Budget 2019 Expectations, Denial Rate for H-1B Visa Applications Spikes, Star India Betting on India vs Pakistan Match et al

Budget 2019 Expectations: Keep Budget projections realistic, reflecting state of economy, say economists. Star India is staring at an ad revenue loss of c. INR100cr, which may more than double if India vs Pakistan match gets hit. Denial rate for initial H-1B visa applications spikes over five-fold to 32% just in the first quarter of the current fiscal. WeWork is in talks to buy c. 70% of WeWork India in a $1.9bn deal.

 

Moving on to the top Business news today: 

 

 COMPANIES 

Flipkart burned c. $1bn since its acquisition by Walmart, as per regulatory filings. WeWork is in talks to buy c. 70% of WeWork India in a $1.9bn deal. 

 

Burn the Cash: US retail giant Walmart-owned Indian e-commerce company Flipkart has burned c. $1bn since its acquisition by the former, as per the regulatory filings disclosed by Walmart last week. 

 

As per the filings, Flipkart had $1.2bn in cash and cash equivalents on its books as of April 30, down from the $2.2bn it held in August 2018 when the US retail giant invested $16bn for a 77% stake.

 

Fending Off the Rival: The aggressive cash burn is probably an attempt to keep away rivals such as Amazon.  

 

In Other News…: WeWork is in talks to buy around 70% of WeWork India at a valuation of about $2.75bn as it filed for an initial public offering in the United States in April. 

 

The cash-and-stock deal worth c. $1.9bn could close as early as August as per reports.

 

Zoom Out: WeWork India is a franchisee controlled by real estate tycoon Jitu Virwani and his son Karan. They control Bengaluru-based developer Embassy Group, while Karan Virwani is the CEO of WeWork India.

 

 SECTORS 
 

Retail sales of vehicles decline to 7.5% in May. Aviation sector in India will bounce back, says Minister of Civil Aviation. 
 
 
A Slowdown: Retail sales of vehicles across categories declined by 7.5% to 1.77 million units in May, on back of a slowing domestic economy and continuing liquidity crisis in Non-Banking Financial Companies (NBFCs), as per data published by Federation of Automobile Dealers Associations.
 
 
Other Factors: Customers’ decision to wait for the general elections results before making a big-ticket purchase, is also likely to have contributed to the demand slowdown.
 
 
Critical: While the decline in sales of passenger cars was arrested after significant production cuts by manufacturers, two-wheeler and commercial vehicle sales fell significantly.
 
 
The demand slowdown for consumer goods in both urban and rural markets led to a decline of 8.6% in sales Y-o-Y of two-wheelers to 1.4 million units.
 
 
All Will Be Well: In the government’s first comments about the ongoing crisis in the aviation sector in India since it was re-elected last month, Minister of Civil Aviation, Hardeep Singh Puri on Friday said that he was confident that airline capacity shortage problems following the grounding of Jet Airways will be solved. 
 
 
Living on a Prayer: The office of a NBFC in Bandra, Mumbai, wears a near-deserted look. There are only a few customers in the room, and the lone executive at the service desk tells you that the company has stopped giving new loans. It is rather evident form the illustration that the sprawling NBFC have also taken a deep hit on back of the ongoing crisis. 
 
 
Read more here.
 
 
 ECONOMY 
 
Budget 2019 Expectations: Keep Budget projections realistic, reflecting state of economy, say economists. 
 
 
Keeping it Real: In a pre-Budget consultation meeting with Finance Minister Nirmala Sitharaman, economists have noted that the newly-elected government must keep the budget 2019 projections realistic, reflecting the true state of the economy. 
 
 
They also asked the government to cut corporate tax and impress upon the central bank to prune the repo rate further.
 
 
NITI Aayog has convened a meeting on June 22 ahead of the Budget where the experts will deliberate on economic growth and development throughout the day.
 
 
Strive Harder: The last few years have been contentious for India as developed countries, led by the US, have upped the ante. 
 
 
Widely used incentives given to Indian exporters have been challenged on the grounds that India has exceeded the time period within which these benefits could be given.
 
 
Since an immediate removal of export subsidies is likely to hurt the Indian economy, it must push for an eight-year phase out period under special and differential flexibilities.
 
 
Moreover, policymakers need to work on a contingency plan to replace existing export incentive schemes, with WTO-compliant, production-oriented schemes targeting R&D and modernisation. Here’s a deep dive into the entire matter.
 
 
 WORLDCUP 

Star India is staring at an ad revenue loss of c. INR100cr, which may more than double if India vs Pakistan match gets hit.
 
 
Heavy Rains Bring Heavy Losses: With heavy rains washing out play in four matches, Star India is currently staring at an advertising revenue loss of c. INR100cr.
 
 
As per experts, this number may exceed INR200cr, especially if Sunday’s match between India and Pakistan at Old Trafford is hit. 
 
 
While the insurance does cover a certain percentage of the sum assured, payments can take their own sweet time coming.
 
 
High Hopes: Star India has pinned high hopes on the India-Pakistan match, charging more than a 50% premium on last-minute ad spot buying, with 10-second ad slot rates touching INR25L. It has been selling ad packages (including television and Hotstar) of India matches for INR16-18L, compared with the INR5L per 10 seconds it charges for ads shown during non-India matches.
 
 
The weather office currently says there’s a 60% chance of rain in Manchester, where the match is scheduled. 
 
 
Bonus: As fans square up ahead of the June 16 match between arch-rivals India and Pakistan, social media is buzzing with emotions ranging from anger and disdain to indulgence and glee. At the centre of all the intense jousting are two ads — one released by television channel Star Sports, and the other by a Pakistan TV app.
 
 
Read this rather fascinating article to know more.
 
 
 OFFBEAT 

Denial rate for initial H-1B visa applications spikes over five-fold to 32% just in the first quarter of the current fiscal. 
 
 
A Disappointment: With the number of new H-1B skilled-worker visas issued each year capped at 85,000, most of this year’s over 200,000 applicants face disappointment.
 
 
The denial rate for initial H-1B applications spiked over five-fold to 32% just in the first quarter of fiscal 2019, up from 6% in 2015. 
 
 
Moreover, H-1B holders can work only for the company that originally sponsored their visa application. So if you want to change employers, you’ll need to “transfer” your H-1B. However, the Trump administration is now targeting “continuing” H-1B applications used by existing employees to either renew their H-1B or switch it to a new employer.
 
 
Spare No One: Even tech giants like Amazon are now seeing double-digit rejection rates.
 
 
Here’s what H-1B holders need to know about the right — and wrong — ways to set about switching employers.
 
 
The document, “Branding Guidelines for the Trump Presidential Campaign,” covers design minutiae such as font size, spacing and authorized colors…It specifies which images of Mr. Trump to use to convey compassion, which to show strength and, in the case of a photo of the president pointing into the camera, when to let donors know they need to boost contributions.
 
 
Four years ago, Mr. Trump launched a first presidential bid that flouted presidential electioneering norms. His re-election campaign is looking a lot more conventional. 
 
 
Will Donald Trump be able to reap benefits from a more professional approach without damping enthusiasm among his supporters or interfering with the kind of seat-of-the-pants campaigning that has proven effective in the past.

 

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