Innholdsfortegnelse for 17-Jun-2018 i Business Today

THE US-based retail giant Walmart is paying $16 billion to take a 77 per cent stake in Indian online retailer Flipkart. Meanwhile, Amazon India is also moving fast, and its parent Amazon Inc has made it very clear that it will continue to invest in India to become a market leader. At the moment, Flipkart is ahead of Amazon India in terms of total sales, and both online retailers are losing money heavily. Last year, Flipkart lost over a billion dollars and Amazon, at least, around half a billion. The Walmart investment into Flipkart is bound to affect physical retailers in India – from organised retailers like Reliance Retail, Kishore Biyani’s Future Retail and also mom-and-pop grocery and vegetable stores. Several right-wing and left-wing organisations have already protested the Walmart…

IS VEDANTA’S STERLITE Copper smelter plant in Tuticorin (English for Thoothukudi) responsible for the cancer in the region? Is rainfall deficient because of the plant? Sterlite CEO, P. Ramnath insists he has data to the contrary. On May 22, Sterlite hit headlines when more than 10 people died in clashes as protesters demanding the plant’s closure turned violent. Vedanta is not new to run-ins with environmental groups and regulators. In September 2009, workers died when a chimney collapsed at its aluminium smelter complex in Korba, Chhattisgarh. Then there were protests in Odisha’s Niyamgiri Hills by the tribal population over plans to source bauxite; and yet again in 2012 over allegations of illegal iron ore mining in Goa. The larger point here is that in India, the need for cheap mining…

THE BURGEONING renewable energy industry is likely to witness an unprecedented IPO rush in the near future to tap India’s capital markets. About six leading companies in the sector are reportedly preparing for initial public offerings. Former Suzlon CEO Sumant Sinha-led ReNew Power, Adani Enterprises’ subsidiary Adani Green Energy, Sembcorp India, a unit of Singapore’s Sembcorp Industries, Mytrah Energy, the State-run Indian Renewable Energy Development Agency (IREDA), and ACME Solar are some of the companies said to be lining up to tap the capital markets. The idea is to create a war chest for acquiring upcoming opportunities in renewable energy auctions, given government incentives for renewable energy projects. But many of these fundraising plans may be severely challenged considering the current damp market conditions, lack of clarity on long-term policies…

India could be heading towards a retail banking crisis. In FY2017/2018, retail loans amounted to around half (48.6 per cent, to be precise) of the loans given by banks (non-food credit). In 2013/2014, they accounted for just 17 per cent. Currently, banks are not interested in lending to corporates. Defaults made by the industrial sector are responsible for nearly three-fourths of the overall bad loans plaguing the public sector banks. As a result, only 3.3 per cent of the total bank lending went to the industrial sector in 2017/2018. Typically, when lending by banks to a specific sector rises dramatically within a short period, the quality of lending falls. With the fall in quality, defaults go up and bad loans rise. As on September 30, 2017, retail bad loans of…

COVER STORY RETAIL WARS THE TWO AMERICAN retail giants have fought pitched, bruising battles on their home turf, and in markets around the globe. Walmart, the world’s largest retailer, and Amazon, the e-commerce behemoth, have crossed swords once more, this time in the fastest growing major economy, India. Jeff Bezos-owned Amazon, with its smart technology-backed consumer solutions, has always had the upper hand. It has left Walmart little choice but to join the digital bandwagon to grow. In the last couple of years, Walmart has made a bevy of online acquisitions across the world, from Jet.com in the US to JD.com in China. The most recent is, of course, the $16 billion (₹1.07 lakh crore) investment in Indian online retail major Flipkart – its costliest acquisition so far. Despite these expensive…

Indirect transfer provisions say that income from transfer of shares of a company registered outside India is taxable in India if the shares derive substantial value from assets located in India. The share or interest would be considered to derive its substantial value from assets (tangible or intangible) in India if, on a specified date, the value of the Indian assets exceeds ₹10 crore and is at least 50 per cent value of all assets owned by the entity TAX RATES ON CAPITAL GAINS FROM UNLISTED SHARES For unlisted shares, short-term capital asset is that which is sold within 24 months, and long-term capital asset is that which is sold after 24 months…

You have been associated with the operations of Siemens India and have been working in Asia for a long time. How do you view the changes in India? A: I have been on the Board of Siemens India for over seven years and have been coming here very often. I know India and love it. India is a very fast-developing country, though there are challenges for big development. That is witnessing an improvement. The speed of development over the past few years has been high. I believe that ‘Make in India’ will help increase the share of industrial GDP from 15 per cent to over 25 per cent with value-added products and services. That is on its way and still a long way to go, but it has gained momentum.…

BACK IN 2013, Rudolph Stefanich designed a device called Sono that demonstrated how a noise control solution could be snapped on to a window pane and silence all the unwelcome noise coming from outside in one fell swoop. Not only would all the noise be banished, but a dial would also allow the user to select which sounds were acceptable. Unpleasant sounds such as those from cars, construction sites and the playground could be tuned out. The Sono device borrows some ideas from noise cancelling headphones; it is full of tiny microphones that pick up and wipe out ambient noise. Sono counter-vibrates the window to silence the sounds coming from outside. The device itself is powered from the energy of electromagnetic noise from Wi-Fi and similar signals, received by concentric…

GASTROINTESTINAL infections are quite common during summer months. And the problems will get compounded if your water intake is low as dehydration complicates matters. Gastrointestinal expert Dr D. Nageshwar Reddy, Chairman and Chief of Gastroenterology at Hyderabad-based Asian Institute of Gastroenterology, tells us how some simple precautions can help one avoid gastric problems. These medical conditions include a wide range of food-borne or water-borne diarrhoeal diseases such as amoebiasis, shigellosis and salmonella poisoning. Symptoms vary from mild to severe, causing abdominal pain, loose motion and sometimes blood in the stool along with fever and appetite loss. All these are warning signs that you need to consult a doctor. Stomach infections could cause severe problems, including kidney failure, if your fluid intake is less than adequate and you are prone to…

Fusion: How Integrating Brand and Culture Powers the World’s Best Companies By Denise Lee Yohn Hachette Pages: 240 Price: ₹499 THE MOST SUCCESSFUL salespeople in the luxury business are those who live or, at least, dress, talk and behave like their clients. That is the received wisdom and is at least partially true. The same principle applies to a lot of other products and services. But does the internal culture of an organisation – and not just the sales function – have to align completely with the brand values? Denise Lee Yohn, brand building expert and consultant, certainly thinks so. In her latest book Fusion: How Integrating Brand and Culture Powers the World’s Best Companies, she builds a convincing argument using examples of Amazon, Google, Starbucks and Southwest Airlines, among…

WELLNESS Get Heath Cover To Pursue Fitness Aditya Birla Health Insurance, in partnership with the health club chain Talwalkars, has launched a wellness programme called FIT-Fitness Insured Totally. The programme offers enrolled members a complete fitness package along with an insurance cover for any illness or injury that occurs post enrolment. The health coverage is available with select annual memberships of Talwalkars and does not incur additional cost. The scheme offers personal accident cover of ₹10 lakh (death and permanent total disablement) and critical illness cover of ₹1 lakh covering 15 medical conditions. NATIONAL PENSION SCHEME Partial Withdrawal Made Easy The pension Fund regulatory development authority (pFrda) has relaxed the norms to allow partial withdrawals from nps accounts. “partial withdrawals will now be allowed to nps subscribers who wish to…

STAY CONNECTED WITH US ON www.facebook.com/BusinessToday@BT_India PERSPECTIVE Why Domestic Airlines Are at the Cusp of Losing Their Winning Streak With crude oil prices moving up further, the profitability of the airlines is likely to be under pressure for the next few quarters businesstoday.in/domesticairlines-crudeoil NEWS Milkbasket Funding: Three Things That Make the Company Different The investor appetite for online grocery start-ups is alive and kicking, despite the possible market polarisation between larger players. businesstoday.in/onlinegrocery-milkbasket Yeddyurappa’s Farm Loan Waiver Policy Karnataka’s ‘One-day’ CM’s move on farm loan waiver was rather swift, in line with the emphasis in the party manifesto businesstoday.in/farmloan-yeddyurappa Five Reasons Why Merc S-Class Is Rated the Best Sedan Globally Mercedes S-Class represents the epitome of luxury, and with the face-lifted version, the package has only become better businesstoday.in/merc-s.class COLUMNS…

FIFTEEN YEARS after the Model Contract Farming Act, the government has again formulated a model law for the states. The State/UT Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation) Act, 2018, is far more comprehensive than the earlier one. Version 1 failed to take off in most states; Version 2, however, covers the entire farming universe, including contract farming and services contracts across the value chain. The bureaucratic mandi system, a key reason why the earlier version failed, has been bypassed entirely. The new law will allow big retailers to work directly with farmers and help create a sustainable ecosystem. It should bring far more predictability to the supply chain and in the process, a steady and predictable income to the farmer.…

As Europe’s General Data Protection Regulation (GDPR) comes into force on May 25, Indian companies with business interests in the region will need to rework their data management systems. The new law will not only affect global behemoths like Google and Facebook but all other companies, big and small, who collect user data. As data breaches are frequently happening, GDPR puts the onus on the firms to assume responsibility for how data is processed and managed. And the larger the entity, the more complicated the process. Imagine the difference between securing a four-room house and a 24-storey building. Companies will have to zero in on what data they are collecting, how they are processing it and how they are putting the consent mechanism in place. According to experts, most companies…

FINANCING INFRASTRUCTURE WHAT: Conference on Mobilising Finance for Infrastructure WHEN: June 25-26, Mumbai WHAT TO LOOK FOR: The event organised by the Asian Infrastructure Investment Bank (AIIB) will bring together leaders from various organisations and governments to share ideas and experiences for sound infrastructure investment. Ministers from AIIB member countries and participants from the private sector will join the debate. ADOPTING CLEAN ENERGY WHAT: CII Clean Tech & Mobility Summit 2018 WHEN: June 29, Noida WHAT TO LOOK FOR: CleanTech is an important component in India’s energy planning. It covers a wide spectrum of sources ranging from generation of renewable energy to water and waste water management, electronic waste disposal, recycling and electronic vehicles. Knowledge-experts will share insights and successful case studies across the globe at the summit. AGENDA FOR…

SOCIAL NETWORKING sites won people’s hearts with their ability to connect people, facilitate sharing of information and community building. They breached users’ trust with much the same ease by slyly leaking information. Even today, these sites are doing little to safeguard the interests of users, who are actually their raison d’être. In its ‘Transparency’ report, Facebook shared the number of requests made by the government for user data, and also how it is working to take down content that is objectionable, has violence and nudity, and is inauthentic as per its community guidelines to create a “safe and welcoming community for the more than two billion people”. That is all very well. But conspicuously absent from the report are matters that affect users the most. “The report doesn’t share information…

US RETAIL ECONOMY $4.3 trillion About 10% of retail is online. Though Walmart in the last few years has been ramping up its online presence, the US is a monopoly of Amazon. Between Amazon and Walmart, they have a warehouse every 20 km in the US. Therefore, reaching out to consumers at their homes is quite easy. In fact, 60% of US homes are Amazon Prime members. The other advantage that Amazon has is that US doesn't have taxes equivalent of VAT or GST for online. So, they are able to offer discounts to the customer without taking it out from the pocket. CHINA RETAIL ECONOMY $3.0 trillion Some 15% ($600 billion) is online retail. China didn't allow any US company in its market and instead developed its own ecosystem.…

SUCCESSES UNFINISHED AGENDA AT A GATHERING OF TOP CEOs in August last year, Prime Minister Narendra Modi, while putting forth his vision for healthcare, agriculture, infrastructure, education and poverty alleviation, said it would become a reality by 2022. When Debjani Ghosh, the then Intel India head and now President, Nasscom, said that before 2022 he would have to face another election — in 2019 — and asked if this meant he was confident of a victory, Modi replied he was giving a vision for the country’s 75th year of independence. This cuts into the heart of any assessment of his government as its completes four years in power. While it has accomplished a number of challenging tasks — such as introducing Goods and Services Tax, Bankruptcy Code and big infrastructure…

BANK OF INDIA Under PCA since Dec ’17 BALANCE SHEET: ₹6.27 lakh cr NET LOSS: -₹2,341 cr GROSS NPAs: ₹64,249 crore 16.93% of advances RETURN ON ASSETS: (-0.40) CAPITAL ADEQUACY: 12.05% IDBI BANK Under PCA since May ’17 BALANCE SHEET: ₹3.61lakh cr NET LOSS: -₹2,575 cr GROSS NPAs: ₹50,621 crore 24.72% of advances RETURN ON ASSETS: -1.03% CAPITAL ADEQUACY: 11.93% INDIAN OVERSEAS BANK Under PCA since Oct’15 BALANCE SHEET: ₹2.47 lakh cr NET LOSS: -₹2,692 cr GROSS NPAs: ₹33,267 crore 21.95% of advances RETURN ON ASSETS: -1.45% CAPITAL ADEQUACY: 9.47% CENTRAL BANK OF INDIA Under PCA since Jun ’17 BALANCE SHEET: ₹3.33 lakh cr NET LOSS: -₹2,991 cr GROSS NPAS: ₹32,490 crore 18.08% of advances RETURN ON ASSETS: -1.25% CAPITAL ADEQUACY: 7.87% ORIENTAL BANK OF COMMERCE Under PCA since Oct’17…

Q: How does HubSpot’s office space reflect the organisation’s culture? A: From the start we wanted to be collaborative and antihierarchical and to prevent “corner office syndrome,” where executives are isolated from employees and certain teams don’t engage with others. So we’ve always had open offices. We also do a seat reshuffle roughly every three months, though that can vary by team and office location. Why make people switch desks so often? Our founders realised that in every office there are good seats and bad seats, so they set up a lottery in which everyone, including them, participated. If you drew number one, you had first choice, but in a few months someone else would get the top pick. The point is to eliminate perceptions of power imbalances. The reshuffles…

IT HAS DAWNED ON BANKS that they need to tap the innovative capabilities of financial technology (fintech) start-ups to stay competitive. They are opening up their systems, or core banking platforms, for plug-ins with fintech players. The banks claim it's helping them expand the financial services network and incubating new set of capabilities for lenders. Still, the marriage of convenience comes with its set of challenges. Increasingly, data security concerns and privacy issues are coming to the fore. A lax regulatory environment for third party system developers, particularly fintechs, is accentuating the concerns. The Reserve Bank of India, the banking regulator, is also worried. “This is again a potential area where we have an opportunity to engage with fintechs that focus on machine learning, pattern matching, fraud detection and creating…

WE HAVE always been awed by the idea of a screen that is anywhere but on a device. Technologists at Carnegie Mellon University have obliged us by coming out with a prototype smartwatch that projects a screen on the wearer’s arm. The chunky watch, named LumiWatch, displays a 6.2-inch display on the wearer’s forearm. This is a fully functional screen that responds to scroll, swipe and touch. The idea is to have a standalone device, quite apart from a smartphone, which will have much more screen space than an ordinary smartwatch. The LumiWatch has a decent portfolio of specs and can work quite smoothly. But there is a problem yet to be solved: the display is not crystal clear because it is on the skin and on a surface that…

ONEPLUS HAS always delighted customers by launching flagship smartphones at prices that are not over the top. With OnePlus 6, the company takes it up a notch by packing in the latest hardware in a stunning design at an incredulous price. OnePlus 6 scores well in appearance – be it the all-glass design rounded at the corners, curved back, ergonomically placed fingerprint sensor, the vertical dual camera set-up or the proprietary alert slider button. It is lightweight and slippery; but, thankfully, its glass body is protected by Corning Gorilla Glass 5, one of the toughest in the market. The curved design accentuates the 6.28-inch display with 19:9 aspect ratio. Even though OnePlus hasn’t used an OLED screen, the AMOLED display with 2,280x1,080p resolution is bright and offers great colour reproduction.…

The Subtle Art of Not Giving a F*ck By Mark Manson Harper Collins Price: ₹499 The Power of Your Subconscious Mind By Joseph Murphy Amazing Reads Price: ₹199 Elon Musk: How the Billionaire CEO of Spacex and Tesla is Shaping Our Future By Ashlee Vance Virgin Books Price: ₹699 Attitude Is Everything: Change Your Attitude … Change Your Life! By Jeff Keller Collins Price: ₹199 Catalyst By Chandramouli Venkatesan India Portfolio Price: ₹299 *Top books by sales for May 10 - 24, 2018; Includes only books released after Jan 1, 2015; Information provided by…

US EASES BANK REGULATIONS President Donald Trump has signed a bipartisan Bill that partly rolls back the Dodd-Frank financial reform and eases banking regulations for all but the largest banks. The new legislation has raised the threshold from $50 billion to $250 billion in assets, which means many of the banks will fall below the limit and need not undergo Fed stress tests or have capital buffers, required to protect large firms. GE TRANSPORTATION TO MERGE WITH WABTEC In a bid to boost its struggling businesses, GE is merging its century-old locomotive operations GE Transportation with Wabtec Corporation in a deal valued at around $11.1 billion. Wabtec is a global provider of railroad equipment, systems and services. GE will get $2.9 billion in cash and post-merger, will own 50.1 per…

THE NEWS OF THE Walmart-Flipkart deal has set tongues wagging. It is expected to run into a tax tangle in India as experts predict that a Hutchison-Vodafone like scenario could emerge given that the Walmart-Flipkart deal will involve many overseas entities. In the $16-billion deal, US-based retail giant Walmart is buying 77 per cent in Indian e-commerce company Flipkart, in which a majority share is held by a Singapore-registered entity, Flipkart Singapore. Shares in this entity are, in turn, held by different investors – prominently, Softbank (almost 23 per cent), Tiger Global (20.5 per cent) and Naspers (13 per cent). Chinese firm Tencent holds around 6 per cent stake, while promoters Sachin Bansal and Binny Bansal together hold close to 11 per cent. The deal is being structured in such…

A futsal turf is usually rented by the hour depending on factors such as the city and the type of slot (prime or not). For example, an hourly off-prime slot on a weekday could cost anywhere from ₹1,000 to ₹1,500, while on weekends, a prime slot could cost between ₹1,800 and ₹3,500. The rental goes up as facilities increase and ground size expands. $92 MILLION brand valuation of Premier Futsal League, according to SMG Insight 13 MILLION viewers watched the inaugural edition of Premier Futsal League in India, says media tech start-up ZAPR $24.6 BILLION size of the professional soccer market in Europe, according to a 2016 estimate…

THE BANKING INDUSTRY that has all along been straightjacketed in its deposit and loan processes is now boldly trying out financial technology or fintech companies for innovative solutions. Whether by choice or threat of its own existence in the new emerging banking landscape, banks are racing ahead to allow third-party developers, fintech and technology companies to connect with them. The solutions include artificial intelligence, machine learning, software robotics, natural language processing, fraud prevention and HR solutions among others. Big private banks are taking a lead, while public sector banks (PSBs) with the possible exception of State Bank of India and Bank of Baroda are still laggards. Hundreds of fintechs in the value-added space (VAS) have partnerships with banks to improve their analytic capabilities, improve operational efficiencies, target new customers, improve…

MUMBAI-BASED VALUEFY SOLUTIONS offers banks and financial institutions cutting-edge analytics capabilities that help them take better wealth management decisions. Other similar start-ups such as CreditMantri, CreditVidya and CreditSeva use both traditional and alternative data points, especially social media, to build customers’ credit profile. This gives lending institutions data for targeting new customers, even those without credit history, and also helps them process loan applications. There are hundreds of such companies – almost all of them start-ups – that are bringing about a technology revolution in the financial services industry. These financial technology providers (fintechs in short) excel at making critical interventions in processes of financial services companies to make them more efficient, help them acquire customers and make better/faster decisions. The solutions provided by these value-added service (VAS) providers are…

At an SRCC event in December 2015, Sundar Pichai, CEO, Google, said, “In the technology world, everything changes at such a fast pace. A lot of what we do is figure out what the next phase is…you have to reinvent yourself.” In line with this thought, the technology giant has launched the next Android update – the Android P – after Android Nougat in 2016 and the Android Oreo in 2017. What’s intriguing about this new update is that it promises to bring in some big changes – think new gestures for navigation and intelligent features to predict actions and saving battery, etc. This new OS update is believed to have the potential to give a fresh twist to the Android smartphone experience. While there is still time for the…

THE RISE IN deaths on shop floors caused by rogue robots in recent years has prompted the manufacturing sector to look for alternatives. Engineers have found a solution in cobots – collaborative robots – that work alongside humans like helping hands, which traditional industrial robots cannot be used for. While industrial robots have been around for decades – the first one worked on a General Motors assembly line in 1961 – the first commercial cobot was developed by Denmark-based Universal Robots (UR) in 2008. Full-scale adoption started only in 2016. Globally, cobots are used in neurosurgery, bartending, physiotherapy, filmmaking and industries. Today, there are about 400 UR cobots in India, across sectors, especially auto and auto components, FMCG and electronics. “We are growing at 100 per cent plus. Large companies…

Q. The biggest challenge you faced in your career A. When I was offered the position, the company wanted someone of Indian origin who has been here, who knows the psyche of Indian buyers and understands the culture. As I started working in India, I realised that the brand would face a lot of challenges here. So, we went back to the drawing board to redefine our strategy. We had a profitable growth of 2 per cent in 2017, but we need to do more to bring the brand back to a leading position. Q. Your best teacher in business A. My mother, who has now retired, was very entrepreneurial in all she did, especially when she ran her tea business. It is very important in an organisation like ours.…

HOME LOAN: Floating Rate; Interest Tenure - Up to 20 years For Salaried Person FIXED DEPOSIT For amount less than ₹1 Crore (Regular) SMALL SAVINGS SCHEMES Source: India Post for small savings schemes, for others, Deals4Loans; *For quarter ending June 2018 CAR LOAN: For New Cars, Tenure- 7 years EDUCATION LOAN: Loan Amount - Up to ₹7.5 lakh Tenure - 15 years PERSONAL LOAN: Tenure - Up to 5 years Loan Amount - Up to ₹15,00,000…