Business News

Subscribe to Business News feed Business News
The Economic Times: Breaking news, views, reviews, cricket from across India
Updated: 1 hour 50 min ago

Azim Premji pens his final letter as boss to Wipro shareholders

1 hour 50 min ago
Ahead of Wirpo’s June quarter earnings on Wednesday, chairman and managing director Azim Premji in a letter to shareholders today said the company will continually transform to scale new heights as the world changes, while remaining firmly committed to its values.Premji will step down on July 31 from the company he built over five decades into one of the country’s largest technology services firms and devote more of his attention to philanthropic initiatives. Rishad Premji, Chief Strategy Officer and Member of the Board, will take over as the Executive Chairman from July 31.Here is the full text of Azim Premji’s last letter to shareholders as CMD of Wipro:This year, we embark on our 75th year of creating value for our stakeholders. It is an important milestone for us and we take great pride in how Wipro is an exemplar of a successful, ethical and a socially responsible organization. If we look back at the Wipro journey in the last seven decades, from a small vegetable oil company to a leading information technology company that we are today, we have evolved by constantly re-inventing ourselves and creating newer opportunities. This has been possible because of the deep commitment and hard work of Wiproites and the core values that have remained our guiding light.Along the journey, we have focused on continuous evaluation of the capabilities we need to win. This year as a part of the strategic plan exercise, we identified four technologies that will lead us into the future - Digital, Cloud, Engineering Services and Cyber Security. Based on the approval from the Board, we have decided to step up our investments significantly in these four big bets. Furthermore, we also divested our datacenter business which has improved our return on capital employed.We are committed to enhancing value for our stakeholders. Our EPS for the year ended March 31, 2019 grew by 18.6% YoY, which was the best in the last 5 years. We improved our working capital substantially and our free cash flows was robust at 106% of our net profits. We have a capital allocation philosophy of providing regular and stable payout to investors keeping two important considerations, one that of building long term stakeholder value and two that allows us to make required investments for future growth.Consistent with this philosophy, we declared a dividend of ` 1 per share, completed a bonus issue of one equity share for every three held in March 2019 and also announced a buyback of ` 105 billion through buyback to the shareholders in April 2019. The shareholders have approved the proposal to buyback equity shares of the company and the process is likely to be completed by August 2019As a large technology company which employs 170,000 plus people, we have the responsibility to drive an inclusive growth. Technologies like digital and AI are disrupting the way services are rendered and the ability to learn becomes vital for our employees. At Wipro, we have made significant investments in re-skilling our employees in digital technologies. There are three levels of training that start from awareness programs, extensive learning programs through virtual labs and immersive programs that provide opportunities to build deep expertise. We are also using TopGear, our social learning and crowdsourcing platform as a workforce transformation tool as it has 2000+ plus learning assignments across 200+ skills. Today, we already have 55,000+ employees on TopGear. Localization is an important initiative we are driving to create a global, diverse and distributed talent base. In the last few years of running this program we have successfully localized all our major markets like USA, UK, Australia, Canada, Singapore, Africa and Middle East. We are acutely aware that much of the economic progress in the world has come at the cost of climate change and therefore we have a responsibility towards creating a sustainable community. We have significantly scaled up renewable energy for our operations, contributing to 40% of our total consumption. Recycled water now contributes to 42 % of our total water usage. Education, has been the primary focus of our work for close to two decades now. Till date, we have partnered with 166 organizations working in school education. Wipro Earthian, a sustainability education program focused on water and bio-diversity, has reached out to 8,600 schools over the last nine years. The Wipro Science Education fellowship in the USA, which we started in 2013, works in seven sites across 35 school districts on improving STEM learning in schools serving disadvantaged communities. This year, we are collaborating with Kings College London and Sheffield Hallam University to provide rigorous continuous professional development to STEM teachers working in government designated ‘opportunity areas’ in the UK, which by definition have a high proportion of failing-schools.Through Wipro cares, our employee giving program, we have worked on education for disadvantaged children and children with disabilities and worked with partners who provide quality primary health care services to underserved communities. My own thinking of wealth & philanthropy is that we must remain ‘trustees’ of our wealth for society, not its owners. As announced earlier, I have irrevocably renounced more of my personal assets and earmarked them to the endowment which supports the Azim Premji Foundation’s philanthropic activities. The total value of the philanthropic endowment corpus contributed over time is ~USD 21 billion, which includes 67% of economic ownership of Wipro Limited. We remain committed to building a glorious future. I am pleased to share that Rishad Premji, Chief Strategy Officer and Member of the Board, will take over as the Executive Chairman of Wipro Limited with effect from July 31, 2019. Rishad brings to this role new ways of thinking, experience, and competence that will lead Wipro to greater heights. He has been an integral part of the leadership team since 2007, and has a deep understanding of the company, business strategy, culture and heritage. He is also deeply committed to the values which form the bedrock of Wipro. I will continue to serve on the Board of Wipro Limited as NonExecutive Director and Founder Chairman while dedicating most of my time and energy to the philanthropic efforts of the Foundation. Leading Wipro from 1966 till now has been the greatest privilege of my life, it has been an extraordinary journey. I want to thank the generations of Wiproites and their families or their contribution towards building our company to what it is today. I am grateful to our clients, partners, and other stakeholders who have reposed trust and confidence in us. Wipro will continually transform to scale new heights as the world changes while remaining firmly committed to its values. I am confident that the future of Wipro will far outshine anything that we have done before.
Categories: Business News

How govt is planning to sell Air India now

1 hour 50 min ago
By Siddhartha SinghIndia is considering inviting expressions of interest to sell Air India Ltd. by the end of next month as the government aims to complete the transaction this year, people with knowledge of the matter said.The government will conduct roadshows as well as be open to meet prospective buyers even before the expressions of interest are sought, the people said, declining to be identified as the discussions are private. The process will likely allow the bidders to look at the accounts of the airline except for some portions that are confidential and also see the share purchase agreement, they said without providing details.The potential bidders will have the option to make suggestions for changes in the sale terms during the process of expressing their interest in the deal, the people said. The government is looking to sell all its stake in the carrier, they said. D.S. Malik, a spokesman of the ministry of finance, did not immediately answer two calls made to his mobile phone. Dhananjay Kumar, a spokesman of Air India, declined to comment.The plan is being prepared after the government’s attempt to partially exit the carrier failed to attract any bidder last year. Finance Minister Nirmala Sitharaman in her budget presentation for the current financial year said the government will revive plans to sell Air India and the divestment would be part of the government’s efforts to raise 1.05 trillion rupees ($15.3 billion) selling stakes in state-run companies.Air India, which is surviving on a 300-billion-rupee taxpayer-funded bailout, has failed to maintain its market dominance as a slew of carriers including InterGlobe Aviation Ltd. and SpiceJet Ltd. started to offer ultra-cheap, on-time flights more than a decade ago. The state-run airline has total debts of $8.4 billion and posted losses of more than 76 billion rupees last year, according to provisional estimates.
Categories: Business News

Biz optimism takes a hit amid slowdown fears

1 hour 50 min ago
New Delhi: Business optimism for the July-September quarter in India decreased by 10.7 per cent amid continued slowdown in consumption and investment demand, says a report. The Dun & Bradstreet Composite Business Optimism Index stood at 70 during Q3 (July-September) 2019, registering a decrease of 10.7 per cent as compared to Q2 (April-June) 2019. "Heightened concerns related to the extended slowdown in the domestic economy and weakening of global economic activity might have weighed upon the optimism levels of businesses," said Manish Sinha, Managing Director - India, Dun & Bradstreet. As per the report, optimism for net profits stood at 66 per cent, registering a decrease of 3 percentage points as compared to Q2 2019, while optimism for new orders stood at 57 per cent - a fall of 6 percentage points as compared to Q2 2019. Meanwhile, optimism for volume of sales stood at 65 per cent - down 9 percentage points as compared to the second quarter of this year. "Multiple issues like crisis in the NBFC segment, rural distress, subdued lending to the micro and small firms, problems in the automobile and aviation sectors and rising trade barriers are imposing constraints to growth," Sinha said; adding that going ahead, businesses are not expecting a revival in demand in the near term. The Dun & Bradstreet Composite Business Optimism Index measures the pulse of the business community and serves as a reliable benchmark for investors. It is arrived at on the basis of a quarterly survey of business expectations.
Categories: Business News

Facing favouritism charges, railways introduces fresh tender system for Train 18

1 hour 50 min ago
With the production of the third Train 18 unit virtually stopped over allegations of favouritism in the tendering process of the first train set, the railways Tuesday said it has introduced a new system for giving all bidders a level playing field and ensuring transparency.Officials said the manufacturing process for the third Train 18 set, or Vande Bharat Express, would go on now with the new tendering process in place.Earlier, stung by allegations of favouritism in the tendering process for manufacturing the first Train 18 set, which was rolled out earlier this year, the Integral Coach Factory had scrapped all existing tenders for the third rake.A second Train 18 set is ready and is likely to be launched next month on the Delhi-Katra route.Officials said the new tendering process gives vendors three months to apply for bids instead of the present three weeks.It makes it mandatory for the production units to follow Research Design and Standards Organisation, which functions as a technical adviser and consultant to the railways, specifications while issuing a tender, which was not followed by the ICF during manufacturing of first Train 18 set."This will bring in more transparency and also give all parties a level playing field," an official said.The first rake of Train 18 was manufactured in a record time of just 18 months at a cost of about Rs 97 crore.However, the ministry received around 25 complaints from vendors and multinational companies that a domestic private firm was allegedly favoured in the procurement process for electrical equipment for the train set.During the bidding process for the first rake, 18 companies were in the fray for supplying electrical equipment. Eight of these firms were Indian.However, only one consortium could make it on the last day of the tender submission, February 6, 2018, due to "certain pre-bidding conditions", sources said, though they did not elaborate.This led to the department of industrial policy and promotion (DIPP) red-flagging the process. And the manufacturing of the third train virtually stopped with a vigilance enquiry at the Integral Coach Factory underway.Not just the Integral Coach Factory (ICF), Chennai, but the Modern Coach Factory, Rae Bareli, also cancelled all tenders pertaining to Vande Bharat Express type of rakes, suburban trains such as Electric Multiple Units (EMU), Diesel Electric Multiple Units (DEMU) and Mainline Electric Multiple Units (MEMU) as well.An official said, "We want to offer a level playing field to all suppliers to participate in the making of these trains which will not only have high quality but (will be produced with) much greater transparency."The Railway Board in a recent meeting with top officials and leading manufacturers of propulsion systems discussed the new timelines to invite wider participation, another official said."The Board met train set manufacturers and informed them that train sets could only be procured from them if the demand exceeds the manufacturing capacity of railways' production units," the senior ministry official said.The ICF has been sanctioned to manufacture 40 Vande Bharat train sets over the next three years – 10 in 2019-20 and 15 each in the next two years.
Categories: Business News

Rakesh Gangwal won't sell IndiGo stake in feud with Rahul Bhatia

1 hour 50 min ago
By Anurag KotokyRakesh Gangwal, the co-founder of IndiGo, said he won’t sell his shareholding in India’s largest airline and will maintain his stake amid a feud with his partner Rahul Bhatia.“I am here for the long haul,” Gangwal, who has accused Bhatia of corporate governance lapses, said by phone. “I have no desire to sell my stake or raise my stake.”Gangwal, teamed up with Bhatia -- a former airline sales agent -- to create IndiGo in 2005, which quickly outpaced rivals to control almost half of the local market, and made both the founders billionaires. Once the chief executive officer at US Airways, Gangwal and his affiliates, own 37% of InterGlobe Aviation Ltd., which operates IndiGo, while his partner’s company holds a little more at 38%. A representative for Bhatia’s InterGlobe Enterprises Ltd. didn’t immediately respond to a request seeking comments.The primary reason for the fight is the controlling rights held by Bhatia which Gangwal alleges allows his partner to push through related-party transactions in violation of rules. Bhatia’s firm, which has interest in a chain of hotels across India, has said all transactions are executed at an arms’ length basis and in a transparent manner.“IndiGo has become too big and too critical a company for the country. It is bigger than me, it is bigger than Rahul Bhatia,” Gangwal said. “I am focusing on governance issues that have gone awry in this company and I am not seeking any additional control in the company.”
Categories: Business News

F&O: Nifty tops hurdle at 11,650; trading range shifts higher

1 hour 50 min ago
By Chandan TapariaThe Nifty50 index managed to hold above 11,600 on Tuesday and gradually extended its gains towards the 11,670 level in the later part of the session. It formed a Bullish Candle on daily scale, as buying interest emerged at lower levels, and managed to close above the crucial hurdle at 11,650.As long as it holds above 11,600, Nifty could extend the gains towards 11,720 and then 11,750 levels, while on the downside supports were seen at 11,550 and then 11,500 levels.On the options front, maximum Put open interest was at 11,300 followed by 11,500 levels while maximum Call OI was at 12,000 followed by 11,800 levels. There was Put writing at 11,600 and 11,500 while minor Call unwinding was seen at immediate strike prices. Options data suggested a trading range between 11,500 and 11,800 levels.India VIX fell 3.24 per cent to 11.63 level.Bank Nifty formed an Inside Bar on the daily scale, as it traded in the range of the previous session and managed to hold above 30,500. It remained consolidative for most part of the session but supports remained intact near 30,250 level. Now the index needs to hold above 30,600 to witness a bounce towards 30,850 and then 31,000 levels, while on the downside supports are seen at 30,400 and then 30,250 levels.Nifty futures closed positive at 11,659 level with a gain of 0.69 per cent. There was long buildup in Torrent Pharma, Jubilant Foodworks, IGL, REC and Dabur while shorts were seen in Just Dial, Federal Bank and Cummins India.(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
Categories: Business News

Higher taxes could kill domestic hedge funds

4 hours 50 min ago
By Andy MukherjeeIndia is killing off the one industry that can bring badly behaving tycoons into line while nudging savers away from an unproductive lust for gold. That industry is domestic hedge funds, which have taken seven years to reach $6 billion in investment commitments from nothing. By contrast, equity investment in India by overseas financial investors is upward of $400 billion.Even that measly $6 billion figure for so-called Category 3 Alternative Investment Funds overstates the industry’s development. Some managers of vanilla mutual funds now seek the AiF registration to avoid regulatory restrictions on what they can pay distributors for selling to mom-and-pop investors. Alternatives that are meant for the rich don’t have such restraints. But leave aside the pretenders. Rather than encourage a community of investment vigilantes who target firms falsifying accounts or stealing from investors, the Indian taxman is threatening to disband it. 70239511 The increase to 42.7 per cent from 35.9 per cent in the tax rate on annual earnings over 50 million rupees ($730,000), announced in the first annual budget after Prime Minister Narendra Modi’s reelection, has a more vocal victim: overseas funds investing in India. These are seeing red. Often structured as trusts or associations, they too will have to pay the higher levy that applies on all non-corporate income. The head of the tax authority in New Delhi has told them they’re “collateral damage.” Offshore investors can always find other markets. What will onshore hedge fund managers do, except leave the country perhaps? Singapore doesn’t tax capital gains; in India profits on cash equities bought and sold within a year will be charged at 21 per cent, up from 18 per cent. It gets even more draconian. Alternative funds now have to withhold 42.7 per cent of all income on derivatives trading before they pass on the returns to investors. This is bread and butter business for long-short hedge funds, which frequently use derivatives to mount leveraged bets. Worse, the ultimate investors won’t be able to set off that ta x against any other business losses.The Securities and Exchange Board of India, or SEBI, has always been suspicious of the source of capital for hedge funds investing in India from Singapore or Hong Kong. It believes dirty money – proceeds of crime, corruption or tax evasion – comes back home from offshore financial centers after being laundered. Whatever the rational basis of those fears, the regulator’s efforts to set up from scratch a domestic industry in alternative assets is being torpedoed by the taxman. “They may be unwittingly about to kill off the onshore hedge fund industry that SEBI created, even before it has begun to crawl,” Vijay Krishna-Kumar, head of IDFC Asset Management’s liquid alternatives investment, told me. 70239566 That would be a shame. Stamping out short sellers will tilt an already-skewed playing field even more toward long-only investors. Those who profit only when share prices rise will happily overlook corporate skulduggery, especially if the tycoons riding roughshod over minority shareholders make the fund managers feel important by giving them access. At this rate, India’s abysmal governance standards will never improve.At $6 trillion, India’s household wealth is a fraction of China’s $52 trillion. Even so, the country had 343,000 dollar millionaires this time last year, according to Credit Suisse Group AG. For them, it’s important to have access to assets uncorrelated with stock market returns that they can replicate with index funds. If hedge funds die because of taxation, the rich in India will be left with two sub-optimal options. “Offshore tax centers can breathe easy now,” says Krishna-Kumar. “India will remain an underdeveloped market where only gold and property would be your alternatives.”So much of India’s private wealth is trapped in gold that any more will be a colossal social waste. For a country that aims to elevate GDP to $5 trillion by the end of Modi’s second term in 2024, from $2.8 trillion now, India needs risk capital to go into productive assets. Yet policy makers are jacking up tax rates on the one avenue for risk-taking they should be nourishing. The money they collect will be chump change compared with the cost of the hedge fund industry’s arrested development. Cronyism thrives on finance – and only finance can stop it. Without an industry that has their back, which analyst will pore over obscure company filings; meet suppliers, customers, and regulators; and use LinkedIn and Google Maps to verify whether employees and facilities exist? In India, taking on important people means risking one’s livelihood – and even liberty. If nothing else, the domestic alternatives business is worth saving because it can speak truth to power and put its money where its mouth is.
Categories: Business News

Coca-Cola India announces changes to its mgmt team

4 hours 50 min ago
BENGALURU: Beverage company Coca-Cola India & South West Asia has announced changes to its leadership team, said a statement issued today. The new structure is designed to enable the India & South West Asia business to be a growth engine for The Coca-Cola Company by capitalising on emerging opportunities while continuing to build on talent development."We believe there are significant opportunities that lie ahead of us to grow our portfolio and meaningfully penetrate the market. It is our constant endeavour to strengthen the leadership team for a strong sustainable future growth and address developing business needs. It also reinforces our commitment towards investing in talent development,” said T Krishnakumar, president, Coca-Cola India & South West Asia. Sarvita Sethi has taken over as vice-president– M&A and new ventures from her earlier role of vice-president of finance, India & South West Asia. In this new role, Sethi will provide leadership to business incubation through alternate revenue streams in new ventures. She will also continue to lead the M&A priorities for the business in India & South West Asia. Harsh Bhutani has been appointed to the position of vice-president – finance (CFO), Coca-Cola India & South West Asia, effective 1st August 2019. He currently heads the finance and business services verticals for Hindustan Coca-Cola Beverages as executive director and chief financial officer for over three years. The Coca-Cola India system provides direct employment to 25,000 people and indirect employment to more than 150,000 people.
Categories: Business News

Air India to launch Delhi-Toronto direct flight in September

4 hours 50 min ago
Dubai-India's national carrier Air India will launch the Delhi-Toronto direct flight on the occasion of the World Tourism Day on September 27 despite facing the threat of privatisation due to mounting debts.The airline is also planning to launch a direct flight to Nairobi, Kenya sometime in October due to immense tourism potential in that area."We will launch Delhi-Toronto non-stop flight from September 27 on the occasion of the World Tourism Day," Air India (AI) Chairman and Managing Director (CMD) Ashwini Lohani told PTI onboard the Indore-Dubai maiden flight.AI 903 is the first international flight from Madhya Pradesh providing the much needed connectivity to the Gulf and beyond to the people of the state."We are also planning to launch a direct flight to Nairobi sometime in October in view of immense tourism potential in that area," Lohani said.Though the AI is facing a debt of nearly Rs. 60,000 crore, the spirit of its CMD is very high and is taking all possible steps including reducing operational costs to keep the national carrier afloat.Air India also plans to introduce Bhopal-Bangalore flight in October to fulfil the major demand of the people.He also said that after Dubai flight, AI will also start it's services for Bangkok from Indore to meet the popular demand of the fun-loving people of the city (Indore) which is the country's cleanest city.From Indore, Air India is operating a 162-seater A320 neo aircraft, which will fly three times a week directly to Dubai on Monday, Wednesday and Saturday while from Dubai it will fly on Tuesday, Friday and Sunday, he said."At present, AI has a capacity of 4,500 seats for Dubai and it plans to enhance it to 5,800 seats by winter by starting four more flights for the Gulf nation," an AI official said.The new flights will commence shortly from Kolkata, Hyderabad, Kunnoor and Kochi during winter session which starts from October 10.Indore-born Sunish Kumar Bhargava will be the commander of this maiden international flight from his home city, the official said."The flight will take a route via Kaccha (Gujarat) to fly over the Arabian Sea to reach Muscat, Oman to enter Dubai due to closure of air space over Pakistan," Bhargava told PTI before entering cockpit.However, he clarified that it will not enhance the flying time.From Dubai, people of Madhya Pradesh will be able to visit major tourist destinations in the world and the biggest city of the UAE with well-known cities like Abu Dhabi, Sharjah, Ajman and Al Ain all near by.Newly elected Indore MP, Shankar Lalwani in the presence of the CMD, Indore Mayor Malini Gaud and former Lok Sabha speaker Sumitra Mahajan flagged-off the maiden international flight to Dubai from Indore.An elated passenger, Aditya Dubey from Dewas, who is going for the first time to Dubai in the maiden international flight from Madhya Pradesh displayed handmade posters in flight "Thanking Air India" for launching this flight and took photos with the CMD.The authorities have made elaborate arrangements for welcoming passengers of this maiden flight by rolling out red carpet.
Categories: Business News

Skoda launches limited edition Rapid at Rs 6.99 lakh

4 hours 50 min ago
Czech carmaker Skoda Auto Tuesday launched a limited edition of its mid-sized sedan Rapid in India at an introductory price of Rs 6.99 lakh (ex-showroom).The edition, which is powered by 1.6 litre petrol engine, is equipped with essential safety features like dual airbags and anti-lock braking system as standard across the range, Skoda Auto India said in a statement.It also has features such as rear parking sensors, anti-glare interior rear view mirror, rear windscreen defogger with timer, height adjustable three-point seat belts at the front, rough road package, and engine immobiliser with floating code system, it added.
Categories: Business News

MFs’ exposure to this space at all-time high; should you buy?

4 hours 50 min ago
Money managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, up 370 basis points YoY and 20 basis points QoQ. There are hopes that large private corporate banks with adequate provisioning and fewer concerns over incremental slippages from select leveraged accounts could see a sharp improvement in return on assets going forward. Even in a tumultuous month for the equity market, mutual funds further increased exposure to the NBFC space by 10 basis points to 9.20 per cent. It was followed by technology (up 10 basis points to 8.70 per cent) and consumers (up 20 basis points to 7.60 per cent).“Earnings growth has not been very impressive over the past few years. However, there are select quality companies – mostly among private banks, insurance, technology, energy, industrials, consumer, and media – which show potential,” Sanjay Singh, Head of Global Markets, BNP Paribas India, told ETMarkets.com.June was a highly volatile month for the market, with Nifty surpassing the 12,000-mark to hit a record high at the beginning of the month. But the euphoria over the general election outcome fizzled out as investors woke up to ground realities, including a slowdown in the economy, concerns over liquidity woes for NBFCs, and a moderation in consumption, among others. Throughout the month, Nifty consolidated in the 11,500-12,000 range, in keeping with the volatile trend of the past two months. Nifty Private Bank index declined 1.86 per cent, while Nifty50 lost 1.12 per cent. Reliance Securities continues to prefer corporate banks, including ICICI Bank and SBI, with a strong liability franchise, fewer concerns over incremental slippages from corporate accounts and those that have adequate provisioning and are trading at inexpensive valuations. “Given a not-so-benign operating environment, conservative plays like HDFC Bank and Kotak Mahindra Bank should continue to do well, even though they are trading at expensive valuation multiples,” the brokerage said. In the Nifty50 pack, mutual funds were net buyers of around 62 per cent of stocks, with Tech Mahindra, JSW Steel, Bharti Infra, Hero Moto and IndusInd Bank being their top picks. (See table).On the other hand, they reduced stakes in select media, oil & gas, chemicals, infrastructure, chemicals, infrastructure, cement and auto stocks.The auto industry has been going through a very difficult phase as marked by a 17.54 per cent slump in domestic passenger vehicle (PV) sales in June and a 25 per cent drop in domestic car sales across categories, data released by the Society of Indian Automobile Manufacturers (SIAM) revealed.Motorcycle sales slipped 9.57 per cent to 10,84,598 units in June 11,99,332 units a year earlier.The mutual fund industry’s average asset under management (AUM) increased for the second consecutive quarter in Q1FY20 (over 4.20 per cent QoQ) to touch a new high of Rs 25.6 lakh crore. “Investors continued to park money in mutual funds, with inflows remaining steady and the contribution of systematic investment plans (SIPs) remains stable at Rs 8120 crore,” Motilal Oswal Financial Services said in a report.
Categories: Business News

Memani: I would go for mid and smallcaps, not largecaps in India

4 hours 50 min ago
Growth outlook in India has deteriorated and there was nothing in the Budget that helps it. The liquidity condition in the Indian economy is not good and it is not improving either. As a matter of fact, it is probably deteriorating and that is something that they have to be very concerned about, says Krishna Memani, Vice-Chief of Investments, Invesco. Excerpts from an interview with ETNOW.How do you see Indian markets given the slowdown concerns -- both domestic and global?The Indian markets are suffering from the same thing that emerging markets are suffering overall. The growth outlook on a global basis is not very rosy and the valuations in Indian markets were high to begin with, There was a bit of a euphoria following the election and they are giving back on that rise after the elections. So the growth outlook in India has deteriorated and there was nothing in the Budget that helps it. This is something that we will be dealing with for quite some time. Has the government taken adequate steps to address the liquidity concerns in your view?No, not at all. If you look at the risks in the Indian economy and therefore for the Indian markets in the near term, the NBFC cash squeeze is by far the biggest near term concern and a recapitalisation plan and other things at the margin really does not solve the issue in any meaningful way. If the government is really concerned about near term growth, they have to take steps. The liquidity condition in the Indian economy is not good and it is not improving either. As a matter of fact, it is probably deteriorating and that is something that they have to be very concerned about. Let’s discuss the tax on FPIs as well. It is obviously going to dent sentiments quite significantly.The challenge the government faces in the budget is on the revenue side. The growth outlook is not good enough to generate significant revenue growth and they have to find ways of replenishing that. The Reserve Bank dividends help somewhat; PSU sales help somewhat, but at the end of the day, the growth outlook has to improve and that is not improving. They are running around trying to find revenues from whatever sources they possibly can. While they are focussed on the revenue side, their real challenge is on the expenditure side. Transfer payments for certain parts of the economy are good political objectives but from a long-term perspective, they really do not do much for getting growth going in the Indian economy. It is a big challenge and taxation and other revenue measures are really not helping much on that front. How prolonged can the slowdown be in your view? Even consumption heavyweights like Titan, Bajaj Finance, GCPL are all acknowledging the slowdown quite openly now. What are your thoughts on the current trend that we are seeing?The government has to be very concerned about that because their policy measures in the last administration basically squeezed the Indian economy real hard. Post elections, they have to take real measures soon as otherwise, the growth outlook for the Indian economy is not going to be 7%. It is going to go below 6% very rapidly. We need some economic remedy and they have not provided any of that in the current Budget. Also, I do not see any discussions on that front. This is a really critical issue for the Indian economy and they have to get to it really quickly, otherwise growth is going to be much lower than what we are anticipating and what they are anticipating in their Budget numbers.What are your thoughts on the FII flows into India? With current valuations and the corporate setup, how do you see that panning out?Flows in India will come about if the growth outlook for India improves meaningfully and that is what we were hoping for. We were hoping for some real concrete policy action relatively quickly. They have to do that in the first two years of the current administration because otherwise there will be politics in the second half and the likelihood of coming up with concrete actions in that phase will be very difficult. So they have to come up with some real concrete policy action and there does not seem to be much going on on that front. Given the valuation level and growth outlook deteriorating rather than improving, both on the short-term and long-term basis, it is very difficult to see significant amount of flows coming into the Indian markets from foreign investors.Auto has been seeing a lot of pain. We have seen a sharp valuation cut. Do you think it merits a closer look?Autos is a global industry and the valuation cuts in autos is in line with valuation cuts everywhere else. This is not a sector that is going to be a favoured by anybody and not just in India, but also on a global basis. As they transition from fossil fuel technology to electric technology and autonomous vehicles, the capital expenditures are gargantuan and the payoff is very spotty or uncertain. I do not think autos is really where I want to put my money in.What are your thoughts on the broader market valuations then?The opportunity in the Indian market for foreign investors is really in midcaps, smallcap, micro cap and the reason for that is most of the flows that have arrived in India from foreign investors really have come from investors who are making an emerging market wide allocation rather than an India allocation and therefore those investors focus on the large cap names that they know and the consumer stories. That is why the valuations on those sectors is quite rich relative to the rest of the emerging markets. If you are going to invest in Indian equities, my preference would be midcap, small cap rather than largecaps.Fed chairman Jerome Powell’s latest commentary suggests that the Fed is readying for that rate cut in July. Are you expecting the same? How does the setup look like for emerging markets like India over the medium term?Yes, we expect the Fed to cut rates in July. Powell had an opportunity to walk that market expectation back in his testimony in the Congress and he did not. It is almost certain that in July they will be cut. We expect another cut in September and the reason for that is very simple; inflation is relatively absent and there is really no reason for the Federal Reserve to try to squeeze the US economy down and we expect monetary policy to be far easier on a global basis, including India, for that matter than it had been in 2071-18.It certainly helps emerging markets because it takes the lustre off the dollar and therefore dollar softens. In that environment, emerging market equities have done well and you will probably see revival of those flows back into emerging markets and India would be an indirect beneficiary of those flows.You also mentioned that the entire liquidity situation has rather deteriorated that the government needs to take concrete steps. What are these steps that you would like to see in order to improve the entire liquidity situation?They have to take a real direct leadership position with respect to injecting liquidity in the market and the best example of that I can cite is what the Federal Reserve did in 2008. The US market at that time was getting squeezed every which way and they found really creative ways of providing liquidity in the marketplace. Clearly all of that entailed a significant amount of risk and whatever the government does today in India, will probably entail a significant amount of risk as well but they have no choice. If they do not do that, if they just simply rely on recapitalisation of the banks and that leading to a significant improvement in liquidity conditions, that is not likely to happen. I cannot specifically indicate a measure that they have to take but they have to take direct action rather than relying on recapitalisation or the banking channel to make it all work. If the Reserve Bank of India looks hard enough, it can find tools and mechanisms to help with that. It is really a question of political will rather than finding ways of injecting liquidity in the market.
Categories: Business News

Flipkart has found a way to keep your cart's price minimal

7 hours 50 min ago
BENGALURU: Walmart-owned Flipkart has begun incentivising sellers to pass on additional discounts to customers enrolled in its loyalty programme Flipkart Plus by offering the vendors non-cash credits, even as the Indian government clamps down on what it describes as “predatory pricing” on ecommerce platforms.As part of a new promotional programme on Flipkart, vendors choosing to offer a 5% additional discount to consumers will receive as much as 50% of discount value back as non-cash credit note.The move is significant as Indian foreign direct investment (FDI) rules prohibit foreign-owned ecommerce marketplaces from directly or indirectly influencing the price of products sold on their platforms. In December last year, a clarification from the government further discouraged these companies from offering cashbacks to consumers on select items, forcing online marketplaces to find alternative ways to discount products and attract buyers. “The incentive is a way of offering a concession on our fees and commissions for achieving all the parameters of the incentive programme,” the company said in a letter to merchants, which was reviewed by ET. Rewards to sellers will be made by way of a credit note and will be adjusted against any payments due, the letter stated.Flipkart told vendors the programme was optional and requires them to opt-in to be a part of it. Further, to be eligible for receiving the rewards, they will need to ensure cancellations are restricted to under 0.5% of total orders during the promotion period.Flipkart Plus is a free loyalty programme offered by the company in which members get benefits such as free delivery, early access to sale events and rewards based on the frequency of transactions. 70237417 “As a homegrown company, Flipkart always encourages MSMEs and sellers to grow their business and implement best practices that can help drive efficiencies for them,” Rajneesh Kumar, SVP, Flipkart group.The restriction on offering discounts by e-tailers is part of a larger attempt by the government to ensure compliance, after years of protests from both online and offline sellers who alleged that players like Flipkart and Amazon were hurting their businesses by undercutting prices.Following a government notification in December 2018, which was implemented in February this year, Flipkart and Amazon were both forced to restructure their businesses. While Amazon reduced its stake in the parent firms of sellers Cloudtail and Appario, Flipkart is winding down its B2B arm, which would sell products to vendors dubbed Alpha Sellers, who in turn sold products back on Flipkart’s platform.The development comes on the back of the country's commerce and industries minister Piyush Goyal questioning Flipkart's corporate structuring at an industry meet last month. The minister is said to have asked Flipkart Group CEO Kalyan Krishnamurthy on how they were offering discounts to customers on its platform. In another meeting with foreign internet companies earlier last month, Goyal had said that India will not allow multi-brand retail as it needed to protect the interests of small offline vendors.
Categories: Business News

This feisty upstart is taking aim at Google Search

7 hours 50 min ago
PAOLI: Gabriel Weinberg is taking aim at Google from a small building 20 miles west of Philadelphia that looks like a fake castle. An optometrist has an office downstairs.Weinberg’s company, DuckDuckGo, has become one of the feistiest adversaries of Google. Started over a decade ago, DuckDuckGo offers a privacy-focused alternative to Google’s search engine.The company’s share of the search engine market is still tiny — about 1% compared with Google’s 85%, according to StatCounter. But it has tripled over the past two years and is now handling around 40 million searches a day. It has also made a profit in each of the last five years, Weinberg said.Weinberg, 40, is among the most outspoken critics of the internet giants. DuckDuckGo’s chief executive has repeatedly called for new privacy-focused legislation and has warned at hearings and in newspaper opinion pieces about the problems that big companies can cause by tracking our every move online.But the challenges faced by DuckDuckGo reflect just how difficult it is to take on the giants and build an internet business that is focused on the privacy of its users.After a decade, the private company’s modest success is an indication that, even as regulators around the world consider tougher rules for the data-tracking methods of big tech companies, selling consumers on privacy-focused services is still an uphill battle.Like other search companies, DuckDuckGo displays ads at the top of each search page. But unlike others, it does not track the online behavior of its users to personalize the ads.DuckDuckGo constantly bumps into Google’s business, which stretches far beyond search. It also has to contend with the fact that most people don’t seem willing to give up much to recover their privacy, and are easily overwhelmed when they decide to try to make a change.“It’s not as easy to switch as we’d like it to be,” Weinberg said while sitting in his office in jeans, red sneakers and a black short-sleeve shirt. “There is a lot of inertia drawing people back to the existing system.”These limitations are reflected in DuckDuckGo’s modest offices. DuckDuckGo, which has 65 employees, has done only two relatively small fundraising rounds, about $13 million, that add up to less than what Google makes in an hour. Weinberg parks his 2011 Honda minivan in a parking lot you can see from his corner office, which is papered mostly in drawings by his two sons.For people who care about privacy, DuckDuckGo is a reminder that it is possible to offer internet access and build an online business without logging every move made by users. It also provides a vision of what the internet might look like if companies are forced to scale back the surveillance economy.“DuckDuckGo is very much a poster child for a future in which companies stand with their users and still make money,” said Gennie Gebhart, a researcher at the Electronic Frontier Foundation, a nonprofit focused on privacy and online rights. “They counter the assumption that we’ve all been socialized to accept: that it is normal to hand overall your information. DuckDuckGo shows that doesn’t have to be the way.”Google has so far avoided any showdowns with DuckDuckGo. Last year, Google added DuckDuckGo as one of the four default search engines available for users of its internet browser, Chrome.But the internet giant has not taken kindly to DuckDuckGo’s suggestions that it is selling information about its users to the highest bidder.“The data we collect makes our product more helpful for people in a variety of ways, such as improving our understanding of queries and combating threats like spam and fraud,” said Lara Levin, a Google spokeswoman. “We keep this data private and secure, and we provide controls so people can make their own choices.”Weinberg started DuckDuckGo in 2008 when he was a stay-at-home dad, after struggling to get two previous startups off the ground. The early versions of DuckDuckGo (its name is a nod to the children’s game) did not have any focus on privacy. When he went in that direction, it was attractive to only a small number of privacy advocates.But after Edward Snowden, a former National Security Agency contractor, revealed extensive online surveillance by the U.S. government in 2013, privacy became a selling point. Business began to grow. 70239042 (A DukcDuckGo's billboard in 2011)DuckDuckGo is not the only upstart that is trying to capitalize on privacy concerns. Proton Technologies, a Swiss startup, is taking on Gmail with an alternative email service. The Firefox and Brave browsers are more focused on privacy than Chrome. And Google Maps users can switch to OpenStreetMap.DuckDuckGo’s search site looks similar to Google, with the G replaced by a playful cartoon head of a duck, who goes by the name Dax. Type in a question and up pops a list of links that looks like what you’d get from Google, with definitions from Wikipedia at the top and maps supplied through a partnership with Apple Maps.Weinberg said the site was designed to make it feel similar to Google, to ease the transition for new users. While DuckDuckGo does not keep data on its users, it can pull the geographic location from each query and serve local results for things like restaurants and news.“We don’t think privacy is stopping getting good search results for anybody,” Weinberg said.In online reviews at sites like Reddit and Quora, users praising DuckDuckGo’s little features — like shortcuts for searching specific websites, known as bangs — are roughly equal in number to those who find its search results inferior.I made DuckDuckGo my default search engine while I was doing my reporting for this article. I mostly didn’t notice a difference, though I did find the maps and local results to be less on target. And there were times when DuckDuckGo couldn’t figure out what I was looking for when Google could, especially for more obscure queries.Joseph Turow, a professor at the University of Pennsylvania who has written extensively about privacy, said that whenever he had tried DuckDuckGo, he had given up after a few days because of nagging doubts about quality of the results.“I’m almost embarrassed to say that I don’t use it more than I do,” Turow said. “There is something in my head that tells me I’ll get a better search from Google, even when I don’t know if that is demonstrably correct or not.”DuckDuckGo is also up against another hard reality of the online world: If you call up DuckDuckGo on the Chrome browser, for example, Google is still logging your search queries.“It can feel a bit futile as an individual,” said Liz Coll, the head of digital change at Consumers International, a consumer advocacy group. “It’s quite hard to isolate your search engine as opposed to all the other things you do online.”DuckDuckGo is expanding beyond the search engine. The company’s second most popular product, a free widget that can be installed in any browser, blocks invisible trackers from Google and other companies while providing a privacy and security grade for every website.The plug-in gives Google’s main website a grade of D, because, DuckDuckGo says, Google tracks you across the web and keeps permanent logs of your activity, which either the government or hackers might exploit.Google has said it offers users many settings so they can opt out of data collection. Most people don’t, the company said, because the data collection makes online services better and hasn’t led to big problems — at least at Google.Weinberg said the challenge of parsing what Google did and did not do was an indication of why it was so important to build alternatives that don’t keep any data.“All of these companies were saying you can’t make money without tracking your users,” he said. “By us existing and getting bigger and being profitable, we serve as the existence proof that it is possible.
Categories: Business News

Hyundai to invest Rs 2k cr for Rs 10 Lakh e-car

7 hours 50 min ago
NEW DELHI: Hyundai is planning to drive in a Rs 10-lakh electric car in India, and will spend over Rs 2,000 crore to develop the vehicle that will be manufactured at its Chennai factory. The car could be a mini SUV, though different body types such as a premium hatchback, are also being considered. It will also be exported across Middle East, Latin America, Africa and Asia.The push from the company towards cleaner mobility comes at a time when the government is nudging automakers to work out serious electric-vehicle plans as pollution worsens across Indian cities, and rising fuel import bills hit the national exchequer.As part of aggressive plans in the electric space, Hyundai is also looking at having an electric battery facility in India — on the lines of one developed by Suzuki and Toyota in Gujarat — and is speaking to an array of potential partners. These include Korean electronics giants like LG, Samsung SDI and SK Innovations, apart from some Chinese companies, Hyundai India MD S S Kim said.“We are carrying out studies to determine a totally new and different product, and this will be an India-dedicated platform,” Kim told TOI, adding, “all body styles are being evaluated” at present.The company recently launched its global electric vehicle Kona SUV in India, but this has been priced upwards of Rs 25 lakh and is not expected to corner significant sales numbers due to its premium tag.Hyundai aims to have a mass-volume affordable electric model for wider sections of the market. “We want a price that should be acceptable to general customers, and is also aggressive,” Kim said.The company plans to develop a supplier chain for the ambitious vehicle. “Investment for a new car is around $200 million, but since this also comes with a new supply chain, it may be $300 million (over Rs 2,000 crore) or more,” Kim said. Asked if the car is being developed around the Rs 10-lakh price point, he said, “May be, that is a target. Hopefully.”
Categories: Business News

Puravankara buys 25 acre from Unitech for Rs 200 cr

7 hours 50 min ago
Bengaluru: Puravankara Projects has bought a 25-acre plot in Bengaluru from cash-strapped realty firm Unitech for about Rs 200 crore.The plot in north Bengaluru was part of a landbank held by Unitech to build residential units. Puravankara, which signed the deal recently, plans to develop commercial property on the plot and strengthen its existing portfolio.“The agreement is to acquire 25 acres, but so far, 12.5 acres have been acquired. The rest of the land is in the clearance stage,” said people aware of the deal. In the first phase, Puravankara will build 2 million sq ft of office space on the acquired land.” Ashish Puravankara, MD of Puravankara, could not be reached for comment. The realty developer, which has largely focused on the residential segment, plans to develop 10 million sq ft of commercial and retail operations by 2023.“The company has 5 million sq ft that is either at design or construction stage. The idea is to create a platform for office assets,” said another person.Puravankara has already acquired land in Bengaluru, Mumbai, Pune and Hyderabad to expand its commercial portfolio. Last year, in the largest commercial land deal in Bengaluru, Keppel Puravankara Development acquired 7.6 acres of land from Metro Cash & Carry India for Rs 405 crore. Unitech had sold 74 acres in Gurgaon, Chennai and Hyderabad for Rs 260 crore in 2017 to boost its cash flow and complete its projects. In December, the Supreme Court had ordered a forensic audit of the Unitech Group and its units to probe alleged monetary irregularities and diversion of homebuyers’ money by the company’s promoters and directors.
Categories: Business News

A $677 billion manager spots buy opportunity amid sell-off

7 hours 50 min ago
By Nupur AcharyaUnfazed by a stock market sell-off that wiped $34 billion from India’s benchmark equity index and unabating jitters in the nation’s credit market, Aberdeen Standard Investments is looking to adding to its India equity holdings.Short-term volatility is “an opportunity to build positions in quality companies whose share prices have been indiscriminately dragged down,” said Kristy Fong, Asian equity investment director at the asset manager. “We favor those with pricing power, well-placed to ride on India’s long-term consumption trend.”A tax proposed earlier this month on India’s super-rich, which many overseas investors may struggle to sidestep, triggered the sharpest weekly loss in the benchmark equity index since mid May. Foreign stock investors are on track to make their biggest monthly withdrawal of 2019. The slump in equities further frayed the nerves of investors spooked by a string of yearlong defaults in the nation’s credit markets that started with IL&FS Group in June last year.“We are still seeing some blow-ups among non-banking financial companies, which highlights liquidity concerns. We think those that are struggling are of mediocre quality and will see a shake-out,” Fong said. Aberdeen manages $676.8 billion as of end-March, globally.Here are the excerpts from the interview:“In the near term, we can expect additional rate cuts to give the economy a lift. Over the long term, the structural positives of a young population and expanding middle class underpin the country’s growth prospects. Improved fiscal reserves ensure the economy is better positioned to withstand external currency and interest rate risks. ”“In itself, India is an investment opportunity because its domestic market is so huge, making it less export-dependent than many emerging market peers.”“Government spending commitments in areas such as infrastructure, as well as rising affordability from price cuts induced by the Goods and Services Tax, lift the prospects for domestic consumption. This should help to drive company profitability.”
Categories: Business News

YES Bank Q1 results: Will it be a 2nd-straight loss for the bank?

7 hours 50 min ago
Private sector lender YES Bank may report subdued earnings for the quarter ended June 30 on rising provisions amid deteriorating asset quality. The lender is scheduled to announce financial results on Wednesday. Kotak Institutional Equities projected a loss of Rs 578.60 crore in Q1FY19 for YES Bank against a net profit of Rs 1,260.40 crore in the corresponding quarter last year. The lender reported a loss of Rs 1,506.60 crore in the preceding quarter ended March 2019. The brokerage house also expects that loan growth to decelerate further to 8 per cent YoY and 4 per cent QoQ. “Revenue pressure will remain high due to weak fee income growth (sharp decline) and NIM pressure (higher funding costs),” Kotak said in a report. Investors should focus on the commentary from MD & CEO Ravneet Gill as it would be crucial as there have been a few more ‘stress accounts’, where the bank had exposure. An assessment by Kotak also showed that pre-provision profit of the lender may decline 45 per cent on 2.10 per cent rise in net interest income. Fee income and treasury income may tumble 56 per cent and 52 per cent, respectively, for the quarter ended June 30. Brokerage firm Prabhudas Lilladher projected 84 per cent YoY fall in profit at Rs 201.10 crore on 22 per cent YoY rise in pre-provisioning operating profit. It also said the asset quality of the lender may deteriorate further with percentage of gross non-performing assets (NPA) spiking to 3.70 per cent in Q1FY19 over 3.22 per cent in Q1FY18. “YES Bank could continue to face challenging quarter with key risky assets could turn NPA with the risk of further provisioning,” Prabhudas Lilladher said.
Categories: Business News

Sitharaman's tax cess hits corporate India where it hurts most

10 hours 51 min ago
MUMBAI: The increase in effective tax rate to 43% for those earning Rs 5 crore and more has spread disquiet in India Inc’s Csuite, raising the possibility of salary reviews, as the rise in tax will invariably push senior compensation levels higher with top talent demanding some offset, said HR heads.As per the latest records available, 144 executives of BSE 500 companies on average earned Rs 11.4 crore annually. Employee stock option plans (Esops) represent a significant proportion of compensation for several executives, said tax experts.The budget raised the tax surcharge on incomes between Rs 2 crore and up to Rs 5 crore to 25% from 15%, resulting in a maximum marginal tax rate of 39%, up from 35.88%. For those with incomes of Rs 5 crore and more, the surcharge was raised to 37% from 15% for a 42.74% highest applicable tax rate, the most since 1992, and also up from 35.88% before the change.A senior India Inc CEO, who did not want to be identified, explained the math to ET: “Take the example of someone earning Rs 10 crore as salary with, say, 25% of it comprising Esops. Currently, about 35% will go towards tax, about 30% will be future cash flow, and what remains will be about 35%. Under the new scenario, what will remain is about 28%. This means the individual will lose 20% of take-home pay.” 70237426 NARROW TAX BASETo compensate for this, the individual’s salary will have to be increased by a fourth, the senior CEO said. “It will take a 25% increase in income to get back to the same level of take-home pay. Or, the employer could opt for an 8% increase per annum, in which case it would take three years for the individual to get back to where he/she was.”Among the leaders in compensation, excluding promoters who have executive roles, are CP Gurnani of Tech Mahindra, AM Naik and SN Subrahmanyan of L&T, Mohit Gujral of DLF, and Ganesh Nayak of Cadila Healthcare. Incidentally, L&T has six executives who earn over Rs 5 crore annually.The increase in surcharge will be a disincentive for top managers, especially those who are close to retirement, pointed out Harsh Goenka, chairman of the RPG Group. The competition for talent will likely drive up costs, whether domestic or expat. While the optics and social intent of the move look credible, widening the tax net is crucial, rather than just milking the salaried top, Goenka said.Prabir Jha, founder of Prabir Jha People Advisory, said the gap between top and bottom salaries is already a prickly issue. “If top salaries get buffered for the higher tax rates, the gap will widen,” Jha said. But “it could create a trickle-down increase down the hierarchy which may impact competitiveness of a business.”The median salary of top executives is on average 243 times higher than that for all staff, according to a 2018 study by ET based on data from Capitaline and annual reports.Another point that’s being raised is the country’s narrow tax base.“When 98% of the country does not pay any tax on their income, is 36% tax paid on their income by these 10,000 not high enough? Why should they have to pay 43% now?” said the CEO of a leading company. “This is the fifth time the tax rate is being increased for this minority group in six years.”The compensation bill for top management is likely to rise, said Ketan Dalal, managing partner, Katalyst Advisors LLP. “This is a bitter pill that has to be swallowed. Possibly, over a period of time, they will be able to make it up, such as by a gross-up,” Dalal said.Another financial expert said large, professionally managed companies such as L&T or Infosys may factor it into pay packets. “And some organisations may be forced to overcompensate to retain extraordinary talent,” he said.But such a move can upset the internal equity, said Aditya Birla Group global HR head Santrupt Misra.“We can’t set a precedent around compensating for tax liability for some,” he said. “Maybe, it can get compensated over a period of time with relevant market benchmarks. Top talent close to retirement age normally builds a corpus to maintain a lifestyle post-retirement and this could upset that plan. But taxation is something organisations and top talent have to learn to live with.”A promoter-CEO could possibly create loopholes such as management structures or management fees to save tax, said Vikas Vasal, national leader, tax, at Grant Thornton India LLP. “But there is absolutely no leeway for a professional CEO,” he said. “This is a steep hike to the overall cost of operations and a huge tax payout for an individual. It will be a huge deterrent for institutions outside India, which would have looked to shifting high-paying jobs to India. This especially when the government wanted to promote foreign funds to set up base in India.”
Categories: Business News

HUL, Future get into a laundry brand fight

10 hours 51 min ago
MUMBAI: Hindustan Unilever (HUL) is launching a new laundry brand after three decades that appears to be aimed at the country’s biggest retailer Future Group. The latter recently cut HUL’s shelf space by nearly a third in the segment to make space for Future’s own line of detergent liquid and powder products.The new liquid detergent product from parent Unilever’s portfolio, Love Home and Planet, will be HUL’s fifth fabric wash brand, and is expected to be launched next month, said two officials aware of the development. The move is reminiscent of HUL’s introduction of Wheel detergent in 1988 to take on Nirma, which had dislodged Surf as washing powder of choice in middleclass and lower-middleclass Indian homes. HUL’s other detergent brands are Rin, Surf Excel and Sunlight and the company accounts for a third of India’s Rs 24,000 crore laundry market. 70238678 Common FeaturesHUL is also hoping to score on the green front with an environmentally friendly product.While HUL declined to comment, Future Group said its liquid detergent brand Voom’s positioning is “caring for fabric and fashion”, something that’s new in a segment that thrives on stain removal. “We feel existing laundry makers will follow this narrative but our pricing and fashion push will be far more competitive,” said Ashni Biyani, managing director of Future Consumer Ltd, the group’s consumer goods arm that introduced the product last week.The two brands from HUL and Future Group have some common features. They are being marketed as liquid detergents that are largely aimed at urban, modern trade consumers. Both are targeting millennials through fashion — HUL’s launch will be at Lakme Fashion Week next month while Future Consumer’s brand is being sold across its fashion stores such as FBB, Brand Factory and Central.The similarities stop there, analysts said.“Globally, liquid format accounts for a larger chunk of the laundry sales and consumers are also gradually moving to more clean, less harsh and environment friendly products,” said Abneesh Roy, executive vice president, Edelweiss Securities. “HUL’s new product merges both these trends and the launch is triggered by premiumisation and sustainability strategy, and not to copy competition.”Unilever has what it hopes will be another ace up its sleeve. The brand is part of its newest line of vegan and plant-based, homecare products in the fabric-care, dish-wash and surface-care segments launched in the US earlier this year. The ingredients are said to be plant-based and ethically sourced and the products have recyclable packaging. In India, Unilever Ventures has invested in vegan and organic skincare startup Pureplay Skin Sciences, which sells skin and hair care products under brands Plum and Phy.HUL’s product will be priced at about Rs 350, more than double Future’s Voom, which has a tag of Rs 150 for a litre pack. At Rs 225, P&G’s premium liquid detergent brand Ariel is also priced lower.
Categories: Business News

Pages

  Udhyog Mitra, Bihar   Trade Mark Registration   Bihar : Facts & Views   Trade Fair