Innholdsfortegnelse for 1 May 2022 i Business Today

FOR INDIA’S ONLINE food delivery giants Swiggy and Zomato, the Covid-19 lockdowns were the ultimate moment of truth. They presented a growth opportunity like never before. People were locked in their homes for months, discretionary spending on food services was at its highest, existing restaurants flocked to their platforms en masse, and new cloud kitchens mushroomed. Consequently, average order values (AOVs) peaked and order numbers shot up to record levels. Yet, improvement in operating margins remained elusive and the writing on the wall became glaringly clear—there isn’t much money to be made on pure-play food delivery business in India. But why is it so? In food delivery, profitability means improving AOV and optimising delivery cost. The average order value of $5 for food delivery in India is approximately six times…

“THE MERGER WILL CAPITALISE ON OUR DOMAIN KNOWLEDGE IN REAL ESTATE AND MORTGAGES AND OUR OPERATIONAL EFFICIENCIES, WHILST LEVERAGING ON THE COST OF FUNDS EFFICIENCIES AND THE DISTRIBUTION NETWORK OF THE BANK”DEEPAK PAREKH, CHAIRMAN, HDFC LTD “THIS [MERGER] TICKS ALL THE RIGHT BOXES IN TERMS OF COMPLETION OF PRODUCT OFFERINGS, LEADERSHIP IN HOME LOANS… AND A CUSTOMER BASE THAT CAN BE LEVERAGED TO CROSS-SELL A COMPLETE SUITE OF FINANCIAL PRODUCTS”SASHIDHAR JAGDISHAN, MD & CEO, HDFC BANK ▶ HDFCLTD, in its 45-year history, had not just helped a chunk of the country’s population build dream homes, but also birthed one of the top private lenders of the country. However, the past few years have been tough with the tried-and-tested business model of the country’s largest non-banking finance company (NBFC) facing regulatory…

HISTORY DOESN’T JUST repeat itself, it endures. Consider the rupee-rouble agreement, discussed in every decade from the 1950s, through the 1960s, ’70s, ’80s, ’90s, and the 2000s, up to as recently as 2017. And here it is again now, in 2022. It has been contested, hotly negotiated and frequently renegotiated. Yet, issues have persisted. In 1961, the then Reserve Bank of India (RBI) Governor, H.V.R. Iengar, wrote to then Prime Minister Jawaharlal Nehru highlighting the risks associated with the 1957 rupee-rouble agreement with the erstwhile USSR. He raised the same concerns about similar agreements signed with some East European countries, wherein we also paid for imports with non-convertible rupees. RBI officials had found evidence of switch trading or ‘shunting’, where Indian exports paid for with those non-convertible rupees to Poland,…

THERE SHALL BE A CEILING OF ₹1 CRORE PER BORROWER FOR FINANCING SUBSCRIPTION TO INITIAL PUBLIC OFFER. NBFCs CAN FIX MORE CONSERVATIVE LIMITS. THE INSTRUCTIONS RELATING TO CEILING ON IPO FUNDING… SHALL COME INTO EFFECT FROM APRIL 1, 2022—RBI CIRCULAR DATED OCTOBER 22, 2021 ONE-THIRD OF THE PORTION AVAILABLE TO NIIs (NON-INSTITUTIONAL INVESTORS) SHALL BE RESERVED FOR APPLICANTS WITH APPLICATION SIZE OF MORE THAN ₹2 LAKH AND UP TO ₹10 LAKH; TWO-THIRDS OF THE PORTION AVAILABLE TO NIIs SHALL BE RESERVED FOR APPLICANTS WITH APPLICATION SIZE OF MORE THAN ₹10 LAKH—SEBI STATEMENT ON DECEMBER 28, 2021 EYE-POPPING GAINS Some of the most popular IPOs of 2021 have given more than double returns to investors in just one day THE PATH TO MULTIBAGGER RETURNS Easy Money for HNIs… ▶ Start point…

ALTERNATIVE BUSINESS MODELS AUTONOMOUS VEHICLE SHARING, NEW SERVICE OFFERINGS, ETC. APPS AND SERVICES FULL LIBRARY OF APPLICATIONS FROM 3RD PARTIES DATA ANALYTICS FULLY CONNECTED CLOUD PROCESSING AND DATA FEEDS FOR MANUFACTURERS SOURCE: MCKINSEY & COMPANY REPORT…

IN FY22, DOMESTIC SALES HAVE FALLEN YOY, BUT EXPORTS HAVE SURGED DOMESTIC SALES OF UTILITY VEHICLES HAVE SURGED… …WHILE EXPORTS HAVE GONE UP ACROSS CATEGORIES DESPITE A DIP IN DOMESTIC SALES OF PASSENGER CARS, MARUTI LEADS THE PACK MARUTI AND HONDA HAVE SEEN PASSENGER CAR EXPORTS GO THROUGH THE ROOF Note: All data for April-February, except for EVs. Figures in number of units except where indicated; top 5 players taken on the basis of absolute sales in 2021-22 Source: SIAM, FADA TATA MOTORS HAS SEEN A MASSIVE SURGE IN DOMESTIC SALES OF UTILITY VEHICLES… DOMESTIC SCOOTER SALES HAVE FALLEN OVER LAST YEAR… DOMESTIC SALES OF MOTORCYCLES HAVE FALLEN… …WHILE KIA LEADS THE LIST OF TOP EXPORTERS OF UTILITY VEHICLES …WHILE SCOOTER EXPORTS HAVE SURGED IN 2021-22 …BUT EXPORTS OF MOTORCYCLES…

Data till April 11, 2022 Source: CMIE Economic Outlook ₹10 Total rise in the prices of petrol and diesel per litre in Delhi since March 22 of this year ₹120.50 The price of petrol in Mumbai. It is the highest among metro cities in the country. In Delhi, the fuel retails at ₹105.50 11.37% The percentage by which diesel prices rose in Mumbai since March 22, to hit ₹104.80/l. In the same period, Brent oil prices hit a high of over $120/bbl…

THAT HOME YOU’VE BEEN eyeing could cost you a fair bit more than what you’d bargained for. Why? Cost of key construction materials is surging, ergo home prices are also expected to follow suit. Estimates by professional services and investment management company Colliers say prices of raw materials have risen significantly by end-March over March 2021—steel (30 per cent), cement (22 per cent), copper (40 per cent) and aluminium (44 per cent). As a result, the average cost of construction for residential units has grown 12 per cent, and 11 per cent for industrial. Now you know why you’ll have to shell out more.…

TATA MOTORS HAS closed the financial year 2021-22 on a high. According to data from the Federation of Automobile Dealers Associations (FADA), the auto major’s market share grew from 7.8 per cent in FY21 to 11.45 per cent in FY22, making it the third-largest passenger vehicle maker in India after Maruti Suzuki and Hyundai. And in electric vehicles, the company is the clear No. 1. With two electric cars—Nexon EV and Tigor EV—in its fold, Tata Motors dominates the market with more than 85 per cent market share after selling 15,198 vehicles. Electrifying, we say.…

▶ AFTER SIX MONTHS of gruelling negotiations, Axis Bank—the country’s third-largest bank—has clinched the Citi India consumer banking deal, beating half a dozen other big institutions. The acquisition cost of Citi’s loan book, worth at least $3.5 billion, is approximately $1.6 billion, far less than the speculated $2 billion. Indeed, valuation was the vexing issue that kept many banks away. But Axis Bank, which has ambitious plans to grow the business, stayed put. Citi’s consumer business is not large. It is going to contribute only 7 per cent to the Axis deposit base and 4 per cent to its advances, but the deal will power the bank’s retail banking business. Axis Bank is predominantly a retail bank with 55 per cent of its advances in retail assets. Amitabh Chaudhry, MD…

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THE COMBINED ENTITY WILL BE SECOND ONLY TO SBI BY ASSETS… #INCLUDES HDFC LTD; FIGURES IN ₹ CRORE (EXCEPT SHARE OF RETAIL) FOR APRIL-DECEMBER 2021 SOURCE: ANNUAL REPORTS, COMPANY PRESENTATIONS …AND WILL HAVE THE BIGGEST MORTGAGE PORTFOLIO IN INDIA FIGURES FOR DECEMBER 2021 SOURCE: HDFC GROUP IT WILL ALSO BE ONE OF THE TOP BANKS GLOBALLY BY MARKET CAP MARKET CAP IN $ BILLION AS ON APRIL 6, 2022 *HDFC BANK MARKET CAP INCLUDES HDFC LTD’S FIGURES SOURCE: MARKETS MARKETS TRACKER The HDFC Bank stock has performed better than HDFC Ltd over the past two years GRAPH NORMALISED TO THE BASE OF 100 SOURCE: ACE EQUITY HOW THEY STACK UP A look at the key numbers for HDFC Bank and HDFC Ltd SOURCE: BSE, SCREENER, COMPANY PRESENTATION AND ANNUAL REPORTS…

▶ AFTER MOVING TO INDIA from my previous role as the Chief Financial Officer for Beijing Mercedes-Benz Sales Service, I was very confident of the prospects of electric vehicles (EV) in India. Back then, there was quite a bit of scepticism for EVs in India ranging from customer acceptance, world-class product availability, concerns regarding driving range, lack of a developed charging infrastructure to support quick charging, and also safety concerns regarding batteries in the event of a collision. Now, we have seen advancements in battery technology, introduction of new products, and development of the overall EV ecosystem. These factors, together with government policies, have led to more countries successfully adopting EVs as the future mobility solution. The world has embraced the reality that EVs can be developed to replace fossil…

FOR 23-YEAR-OLD Siddharth Jolly, some of his happiest memories are that of his family road-tripping across the country in their caravan when he was 15. Little wonder, when it came to setting up his own business, he decided to set up Carawander, a travel company specialising in caravans. The company that was born in October 2020, finally conducted its first road trip a year later. “We had our caravan ready in May last year but the impact of the second wave was still strong and no one was travelling,” says Jolly. However, since then, things have picked up and his caravans are booked for three-four trips every month. While travelling by caravan or motorhome is quite popular in the West, it’s picking up in India now with a series of…

2022 HAS SEEN A ROBUST UNICORN ROSTER IN THE FIRST THREE MONTHS… VALUATION ($ billion) …WHICH RAISED TOTAL FUNDS OF NEARLY $13 BILLION. HERE ARE THE TOP 5 AMOUNT RAISED (in $ million) …CONTINUING THE TREND FROM 2021, WHICH SAW A MASSIVE SURGE IN UNICORNS NUMBER OF UNICORNS ADDED IN 2021, INDIA ADDED THE THIRD HIGHEST NUMBER OF UNICORNS IN THE WORLD… NUMBER OF UNICORNS ADDED 95 THE TOTAL NUMBER OF UNICORNS IN INDIA AS OF MARCH 31, 2022, ACCORDING TO VENTURE INTELLIGENCE The term unicorn is used in the venture capital industry to describe a start-up with a value of over $1 billion E-COMMERCE AND FINTECH ARE AMONG THE TOP SECTORS THIS YEAR. IN 2021, THEY SAW THE MAXIMUM FUND INFLOWS A LARGE NUMBER OF DEALS AND HIGH VALUE…

Collective investment schemes or CIS, wherein a group of people pool money to invest in an asset, would be subject to more stringent norms—on par with mutual funds—with stock market regulator Sebi deciding to tighten the regulatory framework for CIS. It has enhanced the net worth criteria and made it mandatory for the company to have a track record in the CIS space. Such firms will also need to meet norms of minimum number of investors, maximum holding of a single investor, and minimum subscription amount. Sebi will also bring in more transparency in the fee and expense structure of CIS entities.…

Arundhati Bhattacharya broke the mould when she became India’s top banker, as the first woman Chairman of the State Bank of India. Yet, that was not to be the summit of an illustrious career in banking, as she quickly followed that up with an intriguing assignment—as Chairperson and CEO of Salesforce India. In a wide-ranging chat with Business Today’s Global Business Editor Udayan Mukherjee, she discusses her career trajectory, what it takes to reach the top in a male-dominated industry, and the key differences between the Indian public and private sector from her unique vantage point. Edited excerpts: Q: From State Bank of India to Salesforce India is such a big leap. Were you not daunted by what you were getting yourself into? A: Well, not daunted really, but a few of…

A MERGER OF TWO companies is often called a meeting of minds. By any yardstick, it is a complex affair that involves a host of issues ranging from financial metrics, a cultural fit and, perhaps most importantly, keeping differences aside in the interest of creating a robust organisation. Much of this is true in the case of PVR Ltd and INOX Leisure Ltd, two big names in the multiplex space. They competed fiercely, although some regions were always their respective strongholds—north, south and west India for PVR, and east and central for INOX. The two men at the centre of this new entity called PVR-INOX, Ajay Bijli and Siddharth Jain, are candid when they speak of how the pandemic played havoc. Business came to a standstill and the emergence of…

LATE LAST YEAR, AN ALLEGED spat between BharatPe’s former MD Ashneer Grover and Kotak Wealth Management brought to the fore the issue of leveraged finance in the initial public offering (IPO) arena in India. While the spat soon turned into an ugly legal battle with the jury still out on who was at fault, the controversy made many in the markets realise that IPO financing was not just some short-term lending activity. It was an industry where billions of dollars were at stake whenever an IPO hit the market. In IPO financing, high net-worth individuals (HNIs)—non-institutional investors (NIIs) in market parlance—borrow money from non-banking financial companies (NBFCs) to put in bids worth hundreds of crores in a public issue. Such lending is typically done for just 7-9 days depending on the…

35-40% PAYMENT HISTORY Payment history is the most important factor when calculating the credit score. Even a single missed or delayed payment can cause your credit score to drop 20-25% CREDIT UTILISATION It is an indicator of the credit limit used up by you, and is calculated by dividing your credit usage by your overall credit limit. You should ideally avoid using more than 30 per cent of your available limit 15-20% CREDIT MIX It is good to have a ‘mix’ of credit as it shows your ability to manage different types of credit products 10-15% LENGTH OF CREDIT HISTORY This indicates how long you have been using a credit product, and the longer, the better. For lenders, a long credit history shows your ability to manage credit for longer…

INDIA’S COMMERCIAL VEHICLE (CV) segment was already battling falling sales when the Covid-19 pandemic made it worse. In 2019-20, according to industry body the Society of Indian Automobile Manufacturers (SIAM), CV sales dropped 29 per cent to 717,688 units—from its peak of 1 million in FY19—because retail financing took a major hit and there was a transition from BS-IV emission norms to stricter BS-VI norms. In FY21, after the pandemic hit, CV sales plunged 21 per cent to 568,559 units. During the first nine months of FY22, sales improved to 531,702, compared to 388,497 in the corresponding period in FY21. As infrastructure development projects pick up, and the logistics and e-commerce sectors grow, coupled with easing of financing options, companies including market leader Tata Motors and other players like Ashok…