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QBiz: Coca-Cola Loses Fizz, Apple Plunges, Volkswagen Group Exits

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Updated
Business
6 min read
(Photo: iStock)

1. Air India to Raise Foreign Loan Worth $300 mn - PTI

National carrier Air India will soon raise $300 million through the external commercial borrowing route, with the central government providing guarantee for the loan. The debt-laden airline would mainly utilise the proceeds for maintenance of aircraft and working capital requirements, among others. This is the first time Air India is raising funds through the ECB route.

Approvals for extending sovereign guarantee for the loan are in place and the ministry is expected to issue papers in this regard to Air India tomorrow, the official added. The proposal has received approvals from finance and law ministries.

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2. Coca-Cola Loses Fizz, Volume Growth Dips to Single Digits Year on Year - ET

Top beverages maker Coca-Cola’s volume sales growth dropped to low single digits in peak summer season of April-June due to a slowdown in rural consumption, unseasonal rains and 10-15% per cent price increases following 5% hike in excise duty. The maker of Coca-Cola and Sprite fizzy drinks in a statement issued on Wednesday said it had posted “mid-single digit decline in India” year on year in the quarter. The India arm of the world’s largest soft drinks firm had posted double digit growth in the same quarter last year.

Unseasonal rains this year in the three months ended June impacted both Coca-Cola and PepsiCo, which had to cut back production, with production cycles running only two to three days a week – at least for a limited time.

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3. Equity Fund Inflows Near Record as Retail Investors Return - ET

Investment in equity mutual funds by domestic retail investors has hit the highest since 2008, signalling the return of individual players drawn to a stock market that is outperforming physical assets such as gold and real estate.

Domestic net inflows into equity mutual funds in June were the second-highest ever – second only to January 2008 before the financial crisis took hold, according to data from the Association of Mutual Funds in India. Retail investors are now set to make July 15 straight month of net inflows, fund managers say.

Retail investors are helping extend an almost two-year stock market rally just as India’s $100 billion social security and pension fund too begins to invest in equities for the first time.

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Moscone Center in San Francisco (Photo: iStock)
Moscone Center in San Francisco (Photo: iStock)

4. Apple’s Market Cap Loses $60 Billion After iPhone Sales Disappoint - WSJ

After a series of blockbuster earnings that blew past even the most optimistic of Wall Street expectations, Apple Inc. felt the pain of falling short of elevated expectations.

Apple said Tuesday its profit surged 38%, aided again by strong demand for the company’s latest iPhones and robust growth in China where sales more than doubled. The gains lifted Apple’s cash reserves to a record $203 billion. But while Apple sold 35% more iPhones in the fiscal third quarter compared with a year earlier, those sales missed some analysts’ estimates. Apple also indicated its revenue in the current quarter could come in below Wall Street projections.

Within minutes of the earnings report, Apple’s shares fell as much as 7% in after-hours trading Tuesday, erasing about $60 billion in market value. Shares fell 5.2% in early trading Wednesday.

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(Photo: Reuters)
(Photo: Reuters)

5. Govt Gets Rs 1-lakh-cr Spend Cushion for FY16 - BS

With global crude oil prices, already low for a while, expected to remain below $70 a barrel for the rest of this financial year, besides an expected increase in indirect-tax buoyancy, the Narendra Modi-led central government is looking at a spending cushion of about Rs 1 lakh crore for 2015-16.

The savings, especially those on account of lower subsidies, are likely to be used for infrastructure spending, social-sector schemes, and for balancing the fiscal maths, Business Standard has learnt.

The government’s total budgeted expenditure for 2015-16 is Rs 17.77 lakh crore – Rs 15.36 lakh crore meant for revenue expenditure, and Rs 2.41 lakh crore for capital spending. This is the Centre’s highest-ever budgeted capital outlay, against the backdrop of Finance Minister Arun Jaitley’s stated commitment to boosting public spending on infrastructure.

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6. VC-Backed Cos Raise $2.3bn in Apr-June - TOI

Online classifieds major Quikr is close to joining the elite group of tech companies valued at a billion dollars, also called unicorns, after it recently completed a $60-million secondary round. Existing Swedish investor Kinnevik and two new investors – hedge fund Falcon Edge and Coatue Management – participated in the latest round, valuing Quikr at $900 million.

The unicorn club in India includes the likes of e-commerce biggies Flipkart and Snapdeal, taxi aggregator Ola, Paytm, data cruncher Mu Sigma and mobile ad network InMobi.

Asia, largely on the back of China and India, pulled ahead of Europe in deal count, but remained second to the US, with the top six deals accounting for $4.2 billion or 28% of all funding in the region.

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7. Volkswagen Group Sales India Sees 3 Top-Level Exits - ET

The 202.5-billion-euros Volkswagen Group’s Indian sales arm – Volkswagen Group Sales India has seen three high-profile exits in a span of few weeks. Anil Reddi, director of Porsche brand, Nalin Jain, Group CFO and Niraj Srivastava, head of sales of Audi in India have put in their papers. While Jain and Srivastava put in their papers in June, Reddi stepped down from his position on Tuesday and was immediately relieved. Srivastava has been relieved and Jain is serving his notice period, four people in the know said.

The group has seen many heads rolling in the last few years. In the recent past, the Volkswagen Group’s sales entity has faced a slowing market and increased competition, which led to its volumes falling to 62,487 units at the end of FY14 against 75,472 units sold in FY13 and 84,826 units sold in FY12. The revenue of the company has remained in the range of Rs 8,000 crore in the last three years till the end of FY14, according to RoC filings.

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General view of Microsoft Corporation new headquarters near Paris. (Photo: Reuters)
General view of Microsoft Corporation new headquarters near Paris. (Photo: Reuters)

8. Microsoft Posts Record Loss as it Writes Down Nokia - Reuters

Microsoft Corp reported a $3.2 billion quarterly net loss, its biggest ever, as the company wrote down its Nokia phone business and demand fell for its Windows operating system.

The company took a charge of $7.5 billion in the fourth quarter related to the restructuring of its Nokia handset business, which it bought last year.

Under Chief Executive Satya Nadella, the company has been shifting its focus to software and cloud services as demand for its once-popular Windows operating system slows. Revenue fell 5% to $22.18 billion.

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Eicher Motors Ltd. Chief Executive Officer Siddhartha Lal (R) and President of Royal Enfield Rudratej Singh (C) pose during the launch of their limited edition motorcycle at Royal Enfield’s new flagship store in New Delhi, India, (Photo: Reuters)
Eicher Motors Ltd. Chief Executive Officer Siddhartha Lal (R) and President of Royal Enfield Rudratej Singh (C) pose during the launch of their limited edition motorcycle at Royal Enfield’s new flagship store in New Delhi, India, (Photo: Reuters)

9. Why Eicher Motors’ Siddhartha Lal Is Moving to UK - PTI

In order to strengthen its motorcycle business in international markets, Eicher Motors MD & CEO Siddhartha Lal has decided to relocate to the UK for a year, starting next month. Royal Enfield, the two-wheeler division of Eicher Motors, aims to be a global player in 250cc-750cc motorcycle segment over the next decade.

The company’s international bike business constitutes around 5% of sales but is going to increase over the next decade, Mr Lal said.

Royal Enfield had acquired UK-based Harris Performance in June in order to scale up its R&D prowess to enter new markets globally. The company is already in process of developing two new engine platforms on which, multiple new products could be launched, starting next year.

Read the rest here.

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