QBiz: Flipkart Begins Snapdeal Acquisition; Markets Extend Losses
Your roundup of important business stories.
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1. Term-Sheet for Flipkart's Snapdeal Acquisition Signed
The process of selling marketplace e-commerce company Snapdeal to Flipkart has started.
According to sources close to the deal, three months after SoftBank – the e-commerce player’s largest investor – floated the idea before the Snapdeal board, Flipkart, the Bengaluru-based marketplace major, started the process of due diligence last week.
While the term-sheet was not signed last week, sources said the process of due diligence was given the go-ahead after Snapdeal’s board of directors agreed unanimously to Japanese telecom major’s proposal to sell the beleaguered e-commerce player.
(Source: Business Standard)
2. Markets Extend Losses on Weakness in Mid-Caps, India-Pakistan Border Tension Weighs
Indian stocks fell sharply on Tuesday after the army said it hit posts in Pakistan-controlled Kashmir that were providing cover for terrorists planning attacks.
Mid-cap, pharmaceutical, state-run banks and realty stocks led the decline.
The National Stock Exchange’s Nifty index shed 0.55% to 9,386.15 points while the Sensex ended 0.67% lower at 30,365.25 points.
The markets are extremely volatile because of the expiry of the May series futures and options (F&O) on Thursday and the border tension has heightened the nervousness, analysts said.
(Source: Live Mint)
3. India Proposes RCEP Business Visa Card Under Mega Trade Deal
India has proposed RCEP business visa card to ensure hassle-free movement of businessmen in the 16 countries of the grouping under the mega trade deal, negotiations for which are likely to be concluded next year.
The 16-member bloc Regional Comprehensive Economic Partnership (RCEP) is negotiating a mega trade agreement that aims to cover goods, services, investments, economic and technical co-operation, competition and intellectual property rights. Commerce and Industry Minister Nirmala Sitharaman also indicated that the negotiations might not conclude this year and move into the first half of 2018.
The members have aimed at concluding the negotiations, which started in 2012, by year-end. Talking about the visa issue, she said, “We have actually given a proposal for RCEP business card. So we have proposed that for business people like APEC member countries have APEC business cards, similarly, we have asked for RCEP members.”
(Source: PTI)
4. Demonetisation Leaves State Bank of India Scrambling to Deploy Surplus Deposits
The nation’s largest lender, State Bank of India (SBI), saw deposits worth Rs 1.65 lakh crore flow in after the government decided to scrap notes of Rs 500 and Rs 1000 on November 8. Citizens were given till December-end to deposit old notes.
Restrictions were placed on withdrawal of new notes till mid-March. It was assumed that once withdrawal restrictions are removed, much of the deposits that came in would flow out.
If SBI’s experience is anything to go by, that is not how it played out.
Speaking on the sidelines of the bank’s quarterly earnings on Friday, the bank’s top management said that nearly 65 percent of the deposits that came in have stayed in the bank, at least so far. As a result, the bank saw its deposit base swell to over Rs 20 lakh crore as of March 2017, an increase of 18 percent over last year. Current account and savings account (CASA) deposits have grown by 24 percent.
(Source: BloombergQuint)
5. Cabinet Likely to Take up FIPB Abolition on Wednesday
The Union Cabinet, led by Prime Minister Narendra Modi, is likely to consider the abolition of the Foreign Investment Promotion Board (FIPB) on Wednesday.
Once the proposal is approved, the finance ministry could be given a month to wind up the FIPB. Since the early 1990s, it has been the single window for allowing foreign direct investments (FDI) that need official approval.
After it is wound up, the nod would be given by sector regulators, licensing authorities or ministries concerned.
In the Union Budget for the financial year 2017-18, Finance Minister Arun Jaitley had announced that the FIPB would be dismantled.
(Source: Business Standard)
6. Payment Banks Want More Freedom, Seek Nod for Differential Rates
Payment banks, the newest entrants in the banking fold, have asked the Reserve Bank of India for permission to offer differentiated rates of interest on savings accounts with a balance of less than Rs 1 lakh.
The limit on deposits of customer accounts in payment banks is Rs 1 lakh, while differential interest rates can be offered only on amounts above Rs 1 lakh, a restriction that payment banks say denies them an attractive way of getting more customers.
“Banks are allowed different interest rates above Rs 1 lakh and we are not allowed to go beyond Rs 1 lakh. So from payment banks, it is a pending request with the RBI if they could look into it. RBI has not decided yet,” said a top executive with a payment bank on condition of anonymity because the proposal is under the regulator’s consideration.
(Source: The Economic Times)
7. Flipkart, Rivigo in Interbrand's Top 40 Emerging Brands List
The poster boy of Indian e-commerce, Flipkart, along with technology-enabled logistics firm Rivigo, have made it to the global list of top 40 emerging brands featured in “Interbrand breakthrough brands”, a report published by Interbrand, part of the Omnicom Media Group, an advertising and public relations conglomerate.
The second edition of the annual report released on Tuesday in partnership with Facebook, the New York Stock Exchange (NYSE) and Ready Set Rocket, a digital agency, recognises 40 next-generation, disruptive brands that define progress and the potential to grow.
Interbrand’s 2017 report selected 40 brands out of over 350 nominations. The study was restricted to brands that are less than 10 years old. Interbrand picked its final list of brands on the basis of growth potential, the capacity to grab attention and adapt to the changing needs of the consumers, originality and the strength of the business model.
(Source: Live Mint)
8. GST Countdown: Rules, Rates On Select Items Next Pit Stop
Two rules pertaining to the Goods and Services Tax (GST) law and rates on items such as gold and cigarettes remain the next important steps to ensure that the new indirect tax regime rolls out by 1 July.
“We have almost finished 95 percent of the work, we hope to complete the remaining 5 percent in the next meeting of the GST Council on 3 June. If need be, we will have one more meeting before the 1 July rollout,” Revenue Secretary Hasmukh Adhia had told BloombergQuint in Srinagar on the sidelines of the GST Council meeting last week.
Rules relating to transition and returns were deferred for clearance by the GST Council and will be put in public domain once they are cleared by the decision-making body.
(Source: BloombergQuint)
9. Apple May Get Duty Relief but Has to Scale up Manufacturing in India
India will allow Apple to import some components at zero duty in return for the iPhone maker agreeing to scale up local manufacturing in a phased manner over the coming years, said Aruna Sundararajan, secretary for the ministry of electronics and IT.
The ministry is currently in discussions with Apple on its proposal to manufacture in India for which the Cupertino, US-based firm had sought a slew of concessions, including duty waiver for its component manufacturers for 15 years.
Speaking to ET, Sundararajan said the government is trying to reach a common ground with Apple so that the company can start full-fledged manufacturing here.
(Source: The Economic Times)
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