Innholdsfortegnelse for 17-May-20 i Business Today

Fear feeds on fear. There’s no greater fear in world economies today than China, as countries grapple with the fallout of the pandemic that originated in the Chinese city of Wuhan. Was coronavirus a bio-weapon? Was it allowed to spread intentionally? Was it meant to destruct the world’s biggest economies so that China could gain? Is China taking advantage of the global stock market crash to shore up equity in strategic firms? Those are just some of the questions leaders the world over are struggling to answer. Most have already made precautionary moves to block any misadventure. Late March, the European Union (EU) was the first to flag to member states that healthcare equipment firms and research establishments may be takeover targets via the FDI route, asking them to set…

Greater scrutiny of companies from China looking to invest directly in India Investors looking to exit from companies will face greater due diligence Companies with existing Chinese investors may find it difficult to raise fresh funds Start-ups like Paytm, bigbasket, with big Chinese holdings, will find it tough to raise funds Throttling investments from China is another blow to overall start-up funding in India Impacts foreign entities with subsidiaries in India that are looking at raising funds offshore…

Ever wondered why your neighbourhood chicken shop does not have your favourite meat, or even if it does, is pricing it too high? Amit Saraogi, Managing Director of Kolkata-based ₹550 crore Anmol Feeds Pvt Ltd, a feed supplier to the poultry industry, says it is the complete breakdown of India’s chicken economy — hatcheries to feed suppliers to commercial farms to bulk suppliers to retailers — that has caused this crisis. The exemption it enjoys as part of the agriculture and allied sector has not helped either. The problem started with a rumour in February that the bird may spread cor0navirus. This hit demand during the month. By the time the lockdown was announced in March, “the Indian poultry industry had suffered a ₹15,000 crore loss as bulk suppliers abandoned…

Sanitiser for Notes and Keys Southern Naval Command innovated an Ultra Violet Disinfection Unit, with IIT Mumbai. The unit, priced at ₹5,000 produced by Naval Ship Repair Yard, Kochi, can disinfect small objects like currency notes, cards, wallets, pens where sanitising gels and liquids cannot be applied Superfast Covid Hospitals Ahmedabad’s Civil Hospital was converted to a dedicated Covid hospital in four days with 1,200 beds. Kasargod district hospital in Kerala became a medical college to treat Covid patients within a week Electric Masks The Centre for Nano and Soft Matter Sciences, Bangalore, an autonomous institute of the Department of Science and Technology (DST), has developed the TriboE Mask, which holds electric charge to restrict entry of infections Automatic Mist Sanitiser DRDO’s Centre for Fire Explosive & Environment Safety, Delhi,…

The traditional distribution network will go through consolidation and companies will partner with those which were more resilient during the crisis. Smaller distributors could be merged with the bigger ones to ensure efficiency Companies’ association with third-party supply chain and distribution companies with strong digital backbones will become stronger While traditional distributor will still be there, large companies may prefer to partner with third-party distribution companies for logistics. The third-party distributor may pick up stock from the distributor and deliver to stores Small to mid-sized FMCG companies may also want to use cash and carry players as the latter have started delivering directly to retailers Post demonetisation, many companies had strengthened direct distribution; the trend is likely to catch on further While bigger companies already have state-of-the-art warehouse management and…

Stage 1: Survive (0-3 months) In this phase, which could last for three months, travel and tourism companies will have to ensure that they have enough cash for salaries and other fixed expenses In a typical hotel chain, 15 per cent employees account for 50 per cent payroll expenses. Instead of firing lower level staff, top management should take 50-70 per cent salary cuts Request the government to provide relief in the form of tax waivers (statutory, municipality). Ask RBI to extend moratorium period (on loans) Stage 2: Revive (3-12 months) In about six months, when there would be some kind of cure (but no vaccine), domestic travel segment would likely pick up; it is being loosely called revenge travel (frequent travellers who couldn’t travel during lockdown will go on…

After a 25-year illustrious career in HDFC Bank, Aditya Puri, 69, is set to retire from the largest Indian private bank in October. Puri, who joined as the first employee, has been instrumental in building the bank from scratch and turning it into the most valued lender in India. He is now readying his retirement plans. Puri says he has “enjoyable plans” for his retirement life. “I will play my favourite game, golf. Trekking is my other passion. I prefer to walk in the woods,” he says. Music will become the filler, he adds. But what would be his contribution to his biggest passion — banking? Puri is ready to take up board position in any international or Indian firm. He will also consider top jobs in private equity firms.…

RAMESH IYER, VICE CHAIRMAN & MD, MAHINDRA FINANCE Q: What was the issue you were grappling with? A: We were setting up retail finance options across the country in the mid-’90s. The biggest challenge was to recruit teams locally. They came from different backgrounds. The challenge was to align them to one Mahindra culture. Trust and empowerment were the two pillars of success. Q: Who did you approach for advice and why? A: I used to work under a general manager (GM) named Gidwani, in my previous job. Those days, GM used to be head of the unit and I was the junior-most employee. He used to come very early to office. I often followed the same route to learn from him. His advice came in handy. Q: What was…

February 2018: Facebook-owned messaging platform WhatsApp beta-launches its payments service WhatsApp Pay July 2018: Mukesh Ambani forays into new commerce; calls it RIL’s next biggest growth engine August 2019: At RIL’s 42nd AGM, Ambani says he intents to register 30 million kirana stores December 2019: Jio Platforms reportedly does a soft launch of grocery platform JioMart in Navi Mumbai, Thane and Kalyan February 2020: WhatsApp gets NPCI approval to roll out its payments service April 2020: Jio Platforms receive ₹43,574-crore funding from Facebook for 9.99 per cent stake; WhatsApp and Jio Platforms sign deal to grow RIL’s new commerce business…

Agriculture Primary source of livelihood for about 58 per cent population. Gross value added by agriculture, forestry and fishing was estimated at ₹18.55 lakh crore ($265.51 billion) in FY19 Healthcare The hospital industry in India is forecast to increase to ₹8.6 lakh crore ($132.84 billion) by FY22 from ₹4 lakh crore ($61.79 billion) in FY17; a CAGR of 16-17 per cent Pharmaceuticals The size of the sector was $33 billion in 2017. It is expected to expand at a CAGR of 22.4 per cent over 2015 to 2020 to reach $55 billion. Exports were $19.14 billion in FY19 Logistics Estimated to be around $160 billion EOU & SEZ Accounts for 34 per cent of country’s total exports IT & ITeS industry $181 billion revenues in FY19. Exports rose to $137…

Hindustan Unilever’s (HUL’s) Humara Store project is close to Chairman and MD Sanjiv Mehta’s heart. With the company generating 90 per cent of its business through general trade, Mehta has been passionate about digitally enabling kirana stores across the country. Way back in 2017, the company had converted a few grocery stores in Delhi into Humara stores. It tried to technologically empower the owner by getting him to order through HUL’s Shikar app. It also enabled him to offer online services to consumers and keep the right stock keeping units (SKUs) by using data analytics. Back then, a tech-enabled kirana store sounded unreal. In fact, many store owners downloaded the app, but never used it. “I have the app but have never used it. Who has the time to order…

It was 1991. The P.V. Narasimha Rao government had just announced the economic liberalisation policy, and top industrialists were scouting for investment opportunities. Rahul Bajaj, Chairman of Bajaj Auto, would often get calls to diversify into businesses the government had decontrolled. But Bajaj was not ready to leverage the auto business to build a power or a cement plant. He wanted to build Bajaj Auto into a leading global automaker, instead of investing in other sectors. Bajaj was not alone. He was among a number of industrialists who resisted foraying into new businesses, despite prospects of attractive returns. It is these businesses that appear to be better placed as coronavirus-triggered lockdown clogs cash flows. In general, they have lower debt — some even zero financial liabilities — and surplus cash…

Focus on collections, reaching out to customers & monitoring credit bureau data Review of collaterals and guarantees in Covid-hit loan segments Caution while increasing exposure to weak micro enterprises without any government or RBI guarantee No increase in exposure to NBFCs whose business model is built around unsecured loans Accelerated provisioning for potential NPAs Cut in deposit rates as liquidity will be surplus Purchase of good asset portfolios from NBFCs, especially mortgages, including affordable housing Recapitalisation to prepare for shocks…

State Disaster Response Fund (SDRF): Primary source of funding for states in case of a disaster ₹28,983 crore Combined share (Centre and states) allocated for 2020/21 National Disaster Response Fund (NDRF): Supplements SDRFs during disasters of severe nature, if adequate funds are unavailable PM National Relief Fund: Depends on donations and corporate social responsibility funding; ₹3,800 crore Balance as on March 31, 2019 PM CARES Fund: A new public charitable trust created to collect money through donations to fight Covid-19 CM Relief Fund: Like PM National Relief Fund, depends solely on donations State Disaster Management Authorities: Though not funding authorities, they can act as implementing agencies for CSR activities…

Over the past five years, road building has picked up pace. How would government ensure the growth momentum continues despite the challenges posed by the coronavirus pandemic? The government focus on developing a robust infrastructure has been paying dividends. In 2014, the highways sector was in a bad shape with construction falling to 4 km per day in the last quarter of the fiscal. Huge NPAs were staring at concessionaires, there was delay in land acquisition, and various statutory approvals had multiplied problems. However, after removing bottlenecks, fast-tracking decision making, and introducing innovative models like Hybrid Annuity Model, confidence of contactors and concessionaires has been boosted. The pace of construction has risen to 30 km per day. The National Highways sector is not isolated from the challenges posed by the…

What made you choose developing gifts as a business option? I was very sure of setting up my own business enterprise and that too which had a creative aspect to it as I am a connoisseur of innovative products having an artistic value to it, besides utility. So, the gift developing business appealed to me. As it was not my family business, I started from scratch and what followed was gathering extensive information about the business and hardwork. The rest as you say is history and destiny. I truly enjoy this business as its of my liking and am passionate about it. What does RR stand for? My business is named after my father’s elder brother Mr Raja Rajendra (Tauji), whom I consider to be my mentor. He has also…

Jio Platforms gets valued among the top five listed companies in India by market cap. Ambani is now Asia’s richest While WhatsApp brings scale and reach of 400-mn users, RIL offers a vast database of wireless users, and understanding of the local market For RIL, the deal is crucial as major businesses – petrochemicals and oil refinery – are under pressure due to the Covid-19 outbreak WhatsApp will be a super app for payments and enable users to transact with local kiranas…

Mauritius $141.9 BILLION Singapore $94.65 BILLION Japan $33.1 BILLION Netherlands $30.9 BILLION USA $28.35 BILLION UK $27.94 BILLION Germany $12.07 BILLION Cyprus $10.10 BILLION France $7.10 BILLION UAE $6.91 BILLION China $2.34 BILLION Source: DIPP $4.2 BILLION That’s because much of the Chinese investment comes via Singapore (above) and Hong Kong $3.9 BILLION Estimated investment by Chinese firms in India’s start-up economy in 2019 $8 BILLION Amount China claims it has invested in India till December 2019 $26 BILLION Total investment by China in India, including ongoing and planned ones, as estimated by Brookings…

AUSTRALIA: Tightened rules on foreign takeovers fearing strategic assets could be sold cheaply due to the coronavirus crisis. Has mandated scrutiny of every single deal regardless of value ITALY: It expanded the Golden Powers Law, meant to restrict foreign investments in sensitive areas, to include a large number of other sectors. Curbed foreign takeovers in a range of sectors GERMANY: Europe’s biggest economy approved measures which applied to takeover bids from the United States and enterprises outside the European Union SPAIN: Issued Royal Decree suspending the regime on FDI deregulation indefinitely. It necessitates prior government approval for investors outside EU looking at acquiring more than 10 per cent in a local company CANADA: Tightened foreign investment rules, scrutinising investments in companies related to public health or critical supply chains, and…

Despite the lockdown, Dr Amol D. Raut, CEO at Pune’s Genetic Healing and Director at GeneOmbio Technologies, has not slept for days. That’s also the case with his 50-odd colleagues, mainly scientists. Dr. Raut is using his nearly two decades of experience in infectious diseases, molecular diagnostics and human genome sequencing to study the structure and characteristics of the four-month-old SARS-CoV-2 virus gene. Soon, his team will launch a genetic study to develop diets suitable to Indians that can improve immunity against the disease. Another study with the 70-year-old Kaivalyadham Yoga Research Institute at Lonavala near Pune will map genes of a sample pool in Maharashtra to learn how Yoga can improve immunity against the coronavirus. If Dr. Raut’s studies to fight coronavirus are looking for allied solutions based on…

HUL, ITC, Marico and Britannia have partnered with restaurant delivery and hyper-local delivery platforms such as Swiggy, Zomato and Dunzo Cash and carry retailers such as Metro Cash and Carry have started delivering to retailers Big Basket and modern retail companies such as Spencer’s Retail have partnered with cab aggregators such as Uber BigBasket and ITC have partnered with online real estate company NoBroker’s residential community management arm, NoBrokerHood, to deliver in 2,000 residential societies ITC and Grofers have partnered with security and community management solution provider, MyGate, to deliver essentials in over 7,000 gated communities Dairy companies such as Amul, Lactalis and Creamline have started direct distribution to homes…

Accenture Plc, a company with $43 billion in revenue and over 5,00,000 employees across the world, lowered its FY20 annual revenue guidance in March to 3-6 per cent from 6-8 per cent earlier, despite record order bookings of $14.2 billion in the second quarter (it follows the September-August calendar). The assessment of one of the world’s largest tech companies of the impact of Covid-19 was an early indication of things to come. The prognosis was not far off the mark. The Crisis And The Fallout In the middle of March, the coronavirus death toll in the US was still below 400. Around the same time, even though infections in India were below 500, Centre decided to impose a nationwide lockdown to contain the spread of the pandemic. The domestic IT-BPM…

Founders of new-age NBFCs and fintech lending platforms are mostly professionals with limited capital. In a post-Covid world, banks have turned their back on them. The public market borrowing window is not available to them as they are too small to get any interest from investors. That leaves them with private equity players and venture capitalists that have backed them. “But they are, too, return-oriented,” says the founder of a fintech firm. So, will these lenders to underbanked and underserved segments survive or perish? “Every past crisis (The microfinance crisis in Andhra Pradesh or the financial crisis of 2008) has shown that a small or micro customer always fights back and comes out of the crisis. But bankers react by withdrawing credit since they turn risk-averse,” says Manish Khera, Founder…

Patu Keswani, the Chairman of Lemon Tree Hotels, recently decided not to take salary for three months. Other senior members of Keswani’s A-team (such as vice presidents and managers) also took pay cuts of between 50 per cent and 65 per cent. When Business Today spoke to Keswani, his rationale was an eye opener. Just about 15 per cent staff in his hotel chain accounts for half the wage bill. “The key decision at the moment for managements is to take pay cuts instead of firing employees, and look for ways to cut fixed costs. Hotel chains can bring down their wage bill by 30-40 per cent without touching 85 per cent of the staff,” he says. In the large universe of the travel and tourism sector, Lemon Tree is…

In January, Blue Star, a maker of air conditioners, air purifiers and water coolers, set up what Chairman Shailesh Haribhakti calls the “information war room”, a place where half-a-dozen people feed in data, which is then accessed by the company’s key decision-makers. The aim was to track movement of every ship from China to make sure the company is in a good position in terms of supplies as soon as factories reopen. Like most manufacturers who depend on China for critical parts, Blue Star, says Haribhakti, “gets a lot of compressor parts from China. So, it is very important for us to monitor their availability.” Going ahead, the war room will be an integral part of the company’s business continuity planning, he adds. Business continuity planning – the process involved…

Brian L. Roberts, Chairman and Ceo of Comcast Corporation, the us-based company at the intersection of media and technology that provides cable services, entertainment and communication products, is a committed squash player. roberts is an All-American squash player who won a gold medal with the us squash team at the 2005 Maccabiah games in Israel and silver at the 1981, 1985, 1997 and 2007 editions. the silver medals include one in the over-35 division. he opted for squash in high school since he was not tall enough for baseball. today, the 6 ft 2 in roberts is tall enough, but so is his love for squash. he was the number one player in the team and its captain. legendary coach Al Molloy, a former marine, put roberts on a tough…