THE BIG IDEA | PAGE 18 INTERNATIONAL | PAGE 13 COMPANIES | PAGE 4 Quiet scale:Transforming classrooms across India We are a savings platform, says Pharmeasy CEO HYDERABAD, MONDAY, JANUARY 12, 2026 Deathtollmountsto500 asIranprotestsintensify FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. NO. XXII 215, 18 PAGES, `12 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E FE S P E C I A L ■ PF, P11 Large-cap stocks first to benefit from FIIs return, says Saurabh Jain Reliance to invest `7Lcrin Gujarat KRISHNA BAROT Rajkot, January 11 TWO OF INDIA’S biggest business conglomerates – Reliance Industries and Adani Group – committed major investments during the Saurashtra-Kutch edition of the Vibrant Gujarat Regional Conferences (VGRC) here today. Mukesh Ambani, chairman and managing director of RIL, said the group will launch a people-first artificial intelligence platform built in India for India and the world. The platform, he said, will allow citizens to accessAI services in their own language and on theirown devices,with the aim of improving productivity,beginningwith Gujarat. Ambani said RIL is building India’s largest artificial intelligence-ready data centre in Jamnagar with the objective of making AI affordable and accessible at scale. Alongside the technology push, he reiterated the group’s investment plans in the state, announcing that RIL will double its investments in Gujarat to `7 lakh crore over the next five years, after investing over `3.5 lakh crore in the state during the last five years. He said Jamnagar is also being developed as a global hub for clean energy and green materials, anchoring Gujarat’s role in future energy supply chains. Continued on Page 13 MICROBLOGGING PLATFORM X has acknowledged lapses in content moderation linkedtoitsAIchatbotGrokand removed around 3,500 pieces of content and more than 600 useraccounts afterthe government flagged the circulation of obscene material, according to official sources. The company has assured authorities that it will comply withIndianlawsandstrengthen safeguards to prevent a recurrence.Thestepsfollowdirections issued earlier this month by the ministry of electronics and Prime Minister Narendra Modi inaugurates the Vibrant Gujarat Regional Conference for Kutch and Saurashtra region, in Rajkot on Sunday. Gujarat Chief Minister Bhupendra Patel, Deputy CM Harsh Sanghavi and Reliance Industries Chairman Mukesh Ambani were also present ■ MORE REPORTS ON PAGE 4 COMPLIANCE PUSH ■ It has removed 3,500 posts and over 600 accounts ■ MeitY has ■ X has assured authorities that it will comply with Indian laws and strengthen safeguards warned of legal action if unlawful Grok content was not removed ■ X has assured authorities it will comply with all laws »INSIDE« X TO OPEN-SOURCE ITS NEWALGORITHM PAGE 13 informationtechnology(MeitY), which warned of action under thelawifunlawfulcontentgenerated through Grok was not ADITYA KALRA & MUNSIF VENGATTIL New Delhi, January 11 THE GOVERNMENTHAS proposed requiring smartphone makers to share source code with it and make several software changes as part of a raft of securitymeasures,prompting behind-the-scenes opposition from giants like Apple and Samsung. The tech companies have countered that the package of 83 security standards, which would also include a requirement to alert the government to major software updates, lacks anyglobal precedent and risks revealing proprietary details, according to four people familiar with the discussions and a Reuters' review of confidential government and industry documents. The plan is part of Prime MinisterNarendraModi'sefforts to boost security of user data as online fraud and data breaches increase in the world's secondlargest smartphone market, withnearly750millionphones. ITSecretarySKrishnantold Reuters that "any legitimate concernsoftheindustrywillbe addressedwith an open mind", adding it was "premature to read more into it". A ministry spokesperson said it could not comment furtherdue to ongoing consultation with tech companies on the proposals. RAGHAVENDRA KAMATH Mumbai, January 11 FAANG loses dominance in high-paid jobs X admits lapse on GrokAI content; removes 3.5K posts,600 accounts OJASVI GUPTA New Delhi, January 11 Govtseekssource codeaccessfrom smartphonefirms SECURITY STANDOFF ■ Apple, Samsung, Google and Xiaomi oppose government's software oversight ■ The package of 83 security standards lacks any global precedent and risks revealing proprietary details ■ The plan is part of Prime Minister Narendra Modi's efforts to boost the security of user data Ongoing tug of war over government requirements Apple, South Korea's Samsung, Google, China's Xiaomi and MAIT, the industry group that represents the firms, did not respond to requests for comment. The government requirements have irked technology firms before. Continued on Page 13 Pvt credit gains ground in realty takendownpromptly. Government sources said X accepted that violations had occurred on its platform and actedtoblockcontentanddelete accounts found to be hosting or amplifyingobsceneimagery.The companyhasalsoconveyedthat it will not allow such material goingforwardandwillenforceits userpoliciesmorestrictly. The issue has put the spotlight on Grok amid global scrutinyofgenerativeAIsystems over content moderation, data safetyandthemisuseoftoolsto create non-consensual sexually explicitmaterial.Xhasfacedcriticism in multiple jurisdictions over user prompts that enable digitalundressingandsynthetic imagemanipulation. Continued on Page 13 THE DOMINANCE OF FAANG ( Facebook, Amazon, Apple, Netflix and Google) in the technology job market is weakening, according to compensation data from Levels.fyi. PAGE 4 GlobalVC funds expand India teams INTERNATIONALVC FUNDS are increasinghiringinIndiaasoverseas capital flows stabilise aftera prolongedslowdown,withglobal investors seeking stronger ongroundpresence. PAGE 4 PRIVATE CREDIT IS gaining prominence in the residential real estate market as a slowdown in housing sales and tighter lending norms are pushing developers to rely more on structured debt from non-bank lenders. Developersareincreasingly turning to private credit as banks and non-banking financial companies remain constrained in funding land purchases,pre-construction costs and premium payments, industry executives said. Privatecreditreferstolendingby specialised funds that provide structureddebtdirectlytoborrowers,typicallyathighercosts but with greater flexibility than traditional loans. On an average, around $1 billion of private credit deals are concluded in real estate annually, with 60-70% directed towards residential projects,Vivek Rathi, national director–research at Knight Frank India, said. He expects annualvolumes to rise to $2-3 billionashousingsalesmoderate and customer advances CREDIT SHIFT ■ Structureddebtfrom nonbanklendersfillsgapsin landandconstructionfinancing ■ Around 1 bn $ of private credit deals are concluded in real estate annually ■ Majority of private credit funds are directed towards residential real estate projects decline. “Private credit goes largely to residential as it is flexible. But developers don't wish to hold it as it is expensive.Oncethesalescyclestarts, they retire it quickly,” Rathi said. Pricing on such deals ranges from 14% to 30%, depending on the use of funds. The increased reliance on debt comes against the backdropofaslowdownindemand. Continued on Page 13 Devyani-Sapphire merger creates a $1 billion challenger in India’s fast-food market Jubilant Foodworks’QSRcrown faces first real test VIVEAT SUSAN PINTO Mumbai, January 11 FOR YEARS, JUBILANT FoodWorks has towered over India’s quick-service restaurant (QSR) market.The operator of Domino’s Pizza and Dunkin’Donuts built its dominance on speed, scale and relentless execution, opening a yawning gap with rivals. Withaconsolidatedtopline of `8,142 crore in FY25, analysts expect revenues to cross `9,200 crore in FY26, alongside a store network approaching 4,000. That long-unquestioned leadership,however,is nowset for its toughest challenge yet. The triggeris the consolidation announced between the ON THE MENU Jubilant FoodWords: SSG over the last 4 quarters (in %; y-o-y) Q4FY25 12.1 Q1FY26 11.6 Q2FY26 5 Westlife Sapphire FoodWorld Foods (KFC) (McDonald's) 9.1 Q3FY26* Rest of QSRs: SSG over the last three quarters (in %; y-o-y) Sapphire Foods (Pizza Hut) Q4FY25 Restaurant Brands Asia (Burger) Q1FY26 Q2FY26 Devyani Devyani International International (KFC) (Pizza Hut) *Based on latest quarterly update **excluding leap year impact; SSG is 0.7% when leap year impact included; SSG stands for same-store sales growth; Source: Company results Indian franchisees of Yum! Brands — Devyani International and Sapphire Foods — best known for running KFC andPizzaHutoutlets.Together, theDevyani-Sapphirecombine willemergeonascalecomparable to Jubilant, potentially reshapingcompetitivedynamics in the domestic QSRspace. -4.1 INDIGO IS OFFERING Captains and First Officers who join by February 10 attractive incentives, including joining bonuses up to `50 lakh, guaranteed flying hours, favourable home bases, and Employee Stock Ownership Plans (ESOPs), as the airline strives to hire enough pilots to meet DGCA’s updated rest duty guidelines, reports Yaruqhullah Khan. ■ PAGE 5 Continued on Page 13 -4.2 IndiGo offers steep bonuses, perks to lure pilots ment funds which typically enjoy tax exemption in their home jurisdictions. Currently, pension funds and sovereign wealth funds (SWFs) benefit from 100% tax exemption under Section 10 (23FE) of the Income Tax Act, 1961 in respect of specified infrastructure-related income. 1 INDIA’S M&A LANDSCAPE is shifting toward public companies. In 2025, listed companies made up 30% of all deals, up from 23%, including eight of the 14 largest transactions worth $39.5 billion, highlighting their dominance in major deals, reports Mahesh Nayak. ■ PAGE 9 noticed that FPIs continue to grossly underutilise the availableinvestmentlimitsinmany segments of the market like corporate debt. One of the proposals being actively considered is to give tax-free status forlisted equity investments by long-term institutional investors such as pension funds and endow- -4.2 Listed companies power India’s M&A boom in 2005 privy to the discussions on the matter. The move is in the wake of foreign portfolio investors (FPIs) pulling out $19 billion from Indian equities in 2025, even as domestic savings, the key source of capital creation, are at a multi-decade low of around 30% of GDP. Policymakers have also -0.7 ACING THE D2C PLAYBOOK Will these brands shake up 2026? KULDEEP SINGH New Delhi, January 11 rupee depreciation & 12.5% LTCG cited as major reasons for sustained FPI outflows -6.1 BRANDWAGON PAGE 11 ■ High valuations, (12.5%) & STCG (20%) taxes apply to most foreign funds, except select SWFs 2.8 AIRTRAVELSEES 30% DIGI YATRAADOPTIONS PAGE 4 ■ Current LTCG maybe relaxed 5.1 PFRDASEEKSTAX PARITY FOR NPS PAYOUTS PAGE 3 ● Investment limits 2.6 » INSIDE « ■ Proposal under consideration: tax-free status for listed equity investments by longterm pension & endowment funds 2026-27 Further,Abu Dhabi Investment Authority (ADIA) and the Public Investment Fund (PIF) of Saudi Arabia, along with theirwholly-owned subsidiaries are eligible for tax exemptions on income from dividends,interest,and longterm capital gains (LTCG). However, equity market investments by other funds, including other SWFs, continue to be taxed – long-term capital gains (LTCG) at 12.5% and short-term gains (STCG) at 20%. “These funds typically deploy patient capital...,a calibrated extension of tax benefits to them could beviewed as a targeted and fiscallyprudent approach,” said Amit Maheshwari, managing partner at AKM Global. Another proposal is to tweak the LTCG and STCG rates,but this would have substantial revenue implications. -8 The Centre is exploring measures to meet additional FY26 food subsidy needs beyond the `2.03 lakh-cr budget, including small outlay increases, boosting open market sales and using state support funds, writes Sandip Das BUDGET from Indian equities in 2025 amid multidecade low domestic savings (~30% of GDP) -8 CENTRE MULLS TACKLING FOOD SUBSIDY SPIKE $19 billion announce targeted tax concessions & eased norms in FY27 Budget to revive FPI inflows into Indian equities RUN-UP TO THE THE GOVERNMENT MAY exploretargetedmeasuresinthe BudgetforFY27toboostforeign portfolio inflows into Indian equitiesandstabilisemarkets. The steps mayinclude specific tax concessions and a calibrated easing of some macro prudential norms,where they have proven to be barriers to higher capital inflows into the country, according to people ■ FPIs withdrew 1 PAGE 2 ■ Govt may 0 ECONOMY PORTFOLIO RESET -3 FOUR MAJOR banks—Bank of Baroda, RBLBank,Yes Bank, and State Bank of India—have approached the CIC, opposing disclosure of defaulters, NPAs, penalties, and inspection reports, even as RBI says these records must be disclosed. PTI FPIs likely to get sweeteners -1 RBI SEEKS FULL NPAINFO; 4 BIG BANKS UPINARMS 0.5 PAGE 9 -2.8 MARKETS LTCGTAXWAIVER LIKELYFOR PENSIONAND ENDOWMENTFUNDS 1.7** IN THE NEWS “Competition is at its best when it happens between two equal rivals,”said Ankur Bisen, seniorpartneratTheKnowledge Company(formerlyTechnopak). “Wemayjustseethathappening inIndia’sQSRmarket.” The intent behind the deal was spelt out bluntly by Ravi Jaipuria, non-executive chair- man of Devyani International, who described the merger as less about two similar businesses coming together and moreaboutbuilding“oneofthe largestF&BplatformsinIndia”. Under the approved terms, Sapphire shareholders will receive 177 Devyani shares for every 100 shares held. A secondary sale of an 18.5% stake in Sapphire to Devyani promoter entity Arctic Internationalwill precede the merger. Once completed — overthe next 12-15 months — Jaipuria expectsthecombinedentityto cross $1 billion (about `8,600 crore) in annual revenues. The numbers already point to heft. In FY25, Devyani reported consolidated revenues of `4,951 crore, while HYDERABAD Sapphireclocked`2,882crore. Post-merger, the group will operatemorethan3,000stores across India and Sri Lanka, unlockingsynergiesacrossprocurement, supply chains, marketing,technology and human resources. Management has guided for annual synergies of `210-225 crore within two years, alongside faster KFC expansion and a renewed push to strengthen Pizza Hut. For Jubilant,the consolidation raises uncomfortable questions.Analysts believe the market leader may respond by exploring acquisitions — potentially of local or regional pizza chains — to preserve its lead as rivals close in. Continued on Page 13