1. Ola Value Doubles to Rs 32k cr in 6 Months – TOI
In its biggest bet so far in India, New York-based hedge fund Falcon Edge is pumping $100 million (Rs 630 crore) into taxi-aggregator service Ola, valuing it at $5 billion (Rs 31,580 crore) after the investment, according to three people familiar with the matter.
An existing investor in Ola, Falcon Edge’s cheque is part of a $500-million financing round in the taxi-hailing app which will see a two-part close, sources who did not want to be named said. The first chunk of $300 million is already in with Falcon’s investment along with Softbank and Tiger Global putting $75 million (Rs 470 crore) each. Early investor Matrix Partners and another hedge fund Steadview Capital have also participated in this new round. The rest of the $200 million is slated to come in over the next two months from other investors, sources said.
2. Startup Valuations Far Ahead of Reality, Warns SoftBank President Nikesh Arora – ET
SoftBank Corp President Nikesh Arora, the writer of some of the biggest cheques in India’s startup scene in the past year, has cautioned that valuations have raced “far ahead” of what they should be and signalled that he would be “careful” and “cautious” while making new bets.
I think probably two to three years ago valuations were much more reasonable. I think they have got far ahead and they are probably rivalling China or US at this point in time.
— Arora to ET
Arora, who joined SoftBank from Google where he was its chief business officer and its highest-paid employee, said while the investments made by him so far had helped his company grab the attention of entrepreneurs, the coming months would see him changing tack. “We are going to be more careful about investing, we would like to know who are the others, the investors, etc... The ecosystem is not mature enough. We just need to be more cautious,” said Arora.
3. Housing.com to Lay Off 600 Employees in Next 3 Months – ET
Realty portal Housing.com plans to lay off at least 600 employees in the next three months, as it steps up focus on its core technology and product and tightens its cash burn, according to several people familiar with developments at the company.
“Housing is being completely restructured and performance for each employee across departments is being (scrutinised),” said a top executive at the company, which in July fired co-founder and former CEO Rahul Yadav for bad behaviour after months of chaos.
A management representative at Housing said the company was laying off 160 employees in noncore businesses that it plans to shut. The three-year-old startup employs about 2,600 people.
4. Milner Thinks There’s Gold in Used Cars – ET
Russian billionaire Yuri Milner is investing $2 million, or nearly Rs 13 crore, in used-cars marketplace Zoomo, according to two people directly familiar with the development. The funding comes after the startup raised Rs 38 crore from SAIF Partners across two rounds of funding since last year.
The interest from Milner, one of the most influential investors in internet startups globally, comes as two other domestic online marketplaces for pre-owned vehicles – Droom and CredR – are also attracting significant funding from investors. Zoomo provides a platform for sellers and buyers of used cars to connect directly.
Milner has backed several other top Indian internet firms including Flipkart, Ola, Housing, Swiggy, Grofers and Practo in his personal capacity or through his investment firm DST Global.
5. Power Sector’s Woes Now Spill Over to Equipment Makers – BS
The lull in the power sector is now affecting the whole supply chain, with engineering, procurement and construction (EPC) players also feeling the pinch of reduced orders. The EPC companies – state-owned BHEL and private companies like Alstom India, Larsen & Tourbo, Lanco Infratech and Bharat Forge – are witnessing subdued demand from the power sector, and their order pipeline is running dry.
During the April-June quarter of this year, BHEL’s profits plunged 82 per cent over a year ago, mainly because of a decrease in sales to the power sector. “Due to various factors like fuel availability, delay in environment clearances and land acquisition and fund constraints, order finalisation during the past three years has been very low. In three financial years – from 2012 to 2015 – only 26,000 Mw of orders (an average of 8,500 Mw a year) were finalised in India,” said the company’s spokesperson in an emailed response to queries sent by Business Standard.
While the annual results of major EPC companies for 2014-15 reflected a decrease in demand, their annual reports made due mention of the depressed state of affairs in the power sector and an urgent need for revival.
6. Some Payments Banks Face Dual Oversight – BS
Of the payments bank applicants, the companies already operating payment systems in India – such as Airtel, Vodafone and One Mobikwik – could be regulated by both the Reserve Bank of India (RBI) and the proposed Financial Authority, should they get payments bank licenses, i.e., if the Indian Financial Code (IFC) is implemented.
The revised draft of the IFC says that the proposed regulatory body, the Financial Authority, will be responsible for oversight on all financial services, except banking and ‘systemically important’ payment systems and authorised dealerships. It will also regulate all financial products. Regulation of the banking sector, systemically important payment systems and authorised dealerships will remain with RBI.
On what constitutes a ‘systemically important payment system’, the IFC says it will be decided by the Financial Stability and Development Council, led by the Finance Minister and comprising heads of financial regulatory bodies.
7. Profit Making PSUs May be Asked to Submit IPO Plans to Govt – FE
Profit-making unlisted PSUs and their subsidiaries may have to submit listing plans while signing annual performance pacts with the government, a move aimed at helping the Centre garner resources and unlocking the value of many state-owned firms.
The Finance Ministry, according to a senior official, has suggested to the Department of Public Enterprises that listing clause be made mandatory under the new MoU norms for public sector units (PSUs).
Out of about 160 profit-making CPSEs, only 43 are listed on the BSE. The major unlisted profit making CPSEs include RINL, ONGC Videsh, Coal India subsidiaries, Airports Authority of India and Hindustan Aeronautics Ltd.
“The disinvestment department has suggested to the DPE that when they sign the MoUs with PSUs, listing plans should be made mandatory,” a senior finance ministry official told PTI.
8. FPIs Infuse Rs 2,200 cr in Just 5 Trading Sessions – FE
Foreign investors have poured in nearly Rs 2,200 crore in the Indian capital markets in the last five trading sessions on better economic growth prospects and continuous fall in crude prices. This comes on top of a net inflow of Rs 5,323 crore in equities and debt witnessed during the last month.
Prior to that, Foreign Portfolio Investors (FPIs) had pulled out a net amount of Rs 1,608 crore in June, after a much higher net outflow of Rs 14,272 crore in May. The net investment by FPIs in equities stood at Rs 1,552 crore between August 3-7, while the same was at Rs 631 crore in the debt markets during the same period, translating into a net inflow of Rs 2,184 crore, as per data available with the depositories.
According to the market analysts, rout of Chinese equities and crisis in Greece has helped foreign investors to flock to the Indian markets.
9. Economy Shifting Gears, Results of CII Survey Show – Hindu
At a time when government data give mixed signals of an economic recovery, a survey by the Confederation of Indian Industry’s Associations’ Council (CII ASCON) sees early signs of a revival.
Of the 93 sectors surveyed, the proportion that recorded “excellent” growth (faster than 20 per cent) during the April-June quarter of 2015-16 was higher, at 16.1 per cent, than the 7.1 per cent in the corresponding quarter of the last fiscal.
The survey respondents represented a wide range of sectors comprising small, medium and large enterprises and, in many cases, accounted for around 70 per cent of the total industry output in their respective sectors.
“What is especially significant is that there are fewer sectors anticipating negative growth and there has been a significant and perceptible positive movement in percentage points recorded by many of the sectors which were in moderate and negative growth category a year ago,” said Naushad Forbes, Chairman, CII ASCON, and president-designate, CII.
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