QBiz: AP Set to Bag Rs 10,000 Cr Kia Deal; LPG Consumption to Grow

The Quint’s compilation of business news from dailies across India.

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1. Andhra Pradesh Set to Bag Rs 10,000 Crore Kia Project

South Korea’s Kia MotorsKia Motors may put in as much as Rs 10,000 crore in one of the biggest foreign direct investment projects in India, with the Hyundai Motor unit selecting Andhra Pradesh for its maiden facility after a two-year, four-state search in Asia’s third-largest car market.

Kia’s choice of Andhra Pradesh – amid intensifying interstate rivalry to draw investments as part of the Make-in-India initiative – helps reinforce N Chandrababu Naidu’s credentials as a business-friendly chief minister.

Kia’s decision on the plant comes amid India’s growing stature as a manufacturing hub, with several overseas companies responding to the federal government’s Make-in-India initiative.

(Source: Economic Time)


2. Domestic LPG Consumption Set to Grow 10% This Fiscal Year

The country’s domestic liquefied petroleum gas (LPG) consumption is expected to grow by nearly 10 per cent in 2017-18, over the last fiscal.

“We estimate the country’s total LPG consumption to be at 23.5 million tonne for fiscal 2018,” a top official in the Ministry of Petroleum and Natural Gas told BusinessLine.

For the connections released under the Pradhan Mantri Ujjwala Yojana (PMUY), till September last year, at least 85 per cent have approached for a refill of LPG cylinders
The official said

There is a gestation period of three months for new connections. The refill percentage is expected to grow as households get used to the cooking fuel, he added.

(Source: BusinessLine)


3. Snapdeal Acquisition to Benefit Tiger Global More Than Flipkart

A $1 billion buyout of struggling online marketplace Snapdeal by Flipkart may yield more immediate benefits to Tiger Global Management, Flipkart’s largest investor, than to the buyer or to Indian consumers.

The buyout is being arranged by Tiger Global managing director Lee Fixel and SoftBank Group Corp., which count Flipkart and Snapdeal as their largest holdings, respectively. The deal may see SoftBank buy some of Tiger’s holdings in Flipkart and put additional cash into the company, said two people familiar with the matter.

“It’s (Snapdeal acquisition) a double-edged sword for Flipkart. Absorbing Snapdeal will be very, very challenging and will likely turn out to be a big distraction for the management team. But then, Flipkart would also be getting SoftBank as an investor which may prove to be significant over the long term”
Rutvik Doshi, managing director at Inventus Capital

(Source: Livemint)


4. GST: Govt Looking to Keep Similar Products Under One Tax Head

After having opted for multiple rates under the upcoming goods and services tax (GST) regime, India is now looking to keep variations in rates on the same types of products at a minimum to ensure that the tax structure does not get any more complicated.

For example, all types of footwear or mobile phones could attract the same rate.

“Single rate for one product group will bring simplicity in the structure and make implementation easier,” said a government official, adding that differing rate structures within one segment could lead to unnecessary disputes and litigation. GST is expected to be rolled out on July.

Globally, most regimes have a single rate. India has adopted a four-tier tax structure of 5%, 12%, 18% and 28%. The rate applicable on most products will be 18%.


5. Beer Companies to Launch New Brands to Reverse Sales Decline

Heineken, Anheuser-Busch InBev, and Carlsberg are collectively introducing about a dozen new beer brands in India to slake the thirst of its summer-singed consumers.

For the world’s top three brewers, which together control about 90 per cent of India’s beer market, new products could be the recipe for fending off an unhealthy cocktail of sales bans, shrinking store networks, and stagnant demand in a warm, tropical country with promising demographics and increasing affluence.

We need to strengthen our portfolio because consumers want to choose, and we want to be a part of their choice. In the next six months, we will come up with two strong beer brands in the premium segment, and an interesting portfolio of imported brands in the next six weeks
Shekhar Ramamurthy, managing director at United Breweries

6. Liquor Ban Will Cause More Problems in Madhya Pradesh

With Madhya Pradesh chief minister talking of closing down liquor shops “in a phased manner”, the state is set to join the ranks of Kerala, Bihar and Tamil Nadu that imposed prohibition from 2014 onwards, after political leaders found it resonated strongly with women voters, particularly in lower-income groups where domestic violence was seen to be associated with alcoholism.

While many believe prohibition encourages smuggling and creation of gangs that, over time, move to even more lucrative activities like smuggling arms, etc, there is the danger than people get hooked on to even more dangerous intoxicants.

In the case of Madhya Pradesh, the state raised over Rs 7,900 crore in excise duty collections in FY16 with another Rs 31 crore coming in as licence fees for selling foreign liquor and 5,760 crore coming in from auction of country and foreign liquor outlets.


7. Mutual Funds Stock Up on SBI, ICICI Bank

Mutual funds seem to have taken a shine to the stocks of State Bank of India and ICICI Bank in the fourth quarter ended 31 March 2017.

Mutual funds upped their stake in SBI from 7.88 per cent in the third quarter ended December 31, 2016 to 8.42 per cent in the fourth quarter ended 31 March 2017.

In the case of ICICI Bank, MFs increased their shareholding from 16.83 per cent in the third quarter to 20.04 per cent in the fourth quarter.

According to a mutual fund advisor, SBI is on the MFs radar as the acquisition of five associate banks and the Bharatiya Mahila Bank has given it more heft, leading to expectations of improvement in efficiency of operations and productivity, and a further increase in retail business due to the expanded branch network.

8. Start-up ‘Jhakaas’ Brings Small Businesses to Large Consumer Bases

Small and medium enterprises (SMEs) in India find it difficult to meet the demands of consumers due to limited access to sophisticated technologies such as Big Data analysis and machine learning.

This is exactly where a handful of tech start-ups are looking to chip in, with technologies tailor-made to solve the pain-points of SMEs.

One such start-up is Jhakaas Technologies, which runs a mobile app to fulfil day-to-day needs of consumers such as grocery shopping, restaurant hunting, on-call cakes, vegetable shopping, accessing wine shops, ordering medicines and cab booking. To provide these services, Jhakaas partners with local merchants or small businesses.


9. Moped Sales Thrive Despite Muted Two-Wheeler Growth

Kinetic’s 50 cc Luna model, which became synonymous with the moped category in the 1980s, has long faded into oblivion. But mopeds, as a category, continue to be popular, years after the Chal Meri Luna TV advertising campaign was last aired.

The humble moped continues to provide affordable mobility to thousands of people, especially in semi-urban and rural India. In current times, TVS Motor Co. Ltd’s TVS XL model has assumed the leadership mantle in the category. It’s commonly referred to as “Bikki”, “Luna” and “Heavy weight” in parts of Uttar Pradesh—one of the biggest markets for the low-cost, low-speed two-wheelers

In the year ended 31 March, moped sales zoomed 23% to 890,367 units from a year earlier, according to data compiled by Society of Indian Automobile Manufacturers (Siam).

(Source: Livemint)

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Topics:  Snapdeal   Beer   SBI 

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