QBiz: Axis Bank Set to Buy FreeCharge; Swiggy Denies Fraud Charges
Here’s a look at the important business stories from the previous day.
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1. Axis Bank Set to Buy FreeCharge From Snapdeal for up to Rs 400 crore
Axis Bank Ltd is nearing a deal to buy digital payments platform FreeCharge for Rs 350-400 crore in cash, giving much-needed breathing space to the latter’s parent Snapdeal, which is separately in talks to sell itself to larger rival Flipkart.
By buying FreeCharge, Axis Bank will get a popular digital payments brand as well as access to high-quality technology that traditional companies typically struggle to build compared with internet start-ups.
Axis Bank and FreeCharge are likely to announce the deal this week, two people familiar with the matter said on condition of anonymity. FreeCharge had also held lengthy talks with Paytm (One97 Communications Ltd) but chose to go with Axis Bank as the private sector bank offered a higher price, the people said.
Source: Livemint
2. You Can Now Buy Gold Bonds Worth 4 Kg In A Year, An Eight-Fold Jump
Individuals can now buy sovereign gold bonds worth four kilograms of the precious metal in a year as the Cabinet approved an eight-fold jump in cap.
The investment limit for trusts and similar entities has been increased to 20 kilogram a year, a release by the Press Information Bureau said. Earlier limit for all entities stood at 500 grams.
The Sovereign Gold Bond Scheme was launched in 2015 to reduce demand for physical gold and check imports. The yellow metal is the second biggest contributor to India’s import bill after oil. Bonds worth Rs 5,400 crore have been issued in eight tranches till date, according to Reserve Bank of India.
“Specific changes have been made in the attributes of the scheme to make it more attractive, mobilise finances as per the target and reduce the economic strains caused by imports of gold and reduce the current account deficit,” the release said.
Source: BloombergQuint
3. Swiggy Denies Reports of Employee Churn, Fraud Against Investors
Online food ordering service Swiggy has denied allegations that it is experiencing employee churn or has cheated its investors and restaurant partners, after a blogpost by a few current and former employees went viral across social network platforms accusing the company of wrongdoing.
Swiggy that has been backed by investors such as Naspers, answered every allegation charged against it in a blogpost that was released on Wednesday. The online food delivery firm even shared the order data, which it claimed was verified by external firms, ahead of its fundraising exercise.
Earlier in the day, Swiggy had released a statement saying that the anonymous blogpost made false claims with the intention of maligning the image of the company. CEO Sriharsha Majety in the official blog post even questioned if the blog attacking the company was written by former employees.
Source: Business Standard
4. Airtel To Take On Reliance Jio With VoLTE Service Rollout By March 2018
Telecom major Bharti Airtel plans to roll out VoLTE service, that enables phone calls using 4G technology, across India by end of the current financial year.
“We have done (VoLTE) trials in 5-6 cities. Towards the end of this fiscal year, we will be taking VoLTE everywhere. The uptake of VoLTE devices will depend on certification... We should be very much national in the coming 6-9 months,” Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel said during the company’s earnings call.
At present, Mukesh Ambani controlled Reliance Jio is the only operator in India offering voice on 4G network using VoLTE technology, while the incumbent telcos have been offering voice calls to their 4G customers with support of their other established networks – 2G and 3G.
Vittal said that 3G networks in India will be phased out faster than other parts of the world and “India will get to a situation where 4G and 2G will co-exist for a while”.
Source: PTI
5. Flipkart May Be Able To Buy Snapdeal For $850 Million
Snapdeal’s largest investor SoftBank Group Corp approved the sale of online retailer to its larger rival Flipkart Online Services Pvt Ltd for $850 million, two people working on the deal told BloombergQuint, requesting anonymity as the talks are private.
Snapdeal’s logistics arm Vulcan Express and online inventory management company Unicommerce eSolutions are likely to be part of the deal, the two people said. The e-tailer had acquired Unicommerce in 2015. Flipkart’s last offer, which Snapdeal’s board had rejected, was around $600 million, the people said.
Snapdeal’s six member-board will consider the proposal to sell the company for $850 million, the people said. An approval from the remaining shareholders of Snapdeal –Kalaari Capital, Nexus Venture Partners, PremjiInvest and founders Kunal Bahl and Rohit Bansal, among others – is also required, they said. If the financials of the deal are approved by the shareholders and Flipkart, the aim is to sign the definitive agreements by August-end, one of the people quoted above said.
Source: BloombergQuint
6. UIDAI Has Spent Rs 9,055 Crore to Enrol, Despatch Aadhaar Numbers
The Unique Identification Authority of India (UIDAI) spent more than Rs 9,000 crore over the last eight years towards issuing Aadhaar numbers, Parliament was informed on Wednesday.
“The total expenditure of the UIDAI since 2009-10 to 2017-18 (up to 18 July 2017) is Rs 9,055.73 crore,” Minister of State for Electronics and IT, PP Chaudhary said in a written reply to the Lok Sabha.
This includes an expenditure of Rs 3,819.97 crore towards enrolment and Rs 1,171.45 crore towards logistics (printing and despatch of Aadhaar letters), he added.
A total of about 116.09 crore Aadhaar numbers have been generated up to 21 July, 2017, of which about 115.15 crore have been despatched.manner.
Source: PTI
7. Tencent in Talks to Invest $400 Million in Ola
Chinese internet conglomerate Tencent is in advanced talks to invest in India’s largest ride hailing app Ola, according to four people aware of the talks, which if successful could result in an investment of $400 million providing the Bengaluru company with more cash to stave off the challenge from close rival Uber.
The Bengaluru company has raised nearly $400 million since November last year as it seeks to fortify its position as the first mover in the Indian taxi aggregation market. If the investment from Tencent fructifies, Ola will mop up over $800 million in fresh total funding. The additional capital will push Ola's valuation to over $4 billion.
"Tencent executives were in Bangalore last week and they met the Ola management team to discuss the transaction," said one of the people cited above.
Source: Economic Times
8. Jio Woes: Airtel Q1 Net Profit Tanks 75%
Bharti Airtel, India’s largest telecom company, today reported its smallest profit in 18 quarters as the price war triggered by newcomer Reliance Jio led to a massive 75 percent fall in its April-June earnings.
The net profit for the first quarter of 2017-18, at Rs 367 crore, was 74.9 percent lower than the year-ago period, and the company blamed the disruptive pricing of the new entrant for continued “turbulence” and stress in the market.
The net income for the Sunil Mittal company stood at Rs 1,462 crore in the first quarter of 2016-17.
The June quarter net profit is the lowest since December 2012 for Bharti Airtel which along with other established telecom firms has been engaged in a fierce tariff war with Mukesh Ambani controlled Reliance Jio.
Source: Hindustan Times
9. HDFC Q1 Profit Falls 17%, Says Exposure to Essar Steel at Rs 910 Crore
Mortgage lender Housing Development Finance Corp. Ltd (HDFC) on Wednesday reported a 16.84 percent decline in its June quarter net profit to Rs 1,566 crore.
However, the 1,871 crore profit it recorded a year ago was boosted by a one-time gain of Rs 697 crore. Still, the June quarter profit failed to meet Street expectations. According to estimates of 11 Bloomberg analysts, HDFC was expected to post a net profit of Rs 1,769.60 crore.
In a statement, HDFC said its results for the quarter are not comparable from a year ago as it sold shares of HDFC ERGO General Insurance Co. to ERGO International AG, an arm of Munich Re for Rs 922 crore, and also created a one-time special provision of Rs 275 crore as a charge to the statement of profit and loss in the June 2016 quarter.
Source: Livemint
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