QBiz: Amazon Eyes Flipkart; Ordinance to Amend Trade Disputes Law
Here’s your roundup of the top business stories.
1. Amazon Offers to Buy 60 Percent Stake in Flipkart
American e-commerce major Amazon has formally entered the battle for Flipkart, a move that may slow down rival Walmart’s effort to buy a controlling stake in the Bengaluru-headquartered firm.
Sources indicated that Amazon, which aggressively competes with Flipkart in the India market, has put in a matching bid along with a $2-billion breakaway fee. While a competing bid could possibly raise Flipkart’s valuation, thereby helping investors, Walmart is learnt to be determined to strike a deal with India’s e-commerce poster boy.
Amazon has offered to buy a 60 percent stake in Flipkart. If the bid is accepted, the combined entity would more than dominate the country’s online retail market, a reason for the Competition Commission of India (CCI) to step in.
(Source: Business Standard)
2. International Firms Skip Bidding For Oil Exploration Auctions
A key initiative of the Narendra Modi-led administration to cut India’s oil import bill met with a lackluster response from international private firms on Wednesday, 2 May.
Overseas oil explorers did not even make a single bid in the first round of bidding for the Open Acreage Licensing Programme that ended on Wednesday. Among other objectives, it seeks to open up India’s oil and gas sector to attract more investors and boost production.
India, which imports nearly 80 percent of the oil it consumes, aims to cut the crude import bill by 10 percent by 2022 by boosting local production. That’s because high international crude prices widen India’s trade and current account deficits and also fuel inflation.
(Source: BloombergQuint)
3. India to WTO: No Breach of Farm Subsidy Limits in FY15 and FY16
India informed the World Trade Organization that it did not breach farm subsidy limits in the two years 2014-15 and 2015-16.
The outgo for commodities such as rice, wheat and coarse grains in its minimum support programme – the price it pays to farmers when buying their produce – was below the ceiling, it said, putting to rest doubts raised by the US and Australia, among others, that India’s farm subsidies have been increasing.
Input subsidies for farmers including support for fertilisers, irrigation and electricity were $24.8 billion and $23.5 billion in the two years respectively, India said in the submission of its domestic subsidy programme to the multilateral body over a week ago.
(Source: The Economic Times)
4. HCL Poised to Replace Wipro as No. 3 IT Firm
HCL Technologies Limited is set to surpass Wipro Ltd to become India’s third biggest software services provider in the three months leading to 30 June, marking the first change in the pecking order of the country’s $167 billion information technology outsourcing industry in six years.
Billionaire Shiv Nadar-led HCL Technologies expects its dollar revenue to grow by as much as 12.5 percent in the current financial year, implying that the company will race past Azim Premji-led Wipro.
HCL Technologies’s rise has come on the back of years of under performance by Wipro. Until a few years ago, both companies used to generate significant business from managing data centres or offering infrastructure services to their clients.
(Source: Livemint)
5. Coal India Achieves 17 Percent Production Growth in April
Coal India increased supplies to power sector by 14 percent on the back of a 17 percent rise in production and a 13 percent growth in sales during April.
According to data released by Coal India, all its coal producing subsidiaries have recorded production and sales growth during the month.
The public sector coal major produced 44.84 million tonnes of coal during the month – a 6.40 million tonnes rise in comparison to the previous corresponding period. It sold nearly 51 million tonnes of the dry fuel, thus registering a near 6 million tonnes growth against 45.14 million tonnes in the previous period.
(Source: The Economic Times)
6. Cabinet Clears Ordinance To Amend Law For Speedy Disposal Of Commercial Disputes
Seeking to improve India’s ranking in the ease of doing business index, the government on 2 May approved an ordinance to amend a law for speedy disposal of commercial disputes.
While Law Minister Ravi Shankar Prasad refused to give details, saying the ordinance is yet to get the President’s nod, according to the bill which is pending in Parliament, the specified value of a commercial dispute will be brought down to Rs 3 lakh from the present Rs 1 crore.
Prasad told reporters that the Union Cabinet approved the ordinance to amend the Commercial Courts, Commercial Division, and Commercial Appellate Division of High Courts Act.
(Source: BloombergQuint)
7. IndiGo Q4 Profit Misses Estimates As Fuel Expenses Rise
InterGlobe Aviation Ltd’s profit missed analyst estimates by a wide margin due to higher fuel expenses, lower airfares and foreign exchange losses.
Net profit of budget carrier IndiGo’s parent dropped 73 percent to Rs 118 crore as compared with the same quarter last year, according to its filing with the stock exchanges. That fell short of the Rs 478 crore consensus estimate of analysts tracked by Bloomberg.
The bottom line was hit by a 33.5 percent surge in aircraft fuel expenses on a year-on-year basis. Besides, the airline reported a foreign exchange loss of Rs 92.5 crore as against a gain of Rs 160 crore in the same quarter last year.
(Source: BloombergQuint)
8. Hero MotoCorp Fourth Quarter Profits Rise 35 Percent
Hero MotoCorp Ltd, the world's largest selling two-wheeler maker, reported a better-than-expected 35 percent rise in quarterly profit on 2 May. Profit rose to Rs 9.67 billion ($145.08 million) in the three months ended 31 March, from Rs 7.18 billion a year ago, the company said in a statement.
Analysts on average expected a profit of Rs 9.52 billion for the quarter, Thomson Reuters Eikon data showed.
The company sold over 2 million two-wheelers during the quarter, an increase of 23 percent over the same period a year earlier, the statement added.
(Source: Business Standard)
9. Merger With Indus Towers Won't Hit Business Ties With Jio: Bharti Infratel
The planned merger of Bharti Infratel Ltd and Indus Towers will not affect their relationship with Reliance Jio Infocomm Ltd as it continues to be an important customer, Bharti Infratel chairman Akhil Gupta said.
“Both Indus Towers and Bharti Infratel have Jio as a customer and the same will continue. After the merger, nothing changes in terms of customer and competition relationships,” Gupta said in response to an analyst’s question at a conference call on Wednesday, 2 May.
The two companies on 25 April agreed to merge their businesses to create the world’s largest tower company outside China. The combined entity will own more than 163,000 towers, second only to China Tower. The merged company will be listed on the stock exchanges, as Bharti Infratel is a publicly traded company.
(Source: Livemint)
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