1. Flipkart, Amazon: Flagship Events May Fail to Keep Sales Flying High
Flipkart and Amazon India are battling it out for market leadership powered by their flagship sales events, but there's little evidence yet that their week-long joust can perk up Indian online retail's sagging sales growth. Goods worth Rs 10,000 crore are likely to be sold this October, just Rs 1000 crore more than last year.
Flipkart is targeting gross sales of at least $500 million from its five-day ‘Big Billion Days' sale, according to senior executives. The company said that including its fashion unit Myntra, it sold 2.25 million units in the first 12 hours of the event, which began on 2 October. Amazon said it sold 1.5 million units in the first 12 hours of its ‘Great India Festive Sale’, which began a day earlier.
(Source: The Economic Times)
2. FPI Inflows Surpass Rs 20,000 Crore In September; At 11-Month High
Foreign investors pumped in more than Rs 20,000 crore into the capital market in September, making it the highest net inflow in 11 months.
This also marks the third consecutive month of positive inflows (equity and debt).
The trend is likely to continue in coming weeks as regulator Sebi has decided to offer direct entry to well-regulated foreign investors for investing in corporate bonds, say experts.
They attributed the latest flurry of capital to factors such as sound progress in rollout of GST, better corporate earnings and the US Fed's decision not to lift interest rates.
3. Cognizant Investors Grapple With Business and Legal Uncertainties
Cognizant Technology Solutions Corp lost $4.4 billion in market capitalization after it disclosed a corruption probe and the resignation of one of its senior-most executives.
“The company is conducting an internal investigation into whether certain payments relating to facilities in India were made improperly and in possible violation of the US Foreign Corrupt Practices Act (FCPA) and other applicable laws,” it said in a filing with the Securities and Exchange Commission (SEC). Cognizant also announced the resignation of Gordon Coburn, who was effectively the second-in-command at the company.
The two announcements coming together was clearly too much for investors to handle. Cognizant’s shares fell as much as 13.3% percent on the back of fears that Coburn’s resignation could be because the scale of the improper payments was significant.
4. Spectrum Auction May End Early Due to Muted Response
India’s largest spectrum auction may end as soon as this week because of a high reserve price for the airwaves and muted response from telecom operators.
Experts expect the bidding intensity to reduce in the coming days, an outcome that will underscore the need for rationality in the pricing of spectrum in India.
The five rounds of bidding on Saturday, the first day of the auction, saw operators such as Bharti Airtel Ltd, Vodafone India Ltd, Idea Cellular Ltd and Reliance Jio Infocomm Ltd bid for as much as Rs 53,531 crore worth of spectrum. On offer in the auction is 2,354.55 megahertz (MHz) of spectrum worth Rs 5.63 trillion at the minimum or reserve price.
5. Festive Spirit May Light up Auto Sales
Automakers are preparing for bumper festival sales, as they see consumer sentiment and rural demand firming up ahead of Dussehra and Diwali.
Maruti Suzuki, the leader in the passenger vehicle market, on Saturday reported a more than 29 percent rise in September dispatches, as it stocked up dealerships with the Baleno, Vitara Brezza and other models to meet festival demand. Other carmakers like Hyundai Motor, Toyota Motor, Ford Motor and Honda Motor, as well as twowheeler makers such as Hero MotoCorp and Honda Scooter & Motorcycle are also expecting strong sales.
While everyone is bullish on festival demand, there are some concerns about the long list of holidays hurting production in October.
(Source: The Economic Times)
6. ONGC, OIL Making Losses on Natural Gas Production
State-owned Oil And Natural Gas Corporation Ltd (ONGC) and Oil India Ltd (OIL) are making losses on natural gas production after the government cut rates for the fourth consecutive time, bringing down the selling price to below the cost of production.
Price of natural gas produced by ONGC, OIL and Reliance Industries locally was cut by 18 percent to $2.5 per million British thermal unit (mmBtu) based on its gross heat value for the six month period beginning 1 October.
On net heat value basis, the price will be $2.78 per mmBtu.
7. Govt Plans Strategic Stake Sale in 22 PSUs
India is preparing a plan for big-ticket asset sales that involves the disposal of controlling stakes in 22 listed and unlisted companies as the Centre looks to meet the full-year disinvestment target of Rs 56,500 crore. On the list are large state-run companies such as Container Corporation of India, Bharat Earthmovers, as many as three plants of the Steel Authority of India Ltd and unlisted entities like Cement Corporation of India.
A Cabinet note has been floated by the Department of Investment and Public Asset Management (Dipam) to this end, two officials aware of the development told ET. On the list are companies that are profitable and some that aren't but have big asset bases. The key criterion is that none of them are engaged in areas that are strategically critical for India.
(Source: The Economic Times)
8. South Pips North in Car, Durables & Realty Sales
South India, traditionally linked with price-conscious consumers, except when it comes to spending on gold, is fast breaking with the past.
The millennial generation, inspired by information technology (IT), the start-up boom and e-commerce growth, is seen as a trigger for the change. From consumer durables to cars to property, southern states have taken the lead.
In a first, passenger vehicle (car, utility vehicles and vans) sales in the south have overtaken the north. It is now the second-biggest market for carmakers, after the west region.
(Source: Business Standard)
9. Allied Blenders May Sell up to 6% Stake to PE Firm
Allied Blenders and Distillers Pvt Ltd plans to sell a 5-6 percent stake to a private equity investor before going for an initial public offering (IPO) by the end of 2017, a top executive at the liquor maker said.
Jeetu Hemdev, executive director, Allied Blenders, said on Friday that the move will help the firm prepare for its IPO and expand its global footprint.
In August last year, the Kishore Chhabria-led company announced plans to raise Rs 1,000 crore in an IPO.
Allied Blenders, which makes Officer’s Choice whisky and Jolly Roger rum, will use the money to expand its portfolio of premium brands with two launches next year, increase its own capacity and buy more bottling plants.