gilts (central/states) equal to
COVID-support (INR5-6t)
8) Complete scrapping of the reverse repo window
9) Interest-free uncollateralized but conditional
loans for all affected parties
10) Re-thinking on the moratorium for NBFCs as well
Exhibit 2: Our 3-pronged 10-step urgent toolkit might cost the exchequer ~INR4t (~2.0% of GDP) in FY21
Steps
Cash transfer to casual/migrant worker
Ex-gratia cash transfer to health workers/police officials
For the most vulnerable working Smooth supply of free essential eatables, gas cylinders,
sections
water
Health/life insurance cover for all vulnerable sections of
society
Free 3 month rent/electricity charges to affected firms
For MSMEs and other hard affected
12-month interest free uncollateralized loans to MSMEs
sectors
Bail-out package to aviation/hotels/tourism/trade
Open Market Purchases of central/state government
securities to finance all these packages including the
welfare package
Complete scrapping off of reverse repo window
6-months interest free un-collateralized conditional loans
to non-MSMEs
Extension of 3-month moratorium to NBFCs as well
Prongs
Cost to exchequer
INR T
% of GDP
1.1-1.4
0.3
0.5
0.3
2.2-2.4
0.3
0.1
0.7
~1.0
5.0-6.0
1
Sub-total
2
Sub-total
1.1-1.2
~0.5
3
To ensure financial stability
-
0.5
~0.5
~4.0
~0.3
~2.0
Source: MOFSL
Sub-total
Grand total
As shown in
Exhibit 1 and 2
above, our recommended toolkit has three legs.
First,
to
secure and bring confidence to the most vulnerable working sections of the society,
including daily workers, migrants, health officials and the police. It is of utmost
urgency to ensure that the first two classes of workers (casual/daily and migrant
workers) do not attempt to reduce the lockdown efficacy. At the same time, keeping
the momentum high of health officials and the police is also important to ensure
India sails through this difficult period as smoothly as possible. The three-step
recommendations in this section are:
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Sufficient cash transfer to
affected casual/migrant
workers would help ensure
these workers stay in their
camps/houses, and thus,
make the lockdown highly
effective.
1) Cash transfer to all vulnerable working sections of the society:
According to recent employment data, almost a quarter of India’s workforce (~100m
workers) is classified as casual workers
(Exhibit 3).
About 85% of all such casual
workers are engaged in ‘agriculture’ and ‘construction’ sectors, and another 8% are
engaged in ‘manufacturing’
(Exhibit 4).
While agricultural activities are still in
operation, much of the manufacturing sector is adversely affected and the
construction sector is almost entirely shut. This implies that it is likely that two-third
to three-fifth of all casual workers in the country are unemployed at this stage. If the
government announces a cash transfer of INR200 per day per affected
casual/migrant worker for all unpaid leaves for three months (1QFY21), it would
help ensure these workers stay in their camps/houses, and thus, make the lockdown
highly effective. This announcement would cost the government INR1.1-1.4t.
Further, the government should also announce an ex-gratia cash transfer of INR1lac
per health worker (2.2m workers) and per police official (~1m). This would cost the
government an additional INR300b.
Overall, thus, such cash transfers and ex-gratia payments would cost the exchequer
INR1.4-1.7t (0.7-0.8% of GDP).
Cash transfers and ex-gratia
payments would cost the
exchequer INR1.4-1.7t (0.7-
0.8% of GDP).
Exhibit 3: Casual workers account for about a quarter of total
employment in the country
Self-employed
13.1
32.0
14.0
33.0
Casual
14.3
28.9
Regular wages/salaried
15.6
17.6
29.9
22.8
24.9
Exhibit 4: Almost 85% of casual workers in India are
concentrated in two sectors – Agriculture and Construction
Agri
45.2%
Transport
2.4%
M&Q
0.7%
Mfg
7.9%
Electricity etc
0.1%
Consruction
39.2%
33.5
54.8
52.8
56.9
51.0
52.2
52.2
1993-94 1999-00 2004-05 2009-10 2011-12 2017-18
* Data up to FY18
H&R
0.7%
Trade
1.6%
Other
services
2.1%
Source: NSSO, MOFSL
2) Health/Life insurance cover for all vulnerable working sections of society:
A couple of weeks ago, the government had announced an insurance cover worth
INR5m for all health professionals in its welfare package. Such an insurance cover
should also be extended to police officials. Further, casual/migrant workers should
be provided with an insurance cover of INR1m.
Assuming an average cost of INR5,000 for INR5m cover for all police officials and
INR3,000 for all casual/migrant workers, the cost to the exchequer would be an
additional amount of INR300b (or 0.15% of GDP). Of course, all such insurance
covers would expire after the country comes out of the COVID-19 pandemic.
3) Ensure smooth supply of free essential eatables (salt, cereals and pulses), gas
cylinders and drinking water to the country:
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By far, this measure is one of the most difficult to implement effectively. And while
the government has already allocated INR600b toward this measure in its welfare
package, another INR500b to ensure this massive task would definitely be worth it.
Remember, an empty stomach takes away the fear of any disease or of dying as the
person has already experienced both.
The three-step first leg of
the approach would cost
the exchequer INR2.2-2.4t
(or 1.1-1.2% of GDP).
Overall, the first leg of our approach would cost the exchequer INR2.2-2.4t (or 1.1-
1.2% of GDP). Nevertheless, as mentioned above, it would help the country fight the
COVID-19 pandemic more effectively and dedicatedly.
The second leg relates to save hundreds and thousands of micro, small and medium
enterprises (MSMEs, also called unincorporated enterprises) from going bankrupt.
The economic activity is decided by the efficiency of its enterprises (corporate and
unincorporated). MSMEs play a very important role in the Indian economy. We
recommend three steps in this leg too:
4) Provide 3-month rent/electricity charges vacation to all affected enterprises:
According to the National Sample Survey’s (NSS)
73
rd
round,
during 2015-16, there
were 63.4m unincorporated non-agricultural MSMEs in the country, accounting for
roughly a third of the nation’s GVA (gross value added), employing over 110m
workers (~25% of total employment) and contributing almost half to total
merchandise exports. It is, therefore, important to accommodate demands of
MSMEs during this difficult phase
(Exhibit 5).
During 2015-16, the reported market value of owned fixed assets per enterprise was
INR232,000, the annual rent payable on hired fixed assets per enterprise was
INR8,100 and the annual value of electricity charges paid per enterprise was
INR6,000
(Exhibit 6).
Exhibit 5: Key statistics of India’s large MSME sector…
Key statistics for MSMEs
Number of MSMEs (2015-16)
Total employment generated
Share of MSMEs in GVA (2016-17)
Share of MSMEs in GDP (2016-17)
Share of MSMEs in exports (2018-19)
Share of MSMEs in Bank credit (Feb’20)
Number
Exhibit 6: …and some facts about their finances
2,32,000
Per MSME annual value (INR)
63.4 million
110.4 million
31.8%
28.9%
48.1%
13.5%
Owned fixed
assets
Rent payable
Electricity
charges
Emolument per
hired worker
8,100
6,000
87,544
Source: NSS 73
rd
round, Ministry of MSMEs, MOFSL
A 3-month vacation period
for all rent paid on fixed
assets and electricity
charges by MSMEs would
cost the government
~INR250b.
Assuming that the government announces a 3-month vacation for all rent paid on
fixed assets and electricity charges, it would cost the government about INR250b (or
0.1% of GDP) in FY21. Nevertheless, this may help MSMEs survive this difficult
period when their revenues have just dried up almost entirely.
5) 12-month interest free uncollateralized conditional loan to affected MSMEs:
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Further, while the RBI has provided a 3-month moratorium to all borrowers without
hurting their credibility (or credit ratings), it is important to note that many
enterprises would be struggling to arrange money to pay their hired workers. Hired
workers constitute almost 26% of all MSME employment (amounting to ~30m
workers) and the annual emolument per hired worker was INR87,544 in 2015-16.
The government, thus, should also declare interest-free loans to MSMEs amounting
to a maximum of 3-month salary and wages payable to their hired workers. The
maximum amount of loan disbursal would be ~INR650b and the interest payment
forgone would be INR65b (@10%) for a year.
6) Special bail-out packages to the most affected segments such as Aviation,
Tourism, Hotels & Restaurants and Exporters/Importers:
Finally, the government must be extra sensitive toward sectors that have been
disproportionately affected due to COVID-19. The government could announce a
package – including some future tax breaks for these segments, allocation of some
interest-free loans, subsidized aviation turbine fuel (ATF) for airlines for a 6-month
period after Apr’20 (or whenever services resume) and other measures – to help the
affected segments survive during this difficult period. The government could also
announce a package amounting to about INR700b for such industries to help them
avoid mass bankruptcies or lay-offs of workers.
These three measures for
MSMEs and the worst-
affected sectors would cost
the exchequer ~INR1t.
Overall, the above three measures for MSMEs and the disproportionately affected
sectors would cost the exchequer about INR1t (or 0.5% of GDP). In addition to the
first three steps for citizens, the total cost of such an economic stimulus package
would be INR3.2-3.5t (or 1.6-1.7% of GDP).
The first six-steps under the two legs explained above are necessary to help citizens
and the MSMEs to endure the ongoing phase. Nevertheless, support must be
smoothly financed as well for it to be effective. The third and final leg relates to few
more measures, which must be announced by the RBI to support the government
help citizens and MSMEs and to also assure that the economic recovery after COVID-
19 is much stronger than otherwise. The final four steps in our 10-step approach
are:
7) Open market purchases of central/state government securities amounting to all
spending/packages related with COVID-19 – INR5-6t (or 2.5%-3% of GDP):
When the RBI announced a slew of measures toward end-Mar’20, one of the
missing policies was the direct support to the government to finance extra spending
related to COVID-19. Our calculations suggest that even without any additional fiscal
stimulus (apart from the welfare package announced by the government so far) the
central fiscal deficit would be closer to 5% of GDP, as against the budget estimate
(BE) of 3.5% of GDP. Further, states’ deficit would also be closer to 3.5% of GDP,
rather than the target of 2.7% of GDP for FY21.
This means that domestic markets would already be absorbing more than otherwise
supply of government securities. The role of the RBI at this stage is to ensure that
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the bonds market do not go berserk with all the additional supply due to COVID-19
related supply of central/state government securities.
The RBI should announce
the purchases of
government securities
amounting to INR5-6t or
2.5-3% of GDP.
Accordingly, we believe that the RBI will help the financial sector and the economy
by announcing open market purchases of such papers (let us call them COVID-gilts)
to an extent of the outright support package (economic or welfare) amounting to
INR5-6t or 2.5-3% of GDP
(Exhibit 7).
This will help contain the benchmark bond
yield at 6.1-6.3% and not push them higher toward 7%.
8) Complete scrapping of reverse repo window:
It is also important for the RBI to sharply nudge the banking system to stop lazy
banking and start investing the excess capital. One way is for the RBI to stop
compensating banks for all the excess money that they currently leisurely park with
the RBI at 4%. The banks have parked INR5-6t with the RBI during the past few days,
up from INR1.5-2t in the first half of Mar’20.
Such lazy banking is leading to three very important implications: (a) banks are
getting risk-free remuneration of 4% on all excess reserves, and thus, they need not
take risks, (b) the RBI has to pay 4% on large amount of excess capital, hurting its
profitability (and thus, dividend payments to the government), and (c) the RBI’s
reverse repo operations are exhausting about three-fifth of its INR securities’
holding, which stood at INR10.4t as on 3
rd
Apr’20
(Exhibit 8).
Exhibit 7: Likely fiscal deficit in FY21 under our 10-step
approach
Center's fiscal deficit (% of GDP)
~7.0%
~5.0%
3.5%
3.5%
Exhibit 8: Reverse repo operations against the RBI’s holding
of domestic INR securities
RBI's Rupee securities
12
9
6
3
(INR t)
Reverse repo transactions
2020-21BE
2020-21E (pre- 2020-21 (New 2020-21 (New
COVID)
est#)
est.@)
0
10-Jan-20
10-Feb-20
10-Mar-20
10-Apr-20
# Without any additional stimulus
@ Including 2% stimulus suggested by our 10-step approach
Assuming RBI’s rupee securities at INR10.5t as of 10
th
April 2020
Source: RBI, Union Budget documents, MOFSL
If the central government
sticks with its FY20RE fiscal
deficit target, core spending
would be ~INR1.0t lower
than Res, implying a decline
of ~9% YoY in 4QFY20.
9) Extend 6-month interest-free uncollateralized conditional loans to all affected
parties:
Further, just like we suggested 12-month interest-free uncollateralized conditional
loans for MSMEs to ensure they are able to pay timely salaries/wages to their hired
workers, the RBI should also force banks to make out such loans to non-MSME
participants as well. Nevertheless, such loans should be attached with some strict
conditions, such as:
a) Beneficiary candidates should retain the number of hired workers and their
remuneration at the same level as on 1
st
Mar’20;
b) No loan-availing party could pre-pay existing loans during the period of such
interest-free loans;
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c) All deposits linked with such interest-free loans would also be interest-free;
d) The purpose of all such loans should be very explicitly mentioned – personal
loans (medical emergency, etc.), payment to workers, meeting other operating
expenses, etc.
Assuming that INR10t worth loans are disbursed on this account, it would cost the
RBI (and then, the government) about INR500b (assuming 10% rate of interest).
10) Relaxation to NBFCs for all their interest payments:
Finally, just like the RBI has provided a 3-month moratorium to all borrowers, it is
highly unfair to ask NBFCs to make their repayments on account of interest and
principal to their creditors (banks and otherwise). This is where the RBI needs to re-
think its strategy and probably provide this moratorium to the NBFCs as well.
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Conclusion: Three-pronged 10-step approach toolkit for India
With almost negligible
discretionary spending,
household financial savings
should rise as % of
GDP/income, making this
concern secondary right
now.
Before Mar’20 or pre-COVID19, we were among the few market economists who
were strongly against any sort of stimulus, be it fiscal or monetary. We have
highlighted that
massive monetary easing could actually be counter-productive
for
the economy, and thus, there is absolutely
no space for fiscal stimulus.
Declining
domestic savings were one of the reasons for our view. Nevertheless, with almost
negligible discretionary spending, household financial savings should rise as % of
GDP/income, making this concern secondary right now.
Currently, when the focus and responsibility is to save as many human lives as
possible, the authorities need to ensure that the most vulnerable working sections
of the society are free of worry regarding their livelihood while exercising the
lockdowns, which is necessary to fight COVID-19. This is true for all the people
working during this tough time, who are putting their health and life at risk. The
government could help make this lockdown highly effective and show their
gratitude for workers by announcing a cash transfer for casual/daily and migrant
workers and ex-gratia payment for health workers and police officials. An insurance
cover for all these sections would also be very useful.
Moreover, the mammoth MSME sector also requires some hand holding at this
stage, in terms of relaxation of rent payable and electricity charges, along with
interest-free uncollateralized loans to make timely payments of salary/wages for
hired workers. An extra-supportive package for disproportionately affected
industries such as Tourism, Aviation, Hotels and Restaurant and Exporters/Importers
would also be highly effective.
Finally, the RBI has to ensure sufficient financing of these one-off COVID-related
spending by announcing OMOs worth INR5-6t. A complete scrapping of the reverse
repo window would push banks to either invest in government/corporate papers or
lend to economic sectors. Finally, a re-thinking on providing relaxation to NBFCs and
their repayment obligations would also help.
Our 10-step approach
implies an effective
economic stimulus costing
INR5t (or 2.5% of GDP),
which should be financed
by the RBI.
Overall, we do not expect Indian authorities to announce an economic stimulus
package worth 5% or 10% of GDP because many developed economies have done
so. We have always believed that all support has to be highly targeted to ensure its
effectiveness. Our three-pronged 10-step approach would cost the government
about INR4t (or ~2% of GDP). Including the already announced welfare package of
INR1.85t (with the new spending worth INR1.3t), the effective economic stimulus
would cost INR5t (or 2.5% of GDP), which should be financed by the RBI. It implies
that the government’s (center + states) fiscal deficit would be ~11% of GDP in FY21.
Nevertheless, since all these exceptional expenditure is one-off, the deficit will
narrow significantly next year with no requirement from the RBI to fund deficit again
in FY22 and beyond.
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holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income
from clients which are not considered in above disclosures. Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only.
While calculating beneficial holdings, It does not consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.).
MOFSL also earns DP income from clients which are not considered in above disclosures.
Terms & Conditions:
This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be
altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOFSL. The report is
based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from
publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made
as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The report is prepared solely for informational purpose and does not
constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though disseminated to all the customers
simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research
analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Disclosure of Interest Statement
Companies where there is interest
Analyst ownership of the stock
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and
Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL research activity
and therefore it can have an independent view with regards to subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use
would be contrary to law, regulation or which would subject MOFSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities
and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal
Oswal Financial Services Limited(SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong
Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity to which this document relates is
only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities, products and services in any jurisdiction
where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in
Hong Kong.
13 April 2020
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 Motilal Oswal Financial Services
FUEL
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For U.S:
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934
Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by
MOFSL, including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to "Major Institutional Investors" as
defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This document must not be acted on or relied on
by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be engaged in
only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOFSL has entered into a
chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be
executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered
broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading
securities held by a research analyst account.
For Singapore:
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets services
license and an exempt financial adviser in Singapore,
as per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110)
provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL in respect of any matter arising from, or in connection with this
report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”, of which some of whom may consist of "accredited" institutional investors
as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such
Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose
and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes
investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. The securities discussed and opinions
expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment objectives, financial positions and needs of specific
recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations as it deems
necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its
own advisors to determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those
involving futures, options, another derivative products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty,
express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this
document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior
notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their
directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They
may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOFSL. The views expressed are those of the analyst, and the Company may or may not
subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to
any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of
or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL to any
registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in
whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or representatives shall
be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL or any of its affiliates or employees free and harmless from all losses,
costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022 71934200/ 022-71934263; Website
www.motilaloswal.com.
CIN No.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai- 400 064. Tel No: 022
7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579 ;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOFSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National Company
Law Tribunal, Mumbai Bench.
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