FIPB clears Rs 13K cr FDI proposals, Axis Bank cleared

Government panel FIPB today cleared Rs 13,030 crore worth of foreign direct investment (FDI) proposals, including that of hiking foreign investment limit in Axis Bank.

Government panel FIPB today cleared Rs 13,030 crore worth of foreign direct investment (FDI) proposals, including that of hiking foreign investment limit in Axis Bank.

“FDI proposals for more than Rs 13,000 crores recommended for approval. Inflow of investments continue,” Economic Affairs Secretary Shaktikanta Das said.

The Foreign Investment Promotion Board (FIPB) in its meeting today cleared 5 out of 14 proposal, a finance ministry official said.

The proposal of Axis Bank was to hike foreign shareholding limit from 62 per cent currently to 74 per cent. The proposal entails foreign investment worth Rs 12,900 crore.

At present, private banks have a total foreign limit of 74 per cent, of which FII limit is 49 per cent.

The other proposals which were cleared include that of Pharma firm Wockhardt and Aurobindo.

Inter ministerial panel FIPB can clear proposals worth up to Rs 5,000 crore. The ones above that amount go to the Cabinet Committee on Economic Affairs (CCEA).

Foreign direct investment (FDI) into the country increased by 40 per cent to USD 29.44 billion during April- December of 2015-16.

The foreign investment inflows were at USD 21.04 billion in the same period of previous fiscal.

Q4 results: Dabur India hopes to sail in Patanjali’s wake

If Dabur can deliver better sales growth and maintain margins, it may be able to meet the high expectations that investors have set

Squeeze the honey out of Dabur. Now Baba Ramdev did not say this, when he recently said he will take the gate out of Colgate and coined similar fates for other foreign-owned brands. But he may well have. Dabur India Ltd said its health supplements business grew in single digits in the March quarter, as its honey sales were affected by Patanjali honey’s aggressive launch. Patanjali’s 500g honey bottle has a list price of Rs.135 versus Dabur’s Rs.199 (exclusive of discount) on bigbasket.com.

Dabur’s management says it will not compete on price (butbigbasket.com is offering the 500g bottle at a discounted price of Rs.169.15); instead it has launched a “squeezy” honey bottle and will launch value-added variants next month. The initial impact has been harsh but surprisingly, Dabur has only words of praise for its competitor. It sees Patanjali as prising open a huge opportunity for products with a herbal/Ayurvedic tilt.

Chief executive Sunil Duggal said Patanjali may actually help in products such as chyawanprash, which they have struggled to grow in recent years. Warm weather—it sells most in winter—is one reason, but he said the product also lacked the kind of “evangelism” or “disruptive influence” that Ramdev has brought.

Duggal’s logic is Patanjali may initially eat into incumbents’ markets but Ramdev’s efforts can grow the market too. In oral care, for instance, Dabur’s growth has benefited from more demand for Ayurvedic/herbal toothpastes. Though Dabur does not sell ghee, Duggal remarked that Ramdev appears to have added new consumers for this product. As disruptive change goes, there’s no knowing what will happen but Dabur’s view is one possibility, an optimistic one at that.

Dabur’s March quarter results show better sales growth, up by 8.5% in value terms and by 7% in volume. Value sales growth is better than the December quarter’s fall of 2.5%. The end of the blockade on the India-Nepal border has seen its food business come back strongly. That had affected growth in the preceding quarter.

Apart from food and oral care, the home care business did well too. Dabur’s international business saw organic growth (excluding the impact of acquisitions/divestitures) of 19.3% compared with 10.7% growth in the preceding quarter. The recovery in sales growth, some support from price increases, slower increase in costs, all contribute to an increase in its Ebitda (earnings before interest, taxes, depreciation and amortization) margin, both from a year ago and the preceding quarter. A higher tax rate lowered net profit growth to 16.6% compared with a pre-tax profit growth of 20%.

Dabur’s management expects the second half of FY17 to see better sales growth, contingent on a good monsoon. It is still seeing weak rural growth and no significant support from the urban general trade channel (kirana shops). Modern trade is selling well, however. Although some input costs are moving up, the company is not expecting to see significant price increases. It’s a cautious outlook, justifiable considering that past optimism in the sector has not always played out, and what with a hungry competitor on the prowl.

Dabur’s share fell by 1.05% on Thursday. It trades at 38 times the price-to-earnings ratio for the year ended 31 March. FY16 was a tough year but the current fiscal year looks to be a better one, although not if the company’s cautious outlook proves right. If Dabur can deliver better sales growth and maintain margins, it may be able to meet the high expectations that investors have set.

Analytics firms continue to attract investments

Amidst a slowing of funds into the e-commerce and start-ups space, analytics players might buck the trend as they draw insights from raw data to help CEOs make crucial decisions.

Amidst a slowing of funds into the e-commerce and start-ups space, analytics players might buck the trend as they draw insights from raw data to help CEOs make crucial decisions. Sources say Fractal Analytics is in advanced talks to raise $100 million for a minority stake. Fractal’s performance is what will fetch it the funds; the company doubled revenues from about $35 million in 2013 to $70 million in FY15 and its operating margins are 40%.

India’s largest independent data analytics player Bengaluru headquartered Mu Sigma, raised $45 million in 2013 from Fidelity and others for around 3% stake and was reportedly valued at more than $1 billion.

The company, backed by Sequoia Capital, has been doing well; revenues crossed $300 million in 2015 and a quarterly run rate of 7% could well sustain. With the global data analytics market growing by more than 20% annually and estimated to reach a size of $124 billion by the end of 2016, analytics players seem to be on a good wicket. That’s one reason Sasha Mirchandani, who runs Kae Capital Fund, has stayed invested for more than 16 years in Fractal Analytics.

In February, 2015, Singapore’s Temasek led a $60 million investment round in Bangalore-based Manthan Software Services a provider of business intelligence and Big Data analytics solutions for enterprises in which existing investor Norwest Venture Partners ( NVP) also participated. Sohil Chand, managing director, NVP India says top players in this space have operating margins close to 50% in some segments which makes them attractive bets.

Manthan’s annual revenues are in the range of $40 million to $50 million, it is believed to be valued at $500 million. Bimal Raj, Partner, Singhi Advisors, says typically analytics firms are valued at eight times sales but a good product could result in a better valuation. Industry experts say players like Mu Sigma and Fractal Analytics, for instance are targeting Fortune 500 companies as clients. Manthan, meanwhile, is hoping to specialise in areas such as retail performance management systems.

Alokik Advani, managing director Goldman Sachs Principal Strategic Investments Group (GSPSI), the arm of the global investment bank that focusses on making long-term strategic bets in fast growing technology companies, says his firm is looking at potential investments in the data analytics space “We will invest between $2 million to $9 million in funding to promising start-ups in the fintech space,” Advani says.

In February this year, UK based Millward Brown, one of the leading global players in brand, media and communications research acquired Analytics Quotient, a Bangalore based data analytics company founded by former WNS employees. The company started as a four member team in 2008 and its team size has grown to more than 500 employees in the span of eight years with annual revenues around $30 million currently.

Earlier in January this year, Qubole which offers big data services to clients across sectors raised $30 million in series C funding from IVP Capital a US based late stage venture capital fund. Other players which have attracted investments—A series A to Cseries—include Absolute data, Latent View Analytics, Bridgei2i and Fine Analytics.

Sun Capital

Yes Bank To Raise Over Rs 16,500 Crore Via Equity, Debt

Private sector lender Yes Bank on Wednesday said its Board has approved raising over Rs 16,500 crore through issue of equity capital as well as debt securities in one or more tranches.

"The Board of Directors...have approved raising of funds by way of issuance of equity capital up to $1 billion (Rs 6,650 crore) in one or more tranches on such terms and conditions as it may deem fit subject to approval of the shareholders," Yes Bank said in a BSE filing. 


It further said: "The issuance may be by way of qualified institutions placement (QIP) or any other international offering like global depository receipts (GDRs)/American depository receipts (ADRs), or by any other appropriate mode as decided by the Board or Committee thereof." 

The bank added that its Board also approved "raising of funds by way of issuance of debt securities including but not limited to non-convertible debentures, MTN (Medium Term Notes), bonds up to Rs 10,000 crore (in INR or FCY) by the Bank, in one or more tranches and/or series, in domestic and/or overseas market.. on private placement".

Yes Bank on Wednesday  reported 27.42 per cent rise in standalone net profit at Rs 702.11 crore for the fourth quarter ended March 2016 as against net profit of Rs 550.99 crore in the corresponding quarter of 2014-15

After RBI push, DCB Bank lowers lending rates

Private lender DCB Bank today reduced both base rate or the minimum lending rate and the marginal cost of funds-based lending rate (MCLR), a move which will lower EMIs for its borrowers.

While MCLR has been reduced by up to 0.5 per cent, the base rate has been cut by 0.06 per cent.

MCLR for overnight lending has been slashed by 0.5 per cent to 9.32 per cent while it has been lowered by 0.2 per cent to 9.72 per cent effective May 4, DCB Bank said in a statement.

MCLR rate for other maturities has been left unchanged, it said.

DCB Bank revised its base rate to 10.64 per cent per annum from the earlier base rate of 10.70 per cent, effective May 4.

RBI had asked banks to price fixed rate loans of up to three years based on marginal cost of funds from April 1.

The lending rate based on marginal cost of funds is lower than base rate in some cases, resulting in lower EMIs for borrowers. Most banks earlier decided lending rates based on their average cost of funds.

Sun Capital

How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

How Gujarat’s co-op bank hopes to recover Rs 240 cr to repay small depositors

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters

Gujarat-based Madhavpura Mercantile Co-operative Bank (MMCB) has announced its final settlement scheme 2016 in a bid recover dues from defaulters. The bank hopes to recover about Rs 240 crore from nearly 600 borrowers through this scheme.

It may be recalled that thousands of small depositors got duped in the Rs 1,200-crore MMCB scam that was unearthed in 2001. A bank official, requesting anonymity, said MMCB, currently under liquidation, owes nearly Rs 100 crore to about 13,000 small depositors, and Rs 650 crore to 268 other co-operative banks.

With this scheme, MMCB is offering its borrowers the final opportunity to settle their dues. In a press note, the bank said the scheme will cover all accounts except those of Ketan Parekh, Mukesh Babu and Sirish Maniar of Maniar Group.

Chief executive officer GK Fakir said the bank had filed several civil as well as criminal complaints against “defaulter borrowers”. He hoped the final settlement would see most borrowers clearing their dues.

At a time when the Reserve Bank of India did not allow banks to lend more than Rs 15 crore to stock brokers, MMCB had fraudulently issued pay orders worth Rs 12 crore to Mumbai-based stock broker Parekh, and huge sums to Babu and Maniar.

In 2012, the RBI had cancelled the bank’s licence after its total recovery pending stood at over R1,100 crore and non-performing assets had touched 99.9% of total deposits.

Sun Capital

Roposo bags $5 million from Bertelsmann India Investments

NEW DELHI: Relevant E-solutions, which owns and operates fashion discovery app Roposo, has bagged $5 million (about Rs 33 crore) from from Bertelsmann India Investments (BII), the strategic investment arm of German media conglomerate Bertelsmann SE.

The latest round is part of the Gurgaon-based startup's $15 million (about Rs 100 crore) Series B round, which was first reported in August last year, and confirmed by the company, and has been led by its existing backer, Tiger Global Management, which has pumped in $10 million this time around.

While the terms of the investment were not disclosed, Roposo, which also counts early-stage venture capital firm India Quotient as an investor, has raised about $21 million (about Rs 140 crore) in external funding till date.

"While Tiger Global had committed to invest the entire $15 million, we wanted to bring in a new investor that would share the same philosophy as us, and support our growth, and had set aside about $5 million accordingly. We are fortunate to have Bertelsmann on board as a partner," said Avinash Saxena, co-founder of Roposo.

Seeded by Flipkart Co-founder and Chief Executive Binny Bansal, the less-than two year-old startup was founded by IIT Delhi alumnus, Saxena, Mayank Bhangadia and Kaushal Shubhank in 2014. Last year, Tiger Global had led a $5 million Series A round in the company.

The founders also confirmed that Bansal has exited his position in the company last year, as had another early investor in the venture, 5ideas Startup Superfuel.

"We see tremendous promise in Roposo as a social network and as a business model. With an extremely strong founding team, it has managed to capture immense mindshare in India within a fairly short span since inception. With leaders such as multi-channel network StyleHaul in the US and social network Mogujie in China in the Bertelsmann family, we are excited to now work with Roposo to make it the leading fashion destination in India," said Pankaj Makkar, managing director, BII.

The startup will use the proceeds from the round towards strengthening its technology, expanding its team, bolstering the product and enhancing the Roposo community.

"The company is growing at a tremendous pace. We are building a world-class product team, and expect to make some really interesting hiring-related announcements over the course of the year," Saxena said.

Roposo, which claims to have 2.5 million installations of its app till date, is targeting having 7-8 million active users on its platform by the end of the current fiscal.

While fashion and lifestyle are the dominant categories, the startup, which competes with the likes of Wooplr, WithMe and Styledotme, is evaluating entering newer ones, such as food, travel and home furnishings, amongst others.

"Altogether, we're doing about 250,000 posts a month. There is a tremendous amount of engagement taking place, and our central philosophy has always been about connecting users," said Saxena.

Repost's revenue model is centred around its affiliate channels, through its partnership with over 400 websites, including most major ecommerce ventures. It also has advertising and video channels.

"We are experimenting with various channels... The monetisation strategy will shape up by the end of 2016," Saxena said.

Sun Capital