Good morning. Go to any upscale neighbourhood in Delhi or Mumbai and you’ll see electric cars galore. Electric two-wheelers and even three-wheelers have also made strides on Indian roads. The same can’t be said for buses. Electric buses are mostly restricted to public transport in certain cities. Why are private bus fleets not adopting e-buses? Read on to know more. 

In other news, American chip maker Advanced Micro Devices (AMD) is upping its artificial intelligence (AI) game. Meanwhile, the crisis in Bangladesh is affecting Indian tourism.

DE[CODE] THE NEWS

Why Private E-Buses In India Are Still A Distant Dream

E-buses have been included by state transport corporations in major cities like Delhi and Mumbai, but the penetration countrywide is still low. In the private bus sector, the adoption of electric buses is almost negligible. 

Two key government schemes – FAME II and the PM e-Bus Sewa — have incentivised the electrification of electric two-wheelers, three-wheelers, passenger vehicles (for commercial purposes) and state buses. However, one key segment is missing. Private intercity and interstate buses. 

The private bus industry makes up a whopping 93% of the total buses plying on Indian roads, and yet there are no incentives to push for electrification in this sector. Consequently, there has been little adoption in the sector, for one simple reason: electric buses cost three times more than diesel buses. The upfront cost is too much for small-time operators to bear. 

Analysts tracking the sector told The Core that policy-driven technological and financial interventions are imperative to get private bus operators to switch to e-buses. A viable solution to the high upfront cost would be longer leasing options for bus operators, a study by the Council on Energy, Environment and Water (CEEW) found. “NBFCs and banks are not comfortable giving leasing options. They are comfortable giving loans and that's what they have been doing forever,” Himani Jain, senior programme lead at CEEW told The Core. 

CO:RELATION

India Needs Independent Financial Advisors

The Securities and Exchange Board of India (SEBI) released a consultation paper late last month that eases the qualification requirements to become a registered investment advisor or RIA. The SEBI board must accept these recommendations immediately because not only is this a new career option for all graduates who wish to become financial advisors but a fee-based remuneration makes sense for investors, too. It would stop advisors from recommending the wrong products because intermediaries get a commission. 

It assumes significance in the context of a unique investor base touching the 10 crore mark in August 2024. The challenge for SEBI and stockbrokers is that 80% of dormant accounts barely operate during the year. A vibrant market needs agile investors who can move swiftly to benefit from market price trends. For that, knowledge is a critical aspect. Compared to the US, the consultation paper admits that India has fewer independent financial advisors per million people.

CORE NUMBER

$4.9 billion

This is the amount that AMD, the American multinational semiconductor company, has agreed to pay to acquire ZT Systems, which designs and makes infrastructure that power artificial intelligence systems such as ChatGPT. This move aims to enhance AMD’s chips, software and system designing capabilities and place them at par with Nvidia, which is currently a leader in the AI data centre chip market. Therefore, AMD is eyeing only ZT’s system design business and will be chucking out its manufacturing business post the acquisition.

FROM THE PERIPHERY

—🏦 Days after Finance Minister Nirmala Sitharaman flagged the widening gap between deposits and credit in Indian banks, the State Bank of India, the country’s biggest lender, has said in a report that slowing deposit growth in banking is a statistical myth. While credit growth has outpaced deposit growth in recent years, this does not necessarily indicate decelerating deposit activity, according to the report. Since FY2021-22, incremental deposit growth has outpaced incremental credit growth. 

—📉 The unrest in Bangladesh is hitting Indian tourism, with a 90% drop in travellers from Bangladesh, who make up 23% of inbound tourists. According to The Economic Times, this downturn is hitting medical tourism the hardest, despite a 48% rise in 2023. Patient numbers have plunged from 1700-2000 to just a few hundred. Kolkata, a popular shopping spot, and regions like Sikkim and Kashmir are also affected. Although India earned Rs 24,707 crore in foreign exchange, arrivals are still 15.5% below pre-pandemic levels, with Bangladeshis as the largest group of visitors.

—💰 Adani Group’s flagship firm Adani Enterprises is considering raising about Rs 100-120 billion through a share sale. To address concerns over its liquidity risks, the conglomerate has said it has enough cash to cover over 30 months of debt payments. Its cash balance accounted for 24.8% of its gross debt at the end of the first quarter of this fiscal, it said. The financing would help the company recover investor confidence following accusations of fraud by Hindenburg Research last year. 

—🤝 Reliance Industries is planning on combining the two streaming platforms Disney+ Hotstar and Jio Cinema under the banner of the latter, after its merger with the Walt Disney Company goes through. However, currently Disney+ Hotstar has over 500 million downloads while JioCinema has over 100 million downloads. The merger is awaiting regulatory clearances from the Competition Commission of India and the National Company Law Tribunal. Once cleared, the combined media giant will be a $8.5 billion entity.

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