Valuation to too many demands: Why Snapdeal-Flipkart merger is dragging

The Snapdeal-Flipkart merger has turned into the most complex acquisition negotiation

Indian Companies News : In the universe of Snapdeal and Flipkart everyone is hopeful, but of different things. Japanese telecom giant SoftBank and US hedge fund major Tiger Global are hopeful of merging the two e-commerce players. Snapdeal’s board members, such as Nexus Venture Capital, and smaller shareholders are hopeful of a better-valued exit, and the co-founders Kunal Bahl and Rohit Bansal are hopeful of holding on to their company.

The clash of hopes is what has kept the ‘biggest consolidation in Indian e-commerce history’ from becoming a reality. After five months of discussions, the Snapdeal-Flipkart merger has turned into the most complex acquisition negotiation.

Stonewalling deal

In his last email to FreeCharge employees as the top boss, Bahl, buoyed by the sale of the mobile wallet to Axis Bank, said the deal provides them the necessary boost in resources to continue the journey towards building an e-commerce platform.

Axis Bank last week announced it had bought the mobile payments wallet provider from Snapdeal for Rs 385 crore ($60 million).

According to sources close to Snapdeal, the co-founders are actively working towards a ‘Plan B’ and have taken into confidence most of their senior management. According to sources, the two have been fighting SoftBank, the biggest investor in the company, 'tooth and nail’ to prevent the deal from happening.

“They are going to fight the deal till they can. The kind of U-turn SoftBank took last year has left them flabbergasted. First SoftBank asked them to rebrand, spend money on marketing, promising all along that more investments are on way and then they suddenly left them high and dry.(more)

Kalanithi Maran vs Ajay Singh: Blow for SpiceJet as SC dismisses petition

Had earlier moved a confidence motion in the Bihar Assembly to prove the majority of his new govt

Indian Companies News : In a blow to Ajay Singh-led low-cost carrier (LCC) SpiceJet, the Supreme Court on Friday dismissed its appeal challenging the Delhi High Court order that directed it to deposit Rs 529 crore in relation to a share-transfer dispute with media baron Kalanithi Maran.

The Bench headed by Justice Rohinton Nariman heard the counsel to Ajay Singh, who now controls SpiceJet, as well as Abhishek Singhvi, who was appearing for Maran, before rejecting the appeal. SpiceJet is now obliged to deposit Rs 250 crore in cash and Rs 329 in bank guarantees. The payment schedule was to start in August.

According to SpiceJet, the high court order was not only wrong in law but harsh as it amounted to infliction of 'civil death' on the company. It pleaded that the order would have an effect of undoing all efforts of the new management and saddle the company with huge liabilities with fatal consequences.

ALSO READ: Who owns SpiceJet? Kalanithi Maran claims deal with Ajay Singh is dead

Maran, the former promoter of the airline, had transferred his 58.46 per cent stake in the airline to Singh in February 2015, changing the ownership of the LCC. Under the agreement, Maran was to receive redeemable warrants in return for Rs 690 crore spent on SpiceJet towards operating costs and debt payment. However, this allegedly did not happen because the necessary approvals were not obtained from the Securities and Exchange Board of India.

SpiceJet’s petition said the liabilities were over Rs 2,200 crore, which was substantially more than the amount purportedly brought in by Maran and KAL Airways. This amount was, in fact, utilised for the purpose it was brought in. "It is with great effort, perseverance and skill that the company under its new management has been able to revive itself and come out from the severe financial strain that it was facing under the management of Maran and others," the appeal stated.

ALSO READ: Share transfer dispute: SpiceJet must deposit Rs 579 cr, Delhi HC rules

In separate proceedings, Maran has moved the arbitration tribunal demanding compensation from SpiceJet for causing losses and failing to honour the agreement.

As Uber reels under crises, Ola in talks with Tencent to raise $400 mn

Ola is shoring up on investments as it dabbles with the idea of using electric cars as cabs

Indian Companies News : India’s largest taxi aggregator Ola is in talks to raise $400 million in fresh funding from Chinese Internet behemoth Tencent as it looks to quickly expand its service in the country at a time when its global rival Uber is reeling under multiple crises.

Ola is shoring up on investments as it dabbles with the idea of using electric cars as cabs and is increasingly relying on its in-house leasing unit to grow the base of partners on its platform. The company has raised close to $400 million in funding since November when Softbank led a $230 million investment in the company at a $3.5 billion valuation.

ALSO READ: Mr Gadkari, allowing driverless cars will generate more high-paying jobs

Sources told Business Standard that Ola was indeed in talks with Tencent but nothing had been finalised just yet. The Times of India and Economic Times newspapers first reported about the two parties being in talks on Thursday, citing sources that said the round would push Ola’s valuation to over $4 billion.

Globally, Tencent is part of the anti-Uber cartel through its backing of rivals such as Didi Chuxing in China, Lyft in the US, and Go-Jek in South East Asia. The company, in many cases, has invested alongside rival Alibaba and its close ally Softbank, which incidentally is the largest investor in Ola today.

At a time when Softbank is rumoured to be in talks to pick up a small but significant share in Uber, which is valued at $69 billion, it might make sense for Ola to bring in other strong investors. Ola is Softbank’s second-largest bet in India after e-commerce firm Snapdeal, which the Japanese investor is now pushing to sell to its rival Flipkart for a song.

ALSO READ: Snapdeal to seek shareholders view before giving final nod to Flipkart

Jio effect: Vodafone offers 70GB 4G data, unlimited on-net calls for Rs 244

The Rs 244 recharge pack is valid for new users only in the form of first recharge coupon (FRC)

Vodafone India is now offering 70 GB high-speed 4G or 3G data combined with unlimited calls to Vodafone numbers in a new recharge pack of Rs 244.

The Rs 244 recharge pack is valid for new users only in the form of first recharge coupon (FRC). On recharging the new Vodafone number with Rs 244, user gets 1 GB data every day for 70 days. Also, the plan offers unlimited free calls within Vodafone network valid for 70 days.

For existing customers, the Rs 244 recharge pack comes with similar benefits – 1 GB data every day and unlimited calls within Vodafone network – but with 35 days validity only. New users can also avail the FRC benefit just once and on the subsequent recharges they also get the benefits valid for 35 days only.

Indian Companies News : Recently, the company revised other recharge plans with more data benefits and extended validity period. In Rs 346 plan, which comes with 56 days validity, the company is offering 1 GB data per day and 300 minutes of free voice calls every day.

Reliance Jio also added new plans in its portfolio and revised its older plans recently as well. Here is what Reliance Jio is offering in the new tariff plans:

Rs 399 plan: Under the new Rs 399, the company offers 1 GB data per day for 84 days to Prime Subscribers. The plan is similar to the Rs 309 one that the company offered under its Dhana Dhan offer.

Rs 349 plan: Under Jio's Rs 349 plan, you get 20 GB data for a period of over 56 days (almost 2 months). No data limit applies.

On the other hand, the telecom major Bharti Airtel also revised its strategy to stay competitive and launched data roll over initiative that guarantees roll over unused mobile data to the next month. This means that their mobile data will never be wasted. The data rollover feature will be applicable from August 1, 2017, onwards.

ALSO READ: Airtel vs Reliance Jio data offers: All the free schemes that are on offer

Jio 4G handset is virtually free for users; what's the game plan?

This handset could rattle older rivals, but experts are sceptical about mass conversions for Jio

Indian Companies News : In a move that may rattle its older rivals, already destabilised by some of the disruptive plans and freebies offered by it in the past months, Mukesh Ambani-backed Reliance Jio on Friday unveiled its ultra-low-cost 4G feature phone.

However, the success of the new Reliance Jio mobile phone would be pegged on 2G phone customers doubling their present monthly bill on mobile services.

For that to happen, the country’s average revenue per user (Arpu) – currently at Rs 80 for feature phone users and pegged at around Rs 104 overall – will have to go up substantially.

To enable that, Jio is offering users an attractive preposition – unlimited calls (earlier the feature phone users had only limited call time), as well as unlimited data with a cap of 0.5 GB per day (earlier they had no or minimal data usage) on a Rs 153 pack. Also, Jio is offering applications that include videos as well as live TV and YouTube, which will only help customers move to higher data usage and, thereby, larger packs.

In fact, the company has also ensured that customers will not have to pay for the new handset at all if they commit to Jio for the long haul. Reliance Jio is offering the device at a deposit of Rs 1,500, which will be paid pack after three years. While this helps the company garner a huge amount of money upfront, the effective cost for the customer is only the notional interest that he would forgo on an amount of Rs 1,500, which is negligible of course.

Unlike in the case of the earlier Monsoon Hungama plan (phone bundled with services at Rs 501) offered in 2003 by the erstwhile Reliance Infocomm (now Reliance Communications), there will be no risk of the customer running away with the phone this time. The user will remain sticky for at least three years, as not only is the device locked to Jio, but he also needs to continue using Jio for availing of money back. Read more

Move over motorcycles, scooters are way more in demand these days

Scooters captured more than one-third of domestic two wheeler market for first time in over a decade

Indian Companies News : Think about the slowest growing segment of Indian automobile industry. It is not the three-wheelers or the commercial vehicles. It is the motorcycle, the biggest segment of the industry by volume, marked by top players like Hero MotoCorp, Bajaj Auto and Honda.

Society of Indian Automobile Manufacturers (Siam) data shows that the Indian motorcycle market has grown by less than six per cent cumulatively since FY14. In the same period, domestic passenger vehicle market expanded by 20 per cent, commercial vehicles grew by 13 per cent and three-wheelers by 12 per cent.

The volume of motorcycles, the largest segment by units sold, has remained stuck between 10 and 11 million units a year in last four years. While two consecutive deficient monsoons (2014 and 2015) were a factor, the larger impact is coming from a shift towards scooters. If we include scooters, the two wheeler market shows growth of 19 per cent between FY14 and FY17. This implies that the all the growth is coming from scooters.

Domestic scooter market has expanded from 3.6 million units in FY14 to 5.6 million units in FY17, growing 55 per cent. However, motorcycle volumes grew only six per cent from 10.48 million units to 11.09 million units in the specified period. This is also visible in the volumes sold by top players. Hero MotoCorp, the country’s largest two-wheeler maker, had sold 5.42 million motorcycles in FY14 and its domestic sales stood at 5.69 million units in FY17, showing a cumulative growth of five per cent.

Bajaj Auto, the second biggest player in the domestic motorcycle market, had sold 2.09 million units in FY14 and sales dipped marginally to 2 million units in FY17. 

“There has been hardly any growth in motorcycle sales for the last four years,” said the Pune headquartered company in its FY17 annual report. 

The lack of growth to some extent is an outcome of two consecutive years of deficit monsoon (2014 and 2015) which impacted sentiments in rural markets, which accounts for almost half of motorcycle sales. At the same time, there is a shift towards scooters in many urban markets due to the convenience it offers.

UDAN scheme: TruJet to add 10 destinations with 7 aircraft

The airline started operations in July 2015, currently catering to 7 destinations with 16 flights

Hyderabad-based TruJet, one of the private airlines, which has bagged travel routes under UDAN (Ude Desh ka Aam Naagrik) scheme is planning to add 10 destinations with seven aircraft.

The airline started operations in July 2015 and is currently catering to seven destinations with 16 flights.

Antara Dey, spokesperson of the airline said that over the next two years, the airline is planning to add 10 destinations with seven aircraft. Of this, five will be under UDAN scheme, including Mysore, Bidar, Hosur, Salem and Vidya Nagar.

Alliance Air, the regional arm of Air India, SpiceJet and TruJet have won rights to operate flights under the government's regional air connectivity scheme, which seeks to give people from Tier-II and Tier-III cities a chance to fly at a ticket price of Rs 2,500.

Company News : Airlines operating under the UDAN scheme have to ensure that the prices of at least 50 per cent of the seats on their flights are available at a price of Rs 2,500 each for an hour of flying.

The Centre and state will provide viability gap funding for the airlines operating on the UDAN routes to ensure profitability of these flights.

Trujet is planning to deploy ATR72-500/600 with a 72-seat capacity.

Dey, mentioned earlier, said that the airline is looking at 77 per cent PLF (passenger load factor) and expects to make money in a year.

She added that the airline is funded directly by promoters and do not have any plans immediately to look at external funding. (more)

At Reliance AGM, Jio financials, 4G feature phone would be the focus

Street to also watch for details on home-to-fibre, fuel and organised retail segments

In September last year, Reliance Industries (RIL) Chairman Mukesh Ambani shared the roll-out plan for Reliance Jio’s telecom services at the company’s annual general meeting (AGM). This Friday, shareholders and investors will look for details on revenue generation from these services.

RIL is slated to announce its earnings for the April-June quarter (Q1) on Thursday and hold its AGM the day after. Analysts expect the focus, both in terms of the June quarter numbers and the AGM, would be on the company’s telecom business.

The details are important and will reflect on investor sentiment, which is on the rise. On Friday, the RIL stock scaled to a nine-year high.

Company News : While Jio started offering its services in September last year, these services have largely been provided free till March and continue to be offered at discounted prices. Among other details, analysts and shareholders would look for data on revenue generation and the profitability timeline for this business. “Telecom would be the topmost thing to watch, as details on other business like the oil and gas segment have been already spelled out,” said an analyst with a domestic brokerage firm.

Last week, the company extended its promo offers for Jio services, adding to scepticism on any meaningful revenue addition in the current financial year. “We see downside risk to our Jio financial year 2017-18 revenue estimate of $2.7 billion, due to extension of the promotional offers. We are unsure if our FY18 revenue estimate for Jio holds any weight, given that Jio has been capitalising its revenue/expenses thus far,” a Morgan Stanley report dated July 11, said.

In addition to financial details, analysts and investors will look out for official comments on plans for low-cost 4G phones. “While every AGM has the usual expectations on bonus issue (the previous bonus issue was in FY 2009-10), expectations this time are high on another large announcement in telecom, especially 4G feature phones,” analysts with JPMorgan wrote in a report dated July 12. Read more

Presidential elections 2017: NDA to pick its VP candidate today

Voting for the presidential election is on Monday, and for vice-presidential election is August 5

The Bharatiya Janata Party (BJP) parliamentary board is slated to meet on Monday to pick the vice-presidential candidate of the National Democratic Alliance (NDA).

Today, Opposition presidential candidate Meira Kumar and vice-presidential candidate Gopalkrishna Gandhi met members of political parties supporting their respective candidatures.

Addressing the members, both Kumar and Gopalkrishna Gandhi stressed that while electoral college numbers are stacked against the Opposition but the battle was ideological and has brought together political parties from Kashmir to Kanyakumari.

Congress president Sonia Gandhi said the Constitution and the law of the land were “sadly under siege today”. “In these contests, the numbers may be against us. But the battle must be fought and fought hard. We cannot and must not let India be hostage to those who wish to impose upon it a narrow-minded, divisive and communal vision,” she said.

The voting for the presidential elections 2017 is on Monday, while that for vice-presidential election is on August 5.

The counting of votes for the presidential election is on July 20, and the new president will take the oath of office on July 25.

The BJP-led NDA was to announce its candidate on Sunday, but this has been postponed to Monday. Sources claim Manipur Governor Najma Heptulla and Information and Broadcasting Minister M Venkaiah Naidu are two of the aspirants. However, some consider Maharashtra Governor C Vidyasagar Rao as the frontrunner.

But just as the name of NDA’s candidate Ram Nath Kovind was a surprise to many, including people in the NDA, so could be that of its vice-presidential candidate.

July 18 is the last day for filing of nominations for the vice-presidential election. Opposition candidate Gopalkrishna Gandhi is likely to file his nomination papers on Monday.

The Opposition presidential candidate is being supported by 17 political parties, minus the Janata Dal (United). However, the JD (U) is supporting the Opposition’s vice-presidential candidate.

The NDA’s presidential and vice-presidential candidates are expected to win the polls comfortably.

Time not ripe for Prez poll but will support Opposition's Meira Kumar: AAP

BJP's Ram Nath Kovind to contest the election that is scheduled to take place on July 17

The AAP on Wednesday announced that it would support Meira Kumar, the opposition nominee for the presidential poll after the latter "appealed" to Chief Minister Arvind Kejriwal to back her candidature.

AAP leader Sanjay Singh said the decision to support Kumar was taken by the Political Affairs Committee (PAC), the party's apex decision-making body, to "strengthen democracy".

"AAP will support joint opposition's presidential candidate Meira Kumar " senior party leader Ashutosh posted on Twitter.

On supporting Gopalkrishna Gandhi, the opposition's candidate for the vice presidential poll, Ashutosh said the PAC will discuss the issue later.

"We believe that a time should not have come for voting for a crucial post like the president. All political parties should have come together and put up a consensus candidate.

"Nevertheless, an election is taking place to choose the president. In such a scenario, the Aam Aadmi Party supports the joint opposition candidate," Singh said.

"Kumar had called up AAP's national convenor Arvind Kejriwal seeking support," Singh added.

The presidential election is taking place on July 17. Ram Nath Kovind has been fielded by the ruling BJP and its allies.

Some opposition parties, including the JD(U), Telangana Rashtra Samithi, the YSR Congress and the Biju Janta Dal, have extended support to Kovind's candidature.

The Congress did not invite the AAP when it had held discussions with other opposition parties on the matter.

An AAP leader, who did not want to be named, said the party was "fine" with keeping a distance from the Congress.

The AAP is the principal opposition party in Punjab.

The four-year-old party has 85 MLAs and four MPs, which translates into around 9,000 votes in the electoral college for the presidential election.

Indian techies are taking these online courses to get reskilled amid layoffs

Building front-end and stitching it with back-end is a task that IT firms are learning the hard way

Infosys, India’s second largest software exporter this year, has set a bet for graduates who are given campus offers. A graduate is asked to pick a paid course on front-end development (of website or an app) on Udacity, the online technology education provider. The person must get a nano degree or pass the course before being put on training at its Mysuru campus. Once he or she gets placed after training, Infosys pays back the student the course fee on Udacity.

With this, Infosys  is ensuring that it gets trained engineers in thousands who are ready to be put on digital projects — a segment that is disrupting the company and the Indian IT services industry. For a perspective, business from newer digital technologies is growing at 25 per cent, while legacy business is shrinking at 2.5 per cent, according to Everest Group, a global technology consultancy.

Traditionally, Infosys and its peers such as Tata Consultancy Services, Wipro and HCL Technologies have built applications for its customers that can be accessed on a personal computer. This business is slowing and the clients now want these applications to be accessed on smartphones with a smooth customer experiece that comes while accessing Facebook app. Such expectations, bring in new challenges such as smaller form factor, better design and applications hosted on the cloud for IT firms. This also calls for addressing patchy internet access and ensuring that the network is secure.

Indian firms have mastered expertise in developing and maintaining back-end applications. A majority of work that can be repeatable is being automated. However, building the front-end and stitching it with the back-end is a task Indian IT companiesNews  are learning.

Putting in hundreds of fresh minds with the new skills is a good move. India’s top five technology firms have over the past two years undertaken a massive exercise of reskilling over half a million engineers in newer technologies. “The need to retrain the workforce is further amplified with the automation of the old work procesess. Hence, companies need new skills. In addition to different technical skills digital also requires employees to acquire new soft skills. All this is being addressed by investing in training in design thinking and agile development methodologies,” says Peter Bendor-Samuel, founder and chief executive officer of Everest Group, a global outsourcing advisory.

Presidential election was never contested on ideology before: Meira Kumar

Kumar is in Chhattisgarh as part of her campaign for the presidential election

The United Progressive Alliance (UPA) presidential candidate Meira Kumar had termed the ensuing election as “historic” as it was contested on ideology.

“Never before had the presidential election in India been contested on ideology,” she said after meeting the Congress MPs and MLAs in Raipur on Wednesday evening.

Currently, Kumar is in Chhattisgarh as part of her campaign for the presidential election.

She underlined that secularism was under threat and the atrocities on Dalits and tribals had recently increased across the country. “To raise my voice against the atrocities, I am contesting the election,” the Opposition candidate for the top constitutional post said.

Meira kumar said that for the first time 17 parties have decided to contest the election together on an ideology, adding, "This election would make a place in history and is an opportunity to defeat the ideology working on caste and religion."

“I have written to the MLAs and MPs of all the parties and urged them to vote according to their conscience,” she said.

The former Lok Sabha speaker said casteism should be “buried in the ground”. When asked about making the presidential election a Dalit versus Dalit issue, she remarked that she was happy as well as disappointed. “It is sad that we are talking of caste even in the 21st Century,” Meira added.