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Updated: 49 min 35 sec ago

Expert take: The Street beckons, but where's the job?

1 hour 20 min ago
If you are a business school graduate looking to start a career in financial markets, there's a high possibility that the search will be a lengthy and tedious one. It is true that markets are at near record levels, trading volumes are rising, retail investor interest is the highest in a decade but this has not translated into jobs in the financial services sector. From being one of the biggest employment providers in the country almost a decade ago, the financial services industry now epitomises the impact that technology will have on job creation in various industries in the years to come. Make no mistake. This is an irreversible change. The traditional way of selling financial products is on the wane as buying and selling are increasingly being done online or through mobile phones apps. In addition to the lower costs of trading through smart phones, investors like the privacy and convenience of the system. As a result, retail broking firms are no longer hiring people in large numbers unlike in the past.This is because brokerages' role has changed over the years to being just an executor from an entity that made cold calls to prospective investors. In short, brokerages have become more of technology firms than ever, a fact that was first publicised by Wall Street biggie Goldman Sachs a couple of years ago. A recent write-up by MIT Technology Review said Goldman, which employed 600 traders at its US cash equities trading desk in New York, has just two executives left. These jobs have been eaten up by automated trading programs manned by computer engineers. A similar shift is happening at home too. Dealing rooms at brokerages, which used to be buzzing with staff till the end of last decade, wear a desolate look these days with empty chairs. This should not be mistaken for lack of business; just that they need fewer people to get the work done than a decade ago, while bulk of the employees focusing on selling equity mutual fund SIPs (systematic investment plans) -the new fad among retail investors. Brokerages, which used to frequent business schools every year to recruit fresh talent, are making fewer visits of late. In fact, they are more focused on hiring engineers to boost their technological capabilities. Sales people in various brokerages are no longer calling the shots. Sample this: the salary cost of the 30-member technology team at discount broking firm Zerodha is 50% that of the 300-member strong sales team.Similarly , the highest paid employee at Zerodha is its chief technology officer (CTO). This is not an aberration as almost all brokers are heading towards regularly upgrading their technology rather than hiring sales people.Brokerages are liking this as revenue per employee -an indicator of productivity -is probably at the highest-ever levels. This business strategy is unlikely to see a shift in the near future even as investor interest in financial markets and products grow. It will be no different with mutual funds, insurers and consumer finance companies where clients are transacting through smartphone apps. But, the change will be more pronounced in brokerages, which have been the biggest recruiters among financial services firms. (Views expressed are personal)
Categories: Business News

Flipkart, Amazon won't have to hold sales every year if they bag this Modi govt order

2 hours 3 min ago
NEW DELHI: India's biggest ecommerce companies Flipkart and Amazon are vying for the opportunity to handle purchases for the country's largest buyer — the government. The Government e-Marketplace (GeM) portal will manage procurement for ministries and departments for items such as laptops, air conditioners, furniture and items of daily use like stationery at both the state and central level. Services such as taxis and florists also come under the purview of GeM, which was launched in August last year with the main aim of making the process much more efficient. 58814989 Procurement by the central and state governments put together is estimated at Rs 5-7 lakh crore each year. The company that manages the portal could get as much as 0.5% of the total transaction value as commission, said people with knowledge of the matter. Multiple sources confirmed to ET that Flipkart and Amazon have shown interest in the contract for a managed service provider (MSP) for which the government recently issued a request for proposal (RFP). Executives of these firms have attended pre-bid meetings organised by the government ahead of the submission deadline of June 1, they said. Flipkart may tie up with Microsoft for technology since the RFP allows IT and ecommerce companies to form a consortium and bid. Software and services giants Tata Consultancy Services, Accenture and Wipro are also said to be in the race for the contract spanning five years that's extendable by two years. Amazon, sources said, is keen to provide its cloud services and has got the approval of its US headquarters to participate. An executive at a top tech firm said the project is progressing well with ecommerce firms such as Flipkart and Amazon evincing interest. "Flipkart is a logistics provider, they know the game. Amazon is also hovering," said the person, adding that these companies will have to partner with technology vendors since they can't offer their own platforms to the government. "It will be a mega opportunity if all the government departments start to procure through it. The size of the project could anywhere be between Rs 900-1,000 crore." Over 21,000 products and 17 services such as security, transportation, pest control and laundry are already available on GeM, currently run in-house. The total value of purchase made on GeM amounted to Rs 454 crore between August 2016 and April 30 this year. Earlier this year, the government amended the General Financial Rules (GFR) to make it mandatory for central and state agencies to route all their office purchases through the GeM portal. Since its scope has broadened exponentially, the government is looking at roping in private companies to build and manage it. The enhanced scope of GeM has also made the opportunity more exciting for companies. Flipkart and Amazon did not respond to ET's queries. The others cited above couldn't be immediately reached for comment. "The value of the contract will depend on the transactions. There would be a revenue-sharing model with the MSP in which the private company's share has been capped at 0.5% of the total transaction value payable quarterly," said an official. PAYMENT DETAILS All government agencies will have to pay the vendor within 10 days of accepting of goods and services. GeM also aims to speed up payment, addressing one of the biggest concerns of vendors. The MSP will be paid from the GeM special purpose vehicle in a month of the transaction. Vendors will have to pay a registration charge, which will be a source of revenue for the portal. "Formation of consortium is up to the private companies. The government will only talk to the lead partner," the official said. The successful bidder could derive advantages other than just revenue. "Whichever company gets the contract will add the country's largest buyer to its customer base," said Mohit Bahl, partner and retail sector leader at KPMG in India. It could benefit from the data analytics that will result. "They can come out with good trends, decide prices accordingly, help in transparency and smoother process of government procurement."
Categories: Business News

UK raises threat level to maximum, deploys army

3 hours 3 min ago
LONDON: British Prime Minister Theresa May has raised the UK's terror threat to the "critical" level, which means an attack is imminent, and deployed army in the key sites after the deadliest attack which killed at least 22 people and injured 59 others. Prime Minister Theresa May said the decision to raise the threat level was taken after security forces were unable to rule out if Salman Abedi, the UK-born suspect behind Monday's suicide bombing in Manchester, acted alone. The move will see the army deployed to secure the country's key sites. "It is a possibility that we cannot ignore, that there is a wider group of individuals linked to this attack," May said. The terror threat level has been raised to its highest level of "critical", meaning further attacks may be imminent, she said. In a live address on Tuesday night, she noted: "The change in the threat level means that there will be additional resources and support made available to the police as they work to keep us all safe". "As a result of (the Joint Terrorism Analysis Centre's) decision the police have asked for authorisation from the Secretary of State for Defence to deploy a number of armed military personnel in support of their armed officers." She said the request was part of an established plan known as Operation Temperer, which is now in force. The British PM said: "This means that armed police officers responsible for duties such as guarding key sites will be replaced by members of the armed forces, which will allow the police to significantly increase the number of armed officers on patrol in key locations." "You might also see military personnel deployed at certain events such as concerts and sports matches, helping the police to keep the public safe. In all circumstances, members of the armed forces who are deployed in this way will be under the command of police officers," she said.
Categories: Business News

Undeterred by pay hike rows, Infosys again showers top execs with a generous bounty

7 hours 36 min ago
BENGALURU: Generous stock-based incentives boosted the total compensation of four senior executives at Infosys by over 50% in the previous fiscal year, according to the annual report of India’s second-largest software services company, which also announced the creation of a ‘committee of directors’ tasked with advising the management. The report for fiscal 2017 shows that presidents Rajesh Murthy, Sandeep Dadlani and Mohit Joshi, and deputy chief operating officer Ravi Kumar S each received total compensation of over Rs 14 crore. The increase, over the compensation in fiscal 2016, was mainly in the form of performance-based stock incentives that will vest over four years. Such hikes in executive compensation based on variable pay and stock incentives — which Infosys regards as a tool to make the company more competitive —has been one of the subjects of heated debate roiling the firm in recent months. Last month, founder NR Narayana Murthy had expressed anger over the steep hike in compensation to chief operating officer UB Pravin Rao. In fiscal 2017, Rao’s total compensation rose to Rs 11.80 crore from Rs 8.14 crore, including incentives. Rao, based in Bengaluru, earns less than the presidents, who are posted abroad and earn salaries denominated in foreign currency. The annual report said the ‘committee of directors’, which includes co-chairmen R Seshasayee and Ravi Venkatesan as well as board member DN Prahlad, “will support and advise the management in executing the company’s strategy”. MINUS STOCK INCENTIVES, PAY FELL 12-25% Shareholder advisory firms are of the view that while “unusual”, the move is not “unheard of ”. “It will be interesting to see what the exact role of the committee will be,” said Shriram Subramanian, MD of shareholder advisory firm InGovern, who expects more questions to be raised at the annual general body meeting about the actual duties of the committee. The previous AGM, in June 2016, had seen shareholders question the pay hike given to CEO Vishal Sikka, though they approved the increase in a vote. Infosys also received their approval for increase in COO Rao’s compensation, which included annual fixed salary of Rs 4.62 crore, annual variable compensation of Rs 3.87 crore and performancebased stock options of Rs 4 crore. Murthy had slammed Rao’s compensation increase . Infosys had defended Rao’s hike. “It is essential for us to see this revision in his compensation, as with several of our senior leadership team, is focused on making Infosys more competitive, is benchmarked against peers,” said Sikka in a statement in April. Excluding the stock incentives, the company’s top executives, including Rao, saw their fiscal 2017 remuneration fall by 12-25%. Chief financial officer MD Ranganath’s total compensation rose over 40% to Rs 9.25 crore. He was granted Rs 4.5 crore in stock incentives. Excluding the stock incentives, his remuneration for the year dropped 26%. Infosys has been battling a slew of issues — including questions on governance standards and slowing industry growth. It is also dealing with the fallout of former chief financial officer Rajiv Bansal’s outsized severance, which has been termed ‘hush money’. The annual report did not address that issue. The stock-based compensation increases come at a time when rank-and-file employees have yet to receive their annual hike. Infosys has delayed salary hikes for fiscal 2018 until July for junior employees while senior employees will see an even longer delay, Rao told employees in an email two weeks ago. Murthy had said blame for the company’s troublesome remuneration policies lay with the board and had suggested Prahlad be named head of the nomination and remuneration committee. While Prahlad has a seat on the remuneration committee, he was not named chairman. Indian IT employees are facing an uncertain future. IT companies have been aggressive in letting go of non-performers in their annual appraisals and hikes across the industry will be in single digits as growth is harder to come by. Nasscom has delayed releasing agrowth target for fiscal 2018.
Categories: Business News

GST: How Modi govt can enable reduced prices to reach consumers 

7 hours 36 min ago
By Sachin Menon One of the stated objectives of introducing the goods and services tax (GST) is to eliminate multiple taxes, remove cascading of taxes, rationalise tax rates and enhance the spectrum of the input tax credit. This would reduce the incidence of indirect taxes on the products and services. With such a reduction in the tax incidence, it is expected that the prices of goods and services are reduced. This, in turn, one would expect, would result in consumer benefits handed down from the reduction in the incidence of taxes. The Price of Profit-erring The government made its intention clear by introducing an anti-profiteering clause in the GST law to ensure that a commensurate cut in the prices on account of a reduced tax rate, or the benefit of higher input tax credit, is passed on to the consumer. It also proposed to set up an authority to monitor such instances of profiteering. The prices are mainly driven by elasticity of demand, supply constraints and competition. As pricing is a function of multiple factors, it is difficult to attribute only one factor responsible for increase or decrease in prices. Therefore, the actual implementation of this provision is quite challenging both for business and government. It may be possible that the incidence of taxes for a given commodity has reduced. However, due to high demand and supply constraints, the prices have increased. Thus, the procedure to be followed by the anti-profiteering authority becomes critical to examine cases where the change in price is on account of incidence of tax or any other factors. As per the clause, the prices need to be reduced only on account of lower tax rates and higher input tax credit. The issue is whether the businesses that reorganise their supply chains and reduce costs on account of such business efficiency be required to reduce prices. Can this be covered within the purview of the anti-profiteering clause? And how can such benefits be measured at a unit price level? These remain a challenge. Also, even if businesses are willing to pass on the benefits to consumers, it may not be practically possible to alter the maximum retail price (MRP) of products lying with retailers and dealers across the length and breadth of the country. Similarly, alteration may also not be possible in cases where such products are governed by the Legal Metrology Act, 2009, as such a law may not permit the alteration of the MRP. The impact of alteration may also need to be examined in cases where the duty or tax is paid based on the MRP. As is evident from its language, the anti-profiteering clause aims to address the transition issue. However, it is not clear up to what period this can apply. Can this clause also apply to goods that are ‘completely manufactured’ and supplied under the GST era? Hopefully, no. However, industry will need clarity on this matter. Catch-and-Mouse Game The media interactions after the 14th GST Council meeting in Srinagar on May 18 indicate that the government is working on developing the rules and procedures to be followed for determining compliance with the anti-profiteering clause. It is also in the process of deciding the shape and structure of such an authority. The government has indicated that it is keeping a close watch on the movement of prices. Once the authority is set up, it can then examine the cases where the prices were increased even before the introduction of GST. In the absence of any specific and clear rules and procedure, industry is apprehensive that such a clause can be a tool for harassment due to the possibility of misuse and subjective interpretation and determination of the commensurate reduction in prices. Therefore, in order to achieve the objective of reduced prices to consumers, the government should adopt a balanced approach to ensure that honest businesses are not unduly put into difficult situations or come under-litigation. It should also ensure that the anti-profiteering authority does not act as a price regulator in a free and competitive economy. A well thought-through and detailed procedure should be issued by the government to achieve the stated objective of determining the extent of benefit that is to be passed on to consumers. The writer is national head, indirect tax, KPMG India
Categories: Business News

Small cars, SUVs demand may spike ahead of GST as buyers could try to beat price hike

7 hours 39 min ago
NEW DELHI/MUMBAI: Automakers are divided over the impact of goods and services tax, but expect a spike in demand for compact cars and SUVs over the next few weeks from buyers trying to beat a possible price hike. Large vehicles may, however, see some deferrals in purchase because the new indirect tax regime is expected to reduce prices in those segments. At first glance, the rates fixed under GST last week looks slightly higher for small passenger vehicles compared with the current bunch of indirect taxes levied on them. On large vehicles, the new rate is lower. Several industry executives and experts expect vehicle prices to reflect the change in rates. Higher input costs will also likely influence price revisions in July, said the India head of a European carmaker. Rakesh Srivastava, director of sales and marketing at Hyundai Motor India, expects prices in the compact segment to go up 1-3%, affecting almost 85% of the overall passenger vehicle space. And, he has already started witnessing an increase in customer visits at dealerships. “The enquiries and footfalls have shot up. The sub-4 metre (or compact) segment buyer is extremely price sensitive; especially at the entry-end consumers will seek to get vehicles at the best price point,” Srivastava said. RC Bhargava, chairman of market leader Maruti Suzuki, however, is among those who don’t expect major changes in prices. “At present, excise duty is levied on ex-factory price of a vehicle. A number of charges are added on, including octroi, transport costs, dealer margins and state levies. The actual incidence is about 29%, which is same as the rate in GST,” he said. The GST Council that decided on the new tax rates put cars and SUVs in the highest slab of 28%, and imposed an additional cess of 1% and 3% on small petrol and diesel cars, respectively, and 15% on large cars and luxury vehicles. The current levies range from 25% on small cars to 55% on luxury vehicles. The cess is to recover revenue loss due to implementation of GST. Sugato Sen, deputy director general of the Society of Indian Automobile Manufacturers, said the calculations were complicated and that the impact on prices would vary. “Depending on the state of sale, prices in the small car segment may either remain the same or go up marginally,” he told ET. Gaurav Vangaal, senior analyst at IHS Markit, predicts an increase in demand for small cars before July 1. "India is a price sensitive market. If there are indications of vehicles becoming dearer, you witness a pull in the market,” he said. Honda Cars India expects prices of small cars to go up. “Our team is working out the details of pricing under GST. But it looks like that small car prices may go up,” Jnaneswar Sen said. While the actual impact of GST on small cars may not be clear yet, most expect the new rates to help lower the prices of vehicles at the more premium end of the market. “Currently, total levies on luxury cars amount to around 55%. If the 28% tax rate and an additional cess of 15% is levied, then vehicle prices will come down,” said an executive at a leading luxury car maker, who did not wish to be named. Hyundai’s Srivastava concurred. He expects a moderation in price in bigger vehicles. This expected price reduction may lead some customers to postpone purchases, he added. Roland Folger, managing director at luxury vehicle maker Mercedes-Benz India, said his company is waiting for the official notification on the GST rates and was “currently studying the effects that might emerge out of the GST implementation”. VG Ramakrishnan, managing partner at consultancy firm Avanteum Advisors, said any vehicle more than four metres in length and fitted with engines larger than 1500 cc will see a reduction in price. Those looking to buy large SUVs or MUVs are likely to delay purchases to avail of benefits under GST, he said.
Categories: Business News

Roaming charges won't burn a hole in your pocket this holiday season

7 hours 59 min ago
NEW DELHI: Mobile-phone bills from the annual overseas vacation should pinch travellers less this summer, with companies such as Bharti Airtel, Vodafone India and Matrix offering international roaming packs that could lower costs by 60-90%. The latest overseas roaming packs offer subscribers unlimited data use and calling along with free incoming calls. Intensifying competition has also left its mark on the calling-card business, with the segment leader Matrix reducing tariffs by 25% from last year. Furthermore, Matrix said its services are 25% cheaper than those offered by the telecom companies, helping overseas travellers further reduce communication expenses. “The range of discounts could be almost 90% for a heavy voice and data user in a long duration to a 65-70% for a light user, in a short duration, say a couple of days,” said Prashant Singhal, telecom leader at global consulting major EY, citing plans of one of the telcos. Data charges have “gone down to Rs 3 per MB from around Rs 600 per MB across popular roaming destinations”. Until recently, international travellers would switch to WiFi zones at hotels, airports and elsewhere for seamless data access and used pay-as-you-go chargeable plans for making calls. Pay-as-you-go international roaming rates in major destinations, such as the US, could go up to Rs 90 per minute for an incoming call and approximately Rs 200 for an outgoing international call, analysts said. Data consumption was charged at Rs 5.50 per 10 KB, which is equivalent to Rs 563 per MB. Singhal said that if standard roaming rates were applied, the bill would come to about Rs 1 lakh for a week-long trip to the US using 10 minutes of incoming calls, 10 minutes of local calls, 10 minutes of calls outside the country, and five hours of Internet connectivity per day. “Now, the charges (under new packs introduced by telcos) reduce substantially to about Rs 10,000,” Singhal said. PREVENTING BILL SHOCK Bharti Airtel, Vodafone India and Idea Cellular have introduced multiple international roaming packs that include free incoming calls, free texts to India and data benefits, along with free India calling minutes across all popular overseas destinations. New international roaming packs offer unlimited incoming calls and calls to India are charged at Rs 3 per minute, once the free allowance is over. An Airtel spokesperson said the packs with convenient validity options of one day, 10 days or 30 days have received an overwhelming response from customers, as the offers shield them from any shock and obviate the need for a local SIM overseas. “Starting April, the moment a customer’s billing reaches the price of a one-day pack for the country, he/she will be automatically moved to that pack. This will allow our customers to use their devices abroad and roam without any fear of a bill shock,” the spokesperson said. A Vodafone subscriber travelling to the US, UAE or Singapore can get an unlimited voice and data deal by paying Rs 2,500 for a week, going up to Rs 5,000 for a month. For some countries, the rental could be Rs 499 a day. “With this aggressive pricing and higher validity packs, we expect a 2x increase in the number of active roamers,” said Avneesh Khosla, EVP, products and services, at Vodafone India. Gagan Duggal, director of Matrix Cellular, said its plans are more competitive. For a 15-day trip to the US or UK, Matrix is charging users Rs 2,999 for unlimited incoming calls, local calls, calls to India and data, while telcos such as Airtel would charge around Rs 3,999 for unlimited calls, 500 minutes of local calls or calls to India and 5 GB data. Underpinned by more affordable plans, Matrix expects an on-year increase of 18% in SIM sales to 221,000 in the April-June quarter this year. Customers with high data consumption could otherwise easily end up with bill shock, especially since 4G is available in most countries, Duggal said. According to Matrix, data usage by Indian travellers has increased five-fold since last year. The United Nations predicts that India will account for 50 million outbound tourists by 2020. Research firm Ovum expects consumer outbound data roaming traffic to expand at a compounded annual growth rate (CAGR) of 83% between 2015 and 2020. Data will far exceed voice and SMS traffic growth, and help offset revenue declines for telecom companies offering tariff cuts. Analysts at EY said the expected declines will not have a big impact on operator revenue as roaming charges account for approximately 4.6% of total sales, and most of it could be offset by higher volumes. According to EY analysts, overall consumer mobile outbound data revenue for India is expected to grow at a CAGR of 40% between 2015 and 2020.
Categories: Business News

Google develops tools to power up its advertising model

8 hours 9 min ago
MUMBAI: Google is putting machine learning front and centre of its advertising model. Jerry Dischler, vice president of product management for AdWords at Google, said, “Every day Google Analytics processes half a trillion digital moments across devices. As an AI first company, we are helping advertisers make sense of this to create ad platforms that are more useful and connected.” Included in its new suite of services is what Dischler calls “An industry first solution that measures from a digital ad click to a store purchase, without the complex integration of existing solutions in the market. It’s the holy grail for marketers: closing the loop between a click and a store purchase.” Also being introduced is Google Attribution which will measure the value of every online marketing channel, to gain a better understanding of a marketer’s investment. And finally, Google is expanding its local ad efforts and its store visits technology to video, allowing consumers to discover nearby retail outlets, leading to a direct path from a video ad to shopping offline. It will also help advertisers track the offline effectiveness of their video spends. The solutions are aimed at ‘always on’ consumers who make a purchase only after multiple rounds of research, across devices. As Babak Pahlavan, senior director of product management, Google explains, “We don’t just click and buy. Attribution is about assigning values to each step that leads to our decision. It’s hard to do, and so most marketers credit only the last thing the consumer did.” Google has built its attribution solution on Adometry, a company it acquired three years ago. It promises a simple workflow, which allows advertisers to import their data, choose the right attribution model, export it to Google AdWords and optimise their campaigns. Says Pahlavan, “We’ve reduced something that could take months to a few minutes.” According to Dischler, “Online advertising is driving consumers into stores. We’ve measured over 5 billion store visits in 17 countries that were the result of ad clicks.” He was also quick to clarify that Google only uses data from users who share location history and anonymises their data. In the US, Google will introduce TV attribution this quarter, looking at minute by minute airing of TV advertisements to see if they correlate to a rise in search traffic or website visits.
Categories: Business News

Flipkart signs term-sheet for buying out rival Snapdeal

8 hours 14 min ago
NEW DELHI: Flipkart, the country’s largest ecommerce company, has signed a binding term-sheet to acquire rival Snapdeal and is scheduled to undertake commercial and financial diligence in the next few days, according to people aware of the developments. The term-sheet, signed over the weekend, nominally values the Gurgaon-based Snapdeal at about $1 billion. Flipkart will quote a final price after it completes a rigorous examination of Snapdeal’s books, which is expected to take 6-8 weeks, these people said. The developments have come about 10 days after ET reported in its May 12 edition that Nexus Venture Partners, an early investor in Snapdeal and which holds veto rights under its shareholders agreement, had agreed to the sale of the company. If consented to by all the stakeholders in the troubled online marketplace, Nexus, which has invested $43 million-$45 million in Snapdeal for about a 10% stake, could receive about $60 million in lieu of its holding in the company. It is unclear whether this amount will be entirely in cash or have a stock component as well. Additionally, Kalaari Capital, the other longstanding investor in the online marketplace and which also holds a board seat, could receive up to $30 million for its 8% holding in Snapdeal. The special payouts to Nexus and Kalaari as well as an estimated $30 million to the founders of the company -- Kunal Bahl and Rohit Bansal -- will be subject to approvals from the majority, if not all of, Snapdeal’s shareholders. “We cannot comment on the ongoing negotiations but we hope for a resolution soon,” said a spokeswoman for SoftBank, the largest shareholder in Snapdeal and the primary mover behind the sale of the online marketplace. APPROACHING MINORITY HOLDERS Snapdeal and Flipkart did not reply to email queries from ET. Snapdeal has more than 20 stakeholders on its cap table, including PremjiInvest, the personal investment arm of Wipro Chairman Azim Premji, Ontario Teachers’ Pension Plan, eBay, Foxconn Technology Group, Alibaba Group, the world’s largest asset manager BlackRock, Tata Sons Chairman Emeritus Ratan Tata, and hedge funds Tybourne Capital and Myriad Asset Management. Bahl, the chief executive of Snapdeal, and Bansal, the chief operating officer, have begun reaching out to the minority stakeholders through Credit Suisse, which is representing Snapdeal in the deal talks, to get their assent for the sale to Flipkart, according to people aware of the matter. Together, shareholders not represented on Snapdeal’s board own nearly 40% of the company. On Tuesday, ET NOW reported that PremjiInvest, which has invested about Rs 152 crore in Snapdeal for about a 1.17% stake in the company, has formally reached out to the company’s board asking for greater clarity on the proposed sale to Flipkart, as well as on the rights of the minority stakeholders. ET was not immediately able to verify the contents of the missive. SoftBank is not expected to raise objections to the sale and is also likely to convince Alibaba and Foxconn, given its close and long-standing relationship with the two, to give their assent to the transaction.
Categories: Business News

Japanese retailers looking to enter Indian market dominated by European, US brands

8 hours 24 min ago
NEW DELHI: India’s rapidly growing fashion and accessories segment has caught the fancy of Japanese retailers and several of them are getting ready to enter a market so far dominated by European and US brands. A host of retailers from the Land of the Rising Sun, including Mark Styler that owns fashion and lifestyle brands such as Mercuryduo, Dazzlin and Emoda; fast-fashion retailer Miniso; eyewear company Owndays and the Kai Group, which sells products in cooking, grooming and beauty care are scouting for mall space in India’s top cities, senior executives at three top malls said. A couple of Japanese companies already sell their fashion products in India, a country with a burgeoning and increasingly urbanised and prosperous middle class that is becoming an important growth market for global brands. Tokyo-based Muji, which retails apparels to home products, entered India last year in a joint venture with Reliance Brands that sells a raft of global brands, including Kenneth Cole, Steve Madden, Diesel and Brooks Brothers. Muji expects India to be its second largest international market after China, where the retailer with no-logo branding operates around 200 outlets. Kyoto-based luxury lingerie brand Wacoal, too, entered India last year in a joint venture between its Hong Kong unit and India’s Perivbwinkle Fashions. The largest Japanese fashion company and one of the world’s top four fast-fashion brands, Uniqlo, is preparing to come to India next year. ET reported in January that Uniqlo is entering India on its own and is in talks with mall developers in top cities to open stores. “In India, I have seen mostly Japanese companies move in a herd — be it automobiles, electronics or other equipments,” said Harminder Sahni, founder of retail consultancy Wazir Advisors. “I see that has started to happen in retail with Muji coming here.” Kai has already invested about Rs 175 crore in India, the bulk of it in a manufacturing plant at Neemrana outside of New Delhi. The firm, which operates experiential stores in Japan, Hong Kong and other countries, plans to open a store in a New Delhi mall. “We are under negotiations for a store in a mall in Delhi where we will showcase our products such as kitchen goods, kitchen appliances and related items,” said Rajesh Pandya, Kai’s chief operating officer in India. Founded in 2013, fast-fashion brand Minisco sells its products through more than 1,400 standalone stores in 31 countries. A spokesperson for Minisco said the company generally appoints franchisees for its brand but will open company-owned stores in India and later appoint sub-franchisees. One of the mall executives said Mark Styler is in talks with a local company for a franchisee. Masanori Akiyama, the company’s president, did not respond to a text message sent to his phone seeking comment.
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Modi government's surgical strikes meant to boost forces' morale: Amit Shah

May 23, 2017 - 11:00pm
NALGONDA: BJP president Amit Shah today said the NDA government undertook surgical strikes in times of threat to keep up the morale of the defence forces. On the possibility of holding simultaneous elections in the country, he said Prime Minister Narendra Modi has raised the idea before all parties and since it was a major election reform, the BJP alone could not take a decision on it. Shah, while speaking at a BJP booth-level workers meeting at Pedda Devulapalli village in Nalgonda district, said, "On one hand, the Narendra Modi government is taking up development works. At the same time, whenever there is a threat, (it) takes up surgical strikes and keeps up the morale of the armed forces of our country." His remarks came after the Indian Army's today said that it launched "punitive fire assaults" on Pakistani positions across the Line of Control, inflicting "some damage", days after two of its troopers were beheaded. The Army also released a video of the military action which showed some structures in a forested area crumbling in a heap under the impact of repeated shelling. Shah asserted that Telangana should become a gateway for forming BJP governments in all the southern states. He is on a three-day visit to Telangana to strengthen the party from grassroot level. The visit concludes tomorrow. While talking to reporters in Nalgonda town later, the BJP chief said the Modi-led dispensation at the Centre, which will complete three years in office soon, has given a corruption-free government to the country. "The rapid growth in economy, distribution of gas cylinders to the poor, massive rural electrification, fight against corruption through demonetisation, steps against benami properties and shell companies, crop insurance scheme for farmers are some of the major achievements of the Modi government," he said. When asked about the likelihood of implementation of "one nation, one election", he said it was a major poll reform and that BJP alone could not decide on it. "All parties should come forward. But, the prime minister has put the idea before all parties," he said. Shah claimed that his party has emerged as a strong alternative in Telangana. "The Bharatiya Janata Party (BJP) today stands before the people of Telangana as a strong political party and as a strong alternative," he said on the second day of his visit. Shah, who visited some households and interacted with a cross section of people in Nalgonda district, claimed that he received a great response from the people. The BJP would like to increase its strength at every polling booth in Telangana and the party workers voiced the failures of state government in the last two years, he said. Telangana state has been sanctioned funds and schemes to the tune of Rs one lakh crore by the NDA government since it assumed office, he said. Shah alleged that the TRS government, however, has been unsuccessful in implementing various central schemes like housing for poor, MGNREGA and soil health cards. When asked about the Muslim reservation Bill that was passed by the Telangana Assembly, Shah said the BJP was against quotas on the basis of religion. The Telangana Legislature last month passed a bill, which increases the reservations for Scheduled Tribes and backward sections among the Muslim community in government jobs and educational institutions. Replying to a question over whether the BJP would go for a tie-up with the TDP in the next general elections, Shah did not give a direct reply, saying "as of now both the parties are in alliance". The BJP chief visited Velugupalli village in the district and unveiled a statue of Pandit Deendayal Upadhyaya in a SC residential locality. Later, he visited some houses in Chinamadaram village and distributed gas connections to some women under 'Ujwal Yojana' scheme.
Categories: Business News

Voltas, Arcelik to set up $100 million consumer durable JV

May 23, 2017 - 10:56pm
NEW DELHI: Air-conditioner maker Voltas and Turkey's Ardutch have agreed to set up a joint venture company in India with equity capital of USD 100 million, marking the former's foray into consumer durables sector. "Voltas Limited, a Tata Enterprise; and Ardutch BV, a subsidiary of Arcelik AS - part of the Koc Group, have agreed to establish a joint venture company (JVC) in India, to enter the consumer durables market in the country. The new company to be incorporated in India will be an equal partnership joint venture," the companies said in a joint statement. The proposed JV will launch refrigerators, washing machines, microwaves and other white goods and domestic appliances in India. "Consumer durables is a logical extension for Voltas and we are delighted to be forming this joint venture with Arcelik. The Voltas-Beko partnership will also leverage the well-known brand and distribution strengths of Voltas, and we will work towards establishing the joint venture as a market leader for consumer durables in India," Tata Sons Director and Chairman of Voltas Ishaat Hussain said. The JV will leverage the brand presence, sales and distribution network of Voltas, which is the market leader for residential air-conditioners in India, with over 20 per cent market share. "The JVC will have an equity capital of USD 100 million, and Tata Investment Corporation Limited (TICL) and Koc Holding (KOC) will also hold 1 per centy equity stake each, in the new Joint Venture," the statement said. While Arcelik will bring to the JVC its R&D and manufacturing speciality along with product range and global sourcing capabilities. Arcelik has been selling home appliance under Beko brand name in Europe for the past 7 years. "The brand is the market leader in the UK...The complementary strengths of the two partners will help build a sustainable consumer durables business in India," the statement said. The JVC will set up a manufacturing facility in the country, and it will also source products from Arcelik's global manufacturing facilities and vendor base. "Given the accelerating shift of global economic power to Asia, this joint venture will be a critical step for Beko's growth in the region. India stands out as an important opportunity window as it offers a great potential with its 1.3 billion population," President of Consumer Durables Group of Koç Holding, Fatih Kemal Ebiclioglu said.
Categories: Business News

GAIL draws up Rs 30,000 crore capex plan for expansion

May 23, 2017 - 10:53pm
MUMBAI: State-owned gas utility GAIL India today said it has drawn up investment plans of Rs 30,000 crore for expansion. "We have investment plans for Rs 30,000 crore projects in hand, out of which Rs 8,000 crore in the coal gasification, 1,500 crore in city gas and Rs 1,000 crore in breakwater water project," GAIL Chairman and MD B C Tripathi told reporters here. GAIL is also currently executing gas pipelines worth Rs 20,000 crore and another Rs 10,000 crore worth of lines are under various stages of evaluation. The pipelines under execution include Jagdishpur-Haldia line that will take the environment friendly fuel to the east. Current projects will be completed by 2019-20, taking GAILs pipeline network to 15,000 km from the current 11,000 km, Tripathi said. The company has already spent capex of Rs 2,180 crore in FY17 and plans to spend Rs 4,261 crore in FY18 and Rs 7,704 crore in FY19 towards setting up of pipelines, petrochemical and process plants, he said. Among the other ambitious project, the company along with HPCL is setting up 1.7 million tonnes petrochemical plant in Andhra Pradesh. The financial appraisal has been done and six months from now, the investment decision will be taken, he said. Tripathi said the Dabhol power project (in Maharashtra) is being demerged by separating power and liquefied natural gas (LNG) units. GAIL will get charge of the LNG block, while state-owned power producer NTPC would be the largest shareholder in the power block. "We have tendered for building breakwater and it should be complete by 2019. The LNG terminal will then operate at its full capacity," he said. The company reported 69 per cent drop in fourth quarter net profit of Rs 260.16 crore as it wrote down the value of its investment in Dabhol power plant. The company took an impairment of investment in Ratnagari Gas and Power Pvt Ltd (the company that runs Dabhol power plant) for Rs 783 crore, he added. With the growth of the country's economy, demand for natural gas has huge potential, Tripathi said, adding that the company has taken up synchronised development of seven city gas distribution network (CGD) projects at Varanasi, Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneswar and Cuttack. For long term energy security, the first LNG terminal at the east coast is also coming up in Dhamra in Odisha under a joint venture of public and private sector companies. Following the revival of 3 fertiliser plants located at Gorakhpur, Barauni and Sindri, gas demand will be met through companies' supply, he added. "The company is also looking at reducing interest burden by repaying loans. We have brought down the debt from Rs 11,000 crore to Rs 5,000 crore. "In the current year, the company hopes to repay another Rs 3,000 crore, which will help us to reduce interest burden and improve profitability in the years to come," added Tripathi.
Categories: Business News

Tata Motors cuts up to 1,500 managerial jobs

May 23, 2017 - 10:44pm
MUMBAI: Tata Motors today said it has reduced its managerial workforce by up to 1,500 people domestically as part of an organisational restructuring exercise. "The reference (total managers) on which we started (the exercise) was in the vicinity of 13,000...we do see as far as the white collar population is concerned, an overall reduction in the vicinity of 10-12 per cent (up to 1,500)," managing director and chief executive Guenter Butschek told reporters here. He was speaking after announcing the company's earnings for the fiscal 2016-17. The company joins a growing number of organisations adopting such strategies for a variety of reasons, ranging from cutting the flab to automation. These job cuts, which have led to concerns on 'jobless economic growth' in various quarters, have been across multiple sectors, including capital goods, banking & finance, and information technology. Engineering, procurement and construction major Larsen and Toubro had announced shedding of 14,000 jobs in the first half of FY17, HDFC Bank has also reduced its workforce by over 10,000 in the second half of FY17 alone. In the IT segment, the country's largest private sector employer, some estimates have pegged the job losses at over 50,000. The Tata Motors management, however, said blue collar or worker jobs have not been impacted as part of the exercise. With the aim to reduce the number of managerial levels to 5 from the earlier 14, the top automaker undertook a review during the last financial year and identified the possibilities for restructuring. "We underwent a very detailed exercise in terms of the roles, the requirements and the fitment of the roles etc. It was a very comprehensive exercise which we rolled out over a 6-9 month period which also factored in performance and leadership qualities," the company's group chief financial officer, C Ramakrishnan, told. Terming it as a "holistic fundamental review", he said the programme has been completed now and the company will be coming out with a new structure soon. Officials said the exercise was carried out with a view to get ownership and accountability within the organisation and not to cut costs. While some of the affected employees were given voluntary retirement option, some were transfered to a services arm -- Global Delivery Centre, the officials said. However, they did not quantify the number of people moved to the services arm which is based out of Pune.
Categories: Business News

Holiday travel turns cheap! Indigo, Jet & others offering flights for as low as Rs 11

May 23, 2017 - 10:29pm
NEW DELHI: To counter SpiceJet anniversary sale, Indigo, Jet Airways and other airlines have also announced discount fare offers for the flier on select destinations and select period. Here are the details of the sale offers by airlines: SpiceJet: The airline has announced a sale with ticket price starting as low as Rs 12 one-way for all domestic and international flights. The discounts will be applicable on only one way fares. Booking Period: May 23, 2017 to May 28, 2017 Travel Period: June 26, 2017 to March 24, 2018 Minimum fare: Rs 12 (As claimed by the company) Indigo: The Gurgaon-based airline has announced sale fares starting at Rs 11 (basic fare) and all inclusive fare starts at Rs 899. However, the offers are valid on select sectors and select non-stop flights only. Booking Period: May 23, 2017 to May 28, 2017 Travel Period: June 26, 2017 to March 24, 2018 Minimum fare: Rs 11 (As claimed by the company) Jet Airways: Jet Airways is also offering special fares on selected routes. Though, the offer is not applicable on group bookings. Booking Period: May 24, 2017 to May 26, 2017 Travel Period: June 15, 2017 to September 20, 2017 Minimum fare: Rs 1,079 (all-inclusive) AirAsia: The Malaysia-based low-cost airline has also jumped into the ongoing sale competition. It is offering discounts on one-way journey and is available on selected fare classes only. Booking Period: May 23, 2017 to May 28, 2017 Travel Period: Valid till November 23, 2017 Minimum fare: Rs 1,699 (Source: Cleartrip)
Categories: Business News

Aparna Enterprises to commission Rs 320 crore tile unit by July

May 23, 2017 - 8:25pm
HYDERABAD: Aparna Enterprises, part of the diversified Hyderabad-based Aparna Group, will commission its Rs 320 crore upcoming tile manufacturing unit Peddapuram in East Godavari of Andhra Pradesh by July as it seeks to strengthen its backward integration, said a top company executive in Hyderabad on Tuesday. Coming up in two phases, the unit will have a capacity of 1.72 lakh sft of tiles per day. The company has already invested Rs 200 crore and in the process of investing another Rs 120 crore. This is the company’s first plant and it is also looking at a buyout of a tile unit in Gujarat. Talking to journalists in Hyderabad, SS Reddy, managing director of Aparna group said, “As part of our efforts to boost the backward integration, we are commissioning our new tile manufacturing unit while also looking at expanding our other business verticals to take our turnover of the group to Rs 2,300 crore by 2020 from Rs 1,300 crore currently”. Enterprise business comprising tiles and windows currently constitutes around Rs 500 crore of the group turnover, which they plan to double to Rs 1,000 crore by 2020. The group’s construction division is also venturing into affordable residential segment by developing 4.5 million sft of the total 8-10 million sft planned this fiscal. The proposed housing construction projects also include 1.7 million sft of luxury housing, while mid-segment residential complexes account for the balance. Aparna group is also developing some projects in the retail and office segment, said SS Reddy.
Categories: Business News

Mundal appointed as General Counsel of Tata 

May 23, 2017 - 8:24pm
MUMBAI: Tata Sons today announced the appointment of Shuva Mandal, who has worked with some top legal firms, as the Group General Counsel. The announcement comes on the heels of appointment of veteran investment banker Saurabh Agrawal as group chief financial officer (CFO) of the holding company of the salt-to- software conglomerate. Mandal will join the company with from July, a statement said here. He will replace Bharat Vasani, who has been holding the post of Group General Counsel for the last 17 years. Vasani has expressed a desire to move into a more strategic and advisory role. He will continue with the group as legal adviser to the Chairman's office, the statement said. A graduate of the National Law School, Bangalore, Mandal has over 17 years of experience in the legal profession and has advised leading Indian enterprises, global private equity firms as well as Fortune 500 companies. Mandal began his career with legal firm AZB Associates between 2000-15 before moving to Shardul Amarchand & Co (Advocates & Solicitors) as Partner and National Practice Head for corporate, M&A and private equity, the statement said. During his career, Mandal has been actively involved in deal structuring, advising on securities law and development of legal strategy for corporations. "Mandal brings wide-ranging legal experience and energy into this important role as the Group General Counsel. His time spent at India's top legal firms have given him a ringside view of different legal strategies and his long experience of working with multiple Tata companies in the past will hold him in good stead in his new role," said Tata Sons Chairman N Chandrasekaran. "It has always been an enriching and learning experience working with the Tata group as an advisor, and now I look forward to playing a bigger role under the guidance of Chandrasekaran and his new team," Mandal said. Mandal has been advising the Tata group on various matters. In his early days, he worked with the diversified group as a legal adviser to Tata Motors and Tata Chemicals on multiple international projects.
Categories: Business News

Modi government asks 129 'non-performing' babus to leave in public interest

May 23, 2017 - 7:53pm
NEW DELHI: As many as 129 government officers have been forced to retire in past few months in public interest for being non-performers, Union minister Jitendra Singh said today. The action is part of review being done by the central government to check deadwood of its workforce. "A total of 30 Group A officers and 99 Group B officers (total 129) have been sent on retirement in past few months," he said during a press conference. The punishment of compulsory retirement was given after reviewing service records of over 24,000 Group A officers and 42,251 Group B officers. He said the authorities are looking into the service records of another 34,451 Group A officers and 42,521 from Group B to check the non-performers. Singh, Minister of State in the Prime Minister's office, said the government has zero-tolerance policy towards corruption and it is committed to ensure citizen-centric governance. The Centre had in January terminated a senior IAS officer on grounds of non-performance. Earlier in 2014, graft-tainted IAS couple in Madhya Pradesh, Arvind and Tinoo Joshi, were dismissed from service, four years after an income-tax search on their house led to detection of disproportionate assets worth Rs 350 crore and recovery of Rs three crore cash. A service review on a government employee is conducted twice -- first after 15 years and again after 25 years of completion of qualifying service.
Categories: Business News

75 per cent employers not comfortable with work-from-home option: Study

May 23, 2017 - 7:34pm
MUMBAI: While a whopping share of 90 per cent employees say they want a 'work from home' option, 75 per cent of employers are not comfortable with the idea, said a recent study. "Nearly 60 per cent organisations do not have a formal work-from-home policy. Incidentally, 75 per cent employers are not even comfortable with the idea, whereas 90 per cent employees are keen on having such a policy at work," according to a study carried out by job portal, TimesJobs. The study was conducted with a sample size of over 1,100 employees and nearly 800 employers. "To survive in today's competitive business world, companies need to transform from a command and control culture to an empower and enhance value system. Organisations that are able to create a culture that nurtures agile, high-performance teams will thrive," TimesJobs business head Ramathreya Krishnamurthi said. "Policies such as work-from-home and flexi-working create a culture of trust and communicate the company's belief in its high-performance employees, which in turn attracts and retains top talent," he said. The study stated that 70 per cent employers believe that productivity gets hampered when employees work from home, while 44 per cent felt it helps boost productivity. As many as 80 per cent organisations said no to work-from-home as they felt they have no tracking mechanisms to manage workforce, who opt for it, it said. It also found that about 40 per cent employers see a 'lack of control' as the biggest challenge for this. Resistance from top management in acceptance and implementation of work-from-home strategy is another big challenge cited by 30 per cent of employer respondents. However, they do believe that work-from-home set up has certain benefits with 40 per cent seeing its biggest impact in boosting their employer brand. Thirty per cent see it as useful in curbing attrition while another 30 per cent find it beneficial in improving employee productivity, the report cited, while another 25 per cent employers believed that there are many jobs that are not conducive to work-from-home arrangements. A share of 42 per cent say work-from-home doesn't not work well in IT related areas of work, 40 per cent said it is not practical for logistics, supply chain management and procurement roles, while another 40 per cent found it is not useful in customer service functions, said the study. Nearly 35 per cent employers felt work-from-home policy is unsuitable for those working in hospitality and related domains, another 35 per cent said the idea is not apt for administrative profiles, 30 per cent said for engineering profile, while another 25 per cent saw work-from-home concept as inappropriate for accounting and finance roles, it added. Amid these reservations about work-from-home, the study found that 35 per cent organisations are unsure of adopting any such policy in the near future. Forty per cent employers said they already have a policy but they will modify it to suit the changing needs of employees.
Categories: Business News

Mahindra First Choice posts 40% rise in sales in FY17

May 23, 2017 - 7:17pm
NEW DELHI: Mahindra group's used-car chain Mahindra First Choice Wheels today reported a 40 per cent growth in sales in 2016-17 at 2.2 lakh units with revenue crossing Rs 100-crore mark. The company ended the year with over 1,200 franchise outlets and completed over 1.2 million inspections, Mahindra First Choice Wheels (MFCWL) said in a statement. There was strong growth in technology enabled businesses that includes auctions (eDiig.com), inspections (Autoinspekt.com) and IndianBlueBook.com, it said. Revenue growth in 2016-17 for the technology enabled businesses was over 200 per cent, enabled by higher customer adoption of its solutions and launch of new products and services and the company's overall revenue for the fiscal crossed Rs 100 crore, MFCWL added. MFCWL's 1,220 franchisees operate in over 650 towns with high regional penetration pan-India. Its dealer network grew 65 per cent. "FY'17 was a pivotal year for MFCWL in which we have proven our business model by demonstrating revenue and margin growth with profitability. We believe we have a strong sustainable business model in a challenging industry and we hope to demonstrate sustained growth performance in FY'18", MFCW CEO and Managing Director Nagendra Palle said.
Categories: Business News

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