Newspaper Summary 300326

 

Blackstone-backed EPL merges with Indovida to form packaging firm valued at $2 billion

Our Bureau, Mumbai

Blackstone-backed packaging firm EPL Ltd and Indorama Ventures’ Indovida India have signed definitive agreements to merge, in a deal that will create a $1 billion revenue consumer packaging platform focused on emerging markets, with a combined valuation of about $2 billion. The proposed merger, approved by the boards of both companies, will bring together EPL’s flexible packaging capabilities with Indovida’s rigid PET packaging portfolio, creating a multi-format packaging player with a wider global footprint and stronger growth prospects.

The transaction is expected to close over the next 12 months. Under the deal, EPL is valued at around $1.2 billion, implying a price of ₹339 per share — about 70 per cent higher than its previous closing price — while Indovida is valued at roughly $0.7 billion, at a 35 per cent discount to EPL’s valuation multiple. Post-merger, Indorama Ventures will emerge as the promoter with a 51.8 per cent stake, while Blackstone will hold 16.6 per cent in the combined entity.

Emerging Markets

The merged company will derive nearly 75 per cent of its revenue from emerging markets, leveraging complementary geographic presence across Asia, Africa and Latin America. The combination is expected to drive growth through cross-selling opportunities, improved procurement and supply chain efficiencies, and enhanced sustainability initiatives.

Financially, the merger is projected to be margin and return accretive. The combined entity’s EBIT margin for 2025 is expected to expand to 13.6 per cent from EPL’s standalone 12.4 per cent, while return on capital employed is seen improving to 20.9 per cent from 18.7 per cent. The transaction is also expected to be earnings per share accretive from the first year.

Revenue Boost

“The size of our business, both in terms of revenue and bottomline doubles with this transaction,” EPL’s Managing Director and Global CEO Hemant Bakshi, who will lead the merged entity, told businessline. “Overall, it gets us new emerging markets. It helps us get into a new format of rigid packaging, which has a TAM (total addressable market) of $100 billion. And thirdly, it helps us leverage the capabilities which the Indovida business has, to build innovations and become an innovation partner,” he added.

The aim is to build a consumer packaging leader in the emerging markets, he said. Currently 90 per cent of Indovida’s business is from emerging markets. Bakshi estimated combined cost and revenue synergies of the merger at $35-50 million, with cost synergies alone at $5-7 million. Indovida CEO Sunil Marwah will continue to head the Indovida business and report to Bakshi.

Remittances to moderate in near term: Finance Ministry report

Shishir Sinha, New Delhi

With no sign of the war in West Asia ending soon, a Finance Ministry report expects remittances to moderate in the near term. The report, the latest edition of the Monthly Economic Review prepared by the Economic Affairs Department, also highlighted some upside risks to inflation.

Remittance inflows have remained robust recently, with personal transfer receipts rising to $36.9 billion in Q3 FY26, compared with $35.1 billion during the same period in FY25. However, the outlook for these inflows remains highly sensitive to crude oil price movements.

Crude Impact

“Given that Gulf Cooperation Council (GCC) economies accounted for about 38 per cent of India’s total remittances in 2023-24 and host nearly half of Indian migrants worldwide, any sustained rise in crude oil prices could weigh on fiscal conditions in these economies and, in turn, moderate remittance growth in the near term,” the report stated.

External Affairs Ministry data shows an estimated 9.2 million Indians live in West Asia, with the largest concentration in the UAE (nearly 4 million). According to RBI estimates, at least 35 per cent of India’s annual remittances originate from this region. This implies an annual exposure to remittances from West Asia of around $40 billion. These factors, combined with portfolio capital outflows, have contributed to depreciation pressures on the rupee, requiring calibrated policy responses.

Tilt Trade Balance

The report added that beyond remittances, higher petroleum import bills, increased logistics costs, and reduced exports to West Asia could exert pressure on the current account. Elevated crude prices also pose risks to the merchandise trade balance.

Regarding inflation, the report highlighted upside risks to the March print despite favourable agricultural supply conditions. “The oil price shock poses an unexpected upside risk for inflation in the medium term. Supply disruptions and higher input costs are being transmitted to domestic prices, particularly in fuel-intensive sectors,” it said.

If oil and gas prices remain high, they may spill over into other sectors through higher input prices. While the government is monitoring the situation and taking measures to ensure domestic energy availability, retail inflation based on the consumer price index already rose to 3.21 per cent in February, up from 2.74 per cent in January, primarily due to higher food prices.

Economists divided over impact of excise revision on States

Shishir Sinha, New Delhi

The Centre’s sharp reduction in special additional excise duty (SAED) on petrol and diesel has set off a fresh fiscal debate, with economists split on whether States stand to lose revenue from a shrinking tax base or gain from elevated crude prices that inflate VAT collections.

The total central excise duty for a litre of petrol, which stood at ₹21.90, has now been lowered to ₹11.90. Similarly, for diesel, it has been cut to ₹7.80 from ₹17.80. On the other hand, States and Union Territories impose sales tax/VAT on an ad-valorem basis, ranging between 1 per cent and 35 per cent, along with some fixed levies and cess.

The Centre’s revenue does not change with fluctuations in crude prices, but States/UTs do gain on account of changes in crude prices. Also, tax is calculated on base prices that comprise crude prices plus central levies. This raises the question of what impact the revision in SAED will have on States’/UTs’ collections.

Under Pressure

Replying to that, DK Srivastava, Chief Policy Advisor at EY India, said assuming retail prices of petrol and diesel do not change, State VAT/sales tax collection may come under some pressure if availability of fuel or petroleum products reduces or if their supply is rationed.

“Since the central excise duty has been reduced, the tax base on which State VAT/sales tax is levied will also be correspondingly reduced and therefore State VAT/sales tax revenue may fall at least to some extent,” he said.

However, an SBI research report by Soumya Kanti Ghosh presents a different view. The report said States earned ₹3.02 lakh crore from sales tax/VAT on petroleum, oil, and lubricant (POL) products in FY25 and, with an increase in crude prices, States are likely to earn higher VAT revenue from oil at unchanged VAT rates.

Higher VAT

“Even if we consider the FY26 oil consumption by States (estimated from FY25 share) and the new excise duty rates of the Centre, the States are expected to earn higher VAT by ₹25,000 crore, benefiting from the higher crude oil price, with Karnataka benefiting the most,” the report said.

Further, in March 2026, the States had already benefited by ₹2,500 crore incrementally owing to higher oil prices, with around ₹2,400 crore increase occurring before the excise duty cut. “This is definitely going to be higher once we consider the higher consumption of petrol and diesel by States,” it added.

Revising Levies

Now, the big question is whether States will revise levies. “States can act to cut VAT rates and pass on the benefit to consumers,” Ghosh said. “The GoI may also ask states to consider reducing their VAT/Sales tax rates. If this is done then state tax revenues will be adversely affected,” he added.

As wars rage elsewhere, India must battle to green itself

Mahua Acharya

India’s new Nationally Determined Contribution (NDC) — non-binding climate action plans outlined by countries under the Paris Agreement — approved by the Union Cabinet on March 25 is a welcome development amidst all the global disorder. The NDC neither overreaches nor is it as incremental as some critics have called it. It just moves forward, which in the domain of international climate politics is a rare quality.

India is committing to 47 per cent reduction in emissions intensity from 2005 levels by 2035 (building on the 45 per cent by 2030 target); about 60 per cent of installed electricity capacity from non-fossil sources by 2035; and a carbon sink of 3.5–4 billion tonnes through forests and tree cover. These appear to be calibrated extensions from the past. But the drag is that the current power system presents challenges that possibly prevent larger jumps.

The previous NDC targeted 50 per cent non-fossil installed capacity by 2030, which India has already crossed. It is also on track to achieve the targeted 36 per cent reduction in emissions intensity. However, of the achieved 50 per cent non-fossil fuel target, less than 15 per cent is renewable.

Can we do better? The answer is ‘yes’. Globally, countries that once set the pace have struggled to hold it. Targets have slipped, timelines have stretched, and fossil fuels are back in the mix. The US has stepped out of the Paris Agreement altogether. So, when it comes to India’s targets, in a landscape of uneven compliance, greater ambition without assured execution would do little more than invite criticism.

The new NDC is practical, perhaps deliberately. India is transforming one of the largest and fastest-growing energy systems in the world, while still industrialising and expanding access amid rising demand. Because the base is vast, every incremental shift is enormous in absolute terms. Ambition at this scale encounters challenges such as transmission constraints, land acquisition hurdles, storage requirement, and lack of grid readiness and system flexibility.

Had we planned differently — built transmission ahead of generation, designed for variability — the ceiling today may have been higher. In 2025, India built less than 50 GW of renewables capacity when China built three times that. If we had planned ahead for storage and grid infrastructure, perhaps we could have achieved more with unmatched speed and precision.

If urban pollution and oil imports persist, then the response should be rapid electrification of mobility. Only the Centre can do this, as has already been done with urban buses. From fewer than 1,000 electric buses in 2022, the country has contracted over 40,000 in 2026 and nearly 16,000 are on the roads today. Delhi has chosen to go all-electric with its bus system. This shift at a rapid pace is possible, but demands the collective effort of ministries, alongside dogged determination. A similar endeavour is needed for all wheels on the ground, starting with roadway transport vehicles, which currently move over 50 per cent of India’s freight. This is the time to mandate electrification of all corporate, heavy-duty, gas-guzzling fleet.

So, the next phase of India’s climate leadership will be defined through internal pressures, by choosing where to be relentlessly focused. While the NDC continues to be India’s public commitment to the world, the fact is that now is the time to use the outside war to drive greener growth back home, and build a truly green atmanirbhar Bharat.

The writer is CEO, INTENT Platform, and former MD and CEO, CESL.

‘In a shift back to Russian oil, India bought 60 m barrels since March 5’

Rishi Ranjan Kala, New Delhi

Indian refiners shifted back to Russian crude oil buying around 60 million barrels of the geopolitically sensitive commodity from Moscow since March 5 as closure of the Strait of Hormuz impacted 40 per cent of its imports. The Oxford Institute for Energy Studies (OIES) in its recent energy comment pointed out the scale of the Hormuz disruption is like “no other seen in oil market history”. In such a scenario, one of the US tools to help put a lid on crude oil prices has been granting exemptions on sanctioned barrels. Russia has been a clear beneficiary of this measure, OIES pointed out.

Supply Chain

Before the war, pressure was building on the Russian oil supply chain. US sanctions against Rosneft and Lukoil in November 2025 drove India to reduce its reliance on Russian urals, pivoting instead to greater West Asia term volumes. A full pivot has been made back to Russian oil, the OIES said. “Indian refiners have bought up around 60 million barrels of Russian crude since the US issued a sanctions waiver on 5 March. The US reprieve on Russian oil has led to a major repricing of urals and ESPO in the physical market with reports indicating that these have traded at premiums to their benchmarks,” it added.

US Sanctions

India’s importance as a key distillate swing supplier further increases the likelihood that India’s compliance with US sanctions on Russia going forward could ease. Asian countries outside China are highly exposed to the flow disruption from the Hormuz both in terms of availability of crude and products supplies and higher prices, OIES said. For countries such as India and Japan, it added that crude imports through the Strait of Hormuz stood at above 40 per cent and 70 per cent, respectively. For India, the LPG and ethane exposure stand at above 80 per cent while for Japan, the naphtha exposure is around 70 per cent.

The oil market has been reacting in phases as new information continues to emerge. In the initial stage, the focus has been centred on the disruption of oil trade flows through Hormuz with a prevailing view that the disruption will be short-lived and that the existing ‘oil glut’ will provide an effective cushion. As the disruption to Hormuz persisted, the market shifted into a new phase: the conversion of flow disruptions into large production losses, OIES said.

“At the current stage, with no clear visibility as to when trade will resume through the Strait of Hormuz, the market is not only assessing whether output losses could worsen but also how quickly production and refinery runs could recover in the light of the shut ins and damage to physical infrastructure,” OIES said.

Is more online presence less profitable?

Karan Taurani

PLATFORM SHIFT The global FMCG industry is undergoing a structural shift, led by the rapid rise of online channels. While this transition is visible across markets, India stands out — not just for its low online penetration, but also the speed and nature of the disruption driven by quick commerce.

Online grocery penetration in China and the US stands at 15–16 per cent, reflecting a reasonably scaled omni-channel ecosystem, while India remains significantly under-penetrated at less than 5 per cent. As China moved from low- to mid-teen online penetration between 2018 and 2022, the ecosystem saw broad-based margin pressure. FMCG companies faced higher platform commissions, increased trade spends, and a shift away from higher-margin traditional trade, leading to visible compression of gross margin and EBITDA. In the US, during a similar ramp-up phase, margin pressure was largely borne by retailers due to the high cost of order fulfilment and last-mile delivery, while FMCG brands remained relatively resilient as online was primarily a route-to-market shift.

Discovery and Discounting

For India, the trajectory is likely to be closer to that of China than the US. With quick commerce driving a large share of online grocery growth, brands are more dependent on platform-led discovery, discounting, and higher channel investments. As penetration scales up from current low levels, FMCG companies are likely to face near-term margin pressure, driven by an adverse channel mix and rising competitive intensity. While growth will accelerate, profitability may remain under pressure until scale efficiencies and supply chain optimisation begin to offset these costs.

Unlike global markets, India has leapfrogged into quick commerce — a model that delivers groceries within minutes. This level of convenience is not present at scale in the US or China. As a result, India is not merely following the global online transition — it is accelerating it. Quick commerce is turning grocery into a high-frequency and impulse-driven category, fundamentally reshaping consumer behaviour. India’s online grocery market remains significantly under-penetrated; however, of the online grocery penetration, 50–60 per cent is driven by quick commerce, which is a powerful indicator of where the market is headed.

A structural shift is visible in India’s beauty and personal care (BPC) segment. Digital-first platforms such as Nykaa have delivered strong multi-year growth. BPC GMV/revenue growth is trending at 25–30 per cent, outpacing traditional incumbents — for instance, Hindustan Unilever’s BPC segment has grown 8–12 per cent. Notably, HUL’s e-commerce channel (including quick commerce) is growing at about 2x the company average and contributes 10–12 per cent of domestic revenues. However, this growth comes with higher channel costs and mixed impact.

More Competition

First, the rise of quick commerce will lead to more brand fragmentation. The platform-led discovery model, combined with low consumer loyalty in essential categories, enables new-age and D2C brands to scale up rapidly. Unlike traditional retail, where shelf space is constrained, quick commerce allows for faster experimentation and rotation of products. This will result in more winners, but also competition. For incumbent FMCG companies, this creates incremental pressure; while overall category demand will expand, market share consolidation may weaken, as newer brands capture niche segments and consumer attention.

Second, the channel shift will have direct implications for margins. Quick commerce and e-commerce channels typically operate with lower margins for brands compared with general trade. As FMCG companies navigate this shift, they are relying on three key levers: premiumisation, supply chain efficiencies, and tightening operating expenses. However, these levers have limitations. In a fragmented and competitive market, reducing brand investments or innovation could be counterproductive. As a result, even in the best-case scenario, FMCG companies may be able to hold margins only at current levels; the more likely outcome is moderate margin compression in the medium term, particularly as quick commerce continues to scale up.

The pace of disruption will depend on one critical factor: non-metro expansion. Currently, quick commerce remains concentrated in metro markets. If the model scales up effectively in tier 2 and 3 cities — and gains acceptance in grocery — the impact on growth and margins will be amplified. India’s FMCG market could see a faster and deeper structural shift than those of global peers. Net-net, India is entering a phase where growth and margins are diverging. Quick commerce will drive a sharp acceleration in FMCG consumption, increase category penetration, and expand the overall market. At the same time, it will introduce higher competition, lower loyalty, and sustained margin pressure.

The broader lesson from global markets remains relevant: online penetration does not destroy profitability — it delays it. However, India’s journey could be more intense. With quick commerce acting as a catalyst, the transition may be faster, sharper, and more disruptive than what China or the US experienced. For companies and investors alike, the message is clear: the near term will be defined by scale, growth, and market capture. Margins, as history suggests, will follow — but only after the ecosystem matures.

CERC settles dispute dating back a quarter century

A 25-year-old dispute between Lanco Kondapalli Power Ltd and the electricity distribution company (discom) of Andhra Pradesh was settled recently by the Central Electricity Regulatory Commission.

Lanco Kondapalli owned a 368 MW gas-fired power plant. The dispute centered on the exact date of commencing power generation. Lanco maintained that the plant began functioning in October 2000, whereas the AP/Telangana discom argued for January 2001, characterizing the intervening period as a trial run for which they would only pay for fuel rather than fixed charges. At the core of this long-standing disagreement was a sum of ₹78 crore.

On March 23, the commission ruled in favor of Lanco. Consequently, the discom is required to pay Lanco ₹165 crore, a figure that includes accumulated interest. The significant precedent set by this ruling is that the ‘commercial operation date’ is defined by a plant’s operational readiness rather than receiving buyer approval.

Startups now deliver healthcare too

RX-TECH. Moving on from digitising hospital settings and processes, startups are getting into the business of running them Aishwarya Kumar

Anyone who has walked into a hospital in India knows the drill: moving from one counter to another, navigating multiple floors for diagnostic tests and investigations, and generally struggling to find one’s way around the place... and all while being unwell too. A new crop of healthcare startups aim to find a cure for this. “You can’t change how care is delivered unless you actually deliver the care,” says Varun Dubey, founder of SuperHealth, explaining the broader shift that is underway in India’s health-tech ecosystem.

No longer content with just building discovery platforms or digital layers, startups are venturing into the business of healthcare delivery itself. In a country where access to quality secondary and tertiary medical care remains uneven, particularly outside large cities, the startups view the gaps not as a challenge but an opportunity. According to Tracxn, healthcare providers in India have attracted $3.76 billion in funding since 2019. Investments peaked at $760 million in 2021, before moderating in subsequent years. In 2025, the sector raised $602 million, a 15 per cent drop from $709 million in 2024.

Where that capital is flowing to, and where it is not, is shaping the next phase of innovation. “Significant capital is already flowing into hospital infrastructure, particularly in urban markets. What remains under-built are scalable formats such as single-speciality networks, distributed chronic-care pathways, and tech-enabled coordination models that can expand access without replicating heavy capex,” says Dr Pankaj Jethwani, Managing Partner at W Health Ventures. This is where many new-age startups see a place for themselves.

“In a capital-intensive and regulated sector like healthcare, startups can still carve out real advantages in the right white spaces by staying asset-light and deeply patient-focused from day one,” Jethwani adds. “What’s particularly interesting is seeing teams bring in talent and thinking from outside healthcare, and applying ideas from other industries to build differentiated models, especially in single-speciality and clinic-led setups,” he says. The earlier wave of health-tech startups focused on aggregation or convenience. The current generation is redesigning how healthcare is delivered, priced, and experienced. Even Healthcare, for instance, integrates insurance with care delivery, with a focus on continuous preventive care.

“We bundle insurance membership with an end-to-end, full-stack healthcare platform,” says co-founder Mayank Banerjee. “That means everything from digital primary care to physical infrastructure. We currently operate two hospitals and expect to have six or seven by the end of the year”. The next phase of expansion is focused on under-served tier-2 and tier-3 cities such as Agra, Nagpur, and Indore, he says. The startup is betting on an asset-light model to keep costs under control. “We spend about ₹40 lakh per bed because we don’t buy the underlying land... we lease it,” Banerjee explains. “We aim to deliver a high-quality experience, but we’re not trying to be a luxury hospital”.

Others in the ecosystem are rethinking different parts of the value chain. SuperHealth is focused on the economics of hospital infrastructure itself. By redesigning layouts, optimising operations, and embedding technology into care delivery, it aims to significantly reduce costs without compromising quality.

ASSET-HEAVY VENTURE

Among the earlier entrants in this space, Pristyn Care, which offers surgical services to partner hospitals, is redoing its model as the market matures. The company, which has raised $187 million from investors across seven rounds, is moving towards building and operating its own hospitals, says co-founder Dr Vaibhav Kapoor. It is also sharpening its focus on the under-penetrated secondary-care segment, where consolidation is inevitable as individual doctors or smaller hospitals struggle to operate independently, says Kapoor.

“Just like food delivery or e-commerce, healthcare will also consolidate into a few large players over time,” he says. “Smaller hospitals will increasingly partner with, or become part of larger chains”. Hospital owners view this as a practical trade-off. “They continue practising, remain owners, but don’t have to deal with the operational headaches,” Kapoor says.

Pristyn Care targets around ₹1,000 crore revenue over the next two years, with EBITDA margins of 15–20 per cent. Along the way, it has made several course corrections. “We’ve made mistakes — expanding too fast, over-hiring, and not being efficient enough. Those are things we’ve corrected now,” Kapoor says. Unlike asset-light startups, healthcare delivery demands tight control over operations, working capital, and talent. “Large hospital chains manage cash flows and working capital extremely well; that’s something startups have to learn quickly,” Kapoor adds.

FUNDING MARKET

India remains among the top global markets for healthcare startup funding, even as overall venture capital flows tighten. “Major white spaces for hospital and clinic startups are in tier-2 and tier-3 markets,” says Neha Singh, co-founder of Tracxn. “These regions remain underfunded despite strong demand”. She adds that areas such as chronic care, mental health, and rural primary care networks also remain under-explored. The growing number of funding deals in smaller centres such as Coimbatore, Thrissur, and Patna, however, point to a change in thinking.

The curious case of a resignation

DIRECTOR’S CUT. The premature exit of a board member puts India’s largest private bank under the lens like never before K Ram Kumar

When Atanu Chakraborty, the part-time non-executive chairman of HDFC Bank — one of India’s three domestic systemically important banks (D-SIBs) — quit abruptly before the end of his tenure, it caused consternation among stakeholders, including the bank’s board, senior management, shareholders, and regulators. The stock was hammered, with the market capitalisation of India’s largest private sector bank declining by ₹1,52,689 crore over three consecutive trading sessions from March 19–23.

Eyebrows were raised because Chakraborty, a 1985-batch former IAS officer who previously served as Secretary in the Department of Economic Affairs, did not cite the usual “personal reasons” for his exit. The fact that he resigned from a position fetching ₹50 lakh per annum plus perks suggests that "something in him snapped".

The Resignation Letter

In his resignation letter dated March 17, Chakraborty flagged that “certain happenings and practices within the bank, that I have observed over last two years, are not in congruence with my personal Values and Ethics”. He also noted that the benefits of the HDFC merger in July 2023 are yet to fully fructify. While he did not elaborate on specific allegations, his exit raises questions about whether the issues he raised to the board were satisfactorily addressed and highlights concerns regarding shareholder protection in a bank with no promoter.

Hot-Button Issues

Speculation is rife that Chakraborty and MD and CEO Sashidhar Jagdishan were not on the same page regarding several "hot-button issues". Reports suggest Chakraborty wanted a performance review of the CEO before recommending him for a third term.

The bank has faced several regulatory hurdles recently:

• RBI restrictions on the Digital 2.0 programme and credit card sourcing (2020–2022).
• A ₹1 crore RBI penalty in September 2024 for non-compliance regarding interest rates and recovery agents.
• A SEBI administrative warning in December 2024 regarding merchant banker and insider trading regulations.
• A prohibition by the Dubai Financial Services Authority in September 2025 on the bank’s DIFC branch soliciting new business.
• A ₹91 lakh RBI fine in November 2025 for adopting multiple benchmarks and outsourcing KYC verification.

Damage Control

Following the resignation, the bank’s board moved quickly, seeking RBI approval to appoint Keki Mistry as interim part-time Chairman for three months. Mistry downplayed the resignation in an analyst call, dismissing the idea of a power struggle and asserting that the management team works as a "cohesive unit". Another director, Renu Karnad, described Chakraborty's refusal to specify a trigger for his exit as “baffling”. The RBI also issued a statement declaring there were no material concerns regarding the bank’s governance or conduct.

Expert Opinions

Legal expert Vijay Trimbak Gokhale noted that it would be "naive" to think regulatory issues did not weigh on Chakraborty’s mind. He emphasized that directors have a fiduciary responsibility to inform the board and regulators of their concerns.

Banking expert V Viswanathan suggested that because D-SIBs are “too big to fail,” the RBI should consider having nominees on their boards to oversee corporate governance, risk management, and audits. While the bank has appointed external law firms to review the circumstances of the resignation, experts believe RBI and SEBI should conduct their own independent reviews into the matter.