The Economic Times Review | 24th October 2018

♦The Economic times♦

♠ Lakshmi Vilas Bank shortlists five investors to sell stake 

  • Five financial investors, including the Blackstone Group, Bain Capital and TPG Capital Management, have been shortlisted to buy a controlling stake in Lakshmi VilasNSE 3.80 % Bank, reflecting continued private equity interest in the country’s financial services space.
  • Baring Private Equity Asia and home-grown Gajja Capital are the two other contenders left in the penultimate round to acquire the 92-year-old, South-based bank, multiple sources with knowledge of the matter told ET.
  • “Our advisers JP Morgan have shortlisted a few of the bidders,” said P Mukherjee, managing director of the bank in an email reply confirming the matter.
  • The process continues now. The extent of investment and the timing thereof is yet to be worked out,” he said.
  • The non-binding offers are in the range of Rs 140 to Rs 160 per share, valuing the private sector lending between Rs 3,592 crore and Rs 4106 crore, sources said. Offers are at a considerable premium to Monday’s closing .. 

♠ BoB-Dena-Vijaya Merged Bank to get growth capital 

  • The government will provide an additional capital cushion to the proposed merged bank to be formed by amalgamation of Bank of BarodaNSE -0.78 %, Dena BankNSE 1.36 % and Vijaya BankNSE 0.98 % to start the new bank on a stronger footing, a senior government official told ET. 
  • “We will like to have a cushion of at least 50-100 basis points above the existing regulatory capital requirements. The bank will be provided with that growth capital,” he added. The actual capital infusion requiremen in money terms will be available only after financials of the July-September quarter are available. 
  • In September, the government had proposed a merger of the three banks to create the country’s third biggest lender. 

    ♠ ClearTax raises $50 million in fresh funding led by Composite Capital

  • Online tax filing and compliance startup ClearTax has raised $50 million (around Rs 3.67 billion) in fresh funding led by Hong Kong-based Composite Capital as it looks to expand its product and services offerings to customers on its platform.
  • The company which started off with helping individuals file their personal taxes today has expanded into offering solutions for GST and E-waybills and also services such as incorporating businesses and for compliance.
  • It claims 2.5 million individual taxpayers utilised its service this year with millenials forming a majority of its user base. On the B2B front, over 100,000 businesses and 25,000 chartered accountant firms utilise its GST platform since the introduction of the scheme.
  • “With this new investment, we have more firepower to focus on our mission, accelerate our growth trajectory and continue to invest in technology and innovate our platforms to meet expanding customer needs,” said Archit Gupta, Founder and CEO of ClearTax, in a statement.
  • ClearTax did not disclose the terms of its latest investment. The company had raised $12 million in its Series A round, in mid 2016 and has raised a little over $15 million so far. It’s other investors include Y Combinator, SAIF Partners, Founder’s Fund and Sequoia Capital.
  • The new investment comes at a time when competition in spaces such as mutual fund investments, which ClearTax wants to play in, is heating up with the entry of giants such as Paytm. Direct mutual fund buying platforms have cut their fees and are offering their services to customers free of cost in order to acquire as many of them as possible.

Net direct tax collection grows 15.7% to Rs 4.89 trillion, says CBDT

  • The net direct tax collection in the country grew by 15.7 per cent on year-on-year basis to reach Rs 4.89 trillion in the current fiscal till third week of October, a senior official on Monday quoting from the latest data.
  • This marks over 42 per cent of the full-year direct tax collection target of Rs 11.5 trillion for the fiscal ending March 31, 2019.
  • The CBDT official also the income tax department issued about 20 million refunds for an amount of about Rs 1.09 trillion, till last week.
  • The Central Board of Direct Taxes (CBDT) is the policy-making body for the Income Tax Department (ITD).
  • As per the latest data, the number of taxpayers getting refunds is up by 62 per cent from 12.2 million refunds in the corresponding period of the last fiscal. In terms of the refund amount, there has been a surge of 31.7 per cent from Rs 830 billion refunded to taxpayers in the corresponding period last year.
  • The department, the official said, received 58 million IT Returns (ITRs) till October 21 as compared to 36 million returns during the same period of last fiscal.
  • “This is an increase of about 61 per cent,” the official said.
  • Last year, 1.06 new income tax assesses were added, he added.
  • The present taxpayer base in the country is over 62.6 million.
  • The department sent about 1.85 crore emails and SMSes to assessees and taxpayers during the last quarter of the last fiscal 2017-18 (January-March), asking them to file their ITRs and pay taxes based on their tax history or some new information received by the taxman about their transactions, he said.

Amazon, Samara seek CCI nod to acquire More supermarket chain

  • NV Investment Holdings LLC, the investment arm of US online retail giant Inc., and private equity firm Samara Capital have sought the Competition Commission of India (CCI)’s approval to acquire supermarket chain More from the Aditya Birla group.
  • According to documents sourced from business intelligence platform, NV Investment Holdings will acquire 49 per cent stake in Witzig Advisory Services, the wholly-owned subsidiary of Samara Capital, which entered into an agreement to acquire 99.99 per cent of Aditya Birla Retail Limited (ABRL) last month.
  • Samara Capital will continue to hold the remaining 51 per cent stake in Witzig, which will be the owner of ABRL if the transaction gets a nod from the CCI.
  • RKN Retail Pvt. Ltd, a majority promoter entity in Aditya Birla Retail, will sell its entire 62.2 per cent stake, while the rest will be sold by another promoter entity Kanishtha Finance and Investment Pvt. Ltd. The deal was formally announced in an exchange filing by RKN Retail on 19 September.
  • With 523 supermarkets and 20 hypermarkets, More is the fourth largest supermarket chain in India after Reliance Retail, Future Group and D-Mart. As per sources, the deal values More chain at Rs 42 billion. In FY18, Aditya Birla Retail reported a loss of Rs 4.9 billion on a topline of Rs 44 billion.
  • With this acquisition, Amazon will get access a vast supermarket network as the retail major plans to build its own food retail business in India. The company is in the process of launching new products for grocery and everyday kitchen supplies, an area where the US firm has committed to invest $500 million after India announced that it would allow 100 per cent FDI in food retail.
  • “Through this investment, Amazon looks to enhance its services portfolio and meaningfully invest in and create opportunities for skill development and job creation,” a company spokesperson had told Reuters earlier.
  • In food and grocery delivery, firms like Flipkart, Amazon and Big Basket are creating specialised infrastructure for handling same-day delivery. Amazon, which launched its grocery delivery business in February 2016, had initially partnered with supermarkets such as BigBazaar, Star Bazaar, Modern Bazaar and Spar and others.
  • While Amazon has now set up dedicated warehouses in large metros to cater to grocery deliveries, it continues to tap large retail chains to fulfill orders. With More, Amazon could get its own in-house supermarket to service its online grocery demand, just as it is doing in the US with its acquisition of Whole Foods.

OnePlus partners with Reliance Digital to target Tier II markets

  • Chinese premium smartphone maker OnePlus is partnering Reliance Digital to expand its offline reach in India and reach out to customers in smaller cities.
  • The company, in a bid to accelerate its growth momentum, has been growing its line of exclusive OnePlus Experience and Authorised stores. It also sells its devices through Tata Group-owned electronics retail chain Chroma, which it partnered in September.
  • OnePlus had started its journey on online footing in 2013, but the premium smartphone manufacturer is increasingly turning to offline experiential marketing, said Vikas Agarwal, general manager at OnePlus, India.
  • According to a Counterpoint Research report, OnePlus led the premium smartphone market (Rs 30,000-plus) in India with a 40 per cent share in Q2FY19, ahead of rivals Samsung and Apple.
  • “We will be launching exclusive One Plus Kiosks in 20 Reliance Digital stores across the country, which will help us not only improve our visibility but also reach out to new audience base across markets where we do not currently have a large presence,” said Agarwal. The stores, he said, would have dedicated promoters or marketing personnel to give new users the OnePlus experience.
  • While all existing OnePlus discounts and offers that are available online will also be available at the stores, Reliance Digital is likely to announce some promotional offers as well, details of which have not been disclosed yet.
  • In the past, Reliance Digital (consumer electronics arm of Reliance Industries) introduced promotional offers for the recent iPhone as well benefits for Reliance Jio subscribers.
  • One Plus will be launching across Reliance Digital stores in cities such as Ghaziabad, Mohali, Mangalore, Vishakhatpatnam, and Bhubaneswar, among others, apart from the high-growth Tier-I cities. While the initial launch will be around October 30 with a view to cash in on the Diwali sales, the stores will stock only the One Plus 6 and One Plus 6T post its launch.
  • The offline strategy for OnePlus will continue to be a very selective process, he added, and the phones will be available with only select vendors instead of going mass market in one go. “We have three offline channels now and going forward we will be selective about our presence offline as we want our offline experience to be very targeted while still making sure that users are satisfied about the authenticity of the products wherever they are buying,” said Agarwal.
  • OnePlus has a long-standing partnership with Amazon for its online sales, which continue to be their key sales channel apart from their own website.

♠ First Made-in-India engineless train gets on track for trial run

  • India’s much-awaited indigenously manufactured semi high-speed train, code-named Train 18, is expected to be rolled out in September. The train, built by Integral Coach Factory (ICF) of Chennai to promote Make in India, is capable of running at a speed of 160 km per hour. The luxury train was earlier scheduled for roll-out in July. When asked about the reason for the delay, ICF Chennai General Manager Sudhanshu Mani said there was no delay but only change in anticipated turnout time. 
  • “There is no delay. The train has been built in record time of 16 months while it takes 2 to 3 years to manufacture such trains anywhere in the world. Earlier, the anticipated turnout time was July. We now expect to roll it out in September,” said Mani. 
  • Train 18 doesn’t require an engine to run as it will be self-propelled on electric traction like the metro trains. It will replace existing intercity express trains including Shatabdis. ICF will make six such train sets, out of which two will have sleeper coaches.
  • Here are some of the other key features of Train 18: 

* Automatic doors with retractable footstep. 
* Onboard Wi-Fi and infotainment. Modular toilets with bio-vacuum system. 
* Improved centre couplers to lessen jerk impact. 
* Electro-pneumatic brake system with brake discs mounted directly on wheel discs to reduce the braking distance. 
* All coaches are AC chair-car type (executive class as well as second class) including the driving cab 

♠ The executive class will have rotating seats which can be aligned in the direction of travel. 

* Modular luggage rack with glass bottom. 

* New bogie design with fully suspended traction motors. 

* Roller blinds and diffused LED lighting. 

* Halogen-free rubber-on-rubber flooring. 

* Space for wheelchair. 

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