Innholdsfortegnelse for 8-Sep-19 i Business Today

WHILE BIG companies, typically listed at the bourses and actively followed by investors, lenders and myriad analysts, tend to hog the limelight in the business press, the small and medium Enterprises (SMEs) play an immensely important role in industry. Every big company needs suppliers, vendors and distributors – many of whom are small- or medium-sized enterprises. Consider this: Almost 45 per cent of manufacturing output in the country can be credited to SMEs, as well as 40 per cent of exports. If you included the micro industries as well, at last count the number of micro, small and medium enterprises (MSMEs) added up to almost 63 million, employing over 111 million people. Together the MSME sector accounted for close to 28 per cent of India’s GDP. Traditionally, the entire MSME…

INDIAN IT SERVICES companies sounded their positive best in hiring numbers at the end of the first quarter of FY2019/20. Top companies, put together, recorded over 50 per cent increase in hiring compared to the same period last year. TCS added 12,356 employees, their highest for the quarter in five years, and said it had made 30,000 job offers for the year. Wipro, too, added 6,000 people and Infosys added a little less than 1,000 but was strengthening its onshore hiring with over 10,000 people in the US and 2,000 more, to be hired globally. Although most companies have emphasised extensive training to make new hires project deployable at the earliest, the hiring is also indicative of the depth of pipeline the companies are targeting. The hiring numbers consist of…

PROFESSIONAL NETWORKING SITE LINKEDIN, IN PARTNERSHIP WITH INDIANA UNIVERSITY BLOOMINGTON, PUBLISHED THE FIRST-EVER MAP OF GLOBAL LABOUR FLOW. THE PLATFORM GATHERED THE DATA FROM 500 MILLION USERS FOR 25 YEARS, AND RESEARCHERS USED IT TO CREATE A METHOD FOR IDENTIFYING GEO-INDUSTRIAL CLUSTERS. TO BEGIN WITH, THEY IDENTIFIED CONCENTRATED LABOUR FLOWS AMONG FOUR MILLION-PLUS COMPANIES BY ANALYSING AROUND 130 MILLION JOB CHANGES. THEY ALSO FOUND STRONG LINKAGES BETWEEN THE AVAILABILITY OF EDUCATED WORKERS AND PERFORMANCE AND PRODUCTIVITY GROWTH. THE RESEARCH WAS PUBLISHED IN THE AUGUST ISSUE OF NATURE COMMUNICATIONS JOURNAL.…

In January 2009, Canadian equipment manufacturer Nortel filed for bankruptcy protection in both Canada and the US. At the time, Nortel held a little less than 10 per cent stake in the Indian product engineering company Sasken Technologies, and was also one of its top five customers, contributing about 10 per cent of the revenue. This was just the first of the many blows that Sasken had to weather in the coming years. The next one came when chipmaker Texas Instruments strategically shifted its business focus and moved away from the smartphone and tablet business as its open multimedia application platform had lost ground to rivals such as Qualcomm and Nvidia. The third blow came when handset maker Nokia’s (once Sasken’s top customer) business started going down. Starting 2009, within…

Soon after the global dotcom bust in 2000, three childhood friends – Siddharth Sethi, Mitesh Bohra and Avinash Sethi, in their midtwenties then – decided to set up a software company in their hometown, Indore, Madhya Pradesh. Unlike Bengaluru, Hyderabad or Pune, Indore was not an IT hub, and the three were then working in the US. InfoBeans Systems (renamed InfoBeans Technologies in 2017) was incorporated with seed capital of $3,000 (about ₹1.2 lakh) from each co-founder in 2000. “After that we have never invested our own money or others’ money, until we raised ₹37 crore through a public listing on the NSE two years ago. We have been ploughing back to build our company, one block at a time,” says Avinash Sethi, CFO of InfoBeans. It took 10 years…

Founded in 1979 in the town of Vijayawada in South India, Goldmedal Electricals achieved a turn over of Rs 1,400 crore last year and is growing at a CAGR of more than 40 per cent year on year. How did a business with such an unassuming start become one of the most promising FMEG companies in the country? What were the reasons that propelled a company that measured their success on the variables of innovation, quality, and customer satisfaction, to such heights? The amazing success story of Goldmedal calls for a closer look at their journey so far. In the 1980s, the legacy of the founder, Shri Otmalji Goraji, was taken forward by his sons, Shri Jugraj Jain, (Chairman of Goldmedal Electricals) and his brothers. In 1995, the company kick-started…

June 2005 Yes Bank taps the capital market, receives a huge response June 2013 Feud erupts between Rana Kapoor and Ashok Kapur’s family over board seat and control of the bank May 2004 Rana Kapoor and his brother-in-law Ashok Kapur get licence to set up a bank. Rana Kapoor becomes MD & CEO and Ashok Kapur Chairman Nov 2008 Ashok Kapur dies in 26/11 terror attack in South Mumbai’s Hotel Trident June 2015 High Court rules that both promoters have a right to appoint directors on board jointly April 2014 High Court asks co-promoters to resolve their differences March 2014 The bank reports profits of ₹1,618 crore, deposits of ₹74,192 crore, advances of ₹55,633 crore and net NPAs of 0.05 per cent March 2016 RBI finds NPA underreporting of ₹4,176…

RANA KAPOOR describes himself as a professional entrepreneur and Yes Bank founder. He has always been a mentor to his three daughters. The family has two companies – Morgan Credit and Yes Capital (India) – in which the daughters own the entire equity. These two holding companies have about 6.26 per cent stake in Yes Bank. Both have dozens of subsidiaries into varied businesses. Morgan Credit is into several businesses with subsidiaries like DoIT Creations, Press2 dry Cleaning & Laundry, Indian School of Management & Entrepreneurship, DoIT Sports Management, Business World magazine, Indian School of Design & Innovation, etc. It had borrowings of over ₹1,000 crore as on March 2018. There is a loan of ₹800 crore in the form of NCDs from asset management companies (AMCs). Varun Kapur of…

The co-working 400 operators. This is huge for a segment that two years ago Many companies are following a cash-burn model, just like e-commerce, and under-pricing to fill up capacity Co-working is a services industry. Many companies are struggling with service quality Barriers to scale up are high as it is an operationally heavy business The key to profitability is managing rentals; most players are not large enough to drive a hard bargain With the economy slowing, many players will struggle with client exits…

WHERE THERE is technology, there will be anti-technology protests. The growing use of face recognition in China and elsewhere is unsurprisingly leading to a backlash from those at the receiving end. The privacy threat cannot be underestimated either as this technology can be duped by photographs or 3D-printed heads. One way to ward off facial recognition is to attack the software. That is what Joey Bose, a student of Computer Engineering at the University of Toronto, did a year ago. The tool he developed is called Faceshield, and his company describes it as an Instagram-like filter that can be applied to photographs to block face detection online. “It adds noise to specific regions of the face such as eyes, nose or jawline to ‘fool’ the face detector into thinking there…

The 5 AM Club: Own Your Morning, Elevate Your Life By Robin Sharma Jaico Publishing House Price: ₹350 Attitude Is Everything: Change Your Attitude … Change Your Life! By Jeff Keller Collins Price: ₹199 Sapiens: A Brief History of Humankind By Yuval Noah Harari Penguin Random House Price: ₹499 Life’s Amazing Secrets: How to Find Balance and Purpose in Your Life By Gaur Gopal Das Penguin Ananda Price: ₹250 The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 *Top books by sales for July 2019; Information provided by amazon.in…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_ Telcos Struggle to Make Money as DoT Fines Pile Up Recent events involving DoT have sparked debate over its overbearing methods of handling the telecom sector and, in a way, destroying it rather than promoting it businesstoday.in/telecomsector-fine Why India Shouldn’t Ignore RCEP Free Trade Mega Deal Are mega FTAs beneficial for Indian economy? Majority of Indian industry may say no, but a research policy paper attempts to offer a contrarian view businesstoday.in/economy-fta NEWS What Ails the CBI? It’s More Than Political Intervention Lack of clearly demarcated spheres of functioning and overlapping areas of influence severely compromise the integrity and efficacy of the institution, says CBI chief R.K. Shukla businesstoday.in/politicalintervention-cbi Is LIC Emerging As Lender of Last Resort for the Battered NBFC Sector? The insurance…

THE SIGNS of an imminent economic slowdown are evident not just because there is a dip in auto sales. The FMCG sector is also showing signs of desperation. According to a study by Elara Securities, FMCG companies, over the past year, are dumping their stock with distributors and retailers to report a higher volume growth. The report estimates that the growth fuelled by this dumping was in the region of 8 per cent last year. This has led to heavy undercutting in the market across brands. The average closing stock at the distributor level has gone up from 10 days to 25 days, while retailer credit has increased by 15 days to 25.…

The Portfolio Management Services (PMS) industry has witnessed tremendous growth over the past few years as assets under management have grown manifold. However, PMS lags in terms of standardised reporting and transparency in terms of fees and charges. To address this, Sebi formed a working group to review PMS regulations. It proposed some key changes, which include increasing minimum capital requirement for portfolio manager from ₹2 crore to ₹5 crore. It also proposed to increase minimum investment to ₹50 lakh from ₹25 lakh. To address non-standardised reporting of returns by different portfolio managers, it is proposed that time weighted rate of return be used and all performance be reported net of fees, all expenses and taxes. Also, performance is to be reported to clients every quarter against six months earlier.…

THE REAL ESTATE sector has, for some time, been demanding measures to ease liquidity. In a meeting with Finance Minister Nirmala Sitharaman, industry representatives suggested the creation of a real estate stressed assets fund. This fund could take over stalled projects for completion. Currently, construction of nearly 1,75,000 homes in 220 projects has been stalled due to lack of funds or clearances. However, the creation of a stressed assets fund is not the solution to the sector’s woes, where unsold inventory will take 42 months to clear up. Real estate players require operating cash flows, which can come in only when sales take off. Currently, sales are tepid, and property prices have been either stagnant or have gone down in the top cities. While the government is giving incentives for…

CELEBRITIES AND movie stars have always led brand endorsements on print and television. But in a surprising turn of events, @jannat_zubair29, a social media influencer of TikTok fame, has been chosen to be featured in a TV commercial for the confectionery brand Chupa Chups. This followed the soaring success of the brand’s influencer marketing campaign #chupachupstastechallenge on the platform for launching its sour green apple flavour. Asked what led to such a decision, Rohit Kapoor, Director of Marketing (India) at Italy-based Perfetti Van Melle, says, “We wanted to get the brand message out within a short time. And TikTok offered us that opportunity through its organic reach and engaging content.” Chupa Chups worked with five influencers and got 12 million views within the first couple of days. This is not…

Auto parts maker Emdet Group, founded in 1959 by late Dev Mitter, had a 28-year-long relationship with Oriental Bank of Commerce. But his grandson, and Executive Director of the company, Nishchay Mitter, switched to a private bank. “Despite a consistent track record of timely payments and maintaining healthy balance sheet, OBC kept charging 12 per cent interest rate even on incremental loans, not to mention the long turnaround time and 110 per cent collateral on the credit amount. So, I went to Axis Bank, which offered me 8.9 per cent interest rate,” he says. However, for working capital needs, Mitter reached out to LivFin, a supply chain and invoice financier. “Interest rates are no doubt higher, but they disburse the loan in 72 hours.” Mitter never considered government loan initiatives…

Abdul Khalik Chataiwala, Chairman and Managing Director of Lancer Container Lines, decided to start a container logistics business in 2011, after more than a decade in international trade. “I had very close connections in logistics business and hands on experience. These were key deciding factors while making the shift,” says Chataiwala, who has a diploma in Export-Import Management from India International Trade Centre and an MBA in Shipping from the Adam Smith University, Saipan, USA. Lancer Container owns and provides containers to companies for international movement of cargo and offers allied services such as shipping and freight forwarding, providing yards for storage of empty containers, inland transport service, etc. Its core operation, however, is of what is called a non-vessel operating common carrier (NVOCC), a cargo consolidator that does not…

BILLIONAIRE MUKESH AMBANI’S Reliance Industries (RIL) has been on a spending spree over the last five years. It built telecom giant Reliance Jio and expanded the petrochemicals business by constructing the world’s largest refinery off-gas cracker (ROGC), its downstream units and a paraxylene (PX) plant. Besides these, RIL also invested heavily in Reliance Retail, which has grown to become the country’s largest retailer by revenue and profitability — it posted a revenue of ₹1.3 lakh crore in the last financial year and a profit before interest and tax (PBIT) of ₹5,546 crore. On August 11, RIL Chairman Mukesh Ambani told shareholders at the annual general meeting (AGM) that the company has invested ₹5.4 lakh crore in the last five years. Of this, nearly ₹3.5 lakh crore went into building Jio…

Last few months must have been a roller coaster ride for you, not just from a business point of view but also emotionally. What did you tell yourself? It’s not so much emotional for me, (but) it’s been a learning process. It is something that I need to learn from, that is how I am looking at it. I need to come out of it and that’s what I am doing. Have you been spending long hours at work meeting prospective buyers? It’s the same as before. Nothing has changed. Earlier, I just had the company to run, now debt repayment has become the second part of my job. The number of hours that I put in at work is actually the same. What lessons have you learnt in the…

Returns are as of 31 July 2019 Funds are ranked on the basis of five-year performance AUM filter of minimum ₹500 Cr has been applied Returns of six months and one year are absolute, while returns of more than one year are annualised; All portfolio related data is as of July 2019 end; expense ratios as per latest available disclosures by AMCs in monthly factsheets Source: Morningstar…

THEY ARE ALL over the place – on smart speakers, smartphones and synced with a lot many smart appliances. They can talk to us, fetch us information and carry out tasks as bidden. They are the voice-controlled virtual assistants, which are steadily growing in number. Of course, there is no Siri for Android users. But Amazon’s Alexa, Google Assistant, Lyra, Robin and their ilk are doing an excellent job. Look around, and you will find thousands of apps doing the same or more. The only problem: Finding those apps can be difficult. Even if you manage to download them all, running different apps for different tasks is not exactly convenient. Also, let us not deny it; you have always looked for new applications for new kinds of tasks and new…

THE RESERVE BANK task force’s suggestions to curb growing volumes of dollar-rupee trades in offshore market have come at an apt time, as the rupee has been under pressure due to the US-China trade war. Often in the past, the offshore market – also called the non-deliverable forward (NDF) market – has influenced onshore spot price during uncertain times when overseas investors tend to speculate and make arbitrage gains on the price differential. The report cites two instances – the taper tantrum in 2013 and the 2018 emerging market turmoil – when the NDF market had driven down the onshore rupee value, hurting the RBI’s efforts to curb volatility and support real price discovery. Currency gyrations could be fatal for India, more so if the government goes ahead with issuing…

WHILE INDIAN IT service companies have been bracing for a tighter visa regimen worldwide, statistics compiled by non-profit policy research organisation, National Foundation for American Policy (NFPA), shows visa rejection of firms touching an all time high. Top visa seekers from India like Infosys, TCS and Wipro, whose visa rejection rates were below 10 per cent in 2014/15 now are staring at 57 per cent, 37 per cent and 62 per cent rejection rate in FY19 (Oct-Dec), respectively. Even the request for evidence (RFE) and detailing has gone up considerably. For Indian IT firms, which are witnessing talent loss with fewer onsite opportunities, the increase in compliance costs and elaborate RFEs are also slowing down the processing and posing fresh problems for these companies.…

THE GHOST of angel tax will cease to bother start-ups, at least for now, with the tax department extending the exemptions, announced earlier, to those firms where tax additions have been made or those which are under limited scrutiny. The Central Board of Direct Taxes recently said if a start-up recognised by the Department of Promotion of Industry and Internal Trade (DPIIT) is under limited scrutiny on angel tax, the contention of the startup will be ‘summarily’ accepted by the assessing officer. Earlier, the tax department accorded exemption even to those start-ups against which additions were made before February 19, 2019, the day the DPIIT came out with the concessions for start-ups. The February 19 circular exempted start-ups registered with it from the purview of angel tax, a tax on…

Twitter is doing it again – testing a new feature to enhance inclusiveness. Now users will get all notifications when people reply to a particular conversation. ‘Subscribe’ to the feature, and you will be in. The rationale is to make it easy for users to follow conversation threads and engage with the comments. Twitter is testing it on both iOS and Android. In contrast, Instagram said last month that it was testing whether hiding likes and views could help reduce anxiety among users. The idea was to make the photo-sharing platform more personal and less competitive.…

BUSINESS MEET WHAT: International Conference on Business and Economics WHEN: October 12-13, London WHAT TO LOOK FOR: The conference will host independent experts and academics and representatives of corporations to foster a dialogue on banking, economics, insurance and international and global business management. TRADE FAIR WHAT: India International Cooperatives Trade Fair WHEN: October 11-13, Delhi WHAT TO LOOK FOR: Steered by the National Cooperative Development Corporation, the three-day event will aim at promoting cooperative-to-cooperative trade within India and abroad to boost rural and farm prosperity and achieve goals set under the Agri-Exports Policy 2018. SILVER AGE SERVICES WHAT: Senior Care Conclave WHEN: October 1, Delhi WHAT TO LOOK FOR: The second edition of the conclave will focus on elder care investment and technological innovations to provide better senior care services.…

Small steps taken in a home garage laid the foundation for what is today India’s biggest manufacturer of helmets. Studds Accessories owns two helmet plants with a capacity of 6.1 million helmets and 4.9 lakh units of two-wheeler luggage a year. It is looking to add two more plants to meet the expected rise in demand. The Faridabad-based company, with a turnover of ₹333 crore, is even planning to go for an initial public offer. Studds has come a long way from the time brothers Madhu Bhushan Khurana and Ravi Bhushan Khurana sold their first helmet in 1972 under the brand name Rajdoot. In 1970, Madhu Khurana had gone to Lucknow to represent Escorts Motorcycles in a rally. A Rajdoot dealer there pitched the idea for the helmet business saying…

HOMEGROWN SUCCESSFUL INDIAN BRANDS ARE TODAY WELL EQUIPPED TO COMPETE WITH THE GLOBAL MAJOR BRANDS IN EVERY SECTOR. BRANDS LIKE EBCO AND GOLDMEDAL ELECTRICALS ARE HOUSEHOLD NAMES NOW, KNOWN FOR THEIR DURABILITY AND TECHNICALLY SUPERIOR PRODUCTS OVER SOME OF THE BRANDS AVAILABLE IN THE MARKET. GIVEN THEIR TECHNICAL EXPERTISE AND HIGH QUALITY PRODUCTS THESE INDIAN BRANDS HAVE CARVED A NICHE FOR THEMSELVES AND CREATED A STRONG BRAND EQUITY FOR THEIR PRODUCTS IN THE CONSUMERS MIND. Already a market leader in the Office Furniture Fittings & Accessories category, we continue to offer great products to facilitate better working habits, enhance productivity and clutter free workspaces. The top priority in choosing the products under this category should be physical comfort and ease of use. Worksmart by ebco, introduces smart and sleek range…

“IS RANA KAPOOR STILL PART OF THE BANK?,” an analyst asked Ravneet Singh Gill, the MD & CEO, who succeeded Kapoor at the troubled Yes Bank five months ago. The query, during a call with investors last month, was triggered by reports that the founder-professional, who had to exit the bank due to asset quality deterioration, might come back as a director. Though the report was denied by Kapoor himself, the 56-year-old Gill said: “He (Kapoor) has no involvement, executive or non-executive, direct or indirect.” The bank has, in fact, clawed back Kapoor’s bonuses for 2014/15 and 2015/16. Kapoor may be out but his business calls continue to worry the bank. In the last one year, exposure to big troubled companies such as IL&FS, DHFL, Indiabulls, Jet Airways, Anil Ambani’s…

TELECOM RIL has formed two Infrastructure Investment Trusts – Digital Fibre Infrastructure Trust and Tower Infrastructure Trust RIL has transferred Reliance Jio Infratel’s fibre and tower businesses into these trusts, and gross debt of ₹1.07 lakh crore An affiliate of Brookfield Asset Management has invested ₹25,215 crore in the tower trust After the transfer of telecom infra assets, RIL’s net debt as of March 2019 was ₹154,478 crore PETROCHEM RIL is selling 20% stake in its oil and petrochemicals business to Saudi Aramco for ₹1.1 lakh crore RIL is also selling 49% stake in its fuel retailing business to BP for ₹7,000 crore With these two deals, RIL’s net debt is expected to come down to ₹37,000 crore…

Real estate companies setting up co-working arms CoWrks has come up as a unit of real estate developer RMZ Corp. Brigade Group has forayed into co-working with BuzzWorks JV between Indian real estate company and international co-working player WeWork has a JV with Embassy Group in India Acquisitions by co-working players AltF CoWorking has acquired Daftar India; OYO has bought Innov8 PE-backed retail developers/operators setting up own co-working spaces Virtuous Retail has set up a collaborative workspace, The Hive Hospitality player venturing into the co-working segment OYO launches its fully managed workspace Source: JLL-FICCI…

Your money is no longer a piece of paper and ink, changing hands, getting soiled and landing up at a bank exchange counter. Theoretically, it may still happen, but much of this is history in the era of digital transactions. What kicked off with ATMs, debit/credit cards and Internet banking has now evolved into touch-and-go Web and mobile apps. They cover every aspect of our financial life, be it banking, borrowing, investing, tax filing, buying insurance or paying bills. But technology becomes obsolete fast, and by the time you are adept at using one, an advanced version comes into play. Of course, cash will not die all of a sudden, but you can manage your money better digitally, with a vast range of tech tools to choose from. But before…

Homebuyers have a reason to cheer after Finance Minister Nirmala Sitharaman presented the Union Budget on July 5. In a bid to boost Housing for All, the government has introduced an additional income tax deduction of ₹1.5 lakh on the interest paid on home loan under Section 80EEA. It comes with a few riders, though, but before we get there, let us look at the current scenario. All existing borrowers are already eligible for an annual deduction of up to ₹2 lakh under Section 24(b) until their loans are paid off. The additional deduction will be over and above the ₹2 lakh limit. “Deductions under Sections 24(b) and 80EEA are independent of each other, and the interest you are paying cannot be considered for both sections. However, you can claim…

Balance: Responsible Business for the Digital Age By Namrata Rana and Utkarsh Majumdar Publisher: Westland Pages: 302 Price: ₹799 AS JULY FADED INTO AUGUST, India Inc. abruptly moved its subject of heated discussion away from CCD to CSR. While Café Coffee Day (CCD), whose founder had committed suicide, was crashing on the bourses, the Companies (Amendment) Bill was passed in Parliament. The Bill says businesses must spend 2 per cent of profits on corporate social responsibility (CSR) – and violations can attract a fine and up to three years in jail for every officer of the company. That changes this social responsibility to a tax that management will worry deeply about. (This provision is likely to be reviewed.) Which makes the premise of this book even more important: Social and…