A round-up of the biggest articles from newspapers.
Flipkart in talks to lead $ 100-million round in Ninjacart
Flipkart is in advanced talks to lead a new funding round of about $ 100 million in fresh produce supply chain startup Ninjacart, The Economic Times reported.
Why it’s important: This will be one of the largest investment rounds by the e-commerce major in a startup.
The company is planning to expand its footprint in India’s fast-growing egrocery business.
Ninjacart’s valuation is likely to jump to around $ 750-800 million after the financing round from the previous level of $ 500 million.
Flipkart parent Walmart is also likely to participate in this round.
The move will deepen Flipkart’s partnership with Ninjacart as it looks to boost its grocery business to take on rivals like JioMart, Amazon India and BigBasket.
Talace seeking Rs 23,000 crore loan from AI lenders
Tata Sons-promoted Talace Pvt Ltd is seeking a Rs 23,000 crore, one-year loan at near sovereign rates to fund the acquisition of Air India and its initial operating costs, The Economic Times reported.
Why it’s important: Tata proposes to raise an unrated, unsecured, general-purpose loan from Air India’s existing lenders at an annual interest rate of 4-5%.
Existing lenders are ready to give loans but pricing is a hurdle that they need to overcome.
The new debt will replace the earlier credit raised by Air India at 9-10%.
Of the Rs 23,000 crore, Rs 18,000 crore will finance the acquisition and the rest will be for operations.
‘India’s new era companies at least have a model’
India’s equity valuations are inflated at a time there is a risk of earnings not meeting forecasts, said Jim McCafferty, joint head of Asia Pacific equity research at Nomura, in an interview with The Economic Times.
Why he says: Indian equities have done incredibly well recently and they are quite an expensive market.
So, if you look at India vis-a-vis China, valuations are pretty much double what you’re paying in China.
India has been trading at a premium because investors are looking forward to better growth.
The danger is that these inflated valuations are there at a time when that companies are not meeting their forecasts.
In 2022, there’s probably more upside in some of the other markets in Asia, including China and Korea.
India may have had some success at raising equity capital for companies in a new area on fancy valuations but at least they have a business model.
India with more of these exotic IPOs is relatively sensible.
Akasa may take off before Jet 2.0
India’s newest airline Akasa, majority-owned by billionaire investor Rakesh Jhunjhunwala, may get its air operator’s permit as early as April, The Economic Times reported.
Why it’s important: Defunct airline Jet Airways is unlikely to get its AOP within the next six months.
Akasa, registered as SNV Aviation, received its initial regulatory approval, the no-objection certificate on October 11 and has applied for the AOP.
Jet Airways’ have not reapplied for the AOP yet.
An official said that they had called Jet officials once to submit their business plan. They never came for the meeting, yet.
Sterlite may enter the power storage business
Sterlite Power Transmission Ltd will consider entering the power storage business, Mint reported.
Why it’s important: It’s joining a bunch of aspirants eyeing the fledgling sector as rising power demand and generation open up new business prospects.
“We would evaluate that (storage business) because it is quite natural for transmission companies to be in a sector like that,” MD and CEO Pratik Agarwal said, adding that in Australia and US states such as California and Arizona, storage is seen as a grid element.
Large battery storage facilities that store and reconvert electricity can help India’s electricity grids, given the intermittent power generation from clean energy sources such as solar and wind.
Railways to invite bids for private train plan
Indian Railways plans to invite bids from private operators for running more than 150 passenger trains, Mint reported.
Why it’s important: The plan is likely to be flagged off from April 1 after a similar plan failed last year.
The railways has identified about 100 destinations where passenger trains will be run by companies that win the contracts.
Most destinations are expected to be the same as was in the bids invited last year, but the process had to be scrapped in November because of muted interest from private companies.
The railways has begun consultations with investors looking to run private passenger trains and, based on their feedback, bidding parameters would be tweaked to attract more bidders.
GST mop-up likely to ease in December
The GST receipts may moderate in December, easing from sustained growth since June, Mint reported.
Why it’s important: November saw the second-highest tax collections since the nationwide tax regime was introduced more than four years ago.
Electronic permits raised for shipment of goods within and across States in November and early December suggest moderation in transactions compared to October.
Generation of e-way bills recorded steady growth from a daily average of 1.3 million in May to 2.3 million in October, before moderating to 2 million in November.
In the first five days of December, data showed that 2.1 million e-way bills were raised on average.
Taxes for November transactions will be collected in December.
Micro finance institutions want Rs 3 lakh as loan cut-off
Micro-finance institutions want the RBI to hike the qualifying threshold of inflation-adjusted household income for taking loans to Rs 3 lakh a year, Business Standard reported.
Why it’s important: This is to widen the scope of eligible borrowers.
If the RBI agrees to this suggestion, 50 million MFI customers will join the current net of 60 million and an outstanding portfolio of Rs 2.45 trillion.
The development comes even as the RBI is in the final stages of issuing operational guidelines based on the feedback.
The document had proposed a household income threshold of Rs 1.25 lakh for rural and Rs 2 lakh for semi-urban and urban areas for identifying a microfinance borrower.
‘Capital preservation is now more important’
Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, in an interview with Business Standard talked about how investors should approach the financial markets, his investing strategies, and the road ahead for Indian equities.
What he says: The enthusiasm of investors will not vanish overnight. It is a process that takes time, and maybe in India, it will stay at a high level for a while.
This is because the Indian economy is one of the few across the world that is still expanding despite headwinds.
The Indian economy can outperform the rest of the world economy; the stock market will continue to do well, though not as well as it did in 2021.
The strategy has been to diversify. Diversification also means investing in overseas markets.
Preservation of capital now becomes more important than thinking of doubling the money.
‘Tech will empower a billion Indians’
Anant Maheshwari, Microsoft India President, in an interview with Business Standard spoke about the cloud opportunity, the metaverse and the regulatory landscape.
What he says: Microsoft believes that tech will empower a billion Indians. India is in the midst of that digital revolution and maybe even slightly ahead of the world curve.
One major reason for that is, even before the pandemic, we were already enabled by these billion scale platforms.
Now, it’s going above 800 million people. Smartphone users are around 700-800 million people.
Nearly half a trillion dollars could get added to the Indian economy by the leverage of data and AI.
On skills, it’s estimated that more than half of Indian talent of all types will need reskilling in two years.
