Read Weekly India Business News 15th to 19th October 2018:
– Trump administration is planning to do some more changes in US H-1B visa guidelines by January 2019, which may hit Indian IT and related companies.
– Amazon India has disputed the report of RedSeer Consulting claiming that Flipkart received majority of orders during last week’s festive season sales.
– Reliance Industries is planning to replicate Reliance Jio model for its Jio broadband services offering aggressive tariffs and a gamut of product offerings. This may disrupt India’s broadband and cable market.
– Tata Sons is said to be in talks to buy a controlling stake in Jet Airways with management control. The firm is asking for 26% initially and another 26% via an open offer later.
– Koninklijke DSM NV, the Dutch specialty chemicals maker, is looking to pick up assets in India. The group has earmarked $3.5 billion to spend on acquisitions across the globe.
– Huawei will start manufacturing mobile phones in India from next year. The firm has plans to open 1000 exclusive stores across various states.
– Amway has taken Flipkart to court for illegally selling their products on its platform. It is mandatory for e-commerce companies to seek prior approval from direct-selling companies before listing their products.
– ICICI Bank has moved a US court against 11 executives of diamond company Shrenuj and Co. for allegedly defrauding the bank to recover around ₹88.50 crore. Shrenuj is currently undergoing insolvency resolution and diverted funds through its US subsidiary and shell companies in UAE.
– Piramal Enterprises is said to be exploring the sale of its contract pharmaceutical business for about $1 billion.
– Flipkart has claimed to have over 70% market share in Indian e-commerce market during the festive season sale and is said to have sold 3 million smartphones on October 11 itself.
– Saudi Arabia is looking to partner with India for developing complementary supply chains and deploy funds. Lightsource BP is also interested in setting up solar power projects through partnership with National Investment and Infrastructure Fund of India.
– Motilal Oswal’s PE arm shall invest Rs.200 crore in Happy Forgings, the auto parts maker, for a significant minority stake. The funds will be used to accelerate growth and expand into new products.
– Reliance Industries is in advance talks to buy Hathway Cable, DEN Network and may own around 25% in each of the companies.
– Dr Reddy’s Laboratories has entered into a definitive agreement for sale of its API manufacturing business unit in Hyderabad to Therapiva. The financials, however, have not been disclosed.
– Jet Airways, struggling with a severe cash crunch, has failed to give any firm date for payment of September salary to its senior management, pilots and engineers. The airlines has been repeatedly delaying payment of salaries of its employees.
– Cloudtail, the largest seller on Amazon India, has reported revenue of around Rs.7,149 crores in 2017-18, up by 27% compared to around Rs.5,631 crore in 2016-17. However, the growth in 2016-17 was 300%. Cloudtail is a JV between Amazon and Narayana Murthy’s family office.
– As per a report by RedSeer Consulting, online sales of large appliances in India has doubled between 2015 and 2017 from $430 million to $900 million.
– Srinivasa Farms, a poultry company, is planning to set up a family office under Srinivasa Hatcheries and start investing in startups in sectors like processed foods, retail and agri-business.
– Tata Steel is planning to scale up recently acquired Bhushan Steel plant’s capacity to 8.3mtpa from 5.6mtpa.
– Xiaomi is planning to enter into consumer finance and B-2-B lending through NBFC. It aims to offer loans to consumers for buying electronic products as also give credit to firms for asset acquisition.
Policies & Practices:
– To consolidate CSR initiatives of Indian firms, the government is launching a portal so firms can pool their resources and align social work with key government initiatives.
– Sebi has directed Singh brothers and eight other entities to pay ₹403 crore with interest to Fortis Healthcare. These entities were used for fraudulently diverting funds from Fortis Healthcare.
– UIDAI has asked mutual funds industry to discontinue using Aadhaar-based authentication to complete KYC norms and submit an exit plan by 20th October.
– Banks have requested RBI to allow them to use Aadhar for KYC.
– IT department is working on a new policy to reward taxpayers who are not only honest but also consistent in filing ITRs. The rewards could include priority access at airports and railway stations.
– PSU banks have requested the Government for setting up an Oversight Panel to examine allegations made against management before any formal action is taken.
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M&As and tie-ups:
– Treebo and FabHotels are in early stage of discussions for a merger. Both of them had been trying to get fresh funding but could not succeed due to fear in investors of competing with Oyo having SoftBank investment.
– KKR and Co., a PE fund, is in talks to acquire a controlling stake in Aadhar Housing Finance. Aadhar Housing is part of Wadhawan Global Capital having control of Dewan Housing.
– Reliance Industrial Investments has acquired a 12.7 percent stake in SkyTran Inc, the US-based company developing modern transport modes.
– Tata Motors is considering tie-ups with Ola and Uber with new shared mobility platform. It has also created a separate division for exploring tapping its passenger and commercial vehicles for offering shared mobility solutions.
– Foodpanda has acquired Holachef Hospitality, a food-tech startup, for an undisclosed sum. The acquisition marks its entry into cloud kitchens.
– DailyNinja has acquired WakeupBasket which provides early morning delivery of household essentials to around 2500 customers daily. The deal amount has not been disclosed.
Start-up world, funds and fundings
– Universal Sportsbiz, a fashion startup backed by Sachin Tendulkar, has raised $13.5 million in a Series E round of funding led by Accel Partners, its existing investor at a valuation of $160 million.
– As per a report of Preqin, the alternative asset data tracker, PE funds across the globe collectively raised capital of $121 billion in the third quarter of 2018, higher than the previous quarter.
– MyGate, providing security solutions to gated societies thru an app, has raised Rs.65 crore in Series A round of funding led by Prime Venture Partners. MyGate currently provides services to around 1,000 gated communities in Pune, Bengaluru and Hyderabad.
– Kymco, Taiwan’s electric two-wheelers maker, will invest $65 million in Twenty Two Motors, Indian electric scooter startup over the next three years.
– Leap Green Energy, the renewable energy company, has appointed Barclays Plc to help the firm in raising $300-400 million. The firm is looking for funds for growing its portfolio.
– Entrepreneur First, the London-based accelerator, has allocated $20 million for building deep technology ventures in India over the next three years. It has launched a six-month programme in Bengaluru to help build 50 deep-tech startups focussed on AI, ML and robotics and other technologies.
– Sequoia Capital has split its India team into Venture and Growth. Venture team will be headed by Mohit Bhatnagar while GV Ravishankar will lead the Growth team. The firm has invested in companies like Oyo, Zomato, MuSigma.
– National Investment and Infrastructure Fund of India has invested Rs.660 crore in HDFC Capital’s affordable housing projects fund. The fund offers mezzanine finance to developers of mid-income and affordable urban housing projects.
– Amazon is said to be in talks with Future Group for acquiring a stake. The deal size may be around Rs.2000 Crores for a 10% stake.
– TravelTriangle has raised $3 million in venture debt from InnoVen Capital. Funds will be used for for expansion and strengthening outbound-based operations. It has so far raised $32 million in four funding rounds.
– KKR & Co. is evaluating buyouts in the infrastructure sector in India as also investing in IL&FS projects. The fund, which completed raising for $7.4 billion fund last month, is building an infrastructure team in India.
Updates on ongoing cases:
Yes Bank – Rana Kapoor, the Yes Bank CEO, met the other major shareholders Madhu Kapur, her daughter Shagun Gogia and Gaurav Kapur and proposed to combine their stakes and form a joint promoter group. This will help both sides to name directors on the Board of the Bank jointly. The move seems to be the result of RBI’s refusal to extend the tenure of Rana Kapoor.
– The Board of Yes Bank has recommended not to raise the salary of Rana Kapoor for 2017-18. It has also decided to get back bonuses paid to him for two years.
– Air India – – The Government has given Rs.1000 Crore to Air India from National Small Savings Fund. Air India will now avail its unused sovereign guarantee to raise another Rs.500 Crore as loan next week.
Bhushan Power case – Lenders of Bhushan Power are said to be backing JSW’s offer of $2.7 billion. JSW Steel has bid higher than Tata Steel and Liberty House Group.
– IL&FS update – IL&FS has secured moratorium against all creditor actions which prohibits initiation or continuation of any legal proceedings and enforcement of security over assets of IL&FS and group companies.
– Vijay Mallya case – Grant Thornton, the global tax and advisory firm, is under CBI scanner for allegedly submitting highly inflated and exaggerated valuation report of Kingfisher Airlines.
– Essar Steel update:
– Numetal Mauritius may not bid for Essar Steel due to non-settlement of outstanding dues of associated companies.
– JSW may opt out of buying Essar Steel if it is able to buy Bhushan Power. Creditors of Bhushan Power are in favour of JSW Steel’s offer.
– ArcelorMittal shall pay Rs.7,469 crore to creditors of Uttam Galva Steels and KSS Petron to become eligible for bidding for bankrupt Essar Steel.
– PNB fraud case:
– Enforcement Directorate has seized assets of around Rs.218 crore of Mehul Choksi and others.
– Chanda Kochhar has sought one month’s time to appear before Sebi for a personal hearing. She was issued a show-cause notice by Sebi for alleged violation of the code of conduct and had to appear before it on 16th Oct.
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– Paytm Money has appointed Cyrus Khambata, former ED of Central Depository Services to its board of directors. Khambata with experience of over four decades is considered an industry veteran in capital markets.
– RBI has approved Sandeep Bakhshi’s appointment as MD & CEO of ICICI bank for three years.
– Infosys has agreed to pay Rs 121.7 million pending severance package to Rajiv Bansal, its former CFO, as directed by the arbitration tribunal. He had quit the firm in October 2015 due to differences with the management.
– Gunjan Soni, Head of Jabong and Ananya Tripath, CSO Myntra have resigned. Gunjan may reportedly join Zalora, a Singapore based online fashion firm while Ananya may join KKR as operating partner.
– Manu Wadhwa, the first women HR head of Coca-Cola India, has stepped down just after two years of taking over the charge. She had moved from American Express where she spent nine years.
News credit: Livemint, Economic Times, Business Standard