Tata Group Ventures into Airport Business, McDonald's to Acquire Israeli Startup Digital Yield, Amazon Pay Announces Offline Payment Feature, RBI Buys $5bn Through Forex Swap et al.

Tata Group ventures into airport business. Amazon Pay announces offline payment feature. RBI buys $5bn through forex swap. Flipkart launches venture fund for startups.

 

Moving on to the top Business stories of the day.

 

COMPANIES 

Mindtree Board drops share buyback plan. McDonald's to acquire Israeli startup Digital Yield.

Not Happening: Following its meeting on Tuesday, the Mindtree Board has decided to not proceed with the buyback of equity shares of the company. The Board also decided to constitute a Committee of Independent Directors to evaluate L&T’s open offer to buy 31% holding in the IT company.

Out of Options: According to SEBI norms, a share buyback is possible only when an open offer is in place after receiving approval from 75% of the shareholders. With L&T holding 20.32% in Mindtree, it would have been challenging to garner the support of the remaining 75% shareholders.

L&T’s open offer, at INR980(+3.8% vs today's close) per share, is scheduled to start on May 14 and will close on May 27.

McDigital: McDonald’s is set to buy Israeli digital startup Dynamic Yield, in a bid to improve in-store ordering and online marketing services. McDonald’s is estimated to pay more than $300m for Dynamic Yield.

Robo Chef: McDonald's would use the startup's technology to tailor the items displayed on menu boards at drive-thru outlets based on the weather, how busy the restaurant is and the time of day. It will also instantly recommend extra items based on a customer's initial order.

 

AVIATION 

Tata Group ventures into airport business. Cathay Pacific Airways to acquire Hong Kong Express Airways. Airbus strikes deal with China for 300 aircrafts.

Group Acquisition: A consortium of Tata Group, a unit of Singapore’s sovereign wealth fund GIC and SSG Capital Management will invest INR8,000cr in GMR Airports.

The deal will pump INR1,000cr into GMR Airports, a unit of GMR Infrastructure, and purchase INR7,000cr of the airport unit’s equity shares from the parent.

Shared Use: After the purchase, Tata will hold 20% in the airport unit, GIC and SSG will get 15% and 10% respectively. 

Aftermath: GMR Infrastructure shares jumped as much as 9.8% to the highest intraday level since Sept. 3 before closing at INR19.70 (+1.29%).

New Buy: Cathay Pacific Airways has agreed to buy Hong Kong Express Airways from Chinese conglomerate HNA Group for HK$4.93bn ($628m).
 

Half-Half: The purchase price comprises HK$2.25bn of cash and HK$2.68bn of non-cash consideration through promissory loan notes.

Economy Class: Until now, lack of slots at Hong Kong International Airport had constrained Cathay's ability to set up its own budget brand. With this acquisition, the company now has the capabilities to operate in this segment.

Alternative: Airbus has announced that it has reached a deal to sell 300 passenger jets with the Chinese government.

Large Order: The order covers 290 planes from the A320 family and 10 from the A350 line. The total deal is valued at approximately $35bn.

Soured Relations: Two years ago Boeing too had also reached a deal with China for 300 aircrafts. However, the deal fell off following the recent Ethiopian Airlines crash.

 

PAYMENTS 

Amazon Pay announces offline payment feature. PhonePe to separate from Flipkart.

Scan And Pay: Amazon Pay is planning to introduce ‘scan and pay’ service at neighborhood stores. It has already introduced the payments service in department store chain Shoppers Stop, in which the company owns a 5% stake.

Smile All The Way: With this feature, customers can use Amazon smile codes in neighborhood retail stores where they can scan and pay for their purchases.

Late to the Party?: According to industry estimates, there are around 300,000 offline QR-based mobile transactions daily, most of which are enabled by Paytm, followed by PhonePe and Google Pay.

Permission Granted:  Flipkart has given in-principal approval to its online payment subsidiary PhonePe to be set up as a separate entity. This will allow PhonePe to create an independent board and raise fresh funding from external investors.

Fight!!: PhonePe turning into a separate entity will make the rapidly expanding digital payments ecosystem in the country more competitive with the battle among Paytm, PhonePe and Google Pay likely to get more intense.

 

STARTUPS 

Flipkart launches venture fund for startups. Stanza Living raises $4.4m venture debt from Alteria. Oxfordcaps raises $8m in Series A funding.

Funds Delivered: Flipkart has launched a venture fund to back early-stage startups in India. The fund is expected to be $100m.

Payments First: Flipkart will use the fund primarily for startups working in areas related to e-commerce, fintech, payments and complementary spaces.

First Time: Flipkart has invested in over half a dozen odd startups so far. However, this is the first time that the company is setting up a dedicated fund especially for startups at the seed stage.

More Beds: Stanza Living has raised $4.4m in venture debt from Alteria Capital.

Student Discount: Stanza Living is an accommodation platform for students offering affordable housing solutions at prices ranging from INR7,000 to INR25,000 per month.  

The company plans to use the funds to expand its capacity to one lakh beds by 2021.

Another One: Oxfordcaps has raised $8m in Series A funding led by Times Internet. The round also saw participation from existing investors Kalaari Capital and 500 Startups.

Designer: The student housing company provides custom designed and standardized student housing product with a full-stack model of services and amenities. 

Big Ambitions: The new capital will be used to achieve its growth plans along with expansion into 10 cities. The startup is also investing in capabilities like IoT and Deep Learning.

 

 MACRO 
 

RBI buys $5bn through forex swap.  

Good Exchange: The RBI has bought $5bn through long-term forex swap auction. In turn, INR34,561cr was infused into the Indian banking system.

All The Attention:  The swaps will bulk up India's foreign exchange reserves while injecting liquidity into the financial system to ease a cash crunch. 

Countermeasures: The swap is meant to give RBI greater flexibility in managing banking system cash while helping soak up any potential large dollar inflows, which could make the rupee rise sharply. .

 

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