Midcaps Clock Best Day In 9 Months
Financials lifted Indian shares for a third straight session on Wednesday, with mid-caps logging their best day in nine months
On Episode 535 of The Core Report, financial journalist Govindraj Ethiraj talks to Kunal Bajaj, CEO & Co-Founder at CloudExtel as well as Randheer Singh, CEO ForeSee Advisors and former Director E-Mobility, NITI Aayog.
SHOW NOTES
(00:00) The Take
(07:43) Midcaps clock best day in 9 months
(09:51) Gold prices once again hit fresh highs, rupee strengthens further
(13:02) Remittances from US and UK overtake Gulf
(14:44) India set to impose higher tariffs on steel imports, stocks rise
(16:13) Where and how do we really need satellite broadband in India?
(25:38) Can game changing fast charging cars come to India soon, after Chinese car company BYD’s 5 minute and 400 km charging announcement
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Thursday, the 20th of March, and this is Govindraj Ethiraj Headquarters in Broadcasting and Streaming from Mumbai, India's financial capital.
The Take: Dot com to AI smart investors usually survive stock market bubbles
25 years ago this week, the Nasdaq hit its .com era peak after rising more than 500% in five years, and then it collapsed. A silver anniversary is a good moment to ponder upon what's changed in the last 25 years when it comes to stocks, stock markets, and of course, our approach to them. Not much, evidently, though there are some useful shifts and lessons. The Wall Street Journal quoted Sun Microsystems CEO, Scott McNeely, speaking two years after the bust, that's in 2002, saying how dumb it was for investors to buy his company's stock at the peak.
He said, and I quote, "'Two years ago, we were selling at 10 times revenues while we were at $64. At 10 times revenues to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that from my shareholders.
That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard.
And that assumes you pay no taxes on your dividends, which is kind of illegal. And that also assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64?
Do you realise how ridiculous these basic assumptions are? You don't need any transparency. You don't need any footnotes.
What were you thinking?" Unquote. And then there was Cisco Systems, which was going for about 38 times sales and also became the most valuable company for a moment at that time.
Of course, both Sun and Cisco are still around in some form, shape or the other. NVIDIA, the AI company chip, was going at 56 times sales last year. Now, many analysts are comparing or trying to compare the dot-com boom of 2000 with the AI boom right now.
And while stocks have corrected in recent months, the question of a tech bubble is still hanging there somewhere. The same analysts acknowledge that the dot-com boom created some very strong tech companies and, for example, fibre optic investments, which paid off smartly, though, after some time. But there are other differences to note, even as you start looking at it from an India lens or rather through an India lens.
So the big correction in AI stocks in the first week of January 2025 was triggered not because AI or AI chips turned out to be duds, but because someone, in this case, a Chinese company called DeepSeek, came up with a radically cheaper version of the same thing. The interesting point and where it comes home is this. The Wall Street Journal says, for example, that outside of semiconductors, a sector that was inflated by NVIDIA, one of the highest sales multiples back in January could be found in out-of-favour biotechnology companies.
Many have little to no revenue, but lots of promise. And there are the Indian parallels. Now, back to 2000 for a moment.
Indian IT companies were quoting at bizarre valuations. G. Chokalingam, founder of Economics Research, told me that in 2000, companies like Wipro were quoting at a price to earnings of about 150, as were many other IT companies.
Some of these IT companies, including Wipro and then Infosys, are, of course, around and successful. Many others turned out to be duds, frauds, or both. The interesting thing is that while in the 2000s, the entire wave was IT or dot-com, now it is not.
Wall Street, for sure, is still AI-led, as is China right now, but nowhere at the scale that we saw in the 2000s, where tech could have commanded maybe 60 to 70% of total market capitalisation. No wonder, when IT fell or the dot-com bust happened, it took everyone and everything along. And of course, when the NASDAQ crashed, so did the rest of the world.
So, the first thing is that while we are back in a tech-dominated market, at least on Wall Street, the dimensions are different. In India, the good news in some ways is that the themes are quite wide and have been shifting around, even within that, for both good and bad. For instance, defence stocks are rising right now, that's right now in the last few days, and defence and public sector stocks have been almost bubble-like in some cases in India as a theme, much to the surprise of most veteran analysts.
But even if they were to crack badly, they would not affect the rest of the market, as they did not affect when the markets and some of these stocks fell quite sharply from their peak that they saw in September 2024, as did many other small-cap and mid-cap stocks. And to that extent, quite likely India's bubble has already fizzled, at least in the first round. Think of it as a balloon which slowly loses air, as opposed to bursting because of a pinprick.
Indian markets were at a peak market capitalisation of about $5.5 trillion in September, and have dropped about a trillion dollars since that peak. In 2014, India's entire market was around a trillion dollars. ChocoLingham points out that businesses have grown multifold in the last two decades, including, of course, the same companies like Wipro, but their price-to-earnings is only around 25.
Ditto with other companies in the same space. So, valuations have contracted and become more rational, at least in these larger companies, even though they've become much, much bigger in these intervening decades. But then, like we said, themes have been shifting around.
There have been other companies, small and mid-sized, which have seen bizarre multiples, including over 100, but they've been small, scattered, and definitely not reflecting or suggesting a market-wide bubble a la 2000. For instance, many of those stocks that were booming just a few months ago have fallen more than 90% from their peaks. Are they duds, or frauds, or just riding some thematic bubble?
Quite likely one of these. And, once again, it's not affected the whole market. But one thing that's not changed, perhaps, in my understanding, is the retail frenzy that kicks in and kicks off once a fad catches on.
That frenzy could be driven by multiple factors and take different dimensions. For example, COVID-19 accelerated the use of slick, broking apps and the use of social media by purveyors of information or broking companies to ensnare mostly young people with limited income and savings, including into the dirty and dangerous world of derivatives. In the 2000s, people started watching CNBC and were glued to movements in and around the NASDAQ, including in India.
This time, it's social media in that incessant flow of smart-alecky tips and regurgitated content in the guise of wise counsel and advice. Easy to give and distribute when the markets are going up, not so easy when they're going down. For younger Indians who have been attracted to a much larger extent than 25 years ago, the motive is also slowing earnings and high inflation and the prospect of investing and earning from those investments to supplement income.
For the brave or more reckless, it's been about taking many small bets around derivatives or even crypto. Like always, smart investors learn from their mistakes and come back, which on balance is a good way to evolve. Like it or not, the equity cult does grow as it should and has in India too.
The occasional shedding of froth and deflating of bubbles is also important for the sustained growth of the cult and the returns that markets provide to long-term investors. Hopefully, the lessons of the latest market rise and fall have already been imparted and learned.
And that brings us to the top headlines and themes.
The markets are up again as mid-caps clock the best day in nine months.
Gold prices once again hit fresh highs.
The rupee strengthens further.
India is set to impose higher tariffs on steel imports and stocks rise.
Where and how do we really need satellite broadband in India?
Can game-changing fast-charging cars come to India soon after Chinese car company BYD's five-minute and 400-kilometre charging promise?
And remittances from the United States and the United Kingdom overtake the Gulf.
Markets Stay Up
Financials lifted Indian shares for the third straight session on Wednesday with mid-caps logging their best day in nine months as investors continue to bottom pick and bottom fish. The benchmarks were up for the third consecutive session and the Sensex was up and down a little but closed up 147 points at 75,449 while the NSE Nifty 50 was up 73 points at 22,907. The broader indices, as we hinted, had a good day with the Nifty Mid-Cap 100 and the Nifty Small Cap indices both up over 2%.
Early data seems to suggest that foreign institutional investors have turned positive in the last day or two, though it might be too early to call it a trend. Remember, foreign portfolio investors have pulled out nearly $29 billion since October, which is also the most in any six-month period according to Reuters, which also says that a lot of that money has actually gone to China where Hong Kong's benchmark Hang Seng Index and home to many major Chinese companies is up 36% since late September thanks to bets on artificial intelligence spurred by Chinese startup DeepSeek.
Yesterday, we spoke of Swiss investment bank Julius Baer talking about moving investments out of the US into markets like China and India, more China and less India, but definitely China and India. A report on CNBC says investors are feeling gloomy in the United States, quoting the University of Michigan Survey of Consumers, which was released on March 14th, showing consumer sentiment plunging to its lowest since 2022. Wall Street is apparently marching alongside according to the March editions of the Bank of America's Global Fund Manager Survey and the CNBC Fed Survey.
UCLA Anderson, an economic forecasting organisation, has issued its first-ever recession watch warning on Tuesday. And on Tuesday, the sell-off in Wall Street resumed. The S&P was down a percent, the Dow Jones about 0.6%, and the Nasdaq Composite 1.7%. Tesla shares fell more than 5% after RBC capital markets lowered its price target on the stock according to CNBC. Asian markets were slightly lower on Wednesday, but India, as we've talked about already, was higher.
Gold Tells The Story
While Wall Street is subdued and tracking downwards and Indian markets are on a stronger footing right now, the price of gold perhaps tells us what the world is thinking and feeling like.
And a higher price obviously suggests all is not well, whether it is geopolitics or tariffs. On Wednesday, gold hit an all-time peak of $3,045 an ounce, and that's the 15th peak this year according to Bloomberg. At its current trajectory, gold futures could tack $3,200 in just over a month.
Even if we get a shakeout or two along the way, bulls are lying in wait for a discount according to an analyst who spoke to Bloomberg. Russian President Vladimir Putin refused to give Donald Trump the 30-day ceasefire in Ukraine. He and his team had demanded on the path towards ending the three-year conflict, also according to Bloomberg.
Meanwhile, the U.S. Federal Reserve is poised to keep borrowing costs steady at a meeting later on Wednesday, or rather Wednesday overnight.
The Rupee Stays Strong
The rupee is having a good run against the dollar, which of course continues to be relatively weak. The rupee closed stronger against the U.S. dollar for the sixth consecutive session on Wednesday, ending 13 paise stronger at 86 rupees 44. After closing at 86 rupees 57 on Tuesday, according to Bloomberg data, the rupee has gained about 1.2% in March so far, tracking the fall in the dollar index, though however, in the current financial year, it has fallen about 3.6% according to a business standard computation. The dollar index, which is a measure of the value of the U.S. dollar relative to a basket of foreign currencies, was up 0.3% to 103.6. FDI down. Net foreign direct investment into India has declined to $1.4 billion in the first 10 months of 24-25, that's April 24 to Jan 25, from about $11 billion a year ago thanks to more or rather higher repatriation and outward FDI from India. Gross FDI, that's total FDI or foreign direct investment, is still strong with about a 12% growth to about $68 billion in that same April 24 to Jan 25 period from about $60 billion in the previous year according to the Reserve Bank of India.
Repatriation and disinvestment, that's really companies or investors selling their stakes in India and taking money out rose to about $46 billion from about $36 billion the previous year. Overseas investments made by Indian companies also jumped from about $12 billion a year ago to about $20 billion in the April 24 to Jan 25 period. Car prices set to rise.
Well, we've been talking about the pressure being faced at the distributor end thanks to sluggish sales and high inventory levels and now car companies are raising prices further. Hyundai, which is India's second largest car maker after Maruti by market share, will increase prices by up to 3% from April because of higher raw material and operational costs, the company said. Earlier this week, Maruti, Suzuki and Tata Motors also raised prices of their cars citing roughly the same reasons.
Remittances Are Shifting
The share of inward remittances from advanced economies including the United States and the United Kingdom has risen surpassing that of Gulf economies in the last financial year, that's 23-24 reflecting a shift in migration patterns towards skilled Indian diaspora according to a Reserve Bank of India bulletin released on Wednesday. Overall remittances have gone from about $55 billion in 2010 to about $119 billion in 2024. The overall stock of international migrants has tripled from about 6.5 million in 1990 to about 18 million in 2024. The share of the United States in India's total remittances remains the largest at about 28% right now and the share of inward remittances received from the UK is at about 11%. All of this is for the last year. The United Arab Emirates maintained its position as the second largest source of India's remittances with its share increasing to about 19% for the last year.
UAE is the largest hub for Indian migrant workers mostly in blue collar jobs dominated by the construction industry followed by healthcare, hospitality and tourism which of course is in contrast to the United States where Indian migrants are mostly in white collar jobs and that explains the difference and the reason why the United States holds a higher share though the numbers could be lower. Maharashtra receives the highest share at about 20% which of course has been falling a little bit and Kerala is number two with about 19% which has increased followed by other states like Tamil Nadu, Telangana and Karnataka.
India To Slap Steel Tariffs
The Indian government has outlined plans for sweeping trade tariffs just a week after President Donald Trump slapped duties on all US imports of the same metal. India's Commerce Ministry has proposed temporary safeguard duties of 12% on a wide range of steel products. According to a statement on Tuesday, not surprisingly major Indian steel stocks rose on Wednesday.
The government said that safeguard measures are used in times of increased unfavourable and unforeseen imports that cause or threaten to cause permanent damage to the domestic industry. China's property crisis as we've been discussing here has sent its steel exports rocketing, fuelling a global glut at a time of fragile demand and Trump's 25% duties threatened to push metal to other markets. Bloomberg said the tariff on Indian imports will be applied for a period of about 200 days as it stands currently.
Overall, China's steel producers have been producing more steel though have reduced it a little bit and India's imports of that steel has been growing. India's steel producers have been requesting the government to impose a safeguard duty for a few years now, including pointing out that many Chinese factories were producing steel at cost only to keep those factories running. A statement from Crystal Ratings says that the imposition of a 12% duty on some non-alloy and alloy steel flat products will provide pricing support to local manufacturers in the first half of fiscal 2026 and it will also address worries about rising imports.
How Will Satellite Broadband Help?
There has been much discussion about Elon Musk's satellite internet company Starlink's entry into the Indian market now in a three-way partnership with both Jio and Airtel and maybe others to follow who will offer their distribution network and presumably work on some form of revenue share. Until recently, both Indian players had opposed Starlink's entry and its demands to free up spectrum tooth and nail. I reached out to Kunal Bajaj, CEO and co-founder of CloudXtel, a company that works as a B2B provider to many telecom and internet companies linking their infrastructure on the backend in cities like Mumbai.
I began by asking him how he was seeing the importance of satellite broadband networks and who it would serve the most effectively.
INTERVIEW TRANSCRIPT
Kunal Bajaj: India is slightly unique when it comes to wireless broadband services as compared to even many of the mature markets because we have a very high population density and our telecom operators, along with that population density, have actually invested quite a bit to get to upwards of 95, 96, even 97% population coverage with high speed. Now, we're not there yet with 5G, but certainly with 4G, we have those percentages of the population under a 4G signal. And the speeds that are being offered on the 4G network, particularly in rural areas, are actually pretty good.
So really, then the need potentially for satellite broadband services in India will come down to where either a good high-speed quality or reliable connectivity via 4G mobile networks is really not available. And so we talk about, you know, therefore, specific situations or particular niche use cases, at least on the retail side. So there will be some people who live in really far off remote areas where even today your BSNLGO or Airtel signal is really not reached.
But I think the larger use case is going to be the highly sensitive niche use cases that are gonna be used by enterprises. So where you have, for example, manufacturing centres, or you're working in, you know, power, mining, you know, things of that sort, where really, by definition, you're working in fairly remote areas, and your requirements are more than what a simple retail connection can offer you. Because a retail connection will come with its own quirks when it comes to quality of service or reliable throughput or things of that sort.
So the alternative for those types of guys today is very long microwave links that are, you know, actually quite expensive. And replacing those with satellite connectivity may A, be a lot more cost effective, but B, just be a lot more reliable with faster speeds and faster time to market.
Govindraj Ethiraj: How big do you feel this market is? I mean, I can sense what you're saying. We see those towers with those little dishes on top, right?
That's your long range microwave. And we see it even in cities. So what could be the potential size of this?
Kunal Bajaj: Back in my consulting days, I would have probably had a ready answer with a number and, you know, how many crores. Being an operator on the ground, that's an analysis that, you know, I've not done in a while. But, you know, really it's, if you look at the way overall investments in automation, IoT, and connectivity to all of these remote manufacturing areas, and like I said, manufacturing, mining, energy, things of that sort, is the market gonna be, you know, tens of billions of dollars, or is it gonna be hundreds of millions or billions?
I mean, it'll be in that range, but it's not gonna be as huge as our retail market, right? And it's certainly not gonna be as big as, for example, the market for satellite connectivity in Europe or the US, where there, you know, even retail customers are willing to pay, you know, 70, 80, $100 a month with a $200 one-time charge up front, because really their alternative is either very, very slow speeds or no speed at all.
Govindraj Ethiraj: And if you were to look at what networks like Jio or Airtel have promised, which is high-speed 5G networks, and this is all supposed to be rolling out as we speak, or towards the end of the year, or maybe in some parts already there. So how does that compare with what maybe the best-case satellite broadband could be in remote areas?
Kunal Bajaj: In remote areas, yeah, absolutely. Look, you know, I think 5G today has actually proven itself to be quite useful in providing not only mobile broadband, but even home broadband, because we've seen the tremendous pickup of fixed wireless, FWA. And that, you know, was kind of one of those benefits that it wasn't completely clear how much traction we would get in that space, particularly because 5G was originally launched to be a much better mobile experience.
But I think now we're seeing a lot of traction, a lot of benefit and uplift coming from the FWA side. And the reason for that is, you know, for once, and probably for the first time in India, operators have gotten a good enough amount of spectrum to offer a truly broadband experience. We have always been spectrum starved when we launched 3G, when we launched 4G in this country, and, you know, operators were always jockeying for a little bit more spectrum and paying exorbitant rates at auctions.
In 5G, you've got a sufficient amount of spectrum in the high band, and particularly when you provide it in an FWA kind of environment where you have a fixed receiver with a high gain antenna that can be installed in a home or in an SME office, it's delivering very high speeds. So, you know, getting reliable 100 Mbps plus speeds on that is very possible with the network that's been rolled out today. As capacity utilisation will increase, and this is independent of whether it's in suburban or in rural areas, the reliable level of throughput that you'll get is going to come down.
But I think that's, you know, when the operators then step in. And what we expect operators to do over time is if you have high density pockets of very good levels of 5G FWA utilisation, you would expect that in a few months you would get a fibre and an FTTH connection available at those same exact locations. And if it's in rural areas, then likely the capacity available from just, you know, a single tower offering 5G on FWA will be more than sufficient to be able to scale up and support hundreds of users with those 100 Mbps types of connections.
Govindraj Ethiraj: Right. On cost, as things stand today, obviously as maybe more subscribers come in or hundreds of thousands of subscribers come in, costs could change. But as things stand today, what's your sense of cost parameters between let's say a mid-range satellite-based proposition versus what we are currently used to?
Kunal Bajaj: Look, FWA 5G is cheap. It's the cheapest in India. Yes, there's a device cost associated with it, but it's nowhere near the $200 device cost that you would need for a satellite, for the satellite terminal.
Even if costs for India come down substantially from what they are in other parts of the world, but even in the FTTH business, telcos are not investing $100 per home for that Wi-Fi router and for that termination box that they give you, which today is even acting as a set-top box for making a sort of a less smart TV into a smart TV as well. That comes for less than $100 today. So to compete against the type of pricing that we're getting with 5G FWA, satellite costs would really need to come down substantially and a lot of that is the hardware costs.
The other challenge that they'll face in dense areas is that satellites do have restricted capacity. At the end of the day, it's a wireless medium. While on the ground, if one tower gets full, you can add another tower very nearby to split the capacity and split the area into two different cells.
Doing that when it comes to satellites is just a lot more challenging. Adding capacity if one area gets filled up means buying more satellite capacity, launching another satellite or looking at different spectrum bands but they're just not available. So look, I'm not saying that there'll be no impact from satellites.
There will be these very high-end applications where there is a willingness to pay where corporates or high-end users have a particular requirement for quality service or for backup connectivity. But I don't see it having a major large-scale retail impact.
Govindraj Ethiraj: And that's an interesting point that you made because it hasn't struck me that even with satellites, you could have congestion if there are too many subscribers in an area. I didn't think of that. Anything to do with satellites in India is a tricky business, right?
I mean, if you carry a sat phone, for example, without permissions, you could be arrested as things stand. There are so many other regulatory risks. How do you see that environment shaping up?
Kunal Bajaj: Starlink already ran into a lot of problems when a few years ago they launched a website saying, we're coming to India, sign up over here, right? And there was a massive backlash, rightly so, right? Because they had not spoken to DOT.
DOT had not given them permission to do that. And they were basically doing what Starlink or other many Silicon Valley startups are used to, which is just sort of go in and break things and see kind of what happens, right? I think they learned their lesson.
And this approach to partnering with the Indian telcos overcomes the massive battle that was happening around whether Spectrum should be auctioned or priced. And essentially by becoming a partner rather than a competitor, they found the right way to get in. But that doesn't mean that the internal battles within India aren't going to continue.
Because yes, we still have limited Spectrum available. We will still have limited flying slots and all the rest of that stuff. And at the end of the day, I think, there is a lot of merit to our government wanting to create a local ecosystem for satellites as well.
We shouldn't lose this opportunity where we're looking to set up connectivity in India and essentially give all that away to only foreign players and foreign operators. Aarti Airtel has an investment in OneWeb, Jio has a partnership and investment in other satellite operators. V's CTO yesterday as part of the 5G launch mentioned that they're also looking at a satellite partnership.
But we shouldn't lose this opportunity to actually build up capability, capacity, and our own services offering in the Indian context. And why should we be completely reliant on foreign operators for that?
Govindraj Ethiraj: Right, thank you so much for joining me.
Kunal Bajaj: Thank you so much, Govind.
BYD's New Game-Changing Battery
On Tuesday, Chinese car maker BYD unveiled a new super e-platform technology, which it says will be capable of peak charging speeds of 1,000 kilowatts. BYD also said it will allow cars to use the technology to achieve 400 kilometres of range with just five minutes of charging. Tesla offers a charging rate of up to 500 kilowatts and can add up to 270 kilometres in a range of 15 minutes.
Germany's Mercedes-Benz said that its all-electric CLA will be able to recharge up to 325 kilometres within 10 minutes, according to CNBC. Now, it's quite clear that the time to charge is shrinking, and this is obviously important because BYD says that it wants to bring down the time to the point where you would spend as much time charging an electric car as you would filling up a tank in a petrol pump. Now, that's, of course, a sign of relief for those sitting on the fence, as in they want to go in for EV, but are wary of these factors, including, of course, range anxiety.
But as charging times come down, things would obviously change, and India already has a lot of domestic electric vehicle capacity across the spectrum, from two-wheelers, three-wheelers, and four-wheelers, and, of course, in buses, where you see them in many cities in India now. So how far are we, and what does BYD's latest announcement mean from a technical and feasibility point of view, which, of course, also leads to costs? I spoke with Randheer Singh, the CEO and founder of 4C, an expert in electric mobility and advanced energy storage.
Singh earlier worked as director of e-mobility and the advanced chemistry cell programme at Neeti Aayog. So I began by asking him how he saw BYD's latest announcement and how he was viewing its feasibility.
INTERVIEW TRANSCRIPT
Randheer Singh: Govind, thanks for having me here. I mean, before going to BYD, one thing which I should apprise is, the media's gunfire on that company from, of course, China, outside India, is doing partial charging, or let's say 249 miles in five, 10 minutes. Up to 1,000 kilowatts is the power which flows actually with this level of charging.
But you know, in India, there's already a company which has the IP protection and their own connector, which does 15 minutes full charge, irrespective of battery size, by the way. That means if you have a battery size of, let's say, 100 kilowatt hour, which gives you, let's say, the range of 500 or 1,000 or whatever kilometres. So zero to 100%, zero to 100% I'm talking about, not zero to 20 or 20 to 80 or 80 to 100.
Zero to 100% in 15 minutes, the exponent energy, and they have the IP protected. They already have one of the biggest user bases in Bangalore as well as in Delhi. More than 100 plus charging points they have, and now they are also working on the bus charging at the megawatt hour, one megawatt hour level charging, which also does the charging zero to 100% in 15 minutes.
That means, of course, so if you have a bigger battery, then that bigger battery will be charged, right? So if you have a battery of, let's say, 400, 500, 600 kilowatt hours, you will get this type of range. This is about this.
Now coming back to this BYD thing here. So definitely it's not something which personally I think is a fake or bluffing, which they are doing. Definitely this is possible.
It's not something out of the world, but of course it will revolutionise so many things. Having said that, the important thing is there are three important parameters basically when we go for the high-speed charging, or the one is the voltage level which flows through the battery, the voltage level which flows through the cables and all. This finally results in the high temperature.
How this type of temperature will be sustainable in the tropical climate, how this will be regulated. So the cooling mechanism within the cells, within the battery, through the BMS, as well as the cooling mechanism has to be very strong. Definitely they must have done something wherein they might be creating the digital twin of the cell so that the cell balancing happens along with the fast charging and the cooling also.
So the heat dissipation should happen along with this. This is something which is most probably the case. The second thing which happens is, the technology is on both sides.
One is the charging side, second is the cell manufacturing side. So because it doesn't work one way, finally the mouth of the bottle should be big enough for a lot of water to go in one go. So the bottle I'm talking about is the cell basically.
In this case we can say the battery, but let's talk about the cells because cells do the magic. Everything depends on the cells at the end of the day. And of course the BMS, the cooling mechanism and all finally helps to have the batteries and the cells, their life without faster degradation when the fast charging happens.
So degradation is the biggest issue. In fact, when you buy the electric vehicle, you'll find the guideline that after one to two fast charging, please do at least one slow charging. Otherwise your battery will be out of warranty and all.
Those things we need to see once the fine details come out, but of course at 1000 kilowatts of the power when it is flowing, it's doable of course. There's no question about it.
Govindraj Ethiraj: If we were to look at now, let's say there are so many Indian car companies also on the road and one can see even as a consumer every six months to a year or six months to a year or somewhere in between that you can see the range going up and maybe the charging time coming down slowly. But of course this seems to be a bit of a leap. Assuming BYD has cracked some of these aspects, including let's say managing to keep the batteries cool and managing the external factors and the cell's ability to charge.
And your own point that the Indian companies already patented this fast charging thing. So how far is this reality then in India? The reality is that I could literally charge my car at least up to about let's say three to 400 kilometres in just five minutes, which is almost the equivalent of filling gas.
Randheer Singh: Correct. So I'll just pick not to sound that I'm sort of promoting exponent. So there are two aspects within the exponent also.
One is charging, and the second is the battery. So even though the fast charging is happening, they give a warranty of the battery for minimum 3000 cycles when it comes for the three wheelers. When it comes to the buses, nine lakh kilometres for the battery with a zero to 100% in 15 minutes, that type of warranty they're offering.
Currently they don't offer anything for the four wheelers, but definitely they will be coming forward. Now this is about this. So the technology is real.
It exists, it is already in use. So there's no doubt and no question about it. Now it comes very specifically to the BYD, one important factor which we need to see, all these things come at a cost and cost plus the type of connector which they are using.
So currently I'm not aware whether they are right now using the CCS2 or some other connector they have for this particular type of charging, ultra fast charging, which we are talking about. So when it comes to the cost, there are a lot of things, four wheeler or the car companies or the bigger vehicles they have. So currently they are launching with the four wheelers only.
One, I think, is a Han-L sedan and one Tang-L SUV. The two wheels, two of these vehicles, will be coming. So when it comes to fast charging, the cost is a bigger phenomenon for sure.
And you rightly said, they have not said anything about the life of the battery. What is going to be the life of the battery with this type of fast charging in their case? What type of warranties are they giving?
What type of degradation is happening? So those two parameters are going to be very, very important. In addition to this, we don't know about the cells.
What type of cells are being used in this? If the cells which are being used are like, let's say the blade type or the aviation quality and all, then definitely the cost is going to be huge. But in addition to this, the number of companies who produce, that means the supply demand gap would be very, very high.
It wouldn't be available very easily with the other companies, right? So that means the solution cannot be widely available as soon as we are expecting in that case.
Govindraj Ethiraj: Got it. I mean, that really answers my question about, could we see this in India and how soon? And you're saying, obviously, these are parameters that we yet don't know, but BYD itself is in India.
So they could potentially bring all of this, maybe for a higher cost, isn't it?
Randheer Singh: BYD has more than 20, 30 models, right? How many models are in India? I think two or three.
Two officially launched, one is also there. So not more than three models they have. Why are there so many models in India?
Also the proliferation of these models is also not very high. You know, most of their models have been sold to ride-sharing companies. Most of them.
If we compare the retail and the ride-sharing companies, most of the models have gone to the ride-sharing companies. So currently we have not seen that type of adoption. And until unless that adoption happens, it's not localised.
One thing is we know, right? It's not localised. So they or any company would be focussing more on the markets wherein they see a lot of acceptance in a shorter period of time.
Plus they have more capability of investment, then returns, then long-term acceptability, long-term presence, their control over the company, all these things are there. Those things currently are definitely missing in India. Having said that, I cannot totally dispose of this and say that they won't be launching here in India, but definitely the models which we are talking about are not available in India.
And as far as I know, they don't have any plans to launch in India. Those models hang and let.
Govindraj Ethiraj: Right, anyway. But either way, I think what you're saying is that things are definitely changing quite dramatically on this front. And if not today, then in the near future, Indian consumers too will enjoy the benefits of cutting-edge EV technology, which gives them the comfort to buy electric vehicles or electric vehicle cars particularly.
Randheer Singh: But Govind, that is already here, right? I mean, that's what I'm saying. The only thing is it's not being marketed the way it is, EBYD being so big.
Companies here in India which are proven, which are already providing this type of solution. The only thing is, of course, the government has to recognise them. One thing, openly through the BIS standards and all.
But in addition to this, the media should also give proper coverage to such types of companies, heavily funded. Already 50 million plus US dollars, they have already been funded. It has already existed for the last six, seven years.
Already one of the biggest chargers and all. They also provide. I'm not talking about this one company.
There are more in addition to this, which already provides this type of solution. And India specific, of course, for the tropical climate.
Govindraj Ethiraj: Right, that's a useful point. And we've run out of time. Thank you so much for joining me.
Randheer Singh: Thanks, Govind. Bye-bye.
The UPI Bill
India benefits from UPI, small ticket transactions, for which you and I do not actually bear any cost, unlike, let's say, credit cards. But there is a cost to it, which the government foots. On Wednesday, the government approved an incentive scheme for the promotion of low-value BHIM, or BHIM UPI transactions, which is person-to-merchant for financial years 24-25, with an outlay of about 1,500 crore rupees.
These incentives will be provided for UPI transactions up to 2,000 rupees, specifically aimed at small merchants. Over the last three years, the government of India has significantly increased payouts for digital transaction incentives, from about 1,400 crores to 2,200, to about 3,600 crores each year. The incentives are paid or given out to acquiring banks, which further distribute to other stakeholders, including issuer banks, payment service providers, and app providers.
