QBiz: Flipkart Buys eBay India; Vodafone Moves TRAI Against Jio
The Quint’s compilation of business news from dailies across India.
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1. Flipkart Buys eBay India as Part Of $1.4-Billion Funding Round
Flipkart Group raised $1.4 billion from Tencent Holdings, eBay Inc and Microsoft Corp in India’s biggest-ever start-up funding round that will help the country’s largest online retailer take on American rival Amazon Inc.
The fund-raise values Flipkart at $11.6 billion, 23.6 percent lower than its peak valuation of $15.2 billion in 2015 when it raised $700 million from Tiger Global and existing investors including Steadview Capital.
“This is a landmark deal for Flipkart and for India as it endorses our tech prowess, our innovative mindset and the potential we have to disrupt traditional markets,” e-tailer’s founders Sachin Bansal and Binny Bansal said in a statement.
(Source: BloombergQuint)
2. Reliane Jio Effect: Rs 4,600 Crore Hit for Telecom Firms in FY17, Rs 4,900 Crore Hit in FY18
The annual revenue of Indian telecom firms declined for the first time since 2008-09 to Rs 1.88 trillion in 2016-17 (from Rs 1.93 trillion the previous year), and will decline further to Rs 1.84 trillion in 2017-18, brokerage CLSA said in a report released on 7 April.
The reason: the launch and aggressive pricing of Mukesh Ambani-promoted Reliance Jio Infocomm Ltd which has forced other telecom firms to cut prices.
The revenue of telecom firms is expected to recover to Rs 1.87 trillion in 2018-19, marginally higher than that seen in 2014-15, the brokerage added.
Reliance Jio has signed up more than 100 million subscribers since its launch in September, offering free data and voice calls.
(Source: Livemint)
3. India a Step Away From a Modern Motor Vehicle Law
India is a step away from a game-changing legislation that will revamp the laws governing transportation in the country, with the Lok Sabha on Monday passing the Motor Vehicles (Amendment) Bill, 2016.
The changes are significant as they will, for the first time, acknowledge the fundamental reordering of mobility with the introduction of laws recognizing app-based taxi operators.
The amendment to the motor vehicles Act will now be introduced in the Rajya Sabha on Tuesday. If the House does not suggest any further changes, then it will be moved to the President for his assent.
The changes on the anvil include linking driving licences and vehicle registration with a person’s Aadhaar number, stringent penalties for traffic violations, protecting good Samaritans and making road contractors liable in case of accidents due to faulty road design.
(Source: Livemint)
4. Vodafone Moves TRAI Against Jio 'Summer Surprise' Offer
Vodafone India has moved the telecom regulator alleging that Reliance Jio Infocomm (RJio) is continuing its ‘Summer Surprise’ offer, with the latter still promoting the scheme through text messages, and seeking its immediate intervention.
On Monday, Vodafone India shot off a letter to the Telecom Regulatory Authority of India (TRAI) stating this as a blatant violation and disregard of the regulator’s advisory, sources close to the development said.
“RJio is continuing with this offer held as not meeting regulatory norms, in the garb of configuration changes. For the past three days, it has been promoting and luring customers to quickly recharge to avail the benefits of a non-compliant offer and also asking its retailers to communicate the same,” the letter, a copy of which was seen by BusinessLine, said.
(Source: Business Line, The Hindu)
5. 70% of All Goods and Some Consumer Durables to Become Cheaper Under Proposed GST Regime
A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.
India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.
For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.
(Source: The Economic Times)
6. PNB Moves CBI Against Chandigarh's Kudos Chemie After Loan Default
Government-owned Punjab National Bank has (PNB) filed a complaint with the Central Bureau of Investigation (CBI) against Chandigarh-based Kudos Chemie which has defaulted to a loan of Rs 1300 crore. The action against the company follows action by investigating agencies against IDBI Bank, UB group officials in January this year for a Rs 900-crore loan default by Kingfisher Airlines.
PNB officials said it has informed the Reserve Bank of India and its board of directors about the fraud. The bank said in 2016, Directorate of Revenue Intelligence had initiated action against the company for violation of the Customs Act and the account became a non-performing asset in March last year.
(Source: Business Standard)
7. India Among Fastest Growing Advertiser Base For Facebook
Social networking giant Facebook said on Monday that the number of advertisers on its platform have crossed the five million-mark with India featuring among the fastest growing markets.
"More than 5 million businesses all over the world actively advertise on Facebook and the top three verticals are e-commerce, entertainment and media, and retail," it said in a statement. Nearly 75 percent of these active advertisers are outside the US, it added.
"The fastest growing countries are India, Thailand, Brazil, Mexico, and Argentina. The top five countries based on year-on-year growth are the US, Brazil, Thailand, Mexico, and the UK," it said.
Facebook said it is helping local businesses become global and is investing in creating solutions to help small businesses grow in today's mobile economy.
(Source: BloombergQuint)
8. Net Inflows Into Mutual Funds in FY17 Highest in at Least 11 Years
As bank deposit rates fell and stock markets rose, mutual funds in 2016-17 received the highest net inflows in at least 11 years, led by income and liquid schemes.
Net inflows in the fiscal year ended March rose 155.66% from a year before to Rs 3.43 trillion, the highest since at least 2005-06 when the equity market was gaining traction, data from the Association of Mutual Funds in India (AMFI) showed. Data prior to 2005-06 was not available.
India’s benchmark index Sensex rose 16.88% during the financial year, and was the third best-performer among its Asian peers. The index has delivered a compounded annual return of 13.48% from 2005-06 to 2016-17.
(Source: Livemint)
9. Sanjiv Goenka Group Eyeing Over Rs 6,500 Crore FMCG Sales in Next 5 Years
The RP-Sanjiv Goenka Group is eyeing more than Rs.6,500 crore of annual sales from its just launched standalone fast moving consumer goods business over the next three-five years, and is in active negotiations with multiple FMCG companies for acquisition, chairman Sanjiv Goenka said.
The Kolkata-headquartered conglomerate announced its entry into the FMCG business on Monday, with products available in more than 20,000 outlets across kirana and modern retail as well as online marketplaces like Amazon.
The products will be initially available in Pune, Kolkata and the National Capital Region, and will be subsequently taken pan-India. Goenka said the group has plans to list the business once it attains a certain scale.
(Source: The Economic Times)
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