Tag: Business news

Delhivery aims for pre-IPO funding at $3 billion valuation – Times of India

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BENGALURU: New-age logistics major Delhivery is in talks with multiple global investors, including US-based Fidelity, for funding before its initial public offer (IPO) that would value the startup at around $3 billion, two people aware of the matter said. Delhivery was valued at a little over $2 billion after the secondary investment from Steadview Capital in December 2020, the sources added.
This indicates an almost 50% higher valuation for the SoftBank-backed Delhivery in about three months, if a deal is concluded. The pre-IPO round is said to be in the range of $100-150 million, but it could change based on discussions. This would also include a smaller secondary share sale.
In a secondary transaction, existing investors sell their stake (partial or full) to new investors and the money does not go into the company coffers.

The e-commerce-focused logistics firm is one of the leading contenders for an IPO among the top league of Indian startups.
Others include Policybazaar and Zomato, both of which have also seen similar pre-IPO transactions recently with significant jumps in their valuations. This also marks the increasing global investor interest in large Indian startups who are seen as serious contenders to go for an IPO, which could result in good returns on the investment once the company goes public.
“This will be the last fund-raise before they go for an IPO. Fidelity is in active discussions with Delhivery and there is interest from other global investors also,” one of the people mentioned earlier said.
A spokesperson of Delhivery declined to comment on the matter. Fidelity said, “As a practice, we do not comment on individual companies.”
According to the last official statement from Delhivery in December 2020, it plans to go public in the “next 12-15 months”. Sources said it continues to work with audit firms for IPO preparedness. A recent report said it is in talks with several merchant bankers for its IPO.
Started in 2011, Delhivery gets the majority of its business from e-commerce deliveries but it has started expanding in the business-to-business (B2B) segment as well. It works across sectors like consumer electronics, fashion, FMCG, and select industrial sectors like auto.
Currently, e-commerce deliveries constitute around 65% of its total business but it aims to have equal contribution from both its e-commerce and B2B verticals.
Delhivery MD & CBO Sandeep Barasia had told TOI in October 2020 that the company will exit the current financial year with a revenue of Rs 3,700-4,000 crore, surpassing market leaders like Blue Dart. Other leading delivery companies include FedEx, Ecom Express, Gati and XpressBees.
According to media reports citing regulatory filings, Delhivery cut its losses significantly to around Rs 270 crore for the fiscal year ended March 2020, along with a 75% jump in revenue to nearly Rs 3,000 crore.

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Poonawallas, ICICI Venture, others back Magma HDI – Times of India

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MUMBAI: The Poonawallas of the Serum Institute, together with ICICI Venture and Morgan Stanley PE Asia, have invested Rs 525 crore in Magma HDI General Insurance — part of the Magma Group, which was acquired by the vaccine maker last month.
“I see huge potential in the growth of Magma HDI, which is a young and fast-growing company. We are confident that it can reach its full potential in the next few years,” said Serum Institute CEO Adar Poonawalla. Magma HDI is a joint venture between Magma Group and German insurer HDI. The latest transaction involves the buyout of existing promoters for Rs 275 crore and an infusion of Rs 250-crore fresh equity in the company.
The Poonawallas have invested through group company Cyza Chem and two family offices who are new shareholders in the company. Until recently, Magma HDI’s shares were held by Magma Fincorp (32%), HDI (26%), 18% by Jaguar Advisory Services and by Sanjay Chamria — original promoter of Magma, through investment companies.
After the latest deal, Magma Fincorp will hold 24.2%, HDI 17.1%, ICICI Venture 16.7%, Jaguar Advisory 12%, Morgan Stanley PE nearly 10%, Serum Institute 8.2%, Cyza Chem 5.9% and another 5.9% by others, including family offices and employees.
A statement issued by Magma HDI said that the fresh infusion of Rs 250 crore will provide growth capital to meet the needs of the expanding distribution capabilities of the company. The secondary sale of Rs 275 crore enables Magma Fincorp and its group companies to comply with the RBI’s guidelines for ownership of a stake in insurance companies.
Magma HDI MD & CEO Rajive Kumaraswami said, “The growth capital which the investors bring on board will enable us to expand the business and explore new opportunities. The insurance sector is poised to see exponential growth, given the low penetration and the trigger of the pandemic, which has led people to look at insurance as protection.”

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Carlyle to sell 4% in SBI Cards for Rs 3,900 crore – Times of India

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MUMBAI: CA Rover Holdings, an arm of global PE giant Carlyle, is selling about 4% stake in SBI Cards & Payment Services for up to Rs 3,900 crore, translating into a little over $500 million, through block deals on Wednesday.
The Carlyle arm has mandated Bank of America Securities to sell about 3.8 crore shares at a price band of Rs 982-1,022 per share, the deal’s term sheet showed.
On Tuesday, SBI Cards’s stock on the BSE ended at Rs 1,022. At the lower end of the price band, the shares could be sold at a 3.9% discount to the scrip’s closing price.
Carlyle is the largest non-promoting shareholder in SBI Cards, which was holding nearly 16% in the company as of December 2020, its disclosures on the BSE showed. The deal is set to be executed through the accelerated book-building process.
Under this process, the broker managing the deal, after the close of the day’s trading, sends out the term sheet to large institutions to express their interest to buy shares from the block. Once the book is built, the shares change hands on the bourses on the next day.

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Piramal Capital to raise up to Rs 3,000 crore before DHFL merger – Times of India

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MUMBAI: Piramal Capital & Housing Finance is raising up to Rs 3,000 crore through an issue of bonds offering interest at 9.25% per annum. The issue comes at a time when the company has proposed to merge troubled home loan provider Dewan Housing Finance (DHFL) with itself.
The bonds are rated AA by CARE agency and come with the assurance that, should the rating fall by even one notch to AA-, the coupon rate would stand increased by 0.50%. For every notch of rating downgrade thereafter, the coupon would be increased by 0.50% per notch. If the long-term credit rating of the non-convertible debentures (NCDs) is downgraded to A- or below, the holders would reserve the right to recall the outstanding principal amount.
Last month, Piramal Group had announced that it had received the RBI’s clearance for its Rs 34,250-crore acquisition of DHFL. The group had also said that it would merge DHFL with Piramal Capital & Housing Finance once the same is approved by the NCLT. Further, the group had promised to invest Rs 10,000 crore of Piramal Capital’s equity in the merged entity.
The bond issue is slated to complete this week through the book-building process. They are in the nature of debentures that are secured, redeemable, non-convertible, and listed on the stock exchanges. The issue size has been fixed at Rs 2,000 crore with an option to retain over-subscription of Rs 1,000 crore.
The bonds will be issued after approval by the company board in their meeting on March 18. The committee of directors has already approved the issue in their meeting on March 10.
Piramal Capital & Housing Finance (formerly Piramal Housing Finance) was incorporated in 2017 as a wholly owned subsidiary of Piramal Enterprises. With effect from March 2018, Piramal Finance and Piramal Capital were amalgamated with Piramal Housing Finance.

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Retail at 93% of pre-Covid level in February, finds survey – Times of India

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CHENNAI: India’s retail business reached 93% of pre-Covid lockdown levels in February on the back of better performance by consumer durables and quick service restaurants (QSRs).
The retail sector, along with several others, was crippled when India went in for a complete lockdown last March to arrest the spread of the pandemic. While other sectors have since recovered, retail had continued to lag.
The quantum of de-growth in retail sales has reduced as most segments have started to show significant improvement. A survey by the Retailers Association of India (RAI) indicates sales in February 2021 were at -7% of last year’s sales on a year-on-year (YoY) comparison.

RAI’s CEO Kumar Rajagopalan said, “We hope that the uncertainty regarding the rising cases of Covid in a few states will not cast its shadow on the growth momentum with the rollout of the vaccine. Restrictions or not, it has now become imperative for every retailer to adopt ‘phygital’ in various ways — be it social media, messaging platforms, or digital shopping in addition to their normal channels — to align themselves with the changing consumer mindsets of the Next Normal.”
Consumer durables grew 15% YoY, while QSRs grew 18% in February. Categories like footwear, beauty, wellness & personal care, sports goods and food & grocery are showing a steady recovery, the survey said.
Recovery across regions is showing steady improvement with eastern India indicating growth of 2% in the month of February. Southern & northern India have recovered better with sales nearing pre-Covid levels at -6% and -9% respectively YoY, while progress in the western region was slower at -16%.

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Auto companies to pay max Rs 1 crore penalty for mandated recall of ‘faulty’ vehicles – Times of India

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NEW DELHI: Come April and auto manufacturers and importers may have to pay a penalty of Rs 10 lakh to Rs 1 crore for selling “defective vehicles” if the government orders mandatory recall.
The rule for testing of vehicles and mandatory recall under the Central Motor Vehicle Act, notified by the transport ministry, provides for the penalty in case manufacturers or importers fail to undertake a voluntary recall.
While many are critical of the low penalty level, the ministry sought to defend its action with officials arguing that currently there is no penalty. The penalty will be in addition to the cost of fixing the fault.
In 2012, auto industry lobby SIAM had refrained from levying any penalty and sought a code for voluntary recall, something that was not palatable to the government, which wanted a penalty provision as a strong deterrent.
The new rules will apply to vehicles that are less than seven years old with the ministry defining defects as a fault in a vehicle or component or software that poses or may pose undue risk to road safety or environment.
Mandatory recall of over six lakh two-wheelers or over one-lakh four wheelers will attract the maximum penalty of Rs 1 crore. In the case of vehicles carrying over nine passengers and all heavy goods vehicles, the maximum penalty of Rs 1 crore will be imposed, if more than 50,000 vehicles are recalled on the basis of a government diktat.
The government has also finalised the threshold for triggering the recall, which will be notified soon. For example, in the case of a car or SUV, if the annual sale is up to 500 units, 100 complaints (20% of the sold units) will be enough to initiate the recall process.
In the case of cars and SUVs, which register annual sale is between 501 and 10,000 units, the number of complaints have to be at least 1,050 and in the case of cars sold beyond 10,000 units in a year, the number of complaints need to be at least 1,250 for initiating the mandatory recall process.
Similar formula has been worked out for two-wheelers, three wheelers and quadricycles.
There will be a uniform formula for other categories of vehicles including large passenger vehicles, buses and trucks. In these cases, the complaints of defects equivalent to 3% of the annual sales will trigger the government to start the process of recall.
The government intends to set up a portal for vehicle owners to register and lodge their complaints. Based on complaints notices will be sent out with auto companies given 30 days to respond. Based on the responses, the designated agency probe if the vehicle is a “defective motor vehicle” before ordering a mandatory recall.

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Diesel sales top pre-Covid levels by 7%, but LPG slips – Times of India

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NEW DELHI: India’s diesel consumption increased 7% from a year ago in the first fortnight of March but demand for LPG, or household cooking gas supplied in cylinders, dropped more than 3% to coincide with a steep rise in refill prices and removal of subsidy.
Data from state-run fuel retailers, who dominate 90% of the market, show petrol sales rising over 5% from a year ago, boosted by car sales snapping the pandemic blues in February and people going back to using their personal vehicles on resurgence of Covid-19 cases in several states.
This is the first yearly growth in diesel sales since October 2020, reinforcing the view that the economy is on its way to recovery as its consumption is one of the key indicators of economic activity.
In February, diesel demand had slid 8% and petrol consumption declined 2% in February from a year ago. In December, sales had for the first time since October recorded a monthly decline at 6%.
Jet fuel sales were down more than 36% from a year ago in March fortnight. However, this can be seen as a sign of recovery since February when consumption was more than 40% lower than the pre-pandemic level.
The economy stepped out of recession in the December quarter, posting a growth of 0.4% as economic activities in terms of movement of people, raw materials and finished products picked up.
The fall in LPG consumption is surprising since this is the only fuel to remain in the positive territory in terms of growth in sales. While an early onset of summer in parts of the country could be one reason, the impact of a Rs 125-per cylinder price in February and simultaneous loss of subsidy cannot be ruled out.

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No proposal for scrutiny of GST assessment in faceless mode, says Anurag Thakur – Times of India

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NEW DELHI: There is no proposal of faceless scrutiny assessment of GST returns as the Goods and Services Tax rule already provide for electronic filing and assessment, minister of state for finance Anurag Singh Thakur said on Tuesday.
Income tax assessments are being done in a faceless manner except in certain conditions and till March 10, a total of 82,072 assessment cases have been completed in a faceless manner, he added.
To a query in the Rajya Sabha on whether the government is considering scrutiny of GST assessments and some stages of investigations by SFIO in a faceless mode, he said, “No such proposal for scrutiny of GST assessment in a faceless mode is under consideration of the Government presently as the GST laws and rules made thereunder already provide for electronic filing and assessment of returns on the common portal. With regard to the Serious Fraud Investigation Office, the information is also nil”.
The minister said faceless assessments have been initiated to impart greater efficiency, transparency and accountability by eliminating the interface between the Assessing Officer and assessee in the course of proceedings to the extent technologically feasible, optimising utilisation of the resources through economies of scale and functional specialisation and introducing a team-based assessment with dynamic jurisdiction.
“An independent study to ascertain assessees’ experiences in a faceless manner is being conducted by National Council of Applied Economic Research (NCAER). Department of Economic Affairs (DEA), Central Board of Direct Taxes (CBDT) have a tripartite arrangement with NCAER for conducting this independent assessment of Faceless Assessment Scheme of the CBDT,” Thakur said.

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India fuel sales return to pre-Covid levels – Times of India

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NEW DELHI: India’s fuel demand, except ATF, has returned to pre-Covid levels and a reflating economy will help consumption grow in near future, head of the nation’s top oil firm said on Tuesday.
Fuel sales had fallen by a record 45.8 per cent in April last year when a nationwide lockdown was imposed to check the spread of coronavirus infections. Demand started to recover with the easing of lockdown restrictions, with petrol returning to normal growth first and now diesel too is back at pre-Covid levels.
“Expect for ATF, we have touched normal demand,” Indian Oil Corporation (IOC) Chairman Shrikant Madhav Vaidya said. “We are back on track.”
While petrol sales had reached pre-Covid levels a few months back, diesel was up 7.4 per cent year-on-year in the first half of March.
LPG sales showed growth even during the lockdown.
With airlines not operating all flights, ATF sales remain below normal.
“ATF may take a quarters time to return to normal, maybe 3-4 months,” he said.
IOC, he said, is bullish about fuel demand recovery as the economy grows.
“Let’s hope for the best with the vaccine rollout,” he said.
Diesel sales in the first half of March rose to 2.84 million tonnes while petrol demand was up 5.3 per cent to 1.05 million tonnes.
This is the first annual rise in petrol sales since October. ATF sales, which fell by more than 80 per cent in the aftermath of the lockdown, was down 36.5 per cent in the first half of March.
India’s economy returned to positive growth territory in the fourth quarter of 2020 as its real GDP expanded by 0.4 per cent year-on-year after two-quarters of contraction. This was after provincial and localised lockdowns were lifted amid a fall in the daily number of new Covid-19 cases.
Crude oil suppliers group OPEC’s monthly oil report last week forecast a 13.6 per cent jump in India’s oil demand in 2021 to 4.99 million barrels per day.
India’s oil demand had fallen 10.54 per cent in 2020 to 4.40 million bpd from 4.91 million bpd in 2019.
“The encouraging macroeconomic indicators, together with significant decreases in Covid-19 cases across the country, provided a solid foundation for the 2021 oil demand outlook in India,” the report said.
The recent positive developments in industrial activities will result in industrial fuels being the backbone for oil demand growth in 2021, with a healthy rebound for transportation fuels providing further support, it said adding the aviation sector will remain under pressure throughout 2021 and will also be a major source of uncertainty.
“Despite some improvements month-on-month, domestic flight operations remained more than 10 per cent lower than the levels recorded during the same period in 2020,” the OPEC report said.
In 2020, India’s GDP contracted by 7 per cent, but it is forecast to grow by 9 per cent in 2021.
“Following the 0.4 per cent growth registered in 4Q20, India’s was one of the few major economies to post growth in the quarter as lockdowns eased, and this rebound is expected to continue as consumption manufacturing activity rise,” the OPEC report said.

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India’s diesel sales rise as economic activity picks up – Times of India

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NEW DELHI: State fuel retailers’ diesel sales rose 7.4% to 2.84 million tonnes in the first fortnight of March from a year earlier, preliminary industry data showed on Tuesday.
Petrol sales rose 5.3% to 1.05 million tonnes in the same period from a year earlier, the data showed.
This is the first annual rise in gasoil sales in the country since October. Fuel sales in India took a hit in March last year as the government imposed a nationwide lockdown to curb the spread of the novel coronavirus.
The economy returned to growth in the three months to December and the recovery is expected to gather pace as consumers and investors shake off the effects of the Covid-19 pandemic.
The rise in gasoil sales, which account for about two-fifths of the country’s overall fuel demand, comes despite record-high local retail prices and points to rising industrial production in the country.
State companies Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum own about 90% of the retail fuel outlets.
State retailers sold 3.3% less cooking gas in the first half of March than a year ago to 1.01 million tonnes as a significant reduction in subsidies curtailed demand for the fuel, the data showed.
Jet fuel sales were down 36.5% to 204,000 tonnes.

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