QBiz: Govt to Appoint E-Commerce Regulator; Tranzmeo Raises Funds
Here are the top business stories of the day.
1. Govt Looks to Appoint Regulator for E-Commerce Sector
The government plans to introduce a new policy on e-commerce within weeks to boost orderly growth and fair play in the $41 billion industry that caters to roughly 100 million online shoppers in Asia’s third-largest economy.
The new policy would boost the sector, promote exports and ensure fair play, a senior government official said. The government is also examining the need for a regulator for the sector.
The proposed e-commerce policy and the changes in foreign direct investment (FDI) rules related to the sector announced on Wednesday, 26 December, are aimed at placating small traders, who contend that discounts offered by companies such as Amazon and Flipkart are driving them out of business. Addressing their concerns is important given that they are a core voter base for the ruling BJP.
India’s e-commerce market is dominated by Amazon.com and Flipkart, which was acquired by Walmart for $16 billion earlier this year.
2. Indian Firm Makes Electronic Chip to Help Curb Call Drop, Facilitate 5G
Bengaluru-based Saankhya Labs on Thursday, 27 December, unveiled the first indigenously developed electronic chipset that can be used for functions like direct TV broadcast on mobile devices, curbing call drops and 5G connections.
All electronic chipsets, considered as the heart of modern devices, have been developed by foreign companies so far. None of them is made in India because there is no modern semiconductor manufacturing plant in the country.
Saankhya Labs co-founder and CEO Parag Naik said the chipset will help in separating video content from a mobile network and hence reduce the load on the spectrum for improving call quality.
Saankhya's Pruthvi-3 chipset will facilitate direct transmission of video on mobile phones and can also help convert an Android-based smartphone into a satellite phone.
The company expects to launch its chipset-based mobile phone accessories in the form of a dongle and mobile phones within a couple of years, Naik said.
3. United Bank to Receive Rs 2,159 Crore
The government will infuse Rs 2,159 crore capital through preferential allotment in State-run United Bank of India, the lender has informed the exchanges on Thursday, 27 December.
“Central government, in a letter dated 26 December 2018, has informed of its decision to invest Rs 2,159 crore in the equity capital of the bank by preferential allotment…” the bank informed the exchanges. The lender is one of the 11 public sector banks that are under the prompt corrective action framework of the RBI following deterioration in financial health.
UBI’s net loss widened during the July-September quarter to Rs 883.2 crore from Rs 344.8 crore in the year-ago period on the back of higher provisioning.
The gross NPA ratio was at 22.69 percent and net NPA ratio was at 14.36 percent as on end September.
(Source: The Hindu)
4. Maruti to Drive into Future Without Diesel Engines
Maruti Suzuki India Ltd plans to shut its diesel engine assembly plant in Gurugram in the biggest sign yet of a grim future for diesel cars in India.
The Suzuki Motor Corp unit might either convert the diesel engine line in Gurugram to produce petrol engines or add an assembly line for petrol engines at its plant in Manesar, said three people directly aware of the development. Both the factories are located in Haryana.
Maruti’s highlights waning demand for diesel vehicles in India and its plans to aggressively tap the market for petrol and CNG cars, as well as eco-friendly hybrid and electric vehicles (EVs). India’s largest carmaker is expected to gain the most from a deepening partnership between its parent, Suzuki, and Toyota Motor Corp., which covers various areas including the production of hybrid and electric cars.
Sale of diesel cars is expected to fall sharply in India once the more stringent Bharat Stage (BS) VI emission norms come into force from 1 April 2020.
(Source: Hindustan Times)
5. AI Startup Tranzmeo Raises Funding from HPCL
Artificial intelligence (AI) startup Tranzmeo, which is part of NASSCOM 10,000 Startups accelerator programme, has secured an undisclosed pre-seed funding from Hindustan Petroleum Corp Ltd (HPCL) for its AI-powered product, T-connect OneView, the industry body said in a statement on Wednesday, 26 December.
Tranzmeo is the first AI startup in Kerala to receive funds from a state-run Fortune 500 company, it added.
The startup will use the funds to accelerate research and development of its advanced, proprietary technology and product line-up, bolster business development opportunities, and double the headcount over the next one year. HPCL will also join the board of Tranzmeo.
6. Warburg in Rs 3,000 Cr JV With Lemon Tree to Offer Co-Living Spaces
Hospitality chain Lemon Tree Hotels Ltd on Thursday, 27 December, said it has entered into a joint venture with global private equity firm Warburg Pincus Llc to form a platform that would jointly invest about Rs 3,000 crore to develop student housing and other co-living space in India.
Warburg Pincus formed the partnership through its affiliate Magnolia Grove Investment Ltd, Lemon Tree said in a filing to the BSE. This would also mark the entry of Lemon Tree into the rental housing business.
The JV company called Hamstede Living Pvt Ltd will build, acquire, develop, operate and offer on short and long-term leases real estate projects, with primary focus on student housing, co-living for working professionals and multi-family users, the New Delhi-based hotel company said.
Lemon Tree and Warburg Pincus follow budget hospitality firm OYO Rooms which in October entered the rental housing business by setting up OYO Living.
7. Adlabs Imagica Gets Relief from Bombay HC over Tax Benefits Under GST
Adlabs Imagica – which has theme and water parks in Maharashtra and is owned by Adlabs Entertainment – got relief from the Bombay High Court on Thursday, 27 December in a case relating to denial of entertainment tax incentives post GST.
Abhishek Rastogi, the petitioner’s counsel, said the court ordered that a committee be formed with representatives from the Maharashtra government and the Maharashtra Tourism Development Corporation, and that the committee come out with a report on extending entertainment tax benefits to the company. The committee will determine the methodology for extending the benefits to Adlabs Imagica
The issue relates to subsuming of entertainment tax into the goods and services tax (GST) which deprived the company of the entertainment tax incentives it was promised by the state government and the corporation.
The two parks were promised Rs 8 billion of incentives till 2023-2025.
(Source: Business Standard)
8. Next Year Will Bring Macro Challenges, Says Tata Chairman
The Tata conglomerate spent over Rs 70,000 crore ($10 billion) in acquiring assets, deleveraging group companies and untangling cross-holdings in 2018 even as it delivered a mixed performance amid a challenging global environment. While TCS and Tata Steel’s profits rose, Jaguar Land Rover skid into losses.
Chairman N Chandrasekaran, in his year-end note to the conglomerate’s more than seven lakh employees, said that 2019 will bring a number of macro challenges. But, “our job is to run our marathon, not to be distracted by somebody else’s sprint”. The Tata chieftain asked the staff to focus on “what we can control” – manage costs while providing customers the best products and services.
Chandrasekaran, who took charge as the chairman of Tata Group in 2017, has been reducing complexity at the diversified enterprise to make it respond and react fast in a competitive market.
(Source: The Times of India)
9. Indian-American Rajesh Subramaniam Named FedEx President
Indian-American Rajesh Subramaniam has been named as the president and chief executive officer of US multinational courier delivery giant FedEx. Subramaniam, currently the executive vice president, chief marketing and communications officer of FedEx Corporation, will assume his new role on 1 January 2019.
He replaces David L Cunningham at the Tennessee-headquartered company. Subramaniam, an IIT-Bombay graduate from Thiruvananthapuram, has been with FedEx for more than 27 years. He has held various executive-level positions in the company.
He began his career in Memphis and subsequently moved to Hong Kong where he oversaw marketing and customer service for the Asia Pacific region. Subramaniam then took over as the president of FedEx Express in Canada before moving back to the US as senior vice president of international marketing.
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