Flipkart’s revised termsheet has a lot of ‘hold backs’ and ‘clauses’ that make an all-stock deal ‘difficult’ to consider for Snapdeal.

Snapdeal founders Kunal Bahl and Rohit Bansal have been conducting one-on-one meetings with senior executives including heads of multiple business units to firm up their plans for an alternative path, hinting that the much-talked-about deal with rival Flipkart could have potentially hit a roadblock, according to multiple persons privy to the development.

These meetings have been taking place at least since the last one week.

Snapdeal received two offers from Flipkart for an all-stake acquisition in July. While the first one USD 550 million was way below the e-commerce firm’s expectation of USD 1 billion, the second offer that came last week was around USD 900 million.

According to one of the sources mentioned above, it’s not a negotiation on just the numbers any more. The term sheet has a lot of ‘hold backs’ and ‘clauses’ which make it a really ‘difficult deal’ now.

“All meetings are happening on how good Plan B can work in favour of Snapdeal. The founders are trying to convince their direct reports on the same. Looks like the Flipkart deal is now in a limbo,” said one of the sources mentioned above.

“I think the founders are conservative on sharing anything which has not officially been confirmed. The motive of the meetings broadly has thus been to ensure the employees that if the deal happens — great! If it doesn’t happen, the employees shouldn’t worry, for they have a plan that they are working on and that they could all pull it together,” said another person quoted above.

Employees adjust to uncertainty, plan B in place

As part of this Plan B, the plan is to further cut down the costs which may include another round of massive layoffs affecting around 600-1000 people in the company. It will also see its non-core business — Freecharge and Vulcan 3 being sold separately while the company will look at shutting its warehouses.

Meanwhile, the company is also reported to have received another offer from the listed e-commerce website Infibeam. It has been reported that Infibeam’s term sheet is likely to have valued Snapdeal at USD 1 billion. Snapdeal didn’t respond to an email sent on the matter.

Another person quoted above said that the founders are more likely to be keen on Infibeam, given they will get to retain their positions even post the acquisition. While the talks are on, business seems to be usual in the Gurgaon-based office.

One would be surprised given the amount of uncertainty looming. But according to at least two persons quoted above, different departments are working on multiple initiatives.

“Teams have clear plans for the next few months. Till the time the deal doesn’t close, I am going to assume, life is as usual,” said one of them.

“We had a brief period of lull when the letter from the founders had come in April. The email went out and people had no clarity. But we have passed that phase now. It has been months and by now we have adjusted to the fact,” said the second person quoted above.

In an email to the employees in April, Bahl had indicated that the founders had little control over the developments at the company as the investors had taken most of the decisions in their hands.

Snapdeal now continue to witness exists on a routine basis, as and when employees are getting better opportunities. But those lacking that, besides the loyalists are still holding the ground.

After IndiGo, Warburg Pincus & KKR show interest in Air India privatisation

The firms have each asked for details of the proposed Air India privatisation process.

Weeks after Indigo expressed interest in Air India’s businesses, private equity players KKR and Warburg Pincus are eyeing the national carriers units.

The firms have each asked for details of the proposed Air India privatisation process, according to a report in Mint. It added that the discussion are at  “a very early stage” and will gain momentum after there is clarity on divestment process.

The much-awaited Cabinet approval for sale of government’s stake in Air India came today with the Narendra Modi-led team of ministers deciding to set up a committee to explore various options including strategic divestment of the loss-making airline and its five subsidiaries.

Finance Minister Arun Jaitley will head the inter-ministerial panel. The decision was based on the recommendations of Niti Aayog.

The committee will consider the quantum of disinvestment to be made the “universe of bidders”, according to a government statement.

According to media reports, Tata Sons officials led by Chairman N Chandrasekaran have already met top officials in the aviation ministry to express their interest in buying the airline. Tata Sons has stakes in Air Vistara and AirAsia India.

The committee will also study and suggest ways to treat the unsustainable debt of Air India; hiving off certain assets to a shell company and demerger and strategic divestment of the airline’s profit-making subsidiaries.

Air India Transport Services, Hotel Corporation of India, Air India Charters, Air India Engineering Services and Airlines Allied Services are the five subsidiaries of Air India.

The airline, surviving on a Rs 30,231-crore government bailout package, has accumulated losses of around Rs 52,000 crore and as much debt. The package, approved by the previous government in 2012, called for staggered equity infusion over nine years. It has so far received Rs 23,993 crore under the package.

The airline reported an operating profit of Rs 105 crore in 2015-16 though this was contested by Comptroller and Auditor General which said it was actually an operating loss of Rs 321 crore. The national carrier hasn’t made a net profit in at least a decade.

Air India has a 14 percent market share in the domestic market and 17 percent share of the overseas traffic flying to and from India.

Bajaj plans launch of electric 3-wheeler next yr, 2 years ahead of its original date

Bajaj Auto said that the company had made some significant gains on the product putting Bajaj Auto in a position to possibly launch the vehicle next year itself.

Bajaj Auto, the country’s fourth largest two-wheeler maker, could advance the commercial roll-out date for the ambitious electric three-wheeler by two years.

Speaking to shareholders at the company’s 10th Annual General Meeting Rajiv Bajaj, Managing Director, Bajaj Auto, said that the company had made some significant gains on the product putting Bajaj Auto in a position to possibly launch the vehicle next year itself.

Bajaj said, “I have already driven the product and I am very satisfied with it”. The Pune-based company had earlier projected to launch the electric three-wheeler in 2020.

While pricing of the electric three-wheeler will be known at the time of its launch it is expected to be more expensive than a petrol-powered three-wheeler. Last year Kinetic launched a similar product priced at Rs 1.28 lakh.

Bajaj Auto, which is also India’s largest three-wheeler manufacturer, has a 90 percent share of the non-diesel passenger three-wheeler market.

“It is true that our share could have been more than what it is had more permits been issued (by states). However, we have reason to believe that new permits of as many as 50,000 will be issued over the rest of the year”, said Bajaj.

Maharashtra, Delhi and Karnataka will issue the new permits. Maharashtra in fact has decided to do away with permits for passenger three-wheelers.

Electric autorickshaws are already plying in Delhi sold by Chinese brands. TVS Motors and Kinetic Motors have developed such e-rickshaws independently. Plans are afoot to extend this to other cities which are dealing with pollution problems.

Bajaj Auto is also aggressively pushing for an electric foray into the two-wheeler space. A commercial launch of a product is likely around 2020. A number of companies are already engaged in development and sale of electric two-wheelers (scooters); however, barring one company no company has ventured into developing electric motorcycles.

The government of India has devised an ambitious roadmap to electrify all vehicles by 2032. Municipal corporations and state transport undertakings have started buying electric taxis and buses for commercial use. Charging stations, just like petrol pumps, are being set up nationally.

US ‘looks forward’ to working with president-elect Ram Nath Kovind

Kovind, a low-key lawyer-turned-politician, was yesterday elected as India’s 14th President, the first BJP member and the second Dalit to occupy the country’s highest office.

The United States has congratulated president-elect Ram Nath Kovind on his electoral victory and said that it “looks forward” to working with him on regional and global issues.

Kovind, a low-key lawyer-turned-politician, was yesterday elected as India’s 14th President, the first BJP member and the second Dalit to occupy the country’s highest office.

“We want to congratulate the president-elect Ram Nath Kovind on his victory,” State Department spokesperson Heather Nauert told reporters yesterday.

Noting that the US and India have a “deep and growing strategic partnership”, she said: “We look forward to working with president-elect on regional and global issues.”

Nauert credited the close people-to-people contact between the world’s two largest democracies and “our shared democratic values” with the type of partnership they share.

Air India privatisation is unpatriotic, say former employees

The All India Airlines Retired Personnel Association (AIARPA), which has written the letter, represents nearly 11,000 former employees of Air India.

The employees union of Air India representing retired its personnel termed the government’s move to privatise the airline “unpatriotic” and “illogical” in a letter to Civil Aviation Minister Ashok Gajapathi Raju.

The letter also says that the the government’s priority should be to restructure the airline’s huge debt.

The All India Airlines Retired Personnel Association (AIARPA), which has written the letter, represents nearly 11,000 former employees of Air India.

“Why has the government announced the decision to privatise AI — a decision taken in great haste — just at a time when the airline is on the verge of becoming profitable.

“The move is unpatriotic as well as not logical at this point of time,” the union said in the letter.

For the first time in a decade, the airline posted an operational profit of Rs 105 crore in 2015-2016. It rose to Rs 300 crore in 2016-2017.

“For now the restructuring of debt be carried out,” said the letter.

The union also proposed that the government could waive Air India’s Rs 52,000 crore debt so that it can “forge ahead” like it plans to do to make the national carrier attractive for a private player.

It also claims that private investors are “interested” in AI because it is operationally profitable, has a large fleet of aircraft, a profitable low-cost international carrier like Air India Express, profitable ground handling services, and prime slots at airports around the country and the world, among other factors.

“The real reform needed is for compensating for costs incurred in implementing specific government policies not in line with their commercial objectives,” adds the letter.

Monsoon Session: Amid adjournments, long list of bills on Parliament’s agenda

There have already been two consecutive adjournments since the Monsoon Session began on Monday.

The Monsoon Session of Parliament officially began on Monday, but no concrete business has taken place so far amid consecutive adjournments.

While the House was adjourned on the first day after paying respects to members who had recently passed away, the proceedings in the Lok Sabha and Rajya Sabha came to a grinding halt soon after it began at 11 am on Tuesday following a ruckus on various issues including farmer’s plight and cow vigilantism.

Two important bills were scheduled to be taken into consideration on Tuesday in the Lok Sabha- The Indian Institute of Information Technology (public-private partnership) Bill 2017 and Right of Children to Free and Compulsory Education Act 2009. While the former looked into building new knowledge in information technology in the IITs, the latter proposed amendments to the 2009 Act.

Currently, 21 bills are pending in the Lok Sabha while that number goes up to 42 in the Rajya Sabha.

The Upper House saw Bahujan Samaj Party chief Mayawati resigning as a Rajya Sabha MP after her speech on Dalit atrocities was cut short by the Deputy Chairman PJ Kurien. She walked out of the House alleging that the ruling BJP does not give ample opportunities to the opposition to raise significant issues which plague India.

The session is set to witness discussions on various burning issues of farmer suicides, cow vigilantism, the recent lynching issues, the Kashmir unrest and the border standoff with China. The Congress has already passed an adjournment motion in the Lok Sabha regarding farmer suicides on Tuesday and the Narendra Modi-led government is likely to battle a joint opposition on the issue.

A total of 16 bills will be introduced in the Lok Sabha and the Rajya Sabha during the monsoon session. Some of the most important bills that are to be introduced are the Consumer Protection Bill and two bills which will implement CGST and IGST in Jammu & Kashmir.

The new Consumer Protection Bill seeks to make a series of amendments regarding consumer protection laws and make consumer complaints redressal easier. It proposes to set up Consumer Dispute Redressal Commission at the district, state and national level.

The Central Goods and Services Tax (Extension to Jammu and Kashmir) Bill 2017 and the Integrated Goods and Services Tax (Extension to Jammu and Kashmir) Bill 2017 will make Jammu and Kashmir the last state to join the GST regime.

Nine judge bench to hear right to privacy issue for Aadhaar from Wednesday: SC

A nine-judge bench of the Supreme Court will commence hearing from tomorrow to decide if the contentious issue of right to privacy is a fundamental right under the Constitution.

Hours after referring the matter to a larger bench, the apex court today set up the nine-judge bench to be headed by Chief Justice J S Khehar.

It will also comprise Justices J Chelameswar, S A Bobde, R K Agrawal, Rohinton Fali Nariman, Abhay Manohar Sapre, D Y Chandrachud, Sanjay Kishan Kaul and S Abdul Nazeer.

A five-judge Constitution bench headed by the CJI, which was to deal with pleas challenging the validity of the Aadhaar scheme and the right to privacy attached to it, was faced with the two past verdicts, delivered in 1950 and 1962 by larger benches, holding that the privacy right was not a fundamental right.

The apex court said the nine-judge bench would deal with the limited issue of right to privacy and the correctness of the two judgements. The matter challenging the Aadhaar scheme would be then referred back to a smaller bench, it said.

“During the course of the hearing today, it seems that it has become essential for us to determine whether there is any fundamental right of privacy under the Indian Constitution,” the bench, also comprising Justices J Chelameswar, S A Bobde, D Y Chandrachud and S Abdul Nazeer, said.

“The determination of this question will essentially entail whether the decision recorded by this court in M P Sharma and Ors vs. Satish Chandra, District Magistrate, Delhi and Ors. (of 1950) by an eight-judge Constitution bench, and also, in Kharak Singh vs. the State of UP and Ors. (of 1962) by a six-judge Constitution bench, that there is no such fundamental right, is the correct expression of the constitutional position,” it said in its order.

The court asked Attorney General K K Venugopal, representing the Centre, and other senior advocates, including Arvind Datar, Shyam Divan, Gopal Subramanium and Anand Grover, who appeared for petitioners opposed to the Aadhaar scheme, to submit their written briefs in the meantime.

At the outset, Venugopal reiterated the arguments of his predecessor Mukul Rohatgi that there have been inconsistent views so far as judicial pronouncements on right to privacy was concerned.

He said the apex court in M P Sharma and Kharak Singh cases have held that right to privacy was not a fundamental right and later, the smaller benches have said that it was a fundamental right.

Venugopal also said that the right to privacy is not a fundamental right and rather it is common law right which is not recognised by the Constitution.

One of the counsel for petitioners termed as “regressive” the stand of the Centre that the right to privacy was common law right and not a part of fundamental right under the Constitution.

The apex court, initially, referred to the 1978 judgement in the Maneka Gandhi case and said that there was no need to revisit the judgements in Kharak Singh and M P Sharma cases on right to privacy.

A three-judge bench had in 2015 referred to a larger bench a batch of pleas, including the one filed by Justice (retd) K S Puttaswamy, challenging the validity of the Aadhaar scheme and the aspect of right to privacy attached to it.

The apex court had agreed to set up a bench on July 12 to deal with the Aadhaar-related matters after the attorney general and senior advocate Shyam Divan, appearing for petitioners, had jointly mentioned the matter.

The petitioners had claimed that collection and sharing of biometric information, as required under the scheme, was a breach of the “fundamental” right to privacy.

Allowing the Centre’s plea, the court had framed various questions, including as to whether right to privacy was a fundamental right, to be decided by a Constitution bench.

“If yes, then what would be contours of right to privacy,” the bench had said while referring the matter to the then CJI for setting up a larger bench.

At an earlier hearing, then AG Rohatgi, while backing the Aadhaar card scheme, had contended that right to privacy was not a fundamental right.

“No judgment explicitly cites right to privacy as a fundamental right. It is not there under the letters of Article 21 either. If this court feels that there must be clarity on this subject, only a Constitution bench can decide,” Rohatgi had said.

He had cited the two judgements, pronounced by six and eight-judge benches, which had held that right to privacy was not a fundamental right.

Subsequently, smaller benches had held a contrary view and, hence the matter needed to be decided by a larger bench, he had said.

“Whether right to privacy is a fundamental right guaranteed under Part III of the Constitution of India, in the light of express ratio to the contrary by an eight-judge bench in M P Sharma case and also by a six-judge bench of this court in Kharak Singh’s case has to be decided,” Rohtagi had said.

 

Flipkart lifts bid for rival Snapdeal to up to $950 million

Reuters previously reported that Snapdeal had earlier this month rejected Flipkart’s initial bid of between $800 million and $850 million, as its board was unsatisfied with the offer and the payment terms.

Indian e-commerce player Flipkart has sweetened its buyout offer for smaller rival Snapdeal to between $900 million and $950 million, two people familiar with the negotiations said, adding that the new proposal is being evaluated by the company’s board.

Reuters previously reported that Snapdeal had earlier this month rejected Flipkart’s initial bid of between $800 million and $850 million, as its board was unsatisfied with the offer and the payment terms.

The sources, who asked not to be named as the discussions are not public, said talks between the two sides are ongoing.

Flipkart, Snapdeal and its main backers were not immediately reachable for comment.

Religare suffers cyber attack; data completely safe: Company

IT systems across the globe in the recent past have been facing some or the other kind of malware attacks with the intention to extract money from the system owners.

Financial services conglomerate Religare Enterprises said it has faced cyber attack but its data and operations are completely safe. “We are currently assessing the situation, however, our systems, operations and client information and data remain unaffected and secure,” a company spokesperson said over phone.

IT systems across the globe in the recent past have been facing some or the other kind of malware attacks with the intention to extract money from the system owners.

Religare Enterprises said the problem is exactly not in the nature of cyber attacks and there were some stray incidents, following which an advisory was issued from the information technology (IT) department of the company.

“There were some reported incidents on a few machines, our systems, client data, trading systems are all safe and unaffected and there is no impact on business as usual,” the official said.

Regligare said it cannot ascertain the exact details about incident as the IT team is still investigating the matter.

Late last month, operations at one of the terminals of Mumbai-based port facility JNPT were affected due to a malware attack named “Petya”.

Due to this, operations at the terminal were impacted on June 27 night as a result of a fallout of global ransomware attack, crippling some central banks and many large corporations in Europe.

UP trims power allocation, projects higher revenue target to accommodate farm loan waivers

Nearly a week ago, the Uttar Pradesh government revealed the State Budget which stated that the government will able to provide loan waivers to small and marginal farmers.

Nearly a week ago, the Uttar Pradesh government unveiled the State Budget which stated the government will able to provide loan waivers to small and marginal farmers despite a ‘cash-short administration’.

The planned Budget accommodated not only loan waivers but also managed to keep its fiscal deficit under 3 percent of the state’s GDP. It shows that revenue surplus will continue, even though a surplus lower than the earlier FY is budgeted. The fall in the surplus is from Rs 24,506 crore (FY17) to Rs 12,279 crore (FY18).

According to a Business Standard report, the government rejigged its funds by cutting its power allocation to Rs 17,728 crore in FY18 from Rs 34,602 crore in FY17, (revised estimates or RE). The Rs 16,800 crore balance was for raising the revenue target for FY18 by 7 percent. The interim Budget estimated total revenue receipts at Rs 3 lakh crore (FY18) – an 11.4 percent increase from Rs 2.69 lakh crore in FY17 (RE).

The total revenue receipts targeted this FY is at Rs 3.19 lakh crore, higher than the previous budget. This will help the government to get an additional Rs 19,300 crore.

The two adjustments have given the UP government a fiscal space to waive of loans totaling Rs 36,000 crore. The rearrangement was done by the agriculture department.

No capital expenditure was cut.  The total CapEx is set at Rs 77,541 crore in FY18, which is insignificantly above the Rs 76,178 crore in the interim Budget.

Farm loan waivers, however, are not the cause of a fall in the capital spending. The interim Budget accounted the CapEx cuts to bring down the increasing fiscal deficit.

Experts are doubtful of the increase in revenue in FY18. The non-tax revenue, which was earlier forecasted to grow 3 percent, is now at 13 percent. In order to attain this growth, the state government showed grants from the Centre.

“It is unclear whether the sharp increase in grants from the Centre in the Budget estimates would materialise, in light of the relatively modest growth budgeted by the Government of India in aggregate grants to all states,” says an expert.

The tax revenue collections increased by 12 percent in FY17, where the interim Budget estimated a 14.7 percent growth of 14.7 in FY18.

An overall growth of 20.8 percent in the state is expected. According to PRS Legislative Research, a major part of the growth is expected out of sales tax, the goods and services tax revenue amounting a 26 percent growth in FY18.

The state government documents specify that the farm loan waivers will be applicable to small farmers (land less than two hectares) and marginal farmers (less than one hectare).

The state will also cover rescheduled loans due to natural calamities. However, crop loans by self-help groups, microfinance institutions and urban cooperative banks, term loans, and money withdrawn via the Kisan Credit Card will not taken into account for loan waiver. For the purpose of calculating the loan amount, the dues (including interest) as on end-March 2016 would be reduced by repayments received during FY17, without taking into account the money withdrawn by the farmer or new sanctions during FY17.

For calculating loans, the dues (including interest) as on end-March 2016 will be cut by repayments received during FY17. The calculation will not include the money withdrawn by the farmer or new sanctions during FY17.