Mukesh Ambani unveils plan to set up $24bn digital services company to take on Jack Ma's Alibaba. Flipkart reports rise in losses and revenue. Govt plans to make OTC drugs available in retail stores. EU agrees to Brexit "flextension". January 31 set as new deadline. SoftBank's Vision Fund 2 eyes digital pharmacies, lab-grown meat startups.
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Ambani Ma: Asia’s richest man is reportedly eager to build India’s answer to Jack Ma's Alibaba. Mukesh Ambani has unveiled plans to set up a $24bn digital services holding company that would aid Reliance Industry Ltd’s aim to enter and dominate India’s internet shopping space, which would involve taking on Flipkart and Amazon.
This is the latest sign of the oil-to-petrochemicals group’s pivot towards data and digital services. Back in August, Ambani had told shareholders that new businesses – including retail and telecom – would contribute to half of RIL’s earnings in a few years as opposed to the 32% today. The Print
Black and White: Flipkart has reported a significant rise in both losses and revenue. Flipkart Internet, which is the company’s e-commerce arm, registered a 40% rise in losses to INR1,624cr for the year ended March 31, 2019. Meanwhile, operating revenues for the same period rose by 51%. The rise in losses reflect increased expenditure by the Walmart-owned company: Flipkart spent INR3,407cr on employee costs, advertisements, promotions, and legal expenses. Business Today
Pay Your Dues: The Supreme Court last week ordered telcos to pay dues worth INR92,642cr to the government as it upheld the definition of “Adjusted Gross Revenue”.
This is a huge blow to private telcos such as Bharti Airtel and Vodafone Idea who have been running losses for the past many quarters.
With hefty pending licence fees and spectrum usage charges, and no signs of revival in the near future, Airtel and Vodafone Idea are likely to sought government intervention, seeking a waiver of penalties and interest.
The telcos owe the government licence fees and spectrum usage charges, plus penalties and interest. Vodafone Idea, for instance, has pending licence fees and spectrum usage charges dues of INR41,000cr and over INR39,000cr respectively.The operators are also planning a financial and legal plan to raise funds that will allow them to stay viable. ET Telecom
In Other News: The government is mulling a plan to make OTC (over-the-counter) drugs available at retail stores, with their labelling containing important information — preferred dosage and side effects — in local languages.
The move shall increase availability of these drugs areas where pharmacies are rare and doctors are not easily available. BS
Potpourri: GVK Group companies have entered into definitive agreements with subsidiaries of the Abu Dhabi Investment Authority, Canada's Public Sector Pension Investment Board and National Investment and Infrastructure Fund to raise INR7,614cr by selling 79.1% stake in its airport business.
The funds will be used by GVK to retire around INR5,500cr debt of its holding companies and fund the purchase of additional shares in Mumbai International Airport (MIAL) from two South African entities — Bidvest and Airports Company South Africa. It would also help GVK stave off Adani group’s proposed acquisition in Mumbai airport. Firstpost
Back In Favour: Tata Motors share price soared c. 18% in Sunday’s Diwali ‘Muhurat’ trading as sales of luxury car Jaguar Land Rover picked up in China, even amid slowing demand for passenger and commercial vehicles in India.
The gain also came as Tata Motors’ posted INR583cr in profit before tax, at the consolidated level vs Bloomberg’s consensus estimate of INR1,600cr and compared with a loss in the year-ago quarter. Livemint
Brexit is Just A Series of Déjà Vus: The 27 European countries that aren’t planning on leaving the EU anytime soon have consented to London’s request for a three-month extension of the Brexit deadline. The new deadline will be January 31, 2020.
“The EU27 has agreed that it will accept the UK’s request for a Brexit flextension until 31 January 2020,” European Council President Donald Tusk tweeted today. “Flextension” is a portmanteau for “flexible extension”, which means Britain could leave the EU before the deadline provided if British MPs approve the deal Brussels recently signed with Boris Johnson. Reuters
Chinese Sputters: China’s economic growth has slowed to a near-three-decade low. New numbers also suggest that profits at Chinese industrial companies fell in September – again. This has accompanied inflation, decreased consumer demand and a still-raging trade war. These uncertainties have affected oil prices, which fell after strong gains last week.
Following the data released on Monday, Brent crude was down by 0.2% and WTI by 0.3%. Moneycontrol
Whatta Vision: Vision Fund, SoftBank’s $100bn investment behemoth, sent tremors around the start-up world. Now the Japanese conglomerate is eyeing investments for Vision Bank 2, which is apparently going to be even larger than the first. Prospective candidates include a pharmaceutical delivery startup, a robotic burger-maker, and a lab-grown meat company. Japan Times
Apple Today Kept the Profits Away: In 2017, 2.3mn iPhones were sold in India. In 2018, that number was 2 million. A weakening rupee, higher import duties and economic slowdown factored in, leading to Apple India’s revenue and net profit falling for the first time in FY19.
As per regulatory filings, revenue from operations fell 19% to INR10,538cr while profit fell to INR262.3cr – a drop of over 70%. ET Tech
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